Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-00523/USCOURTS-caed-2_15-cv-00523-14/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1345 Foreclosure

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UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

NELSON LAC, 

Plaintiff, 

v. 

NATIONSTAR MORTGAGE LLC, et al., 

Defendants. 

No. 2:15-cv-00523-KJM-AC (TEMP) 

ORDER 

Defendant Nationstar Mortgage LLC asks the court to reconsider its decision to 

award plaintiff Nelson Lac his attorneys’ fees under California Civil Code section 2924.12. The 

court held a hearing on June 3, 2016. Aldon Bolanos appeared for Lac. Jered Ede and Timothy 

Burnett appeared for Nationstar. The motion is denied.1

 

I. BACKGROUND 

In 2006, Nelson Lac obtained a mortgage loan. See Request for Judicial Notice 

Ex. L, ECF No. 67. In 2008, Lac’s construction business closed, and he fell behind on his 

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 This court separately has ordered Mr. Bolanos to show cause why he should not be 

sanctioned for the unauthorized practice of law. See Order to Show Cause, ECF No. 98. Among 

other sanctions, Mr. Bolanos was ordered to show cause why the court should not vacate its order 

awarding attorneys’ fees to Mr. Lac, the same order that is the subject of this motion for 

reconsideration. See id. at 4. In this order the court reviews only Nationstar’s motion. 

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mortgage payments. Lac Decl. ¶ 3, ECF No. 56-2. Nationstar began servicing Lac’s loan in July 

2013 and is the loan’s current servicer. See Janati Decl. ¶¶ 2, 5, ECF No. 66-1. 

Lac filed a complaint in this court on March 9, 2015. ECF No. 1. He alleged 

Nationstar ignored several requests for a loan modification his attorney made in 2014. Id. ¶¶ 3–6. 

He also alleged Nationstar falsely claimed to have tried diligently to contact him before a notice 

of default was recorded in December 2014. Id. ¶ 7. He requested damages, declaratory relief, an 

equitable accounting, interest, attorneys’ fees, and costs. Id. at 7–8. 

Nationstar did not timely file a responsive pleading, so in September of last year, 

Lac moved for the entry of Nationstar’s default, ECF No. 12, and applied ex parte for a 

temporary restraining order, notifying the court a foreclosure sale had been scheduled for midOctober. TRO Appl. at 3, ECF No. 13. The court set a hearing on the motion and instructed 

Lac’s attorney, Mr. Bolanos, to contact Nationstar and notify it of Lac’s application and the 

hearing. ECF No. 15. The docket reflects Bolanos complied with that order. ECF No. 16. 

In October 2015, Nationstar appeared in this action by filing a belated motion to 

dismiss. ECF No. 17. A few days later, the court held a hearing on Lac’s ex parte application. 

Minutes, ECF No. 23. Following a discussion with counsel, the court issued an order granting the 

application for a temporary restraining order as unopposed and enjoining any foreclosure sale for 

sixty days. Order Oct. 14, 2015, ECF No. 24. The court also struck Nationstar’s untimely 

motion to dismiss and instructed the Clerk’s Office to enter Nationstar’s default. ECF No. 30. 

Soon after his request for a TRO was granted, Lac requested an award of the 

attorneys’ fees he incurred in obtaining the temporary restraining order, citing California Civil 

Code section 2924.12. ECF No. 36. At the time, as described above, Nationstar had not timely 

appeared, and its default had not been set aside, so it filed no opposition. The court awarded Lac 

attorneys’ fees of $6,660. See Order at 6–8 (citing Cal. Civ. Code § 2924.12 and Monterossa v. 

Superior Court of Sacramento Cty., 237 Cal. App. 4th 747, 753, 757 (2015)), ECF No. 61. In the 

same order, the court set aside Nationstar’s default. Id. at 4–6. Nationstar now moves for 

reconsideration of the fee award. ECF No. 69. Lac opposes the motion. ECF No. 79. 

