Opinion
3:19-cv-00470-HZ
12-28-2022
GARY C. GOSHA, an individual, and KIT M. GOSHA, an individual, and together as husband and wife, Plaintiffs, v. THE BANK OF NEW YORK MELLON CORPORATION FKA THE BANK OF NEW YORK, AS TRUSTEE CWALT 2005-72, a Delaware Corporation; BAYVIEW LOAN SERVICING LLC, a Florida Corporation; CLEAR RECON CORP, a California Corporation, Defendants.
Gary M. Gosha Kit M. Gosha Plaintiffs, Pro Se. Gregor Hensrude Klinedinst PC Attorneys for Defendants Bank of New York Mellon Corporation and Bayview Loan Servicing, LLC. Shannon K. Calt Aldridge Pite LLP Attorneys for Defendant Clear Recon Corporation.
Gary M. Gosha Kit M. Gosha Plaintiffs, Pro Se.
Gregor Hensrude Klinedinst PC Attorneys for Defendants Bank of New York Mellon Corporation and Bayview Loan Servicing, LLC.
Shannon K. Calt Aldridge Pite LLP Attorneys for Defendant Clear Recon Corporation.
OPINION & ORDER
MARCO A. HERNANDEZ United States District Judge.
This matter is before the Court on the Motion of Defendants Bank of New York Mellon (“BONY”) and Bayview Loan Servicing for Attorney Fees and Costs [ECF 103]. For the following reasons the Court grants in part Defendants' Motion and awards BONY and Bayview attorney fees in the amount of $29,333.00 and costs in the amount of $1,577.
BACKGROUND
In October 2005 Plaintiffs obtained a cash-out loan in which they took substantial cash out of their home and modified their mortgage terms. As part of the cash-out loan, Plaintiffs signed and executed an Adjustable Rate Note (“Note”) on October 24, 2005. On October 31, 2005, Plaintiffs signed and executed a Deed of Trust (“Trust Deed”) for the property.
In August 2011 Plaintiffs stopped making payments on their mortgage. Their mortgage servicer subsequently issued several notices detailing the amount outstanding and “threatened foreclosure.” Compl. ¶¶ 29-30.
In 2016 Plaintiffs filed an action to stop the foreclosure proceedings. Gosha v. BONY Mellon, 16-CV-0073-BR (Gosha I). Plaintiffs alleged in that action that the Trust Deed was void and that Defendants committed fraud in attempting to foreclose on the debt. On December 13, 2016, the Court dismissed Gosha I with prejudice. At some point thereafter Defendants voluntarily rescinded their initial non-judicial foreclosure proceedings. Compl. ¶ 18.
On June 14, 2018, the loan servicer, Defendant Bayview invited Plaintiffs to participate in the Oregon Foreclosure Avoidance Program (“OFAP”). Compl. ¶ 25. The OFAP conference ended “with an adverse result for” Plaintiffs, and Bayview was provided with a certificate of compliance that allowed it to pursue nonjudicial foreclosure under Oregon law. Id.
Prior to October 10, 2018, Defendants sent Plaintiffs several notices showing the amounts due and the amounts necessary to reinstate their mortgage. On October 10, 2018, Defendant Clear Recon Corporation (CRC) recorded a second Notice of Default in Washington County, Oregon.
On October 29, 2018, Plaintiffs sent a dispute letter to CRC demanding the foreclosure be rescinded on the basis that the order in which the notices were sent did not comply with Oregon law. Compl. ¶ 47. Shortly thereafter, CRC rescinded the second notice of default and acceleration of the debt. On October 30, 2018, CRC recorded a recission in Washington County.
On December 22, 2018, Plaintiffs were served with a Trustee's Notice of Sale to commence a non-judicial foreclosure. The Notice reflected Plaintiffs' failure to make payments beginning in September of 2011 and a total amount required to reinstate of $247,892.26. Defendants also issued a third Notice of Default, which was recorded in Washington County on December 20, 2018.
On April 1, 2019, Plaintiffs filed a Complaint in this Court in which they sought to enjoin the trustee's sale and asserted several claims for relief. On April 23, 2019, Defendants filed a Motion to Dismiss for failure to state a claim. On October 18, 2019, the Court issued an Opinion and Order in which it granted in part and denied in part Defendants' Motion to Dismiss. Specifically, the Court denied Defendants' Motion as to Plaintiffs' claims for breach of contract against CRC and Bayview, violation of the Oregon Unfair Trade Practices Act against all Defendants, violation of the Real Estate Settlement Procedures Act against Bayview, and violation of the Fair Debt Collection Practices Act against CRC.
