Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02340/USCOURTS-caed-2_09-cv-02340-3/pdf.json

Parties Involved:
ETS Services, LLC
Defendant
Patricia Lopez
Plaintiff
Danny Maestre
Defendant
Maestre Home Loans
Defendant
Wachovia Mortgage
Defendant
World Savings Bank, FSB
Defendant

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

PATRICIA LOPEZ, 

 Plaintiff,

v.

WACHOVIA MORTGAGE; WORLD 

SAVINGS BANK FSB; ETS SERVICES, 

LLC; MAESTRE HOME LOANS; DANNY 

MAESTRE; AND DOES 1-20 

inclusive, 

 Defendant.

______________________________/

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2:09-CV-02340-JAM-KJN

ORDER GRANTING DEFENDANT‟S

MOTION FOR AWARD OF ATTORNEYS‟ 

FEES

This matter comes before the Court on Defendant Wachovia 

Mortgage, FSB‟s (“Defendant‟s”) Motion for Award of Attorneys‟ 

Fees (Doc. No. 36) from Plaintiff Patricia Lopez (Plaintiff). 

The motion for attorneys‟ fees is brought pursuant to California

Code of Civil Procedure (CCP) Section 1033.5(a)(10)(A) which

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permits recovery of attorney fees as costs when authorized by 

contract. Plaintiff opposes the motion.1

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff began her lawsuit against Defendant by filing a 

Complaint in this Court on August 21, 2009. (Doc. No. 1). 

Defendant thereafter brought a Motion to Dismiss the Complaint. 

(Doc. No. 9). Before the motion could be heard, Plaintiff filed 

a First Amended Complaint (“FAC”) (Doc. No. 14), which was 

substantially identical to the original Complaint. The filing of 

the FAC caused Defendant‟s motion to be vacated. Accordingly, 

Defendant then brought a Motion to Dismiss the FAC. (Doc. No. 

16). Plaintiff did not file either an opposition to the motion, 

or a statement of non-opposition, in violation of the Local 

Rules. The Court granted Defendant‟s unopposed motion to 

dismiss. The Court also held a show cause hearing, at which 

Plaintiff‟s counsel was sanctioned for failing to comply with 

the local rules, and ordered to inform her client and her 

contractor of the Court‟s sanctions. 

On February 18, 2010 this Court entered judgment dismissing 

Wachovia Mortgage, FSB, formerly known as World Savings Bank, 

FSB, with prejudice pursuant to FRCP 12(b)(6). (Doc. No. 31). 

The judgment states that FSB shall be entitled to their costs, 

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L. R. 23(g).

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including attorneys‟ fees, in a sum according to a motion for 

such fees and costs.

On March 1, 2010 Plaintiff filed a Notice of Voluntary 

Dismissal pursuant to FRCP 41(a)(1)(I) as to the remaining 

Defendants. (Doc. No. 32). On April 5, 2010 Plaintiff re-filed 

this matter against Defendant, Wachovia, et al., in Sacramento 

County Superior Court, Case No. 34-2010-00074531.

Defendant filed this motion on March 15, 2010 arguing: (1) 

attorneys‟ fees are recoverable under the Promissory Note 

(“Note”) and Deed of Trust (“DOT”); (2) the fee clauses are 

applicable to, and encompass, Plaintiff‟s claims; and (3) 

Defendant‟s attorneys‟ fees are reasonable. 

Plaintiff opposes this motion (Doc. No. 38), arguing: (1) 

Defendant‟s motion is untimely and barred under FRCP 54(d)(2); 

and (2) Defendant is not a “prevailing party” for the purposes 

of California Civil Code (CCC) section 1717. Plaintiff also 

contends that Defendant has failed to substantiate its fee 

requests. However, Plaintiff does not bring any specific 

substantive challenges to Defendant‟s request, nor does she 

support her general allegations. For the reasons set forth 

below, Defendant‟s motion for attorneys‟ fees is GRANTED.

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II. OPINION

A. Legal Standard

“In an action where a federal district court exercises 

subject matter jurisdiction over a state law claim, so long as 

state law does not contradict a valid federal statute, state law 

denying the right to attorney‟s fees or giving a right thereto . 

. . should be followed.” Avery v. Management, 568 F.3d 1018, 

1023 (9th Cir. 2009)(citing MRO Communications, Inc. v. AT&T 

Co., 197 F.3d 1276, 1281 (9th Cir. 1999) (holding state law 

controls entitlement to attorney‟s fees if the district court 

exercises subject matter jurisdiction over a state law claim)). 

This Court exercised subject matter jurisdiction in dismissing 

all of Plaintiff‟s claims. Therefore, California law supplies 

the rules of decision in this matter.

