Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-00401/USCOURTS-cand-3_10-cv-00401-5/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 28:1441 Petition for Removal

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ANITA CONCEPCION,

Plaintiff,

 v.

WORLD SAVINGS FINANCIAL, FSB, nka

WACHOVIA FINANCIAL SERVICES, INC.;

WACHOVIA FINANCIAL SERVICES, INC., A

WELLS FARGO COMPANY; WELLS FARGO

N.A., et al.

Defendants. /

No. C-10-CV-00401 EDL

ORDER ON MOTION FOR

ATTORNEYS’ FEES

I. BACKGROUND

 On March 8, 2010, this Court dismissed this case without prejudice, based on Plaintiff’s

failure to respond to an order to show cause why the complaint should not be dismissed for failure to

prosecute or why Defendants’ motion to dismiss and motion to strike should not be granted as

unopposed. Plaintiff did not make any attempt to resurrect the case following dismissal. Defendants

then moved for attorneys’ fees incurred in connection with this action pursuant to the underlying

mortgage agreement documents. Plaintiff’s attorney failed to timely oppose the fee motion, but just

before the initial hearing filed a “motion for additional time” which the Court granted due to

Plaintiff’s counsel’s compelling personal circumstances. The Court continued the motion hearing by

six weeks and allowed an additional three weeks for Plaintiff’s opposition as Plaintiff’S counsel

requested. Despite this generous extension, no additional papers were timely filed, and the Court

issued an Order to Show Cause why Plaintiff’s attorney should not be sanctioned and referred to the

Case 3:10-cv-00401-EDL Document 26 Filed 06/15/10 Page 1 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 In connection with this motion, Defendants have filed a Request for Judicial Notice. The Court

may take judicial notice of documents referred to by the complaint if they are authentic and central to

plaintiff’s claim. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Here, the central focus of

Plaintiff’s complaint relates to a “loan,” but the complaint does not attach documents or otherwise

specify the “loan” in question. Defendants’ Request for Judicial Notice attaches an Adjustable Rate

Mortgage Note signed by Plaintiff. See RJN Ex. A. Plaintiff does not contest the authenticity of this

document, and the Court may take judicial notice of it. The Court may also take judicial notice of the

Deed of Trust attached as Exhibit B, which was executed by the parties and publicly recorded in the

records of the Office of Contra Costa County Recorder on December 15, 2005, and is also implicitly

referenced in the Complaint. See RJN Ex. B.

2

Court’s Standing Committee on Professional Conduct, and required a response by June 14, 2010. 

Plaintiff’s counsel filed an untimely response to the fee motion and to the order to show cause on

June 15, 2010, the date of the continued hearing.

II. ANALYSIS

A. Procedural Issues

Pursuant to Local Rule 54-5, a motion for attorney’s fees must be supported by a declaration

stating that “counsel have met and conferred for the purpose of attempting to resolve any disputes

with respect to the motion or a statement that no conference was held, with certification that the

applying attorney made a good faith effort to arrange such a conference.” Neither Defendants’

Motion or the Declaration of Mark T. Flewelling (“Flewelling Decl.”) in Support make any such

statement and the motion is technically procedurally deficient on this basis.

In addition to Defendants’ procedural deficiency, Plaintiff did not timely file an opposition to

the motion as required under Local Rule 7-3 despite being given significant additional time in which

to file. However, the Court has considered Plaintiff’s counsel’s late filed opposition and given

Defendants’ counsel an opportunity to respond during oral argument.

The Court concludes that neither of these procedural deficiencies are dispositive.

B. Substantive Analysis

Defendants rely on two provisions in the loan documents at issue in the Complaint to justify

their request for all of their fees incurred in connection with this action.1

 Specifically, the

Adjustable Rate Mortgage Note signed by Plaintiff provides:

(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 attorneys’ fees and court

Case 3:10-cv-00401-EDL Document 26 Filed 06/15/10 Page 2 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

costs.

