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Pascual v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

February 13, 2014

JUAN G. PASCUAL, an individual Plaintiff,
v.
WELLS FARGO BANK, N.A., successor in interest to WORLD SAVINGS BANK, FSB; and DOES 1-50, inclusive, Defendants.

ORDER GRANTING DEFENDANT WELLS FARGO'S MOTION FOR THE AWARD OF ATTORNEYS' FEES; ORDER REFERRING ATTORNEY WENDELL JONES TO THE STANDING COMMITTEE ON PROFESSIONAL CONDUCT FOR DISCIPLINARY PROCEEDINGS (Dkt. No. 24)

KANDIS A. WESTMORE, Magistrate Judge.

Plaintiff Juan G. Pascual filed this lawsuit against Wells Fargo Bank asserting six causes of action based on alleged conduct during the origination of Plaintiff's residential mortgage loan in January 2006. (Compl., Dkt. No. 1, Ex. A; First Amended Complaint, ("FAC"), ¶¶ 33-35.) Ultimately, the court granted Wells Fargo's motion to dismiss Plaintiff's First Amended Complaint in full and without leave to amend. (Dkt. No. 22.)

On August 22, 2013, Wells Fargo filed a motion for attorneys' fees based on the fee-shifting provisions in Plaintiff's note and deed of trust. Plaintiff did not file a timely opposition or notice of non-opposition, and on September 27, 2013, the Court issued an order requiring Plaintiff's counsel Wendell Jones to file a supplemental brief to explain "why the Court should not shift some or all of any award of attorneys' fees from Mr. Pascual to himself." (Dkt. No. 32.)

On October 17, 2013, the Court held a hearing, at which Mr. Jones did not appear. After careful consideration of the parties' arguments, for the reasons set forth below, the Court GRANTS Well Fargo's Motion to for Attorneys' Fees, and orders Mr. Jones to personally pay 75% of the fee award, and Mr. Pascual shall pay the remaining 25% of the fee award. In addition, the Court refers Mr. Jones to the Standing Committee on Professional Conduct for the United States District Court for the Northern District of California for a determination as to whether further discipline is appropriate.

I. BACKGROUND

A. Instant Action

Plaintiff filed this action in Alameda Superior Court on April 2, 2013 alleging six causes of action against Wells Fargo based on conduct during the origination of Plaintiff's mortgage loan in January 2006. ( See Compl., Dkt. No. 1, Ex. A; First Amended Complaint, "FAC", ¶¶ 33-35.) On May 1, 2013, Wells Fargo removed the case to federal court.

On May 8, 2013, Wells Fargo filed a motion to dismiss the initial complaint, which contained allegations that the case was preempted by the Home Owners' Loan Act (HOLA) and was fatally time-barred by the applicable statutes of limitation. (Dkt. No. 4.)

On May 9, 2013, Wells Fargo sent Mr. Jones a letter advising him that Wells Fargo reserved its right to recover attorneys' fees and costs incurred to defend the action pursuant to Article 7 of the Deed of Trust and Paragraph 7(E) of the Note. (Decl. of Melissa M. Coyle, "Coyle Decl., " Dkt. No. 24-3, Ex. A.)

On May 20, 2013, presumably in response to Wells Fargo's initial motion to dismiss, Mr. Jones filed an amended complaint, which did not add additional facts to address HOLA preemption or the statutes of limitation issues. (Pl.'s First Am. Compl., "FAC, " Dkt. No. 11.)

On June 3, 2013, Wells Fargo filed its motion to dismiss the First Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. (Dkt. No. 12.) Pursuant to Civil L.R. 7-3, a party has 14 days from the date of filing to file an opposition to the motion. As a result, Plaintiff's opposition was due on June 17, 2013. Plaintiff did not file his opposition until June 18, 2013. (Dkt. No. 15.)