Moreover, “[s]tate law controls both the award and the 

reasonableness of fees awarded where state law supplies the rule 

of decision. California Code of Civil Procedure section 

1033.5(a)(1) permits recovery of attorney fees when authorized 

by contract. . . . California Civil Code section 1717(a) 

addresses recovery of attorney fees in contract actions and 

provides: 

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 

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

the party who is determined to be the party prevailing on 

the contract . . . shall be entitled to reasonable 

attorney‟s fees in addition to other costs.” Whittle v. 

Wells Fargo Bank, 2009 WL 1854110, at **3-4 (E.D. Cal. May 6, 

2010) (internal citations omitted).

“To be a prevailing party, the party must have received an 

enforceable judgment on the merits or a court-ordered consent 

decree.” U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009) 

(citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of 

Health & Human Res., 532 U.S. 598, 604 (2001) (“[E]nforceable 

judgments on the merits and court-ordered consent decrees create 

the „material alteration of the legal relationship of the 

parties' necessary to permit an award of attorney's fees.”)). An 

involuntary dismissal, “except one for lack of jurisdiction, 

improper venue, or failure to join a party under Rule 19--

operates as an adjudication on the merits.” Fed. R. Civ. P. 

(“FRCP”) 41. 

A dismissal with prejudice materially alters the legal 

relationship of the parties because the defendant does not 

remain subject to the risk that the Plaintiff will re-file. See

U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009) (concluding 

that Defendants did not prevail because Plaintiff‟s claims were 

dismissed without prejudice and thus Defendants were still 

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subject to the risk of re-filing). See also Avery v. First 

Resolution Management Corp., 568 F.3d 1018, 1024 (9th Cir. 

2009). This Court entered judgment dismissing with prejudice all 

claims against Defendant for failure to state a claim, not for 

lack of subject matter jurisdiction. Thus, Defendant received an

enforceable judgment on the merits which materially altered the 

legal rights of the parties. Accordingly, the Court finds that 

Defendant is the prevailing party and is entitled to attorneys‟ 

fees. 

This Court‟s Local Rule 293(a) provides that “motions for 

awards of attorneys‟ fees to prevailing parties pursuant to 

statute shall be filed not later than twenty-eight (28) days 

after entry of final judgment.” (E.D. Cal. L.R. 293(a)). “These 

Rules govern all actions in the United States District Court for 

the Eastern District of California. . . .” (E.D. Cal. L.R. 

102(a)). Thus, the applicable filing deadline is twenty-eight 

(28) days after entry of judgment. 

The final judgment in this matter was entered on February 

18, 2010. This motion was filed on March 15, 2010, the twentyfifth day after entry of judgment. Therefore, the Court finds

that this motion was timely. 

Lastly, the Court takes judicial notice of the contracts 

that provide for attorneys‟ fees and costs (the DOT and the 

Note), as requested.

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B. Scope of Attorneys‟ Fees Provisions

Defendant argues that both the Note and the DOT authorize 

the recovery of attorneys‟ fees. The Note provides at paragraph 

7(E): 

“The Lender will have the right to be paid back by me 

for all 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 costs.”

The DOT provides at Covenants paragraph 7: 

“If: (A) I do not keep my promises and agreements made 

in this Security Instrument, or (B) someone, including 

me, begins a legal proceeding that may significantly 

affect Lender‟s rights in the Property (including but 

not limited to any manner of legal proceeding in 

bankruptcy, in probate, for condemnation or to enforce 

laws or regulations), then Lender may do and pay for 

whatever it deems reasonable or appropriate to protect 

the Lender‟s rights in the Property.

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Lender‟s actions may include, without limitation, 

appearing in court, paying reasonable attorneys‟ fees

. . . 

I will pay to Lender any amounts which Lender advances 

under this Paragraph 7 with interest, at the interest 

rate in effect under the Secured Notes.”

Defendant contends that Plaintiff‟s FAC “significantly” 

affects Defendant‟s interest in the property, given allegations 

seeking injunctive relief to halt foreclosure and collection, 

thereby invoking the DOT‟s attorneys‟ fees provisions. 

Furthermore, throughout the FAC Plaintiff attacks the validity 

and enforceability of the Note. In her opposition, Plaintiff 

complains that the motion fails to allege which fees were within 

the scope of the attorneys‟ fees provisions of the Note and DOT. 

However, Plaintiff fails to identify specific fees that are not 

within the scope of the provisions. 

“Where a cause of action based on the contract providing 

for attorney's fees is joined with other causes of action 

beyond the contract, the prevailing party may recover 

attorney's fees under [Cal. Civ. Code § 1717] only as they 

relate to the contract action. However, attorney's fees 

need not be apportioned when incurred for representation on 

an issue common to both a cause of action in which fees are 

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proper and one in which they are not allowed. For example, 

the holder of a note which provides for payment of fees 

incurred to collect the balance due is entitled to fees 

incurred in defending itself against “interrelated” 

allegations of fraud. . . . Moreover, an obligation to pay 

attorney fees incurred in the enforcement of a contract 

„includes attorneys' fees incurred in defending against a 

challenge to the underlying validity of the obligation.”