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Nationstar’s reply brief was filed late, four days before hearing, and is three pages 

longer than this court’s standing order allows. See E.D. Cal. L.R. 230(d) (“Not less than seven 

(7) days preceding the date of hearing, the moving party may serve and file a reply to any 

opposition filed by a responding party.”); Standing Order at 4, ECF No. 6-1 (“Replies shall not 

exceed ten (10) pages. Only in rare instances and for good cause shown will the court grant an 

application to extend these page limitations.”). The reply brief is therefore stricken. 

After Nationstar’s motion to reconsider was filed, the court denied Lac’s motion 

for a preliminary injunction, finding he was unlikely to succeed on the merits of his claims. ECF 

No. 86. The court also dismissed Lac’s original complaint under Federal Rule of Civil Procedure 

12(b)(6), allowing him leave to amend. ECF No. 94. Lac filed an amended complaint in June 

2016. ECF No. 97. He now asserts five claims against Nationstar: (1) pursuing a foreclosure sale 

while considering his application for a loan modification in violation of California Civil Code 

section 2923.6; (2) providing him no single point of contact in violation of California Civil Code 

section 2923.7; (3) not acknowledging receipt of his loan modification application in violation of 

California Civil Code section 2924.10; (4) negligently mishandling his modification application; 

and (5) engaging in unfair business practices in violation of California Business and Professions 

Code section 17200. 

II. LEGAL STANDARD 

Nationstar asks this court to reconsider its previous order awarding attorneys’ fees. 

“As long as a district court has jurisdiction over [a] case, then it possesses the inherent procedural 

power to reconsider, rescind, or modify an interlocutory order for cause seen by it to be 

sufficient.” City of Los Angeles v. Santa Monica BayKeeper, 254 F.3d 882, 885 (9th Cir. 2001) 

(citation, quotation marks, and emphasis omitted). In addition, Rule 54(b) of the Federal Rules of 

Civil Procedure authorizes courts to revise “any order or other decision . . . that adjudicates fewer 

than all the claims or the rights and liabilities of fewer than all the parties . . . at any time before 

the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed. 

R. Civ. P. 54(b). 

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Reconsideration is appropriate where it is necessary to correct clear error or 

prevent manifest injustice, where new evidence has become available, or where there has been an 

intervening change in controlling law. Cachil Dehe Band of Wintun Indians v. California, 

649 F. Supp. 2d 1063, 1069 (E.D. Cal. 2009) (citing Sch. Dist. No. 1J Multnomah Cty. v. AC&S 

Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)). Under Local Rule 230(j), the party moving for 

reconsideration must explain: 

(1) when and to what [j]udge . . . the prior motion was made; 

(2) what ruling . . . was made thereon; (3) what new or different 

facts or circumstances are claimed to exist which did not exist or 

were not shown upon such prior motion, or what other grounds 

exist for the motion; and (4) why the facts or circumstances were 

not shown at the time of the prior motion. 

E.D. Cal. L.R. 230(j). “To succeed, a party must set forth facts or law of a strongly convincing 

nature to induce the court to reverse its prior decision.” Knight v. Rios, No. 09-00823, 2010 WL 

5200906, at *2 (E.D. Cal. Dec. 15, 2010). 

III. DISCUSSION 

Nationstar argues this court’s previous order was clearly erroneous because 

California law allows attorneys’ fee awards if a plaintiff obtains a preliminary injunction, but not 

if she obtains only a temporary restraining order. Mot. Recons. at 5–9. Its motion may be denied 

on a straightforward reading of this court’s October 2015 order. The injunction this court entered 

was not purely a temporary restraining order, as it remained in effect for longer than twenty-eight 

days and was issued after Nationstar’s counsel raised no opposition at hearing. See Order Oct. 

14, 2015, ECF No. 24; Fed. R. Civ. P. 65(b) (imposing a fourteen-day limit on temporary 

restraining orders; allowing an extension to twenty-eight days for good cause). The court 

“grant[ed] the motion for a temporary restraining order and construe[d] the parties’ agreements at 

hearing as a stipulation to entry of a sixty-day preliminary injunction.” Order Oct. 14, 2015 at 1. 

The court’s order clearly awarded Lac not only a temporary restraining order, but preliminary 

injunctive relief. Nationstar did not object to that order until the hearing on its motion to 

reconsider, where it was represented by different attorneys. Because Nationstar’s motion rests 

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principally on the distinctions it draws between temporary restraining orders and preliminary 

injunctions, there is no reason to reconsider. 

