ORDER GRANTING DEFENDANT‟S MOTION FOR AN AWARD OF
This matter comes before the Court on Defendant Wachovia Mortgage, a division of Wells Fargo Bank, N.A., successor by merger to Wells Fargo Bank Southwest, N.A., f/k/a Wachovia Mortgage, FSB, f/k/a defendant World Savings Bank, FSB‟s ("Defendant") Motion for an Award of Attorneys‟ Fees (Doc. #30). Defendant asks the Court to award attorneys‟ fees in the amount of $21,594.50. Plaintiffs Mamerto Q. Salinas and Minda Salinas, collectively ("Plaintiffs"), oppose the motion (Doc. #34).*fn1
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs borrowed $548,000.00 from Defendant on or around 3 March 1, 2007. The loan was memorialized by a fixed rate 4 mortgage note ("Note") and secured by a Deed of Trust ("DOT") 5 recorded against the subject property. 6
Plaintiffs originally filed this action against Defendant 7 in the Superior Court for the State of California, County of San 8 Joaquin on April 4, 2011. Defendant removed the case to this 9 Court on May 5, 2011 (Doc. #1) and moved to dismiss the Complaint on May 12, 2011 (Doc. #7). On May 16, 2011, Plaintiffs filed a Motion for Preliminary Injunction (Doc. #10). The Court denied Plaintiffs‟ Motion for Preliminary Injunction (Doc. #26) and it granted Defendant‟s Motion to Dismiss with Prejudice (Doc. #27). Defendant now seeks to recover attorneys‟ fees.
Under the American rule, the prevailing litigant ordinarily is not entitled to collect reasonable attorney's fees from the losing party. Travelers Casualty & Surety Co. of Am. v. Pacific Gas & Electric Co., 549 U.S. 443, 448 (2007). A statute or enforceable contract allocating attorney's fees, however, can overcome this rule. Id. State law governs the enforceability of attorney's fees in contract provisions. Security Mortgage Co. v. Powers, 278 U.S. 149, 153 (1928).
California permits parties to allocate attorney's fees by 2 contract. See Cal. Code Civ. Proc. § 1021. California Civil 3 Code Section 1717 governs the recovery of attorneys‟ fees 4 pursuant to an underlying contract. The statute "authorizes 5 reasonable attorney‟s fees "[i]n any action on a contract, where 6 the contract specifically provides that attorney‟s fees and 7 costs, which are incurred to enforce the contract, shall be 8 awarded either to one of the parties or to the prevailing 9 party.‟" Barrientos v. 1801-1825 Morton LLC, 583 F.3d 1197, 1216 (9th Cir. 2009) (quoting Cal. Civ. Code § 1717(a)).
2. The Note and Deed of Trust
Defendant argues that its right to recover attorneys‟ fees is set forth in two clauses in the Note and the DOT. The Note provides at paragraph 7(E):
Payment of Lender's Costs and Expenses:
The Lender will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses may include, for example, reasonable ...