On February 28, 2022, Defendants filed Motions for Summary Judgment in which they sought judgment in their favor on all of Plaintiffs' claims.
On August 30, 2022, the Court issued an Opinion and Order in which it granted Defendants' Motions and dismissed Plaintiffs' claims with prejudice. On that same date the Court entered a Judgment in favor of Defendants.
On September 14, 2022, BONY and Bayview filed a Motion for Attorney Fees and Costs pursuant to Federal Rule of Civil Procedure 54(d).
STANDARDS
Federal Rule of Civil Procedure 54(d)(2)(A) provides a “claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages.” “Rule 54(d)(2) creates a procedure but not a right to recover attorneys' fees . . . there must be another source of authority for” an award of attorney fees. MRO Commc'ns, Inc. v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1280-81 (9th Cir. 1999)(quotation omitted).
Oregon Revised Statute § 20.096(1) provides:
In any action or suit in which a claim is made based on a contract that specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements, without regard to whether the prevailing party is the party specified in the contract and without regard to whether the prevailing party is a party to the contract.
“Under that statute, if a contract entitles one contracting party to recover attorney fees upon prevailing in an action to enforce the provisions of the contract, the prevailing party in the action is entitled to attorney fees whether or not that party is the party specified in the contract.” Menasha Forest Prod. Corp. v. Curry Cnty. Title, Inc., 350 Or. 81, 88 (2011).
DISCUSSION
Defendants assert they are entitled to attorney fees on the grounds that they were the prevailing parties and the Trust Deed and Note contain attorney-fee provisions. Plaintiffs concede Defendants are the prevailing parties in this matter, but assert they are not entitled to attorney fees under the circumstances of this case.
I. Trust Deed and Note
The October 31, 2005 Trust Deed provides if the borrower fails “to perform the covenants and agreements” contained in the Trust Deed, Defendants have the right to “do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property” including “appearing in court” and “paying reasonable attorneys' fees.” Hensrude Decl., Ex. B ¶ 9. The Trust Deed further provides the Lender is entitled to “reasonable . . . attorneys' fees” incurred in “pursuit of acceleration or sale.” Id. ¶ 22.
The October 24, 2005 Note provides in relevant part:
If I do not pay the full amount of each monthly payment on the date it is due, I will be in default.
* * *
If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal that has not been paid and all the interest that I owe on that amount.
* * *
If the Note Holder has required me to pay immediately in full as described above, the Note Holder 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. These expenses include, for example, reasonable attorneys' fees.Hensrude Decl. [104], Ex. A ¶ 7(B), (C), (E).
II. Plaintiffs' Arguments
Notwithstanding the provisions for attorney fees in the Trust Deed and Note Plaintiffs assert the Court should deny Defendants' request for attorney fees on the grounds that Defendants have not been financially harmed by Plaintiffs, Defendants should be estopped from claiming fees in this matter, and Defendant is not permitted an award of attorney fees under Section 9 of the Trust Deed.
A. No Harm
Plaintiffs assert the Court should deny Defendants' request for fees because Defendants did not suffer any harm in Gosha I or in this case. Specifically, Plaintiffs note CRC rescinded the notice of default on May 26, 2017, and Defendants voluntarily rescinded the December 2018 foreclosure and returned the preliminary injunction bond. Plaintiffs, however, fail to cite any authority to support their assertion that Defendants must establish they suffered harm in order to obtain attorney fees that are provided for under contract. Rather, as noted, Oregon law requires only that a party show there is a contract that entitles it to recover attorney fees and that it is the prevailing in an action to enforce the provisions of the contract. Menasha, 350 Or. at 88. Here both the Trust Deed and Note contain provisions for attorney fees for the prevailing party and Defendants were the prevailing parties. Accordingly, Defendants have satisfied the requirements for an award of reasonable attorney fees.
B. Estoppel
Plaintiffs assert Defendants should be estopped from requesting an award of attorney fees because they previously declined to assert a claim for attorney fees as a prevailing party in Gosha I.