Nationstar’s substantive arguments would not lead to another conclusion. The 

court addresses them here in the interest of completeness and clarity. 

A. Statutory Interpretation 

The statute in question is California law. See Order Mar. 28, 2016, at 6. This 

court therefore interprets it as a California court would in the same situation, see Kairy v. 

SuperShuttle Int’l, 660 F.3d 1146, 1150 (9th Cir. 2011), applying California’s rules of statutory 

interpretation, see In re First T.D. & Inv., Inc., 253 F.3d 520, 527 (9th Cir. 2001). 

Under California law, when construing a statute, courts “begin with the plain 

language of the statute, affording the words of the provision their ordinary and usual meaning and 

viewing them in the statutory context, because the language . . . generally is the most reliable 

indicator of legislative intent.” Fluor Corp. v. Superior Court, 61 Cal. 4th 1175, 1198 (2015) 

(citation and quotation marks omitted). If the words are unambiguous, no further analysis is 

necessary. Id. A statute means what it says. 

If the statute’s language is unclear, the court “next consider[s] the context in which 

these words appear, attempting to harmonize the words of the statute within the overall statutory 

scheme.” People v. Valladoli, 13 Cal. 4th 590, 599 (1996). A court may also consider a statute’s 

legislative history: “Both the legislative history of the statute and the wider historical 

circumstances of its enactment may be considered in ascertaining the legislative intent.” DynaMed, Inc. v. Fair Empt. & Hous. Comm’n, 43 Cal. 3d 1379, 1387 (1987); accord Fluor Corp., 61 

Cal. 4th at 1198 (“If, however, the statutory language may reasonably be given more than one 

interpretation, courts may consider various extrinsic aids, including the purpose of the statute, the 

evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing 

the statute.” (citations and quotation marks omitted)). 

Here, the text of section 2924.12 does not discriminate between preliminary 

injunctions and temporary restraining orders. That section provides, “A court may award a 

prevailing borrower reasonable attorney’s fees and costs . . . . A borrower shall be deemed to 

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have prevailed for purposes of this subdivision if the borrower obtained injunctive relief . . . .” 

Cal. Civ. Code § 2924.12(i). Nationstar’s argument is not persuasive. Its interpretation 

essentially reads “injunctive relief” to mean “any injunction except a temporary restraining 

order.” 

The statute’s context and legislative history support the court’s conclusion. See

Req. J. Not., Tr. Cal. Sen. Floor Sess. (S.B. 900), ECF No. 80-1.2 The Senate floor session 

transcript describes the principles that guided deliberations, providing the court with clues as to 

the purpose of the statute and evil to be remedied. See id. at 6. In the midst of the California 

foreclosure crisis, Senator Noreen Evans argued that, when lenders or servicers break the law, 

“the only remedy that is available to a borrower, prior to the foreclosure sale, is injunctive relief.” 

Id. at 8. Senators considered whether section 2924.12 should cover “any injunction” or whether it 

should narrow coverage by specifying one or two types of injunctive relief. Id. at 15–17. The 

Senate did not eventually narrow the statute’s coverage, as is evident in its enacted language. In 

addition, Senator Darrell Steinberg’s argument is particularly relevant here: 

[Those who drafted the statute recognized that] if you are a 

homeowner who is about to lose their home unfairly and you were 

under a great amount of stress and you’re trying to work with the 

company to try to avoid the dual tracking to ensure that the loan 

modification is finished so that you can stay in your home. If all 

that breaks down, the only way you’re ever going to remedy that 

situation is to have an attorney. Yes, an attorney. Who is willing to 

go into court on your behalf and make sure that you can stay in 

your home. Now why is it that the granting of a temporary 

restraining order or preliminary injunction grants that attorney fees? 

Because here’s the way this will work, when a temporary 

restraining order or preliminary injunction is granted, their servicer 

will then have an opportunity to cure and if they cure, which I hope 

they would do after the issuance of a temporary restraining order, 

the attorney fees will be cut off. There will be no more litigation. 