Whittle v. Wells Fargo Bank, N.A., 2010 WL 1444675, at * 3 

(E.D. Cal. Apr. 12, 2010) (internal citations)). 

All of the claims in the FAC challenge the validity or 

enforceability of the loan, and/or seek rescission of the loan, 

or otherwise significantly affect Defendant‟s rights in the 

property. “Here, the court could reasonably find that 

[Plaintiff‟s] various claims were „inextricably intertwined‟, 

making it impracticable, if not impossible, to separate the 

multitude of conjoined activities into compensable or 

noncompensable time units.” Id. (internal citations and 

quotation marks omitted). Thus, the DOT and Note's attorneys‟

fees provisions encompass the defense of all of Plaintiff‟s 

claims. Accordingly, the Court finds that Defendant is entitled 

to an award of attorneys‟ fees.

C. Reasonableness of Attorneys‟ Fees

Defendant asserts that its $14,464 attorneys‟ fees are 

reasonable. Plaintiff‟s opposition fails to make any supported 

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substantive objections to the reasonableness of Defendant‟s 

attorneys‟ fees. “The matter of reasonableness of attorney's 

fees is within the sound discretion of the trial judge.” Stokus 

v. Marsh, 217 Cal.App.3d 647, 656 (1990).

“In determining what constitutes a reasonable compensation 

for an attorney who has rendered services in connection 

with a legal proceeding, the court may and should consider 

the nature of the litigation, its difficulty, the amount 

involved, the skill required and the skill employed in 

handling the litigation, the attention given, the success 

of the attorney's efforts, his learning, his age, and his 

experience in the particular type of work demanded ...; the 

intricacies and importance of the litigation, the labor and 

necessity for skilled legal training and ability in trying 

the cause, and the time consumed.” (Alford v. Wachovia 

Bank, 2010 WL 1027821, at *3 (E.D. Cal. March 17, 2010)

(internal citations omitted). 

The Court finds that Defendant‟s counsel‟s hourly rates 

($320 and $280) are reasonable but the total time billed on this 

case is excessive. First, the Court will reduce the requested 

amount by $560 since Defendant included two (2) hours for a 

hearing on this motion which did not occur. Second, the Court

finds that 6 hours (rather than 12 hours) is more reasonable 

for the preparation of this motion in light of the fact that 

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Defendant‟s attorneys had previously filed a very similar motion 

to dismiss. Accordingly, the court will further reduce 

Defendant‟s attorneys fee request by $1,680. 

Given Plaintiff‟s apparent financial hardship, and 

Plaintiff‟s attorney‟s inappropriate behavior in this case, the 

Court finds that it would be unjust to order Plaintiff to pay 

Defendants‟ attorney‟s fees. After this Court entered judgment 

dismissing all of Plaintiff‟s claims against Defendant with 

prejudice, Plaintiff‟s attorney re-filed this case in State 

Court. It appears to the Court that Plaintiff‟s attorney is 

merely attempting to delay and needlessly prolong this 

litigation. However, it is inequitable to punish the Plaintiff 

for her attorney‟s wrongdoing. Therefore, the Court orders that 

Plaintiff shall not pay any part of the attorneys‟ fees in 

connection with this motion, directly or indirectly. The fees 

shall be paid by Sharon Lapin, Plaintiff‟s attorney of record, 

under California Code of Civil Procedure § 128.6, on the grounds 

that the filing of the FAC was frivolous and made solely for the 

purposes of delay. See Justo v. Indymac Bancorp, 2010 WL 623715 

at *12 (C.D. Cal. Feb. 19, 2010). Section 128.6 requires notice 

and the opportunity to respond. Accordingly, the court hereby 

gives notice to Sharon Lapin that unless she shows good cause 

for filing the FAC (which was substantially identical to the 

original Complaint and whose dismissal she then did not oppose), 

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she is required to pay Defendants‟ attorney‟s fees awarded 

herein. Within ten (10) days of the date of this Order, Ms. 

Lapin is ordered to either pay Defendants‟ attorney‟s fees of 

$12,224, or submit a statement of good cause explaining why the 

filing of the FAC was not frivolous and not solely for the 

purpose of delay. 

III. ORDER

For the reasons set forth above, the Court GRANTS 

Defendant‟s Motion for Award of Attorneys‟ Fees. Defendant is 

awarded attorneys‟ fees and costs in the amount of $12,224.

Attorney Sharon Lapin is ordered to pay Defendant $12,224 in 

attorneys‟ fees, or submit a statement of good cause for the 

filing of the FAC, within ten (10) days of this Order. 

IT IS SO ORDERED.

DATED: July 29, 2010

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