Estoppel is an equitable doctrine that “‘precludes a person, based on the person's acts, conduct, or silence where there was a duty to speak, from asserting a right that otherwise would have been available.'” Nelson v. Liberty Ins. Corp., 314 Or.App. 350, 359 (2021)(quoting Deardorff v. Farnsworth, 268 Or.App. 844, 849 (2015)). To succeed on a claim for equitable estoppel a party must establish the following elements: (1) a false representation, (2) made with knowledge of the facts, (3) “the other party must have been ignorant of the truth,” (4) the representation was made “with the intention that it should be acted upon by the other party,” and (5) “the other party must have been induced to act upon it.” Nelson, 314 Or.App. at 359 (quotation omitted). A “false representation may be made by silence, as well as by speech . . . but only if a party is silent when it has a duty to speak.” Id. at 359-60 (quotation omitted). “[T]he duty to speak does not arise until the party against whom estoppel is urged knows or should know that the failure to speak will likely mislead the other party to act to his or her detriment.” Id. at 360 (quotation omitted).
Plaintiffs do not establish that in declining to seek an award of attorney fees in Gosha I Defendants made a false representation by silence. In particular, there is no indication that Defendants “had a duty to speak” because neither the Trust Deed nor the Note required Defendants to seek attorney fees when they were the prevailing parties. In addition, Plaintiffs do not indicate how they were “induced to act” on Defendants' decision not to seek attorney fees in Gosha I or point to any evidence that Defendants declined to seek attorney fees with the intention that Plaintiffs would be “induced to act upon” Defendants' decision. Plaintiffs, therefore, fail to establish a claim for equitable estoppel as to Defendants' request for attorney fees.
C. Trust Deed
Plaintiffs assert Defendants' request for attorney fees conflicts with Section 9 of the Trust Deed, which provides “[a]ny amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument.” Hensrude Decl., Ex. B ¶ 9. Plaintiffs note Bayview has represented in at least one other case that Section 9 of “the deed of trust authorizes attorney's fees to be added to the loan amount, but does not provide for a separate award of attorney's fees.” Susu v. Bayview Loan Servicing, LLC, No. C 18-00135 WHA, 2018 WL 6591660, at *2 (N.D. Cal. Dec. 13, 2018). According to Plaintiffs, therefore, Defendants are not entitled to a separate award of attorney fees in this matter.
Defendants assert “nothing within the reasonable interpretation of Section 9 from the Deed of Trust means this Court is prohibited from entering a fee award against Plaintiffs” and the Susu decision is not binding on this Court. Def. Reply at 4. Defendants do not provide any further analysis.
In Susu the court evaluated a request for attorney fees brought pursuant to a Trust Deed with language identical to Section 9 in this matter. The Susu court concluded Section 9 authorized attorney fees to be added to the loan amount, but did not authorize a separate award of fees. Defendants here, however, assert the Court may also award fees pursuant to Section 22 of the Trust Deed, which provides Defendants are entitled to “reasonable . . . attorneys' fees” incurred in “pursuit of acceleration or sale.” Courts in Oregon have held Trust Deed provisions with language identical to Section 22 “clearly allow” for the recovery of attorney fees in pre-sale non-judicial foreclosure cases. See, e.g., U.S. Bank Nat'l Ass'n as Tr. for Greenpoint Mortg. Funding Tr. v. Edwards, No. 3:16-CV-01307-AC, 2019 WL 2331704, at *3 (D. Or. Mar. 14, 2019), report and recommendation adopted as modified on other grounds sub nom. U.S. Bank Nat'l Ass'n as Tr. for Greenpoint Mortg. Funding Tr. Mortg. Pass-Through Certificates v. Edwards, No. 3:16-CV-01307-AC, 2019 WL 2330889 (D. Or. May 31, 2019). This Court agrees that the plain language of Section 22 permits Defendants to recover attorneys fees in this matter.
In summary, Defendants have established that they are entitled to reasonable attorney fees in this matter.
III. Reasonable Attorney Fees
Defendants request $52,966.85 in attorney fees comprised of $30,829.35 for work performed by attorneys Gregor Hensrude, Ian Rambarran, Anthony Soldato, Michael Solomon, and paralegal Cam Picano with the Klinedinst firm and $22,137.50 for work performed by Peter Salmon with the firm of Aldridge Pite.