But the attorney should be compensated for what it took to cajole, 

to urge, to make the servicer cure the problem in the first place. 

Id. at 31. 

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 The court grants Lac’s request for judicial notice. “Legislative history is properly a 

subject of judicial notice.” Anderson v. Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012). The 

court also overrules Nationstar’s associated evidentiary objections. Although Nationstar argues 

Lac’s exhibit is inauthentic, it does not suggest that Lac’s exhibit misquotes the actual legislative 

history, and nothing about the exhibit suggests its contents are inaccurate. 

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This language is also consistent with the relevant conference report, which refers 

generally to injunctions and injunctive relief. See Sen. R. Comm. Conf. Rep. No. 1, S.B. 900, 

at 33 (June 27, 2012). The same report explains the legislators’ understanding that a lender or 

servicer would have an opportunity to correct its errors, but that the law would nonetheless allow 

an award of attorneys’ fees. See id. (“[T]he servicer or other covered entity may avoid legal 

action by curing the violation any time prior to the recordation of a trustee’s deed. . . . If it is 

necessary to order injunctive relief, a party who obtains an injunction is among those who is 

recognized as a prevailing party for purposes of attorneys’ fees and costs.”). This logic applies 

just as well to temporary restraining orders as preliminary injunctions. 

Lac’s application for a temporary restraining order appears to have functioned as 

intended, delaying a foreclosure sale and encouraging Nationstar to respond to Lac’s plea and to 

the court’s directives. Nationstar did not even appear in this lawsuit until after Lac requested 

injunctive relief. When Nationstar did appear, it agreed to consider Lac’s application, and it 

agreed to an injunction. Nationstar can now correct any oversights it made, and Lac may be 

awarded the reasonable attorneys’ fees he incurred in the process. 

Finally, although Nationstar notes that no California courts have interpreted 

section 2924.12 to include temporary restraining orders, Mot. Recons. at 6, the absence of 

decisional law does not overcome the plain language of a statute, supported by its legislative 

history. 

B. Whether Monterossa v. Superior Court is Binding 

In Monterossa v. Superior Court, the California Court of Appeal held that a 

borrower is a “prevailing borrower” under section 2924.12(i) even if he or she does not obtain 

permanent injunctive relief. 237 Cal. App. 4th at 753–57. At hearing, Nationstar urged this court 

not to follow Monterossa, which it argued was wrongly decided. 

Where, as here, a federal court applies California law to a question addressed in no 

California Supreme Court decision, the federal court must follow any germane decision of the 

California Court of Appeal. Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007). 

Only if the federal court finds “convincing evidence” that the California Supreme Court would 

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not follow the lower court’s decision may the federal court part ways with that lower state court. 

Id. “Convincing evidence” includes “intermediate appellate court decisions, decisions from other 

jurisdictions, statutes, treatises, and restatements.” Eichacker v. Paul Revere Life Ins. Co., 354 

F.3d 1142, 1145 (9th Cir. 2004) (citation and quotation marks omitted); accord Lewis v. Tel. 

Emps. Credit Union, 87 F.3d 1537, 1545 (9th Cir. 1996). A federal court’s disagreement with the 

state court’s decision—or even a series of disapproving federal district court decisions—does not 

alone create the necessary “convincing evidence.” See Ryman, 505 F.3d at 995 & n.1. 

To see how this rule works in practice, consider the Ninth Circuit’s unpublished 

decision in Hunt v. U.S. Bank N.A., 593 F. App’x 730 (9th Cir. 2015). In Hunt, the plaintiffs 

appealed the district court’s order dismissing their complaint and denying leave to amend. Id.

at 731. On appeal, they relied solely on the California Court of Appeal’s decision in Glaski v. 

Bank of America, 218 Cal. App. 4th 1079 (2013). In Glaski, the Court of Appeal held that a 

borrower had standing to attack an allegedly void assignment even though the borrower was not a 

party to the assignment. See id. at 1094–95. In decisions both before and after Glaski, however, 

several other courts disagreed, including other districts of the California Court of Appeal. See, 

e.g., Bowen v. Bank of N.Y. Mellon, No. D064927, 2014 WL 6673272, at *4 (Cal. Ct. App. Nov. 