RJN Ex. A at 4. Additionally, the Deed of Trust signed by Plaintiff provides:

7. Lender’s Right To Protect Its Rights In The Property:

If . . . someone, including me, begins a legal proceeding that may significantly

affect the Lenders’ interest in the Property, . . . then Lender may do and pay for

whatever it deems reasonable or appropriate to protect the Lender’s rights in the

Property. Lender’s actions may include, without limitation, appearing in court,

paying reasonable attorneys’ fees . . . Lender must give me notice before Lender

may take any of these actions.

RJN Ex. B at ¶ 7.

California law governs Defendants’ right to recover fees pursuant to an underlying contract. 

See Berkla v. Corel Corp., 302 F.3d 909, 919 n.11 (9th Cir. 2002). California Civil Code § 1717

states:

(a) In any action on a contract, where the contract specifically provides that

attorney’s fees and costs, which are incurred to enforce that contract, shall be

awarded either to one of the parties or to the prevailing party, then the party who

is determined to be the party prevailing on the contract, whether he or she is the

party specified in the contract or not, shall be entitled to reasonable attorney's fees

in addition to other costs.

. . .

Reasonable attorney's fees shall be fixed by the court, and shall be an element of

the costs of suit.

. . .

(b)(1) The court, upon notice and motion by a party, shall determine who is the

party prevailing on the contract for purposes of this section, whether or not the

suit proceeds to final judgment. Except as provided in paragraph (2), the party

prevailing on the contract shall be the party who recovered a greater relief in the

action on the contract. The court may also determine that there is no party

prevailing on the contract for purposes of this section.

Defendants contend that, although the Complaint was dismissed without prejudice (and

without consideration of the merits of the dispute), they are the prevailing party on a “practical

level” and therefore entitled to fees relating to the contracts in question. See Donner Mgt. Co. v.

Schaffer, 142 Cal. App. 4th 1296, 1310 (2006) (noting that, in the absence of legislative directive in

attorneys fees statute, “practical level” standard has been applied to determine prevailing party in

cases dismissed without prejudice). Defendants also contend that, because the Adjustable Rate

Mortgage Note allows for fees “in enforcing this Note,” they are also entitled to fees incurred in

Case 3:10-cv-00401-EDL Document 26 Filed 06/15/10 Page 3 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

defending themselves against Plaintiff’s interrelated allegations of fraud. See Compl. ¶¶ 43-44. In

support of their motion, Defendants attach an attorney declaration as well time records for Mr.

Flewelling and other members of his firm who worked on this matter as of March 16, 2010 detailing

the number of hours billed, the nature of the services rendered, and the hourly rate and qualifications

of each attorney and paralegal who worked on the matter since it was filed.

On June 15, 2010, Plaintiff’s counsel belatedly filed an opposition briefly arguing that the

action was not one to “enforce the Note” as contemplated by paragraph 7(E) of the Note, and that

paragraph 7 of the Deed of Trust is also inapplicable because the action does not purport to affect

Defendants’ interest in the property. Finally, Plaintiff argues that the Court should not deem

Defendants to be prevailing because the action was dismissed without prejudice based on Plaintiff’s

lack of desire to continue the case, not on the merits. 

Under the unusual circumstances of this case, the Court in its discretion does not consider

Defendants to be the prevailing party, even on a practical level, because there was no decision on the

merits and the case was dismissed without prejudice due apparently to Plaintiff’s attorney’s failure

to diligently prosecute the case. Donner is distinguishable because there the discretionary decision

to find one side the prevailing party following a dismissal was based on the fact that the dismissal

was “compelled” by a special litigation committee’s decision that it was not in the best interests of

the plaintiff corporation to continue the lawsuit, and therefore the lawsuit ended “based on the

existence of a complete defense.” Donner, 142 Cal. App. 4th at 1311. No such circumstances are

present here, and in fact Plaintiff would be free to re-file her complaint because it was dismissed

without prejudice. Secondarily, the Court finds that there are serious questions with respect to the

applicability of the provisions of the loan agreement documents cited by Defendants, but does not

rely on these questions for its decision in this case. 

IT IS SO ORDERED.

Dated: June 15, 2010 

ELIZABETH D. LAPORTE

United States Magistrate Judge

Case 3:10-cv-00401-EDL Document 26 Filed 06/15/10 Page 4 of 5
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Case 3:10-cv-00401-EDL Document 26 Filed 06/15/10 Page 5 of 5