The Court has an independent duty to review a party's fee petition for reasonableness. See Gates v. Deukmejian, 987 F.2d 1392, 1401 (9th Cir. 1993). Under Oregon law, the lodestar method is commonly applied and is a permissible approach for determining the reasonableness of an attorney fee award. ZRZ Realty Co. v. Beneficial Fire & Cas. Ins. Co., 255 Or.App. 524, 554, clarified on other grounds, 257 Or.App. 180 (2013). The lodestar method multiplies a reasonable hourly rate by the number of hours reasonably expended in the litigation. Strawn v. Farmers Ins. Co. of Oregon, 353 Or. 210, 217 (2013); Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). A court applying Oregon law must consider the factors set forth in Or. Rev. Stat. § 20.075(2), which are comparable to the lodestar approach. Foraker v. USAA Cas. Ins. Co., No. 3:14-cv-00087-SI, 2018 WL 3873575, at *2 (D. Or. Aug. 15, 2018). The court must make sufficient findings regarding the statutory factors to facilitate “efficient and meaningful appellate review for abuse of discretion,” but adequate findings need not be complex or lengthy. Frakes v. Nay, 254 Or.App. 236, 255 (2015) (quoting McCarthy v. Or. Freeze Dry, Inc., 327 Or. 185, 188, 190-91 (1998)).
“The party seeking an award of fees must submit evidence supporting the hours worked and the rates claimed.” Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000)(citing Hensley, 461 U.S. at 433). Fee petitions that lack sufficient supporting materials to permit the court to make a determination of the reasonableness of the hourly rates claimed or of the tasks performed may be totally or partially denied. SeeLyon v. Chase Bank USA, NA., 656 F.3d 877, 892 (9th Cir. 2011); Rolex Watch U.S.A v. Hoffman, 3:12-CV-736-PK, 2013 WL 12321461, at *4 (D. Or. May 29, 2013).
To determine the reasonable hourly rate of an attorney this Court uses the most recent Oregon State Bar Economic Survey published in 2017 as its initial benchmark. Attorneys may argue for higher rates based on inflation, specialty, or any number of other factors.
A. Aldridge Pite Fees
Defendants seek attorney fees of $22,137.50 for work performed by Aldridge Pite, LLP. Defendants, however, do not support this request with any evidence. Hensrude states in his Declaration that he was “informed by Peter Salmon, who was primarily responsible for the litigation, that his firm incurred $22,137.50 in attorney fees for the defense of BONY in this Action.” Hensrude Decl. ¶ 12. Defendants did not provide the Court with any billing records, billing rates, or information about the experience level of counsel who performed work for Aldridge Pite. Defendants, therefore, failed to adequately support their request for these fees. Lyon, 656 F.3d at 892. Accordingly, the Court declines to award Defendants attorney fees of $22,137.50 for work performed by Aldridge Pite.
B. Gregor Hensrude
Defendants request fees for Hensrude of 65.2 hours at $295 and 17.3 hours at $290. Hensrude had 19 years of experience during this action. During the relevant period Hensrude was the managing shareholder of Klinedinst PC. The Oregon State Bar Economic Survey rates for an attorney with comparable years of practice in Portland in 2017 were between $250 and $500 per hour. The Court, therefore, concludes the hourly rates of $290 and $295 sought by Hensrude are reasonable.
In addition, this matter was complicated and involved a temporary restraining order, a motion to dismiss, discovery disputes, a motion for summary judgment, and oral arguments. The Court, therefore, concludes the hours sought by Defendants for Hensrude's time are reasonable.
C. Ian Rambarran
Defendants request fees for Rambarran of .9 hours at $295 and .6 hours at $290. Rambarran had 19 years of experience during this action. Rambarran is a shareholder with Klinedinst and has been a licensed attorney for approximately 19 years. He counsels clients, “litigates in the realm of financial services, and has substantial expertise in the area of mortgage lending litigation.” Hensrude Decl. ¶ 4. The Oregon State Bar Economic Survey rates for an attorney with comparable years of practice in Portland in 2017 were between $250 and $500 per hour. The Court, therefore, concludes the hourly rates of $290 and $295 sought by Rambarran are reasonable.
The 1.5 hours of time requested for Rambarran involve review of this Court's Orders and legal research. The Court, therefore, concludes the 1.5 hours sought by Defendants for Rambarran's time are reasonable.
C. Anthony Soldato
Defendants request fees for Soldato of seven hours at $270 and 10.1 hours at $260. Soldato had over ten years of experience during this action, “including much representation of lenders and loan servicers.” Hensrude Decl. ¶ 5. The Oregon State Bar Economic Survey rates for an attorney with comparable years of practice in Portland in 2017 were between $225 and $410 per hour. The Court, therefore, concludes the hourly rates of $260 and $270 sought for Soldato are reasonable.