25, 2014) (unpublished); Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 515 

(2013). The Hunt court therefore affirmed the district court’s decision not to follow Glaski. See

593 F. App’x at 731 (citing Ryman, 505 F.3d at 994). 

Hunt and Glaski are helpful for another reason: they illustrate the difficulty of 

predicting developments in state law and the peril of disregarding state authority. After Hunt was 

decided, a portion of the Glaski conflict came before the California Supreme Court in Yvanova v. 

New Century Mortgage Corp., 62 Cal. 4th 919 (2016).3

 The Court of Appeal had decided the 

plaintiff in Yvanova lacked standing to pursue a wrongful foreclosure claim based on an allegedly 

void assignment. 226 Cal. App. 4th 495, 502 (2014), rev’d, 62 Cal. 4th 919. It rejected the rule 

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 The Hunt panel acknowledged the pending review in Yvanova, but distinguished that 

case and others. See 593 F. App’x at 731 n.1. 

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of Glaski. Id. The California Supreme Court reversed, after considering Glaski and contrary 

decisions at length, and drawing careful distinctions between void and voidable assignments. See

62 Cal. 4th 929–42. It adopted an adaptation of the Glaski court’s position: “a borrower who has 

suffered a nonjudicial foreclosure does not lack standing to sue for wrongful foreclosure based on 

an allegedly void assignment merely because he or she was in default on the loan and was not a 

party to the challenged assignment,” but clarified that it did not mean “a borrower may attempt to 

preempt a threatened nonjudicial foreclosure by a suit questioning the foreclosing party’s right to 

proceed.” Id. at 924.

Nationstar argues that because no permanent injunction was awarded in 

Monterossa, that court wrongly allowed attorneys’ fees. It points out that section 2924.12(i) 

allows an award of attorneys’ fees “in an action,” not “after a motion.” This argument is far from 

“convincing evidence.” No other court has called the reasoning of Monterossa into question. 

Moreover the Court of Appeal’s reasoning is persuasive. First, “[t]he statute at issue refers to 

‘injunctive relief,’ which plainly incorporates both preliminary and permanent injunctive relief.” 

237 Cal. App. 4th at 753. Second, as a practical matter, “in many cases the best a plaintiff can 

hope to achieve is a preliminary injunction.” Id. at 754. More specifically, when a plaintiff 

shows a violation has likely occurred, the defendant can correct the violation and move to 

dissolve the preliminary injunction. Id. Although the defendant’s compliance essentially moots 

the borrower’s claims, the borrower would nonetheless have obtained the defendant’s 

compliance, and the statute will have served its purpose. Id. And third, the Monterossa court’s 

interpretation matches the law’s larger purpose: ensuring that lenders and borrowers have a fair 

opportunity to explore alternatives to foreclosure. See id. at 755 (citing Cal. Civ. Code 

§ 2923.4(a)).

C. Interpreting Monterossa

Nationstar also argues that because the Monterossa court did not specifically 

consider a temporary restraining order, its decision cannot apply here. Its argument, as noted 

above, turns on distinctions between temporary restraining orders and preliminary injunctions. 

First, it points out that a temporary restraining order, but not a preliminary injunction, may be 

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issued ex parte and without notice. See Mot. Recons. at 7 (citing Cal. Civ. Proc. Code § 527(c); 

California Rules of Court 3.1203(a); and Pac. Decision Sciences Corp. v. Superior Court, 121 

Cal. App. 4th 1100, 1110 (2004)). Second, a temporary restraining order does not require a full 

evidentiary hearing giving each party the opportunity to present arguments and evidence. See id.

(citing Cal. Civ. Proc. Code § 527). Third, a temporary restraining order does not require a 

plaintiff to post bond to protect the interests of the defendant pending final resolution of the case. 

See id. at 7–8 (citing Cal. Civ. Proc. Code § 529). Finally, a temporary restraining order 

terminates automatically when a preliminary injunction is granted or denied. Id. at 8 (citing 

Landmark Holding Grp. v. Superior Court, 193 Cal. App. 3d 525, 529 (1987)). Nationstar also 

describes the distinctions the Federal Rules of Civil Procedure draw between preliminary 

injunctions and temporary restraining orders. See id. Specifically, the Federal Rules separate the 

two remedies into two separate subsections of Rule 65, and notice requirements are less strict 

when it comes to temporary restraining orders. Compare, e.g., Fed. R. Civ. P. 65(a)(1) (“The 

court may issue a preliminary injunction only on notice to the adverse party.”), with, e.g., Fed. R. 