On August 8, 2013, the court granted Wells Fargo's motion to dismiss Plaintiff's First Amended Complaint on all claims and without leave to amend on the grounds that all claims were fatally time-barred or preempted by HOLA. (Dkt. No. 22.) Accordingly, the Court entered judgment on August 8, 2013. (Dkt. No. 23.)

On August 22, 2013, Wells Fargo filed a motion for attorneys' fees based on the fee-shifting provisions in Plaintiff's note and deed of trust. (Def.'s Mot. at 3-6, Dkt. No. 24.) Wells Fargo is seeking $8, 800.00 in fees if the motion is unopposed, and $9, 762.50 if it is opposed.

Plaintiff did not file a timely opposition, which would have been due within 14 days of the motion, or September 5, 2013. On September 19, 2013, however, Plaintiff filed a notice of non-opposition. (Dkt. No. 30.)

On September 27, 2013, the Court issued an order requiring Plaintiff's counsel Wendell Jones to file a supplemental brief to explain "why the Court should not shift some or all of any award of attorneys' fees from Mr. Pascual to himself." (Dkt. No. 32.)

On October 4, 2013, Mr. Jones filed a supplemental brief wherein he stated that, while he stood behind his decision to file the case:

if the court deems Plaintiff's counsel should not have filed the Compliant based on arguments that may or may not have been raised by Defendant and the Defendants should be awarded attorneys fees, Plaintiff's counsel will stipulate to bearing the burden of paying these fees. However, Plaintiff asserts that $8, 800-$9, 762.50 is excessive and the amount should be $1, 962.50, the amount claimed in Melissa M. Coyle's Declaration filed August 22, 2013.

(Pl.'s Counsel Supplemental Brief, Dkt. No. 33 at 3)(emphasis in original). The Court notes that the $1, 962.50 in Ms. Coyle's declaration did not refer to the total amount of attorneys' fees paid by Wells Fargo in the defense of this matter, but rather the estimated amount of attorneys' fees incurred in filing the motion for attorneys' fees in the event that the motion was opposed. (Decl. of Melissa M. Coyle, "Coyle Decl., " Dkt. No. 24-3 ¶ 7.)

On October 17, 2013, the Court held a hearing, at which Mr. Jones did not appear. Instead, Mr. Jones engaged Attorneys to Go- a private, appearance service that contracts with attorneys in California-to provide an attorney to specially appear on his behalf. He did not notify the court of his inability to attend the hearing nor did he request to appear telephonically.

B. Previous Actions in the Northern District of California

A CM/ECF query of Mr. Jones' name as an attorney of record generated 52 cases in the Northern District, including the instant action.[1] Of the 51 other actions, 16 involved loans that originated with World Savings Bank.[2]

Of the 52 cases filed in this district, only five resulted in agreements that the lender would perform a loan modification review, but there was no guarantee that Mr. Jones' clients would receive a loan modification. In addition, one case resulted in an unknown settlement.

The remaining 46 cases resulted in dismissal, many of which were for failure to prosecute for failing to oppose motions to dismiss, failure to file amended complaints, and for failure to respond to orders to show cause.

1. Cases involving World Savings Loans

The 16 cases in this district involving loans that originated with World Savings Bank resulted in most cases being dismissed with prejudice or without leave to amend. In particular, three cases were dismissed with prejudice due to Home Owners' Loan Act (HOLA) preemption, and Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) claims that were time-barred. In addition, five cases were voluntarily dismissed by plaintiffs after the defendant filed a motion to dismiss which alleged HOLA preemption. The remaining eight cases resulted in four dismissals without prejudice, three agreements that the lender would perform a loan modification review with no guarantee that the client would receive a loan modification, and one unknown settlement.

In addition, in at least one World Savings case, Mr. Jones was sanctioned by the district court in the amount of $1, 000.00 for his "repeated fail[ure] to respond to deadlines set by the local rules and the orders of this Court." Khan v. World Savings ...


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