The 17.1 hours of time requested for Soldato involve deposition preparation and discovery review. The Court, therefore, concludes the 17.1 hours sought by Defendants for Soldato's time are reasonable.
D. Cam Picano
Defendants request fees for Picano for 1.1 hours for preparation of documents at $115 per hour. Picano is a paralegal who has “maintained a position in the legal community for more than two decades.” Hensrude Decl. ¶ 7.
The Court relies on the National Utilization and Compensation Survey Report published by The Association of Legal Assistants Paralegals (NALA) in 2018 to determine the reasonable hourly billable rate for paralegals. The NALA Survey Report indicates the average hourly billing rate in 2018 was $154 for paralegals in the Far West Region (which includes Oregon) with 25 years of experience. The Court, therefore, concludes the hourly rate of $115 sought for Picano is reasonable as are the 1.1 hours billed by Picano.
E. Other Issues
Hensrude states in his Declaration that Michael Solomon worked on this matter as an associate. The billing records submitted by Defendants, however, do not contain any time billed by Michael Solomon.
In addition, Defendants request $30,829.35 in attorney fees for the Klinedinst firm. The billing records, however, reflect only $29,333.00 in attorneys fees accrued.Defendants, therefore, fail to support $1,496.35 of their requested fees.
See Exhibits 1 and 2 for the Court's calculation of fees.
In summary the Court concludes Defendants have established that $29,333.00 of the requested $52,966.85 attorney fees was supported and reasonably incurred in this matter. Accordingly, the Court awards Defendants attorney fees in the amount of $29,333.00.
IV. Costs
Defendants request costs in the amount of $1,577.50 for court reporter fees.
A. Standards
Federal Rule of Civil Procedure 54(d)(1) provides “[u]nless a federal statute, these rules, or a court order provides otherwise, costs - other than attorney's fees - should be allowed to the prevailing party.” Draper v. Rosario, 836 F.3d 1072, 1087 (9th Cir. 2016). “By its terms, the rule creates a presumption in favor of awarding costs to the prevailing party, but vests in the district court discretion to refuse to award costs.” Ass'n of Mexican-Am. Educ. v. Cal., 231 F.3d 572, 591 (9th Cir. 2000). See also Save Our Valley v. Sound Transit, 335 F.3d 932, 944-45 (9th Cir. 2003).
28 U.S.C. § 1920 allows a federal court to tax specific items as costs against a losing party pursuant to Federal Rule of Civil Procedure 54(d)(1). Section 1920 provides:
A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.
A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree.
The court must limit an award of costs to those defined in 28 U.S.C. § 1920 unless otherwise provided for by statute. Grove v. Wells Fargo Fin. Ca., Inc., 606 F.3d 577, 579-80 (9th Cir. 2010). See also Haagen-Dazs Co., Inc. v. Double Rainbow Gourmet Ice Creams, Inc., 920 F.2d 587, 588 (9th Cir. 1990)(citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987)).
Under Local Rule 54-1, a party seeking costs in this district must provide a “detailed itemization of all claimed costs. The prevailing party must file an affidavit or declaration and appropriate documentation.” LR 54-1(a)(1).
II. Analysis
Defendants request costs in the amount of $1,577.50 for court reporter fees “for the deposition of Plaintiffs.” Hensrude Decl. ¶ 11. Defendants did not include a bill for the court reporter's services. Defendants, however, supported their request with a Declaration and it is undisputed that Defendants took the deposition of Plaintiffs and that Plaintiffs' depositions were “reasonably necessary” for use in the case. ” U.S. v. W. Radio Servs. Co., Inc., 671 Fed.Appx. 460, 462 (9th Cir. 2016). See also Evanow v. M/V Neptune, 163 F.3d 1108, 1118 (9th Cir. 1998) (“Deposition costs are taxable if they are reasonably necessary for trial.”). The Court, therefore, concludes the costs sought by Defendants are allowed under § 1920. Accordingly, the Court awards costs to Defendants in the amount of $1,577.50.
CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART Defendants' Motion [103] for Attorney Fees and Costs and awards attorneys' fees Defendants in the amount of $29,333.00 and costs in the amount of $1,577.
IT IS SO ORDERED.