Civ. P. 65(b)(1) (“The court may issue a temporary restraining order without written or oral 

notice to the adverse party or its attorney [in certain circumstances].”). 

Although these distinctions are cognizable, the California legislature did not enact 

them into section 2924.12(i). In any event, just as some policy concerns favor Nationstar’s 

interpretation, others favor Lac’s. Temporary restraining orders may be granted ex parte, but they 

are often obtained in emergency situations at the very beginning of a case, where attorneys’ fees 

are small. Additionally, in federal court, the same legal standard applies to both preliminary 

injunctions and temporary restraining orders. See Stuhlbarg Int’l. Sales Co. v. John D. Brush & 

Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001), overruled on other grounds, Winter v. Nat. Res. Def. 

Council, Inc., 555 U.S. 7 (2008). In both instances the plaintiff must show he “is likely to 

succeed on the merits, . . . likely to suffer irreparable harm in the absence of preliminary 

relief, . . . the balance of equities tips in his favor, and . . . an injunction is in the public interest.” 

Winter, 555 U.S. at 20. 

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It is true the injunctive relief in question in Monterossa was a preliminary 

injunction, but the Court of Appeal’s decision drew more broadly on its interpretation of the 

Homeowner Bill of Rights’ text and its legislative history. 237 Cal. App. 4th at 753–54. The 

legislature’s mission was to expand borrowers’ preforeclosure options and to prevent unfair 

foreclosures. See id. at 752. Section 2924.12 may therefore be interpreted to encourage 

compliance by allowing reasonable attorneys’ fees in actions that promote compliance and 

cooperation between lenders and borrowers. Id. Both section 2924.12 and the Monterossa court 

refer broadly to an “injunction” or “any injunction,” not to “any injunctive relief except for 

temporary injunctions.” Id. at 753. 

In addition, as summarized above, the Monterossa court reasoned that 

homeowners facing foreclosure often have no remedy aside from a short-term injunction. Id.

at 755. Its discussion of a preliminary injunction as “victory” applies just as well to temporary 

restraining orders: like a preliminary injunction that dissolves before the lawsuit’s conclusion, a 

temporary restraining order may allow lenders to fix problems. In many instances, especially 

when timelines are short, a temporary restraining order is akin to a nascent preliminary 

injunction. This case is an example. Before Nationstar moved for reconsideration, the parties 

agreed to a preliminary injunction. ECF No. 24. 

D. Awarding Attorneys’ Fees as a Discretionary Matter 

Finally, Nationstar suggests that because an application for a temporary restraining 

order may be granted ex parte, an award of attorneys’ fees might implicate its federal 

constitutional rights.4

 A reasonable interpretation of section 2924.12(i) allows the court to avoid 

any constitutional problems. Cf. Clark v. Martinez, 543 U.S. 371, 381 (2005) (a statutory 

interpretation that implicates no constitutional questions is preferred over an interpretation that 

creates a conflict). The award of attorneys’ fees under section 2924.12 is discretionary; that 

section uses the verb “may,” not “must” or “shall.” Cal. Civ. Code § 2924.12(i). By permitting 

 4

 Nationstar develops this argument further in its stricken reply brief. See Reply at 9–12. 

Its arguments in that brief, if considered here, would not lead the court to a different conclusion. 

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rather than requiring a court to award attorneys’ fees, section 2924.12 allows courts to avoid 

awards that would be inequitable or unconstitutional. 

The court declines here to reconsider its discretionary decision to award attorneys’ 

fees. The injunction granted in this case encouraged Nationstar’s active involvement. 

IV. CONCLUSION 

Nationstar’s reply brief, ECF No. 82, is STRICKEN. 

The motion for reconsideration, ECF No. 69, is DENIED. 

IT IS SO ORDERED. 

DATED: July 26, 2016. 

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