Case Name: Morin, et al. v. Wells Fargo Bank, N.A., et al.
Case No.: 1-11-CV-212365
Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and U.S. Bank National Association (“US Bank”) (collectively, “Defendants”) move to strike portions of the fifth amended complaint (“5AC”) filed by plaintiffs Lorraine Morin (“Ms. Morin”) and Michael Morin (“Mr. Morin”) (collectively, “Plaintiffs”).
This is an action for wrongful foreclosure. In March 2005, Ms. Morin refinanced her home with Wells Fargo that was secured by a deed of trust (“DOT”) on a property located at 1084 Laurie Avenue, San Jose (the “Property”). (5AC at ¶¶ 12, 15.) In November 2008, Ms. Morin and her husband contacted Wells Fargo about a loan modification and were advised that they would not be considered for one unless they were delinquent on their loan payments. (Id. at ¶ 16.) Relying on these representations, Ms. Morin ceased making mortgage payments so that she could be reviewed for a modification.
Wells Fargo subsequently negligently handled Ms. Morin’s loan modification review for over a year, repeatedly telling her that documents that she had submitted and resubmitted had been misplaced or had expired and occasionally denying her application for reasons that were inaccurate and untrue, including that she had not submitted the proper documentation with her application. (5AC at ¶ 19.) Ms. Morin fell further into arrears due to Wells Fargo’s failure to timely review her application. (Id.)
In November 2009, Ms. Morin was given a forbearance plan for three months until February 2010. (5AC at ¶ 20.) She successfully completed the forbearance plan, but was not given a loan modification. (Id.) Wells Fargo told Ms. Morin that it wanted to wait to see what happened with interest rates before offering her a modification but then continued to move forward with the foreclosure. (Id.) In February 2010, Ms. Morin was told that the Property was set to be sold on March 22, 2010, and that she needed to submit a new modification package in order to stop the sale. (Id.) She complied. (Id.)
Ms. Morin then received an additional forbearance agreement which she complied with. (5AC at ¶¶ 21-23.) She was subsequently offered a permanent loan modification on November 16, 2010; however, she was required to pay a contribution payment of $41,818.03 in order for the terms of the modification to go into effect. (Id. at ¶ 24.) This amount, and an additional $6,895.42 in late fees and recoverable expenses, were the result of the arrearage that had accrued while Wells Fargo negligently handled her modification application. (Id. at ¶ 25.) Ms. Morin was unable to pay these amounts and therefore Wells Fargo continued the foreclosure process. (Id. at ¶¶ 26, 28.)
On July 7, 2014, Plaintiffs filed the 5AC asserting the following causes of action: (1) deceit; (2) negligent misrepresentation; (3) negligence; (4) violation of Business & Professions Code § 17200; (5) set aside foreclosure sale; (6) fraud in the inducement; and (7) declaratory relief.
On July 11, 2014, Defendants filed the instant motion to strike Plaintiffs’ request for attorney’s fees and allegations relating thereto. (Code Civ. Proc., §§ 435 and 436.)
Defendants’ request for judicial notice is GRANTED. (See Evid. Code, § 452, subds. (d) and (h); see also Alfaro v. Committee Housing Imp. System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382; Evans v. Cal. Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549; see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265.)
Plaintiffs’ request for judicial notice is GRANTED. (See Evid. Code, § 452, subds. (d) and (h).)
In arguing that Plaintiffs’ request for attorney’s fees should be stricken, Defendants contend that Plaintiffs’ have failed to plead facts which demonstrate an entitlement to such damages. More specifically, Defendants’ assert that Plaintiffs are not entitled to attorney’s fees pursuant to Civil Code section 1717 or the “tort of another doctrine” as they contend. Defendants’ assertions are well-taken.
As a general matter, parties to litigation must pay their own attorney’s fees, except as provided by statute or agreement, or where such fees are themselves part of the measure of damages. (See Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1257; Code Civ. Proc., § 1021 [“[e]xcept as attorney’s fees are specifically provided for by statute, the measure of and mode of compensation of attorneys … is left to the agreement, express or implied, of the parties …”]; Code Civ. Proc., § 1033.5, subd. (a)(10) [attorney’s fees are “allowable as costs … when authorized by … contract, statute, or law”].)
Plaintiffs first insist that they are entitled to attorney’s fees under Civil Code section 1717. This code provision transforms a unilateral contract provision for attorney’s fees into a reciprocal provision in favor of the prevailing party. However, as Defendants contend, this code section applies only to actions “on a contract” and to fees “which are incurred to enforce that contract.” (Civ. Code, § 1717, subd. (a).) Civil Code section 1717 “does not make a unilateral fee provision reciprocal on tort or other noncontract claims.” (Brown Bark III, LP v. Haver (2013) 219 Cal.App.4th 809, 830.) Here, Plaintiffs assert no contractual claims, i.e., claims based on the Deed of Trust, the contract which contains the subject attorney’s fees provision. Plaintiffs nevertheless insist that the language of the provision is broad, and thus is not limited only to contract causes of action but any claims that might affect Defendants’ interest in the Property. This assertion is unavailing. “[S]ection 1717 does not apply to tort claims; it determines which party, if any, is entitled to attorney[] fees on a contract claim only. [Citations.] As to tort claims, the question of whether to award attorney[] fees turns on the language of the contractual attorney[] fee provision, i.e., … whether the type of claim is within the scope of the provision. [Citation.]” (Id. at 827-828.) “A party may recover attorney fees on a tort claim only if an attorney fee provision broad enough to cover tort claims expressly identifies that party as a party entitled to its benefits.” (Id. at 828.) Here, the subject provision does not do so; its language limits the right to recover attorney’s fees to the lender, not Plaintiffs, and does not authorize Plaintiffs to recover attorney’s fees on any type of claim. (See e.g., Moallem v. Coldwell Bank Com. Group, Inc. (1994) 25 Cal.App.4th 1827, 1830-1832 [because claims at issue were not on contract and fee provision’s language limited right to recover attorney’s fees to defendant, plaintiff could not rely on Civil Code section 1717’s reciprocity principles to make the unilateral fee provision reciprocal on non-contract claims].) Thus, as Plaintiffs’ claims sound in tort rather than contract, they are not entitled to attorney’s fees under Civil Code section 1717 based on the fees provision in the Deed of Trust.
With regard to Plaintiffs’ second claimed basis for attorney’s fees, the “tort of another” doctrine, which is embodied in Code of Civil Procedure section 1021.6, is an exception to the general rule that a party must bear its own attorney’s fees. (See Code Civ. Proc., § 1021; see also Gray v. Don Miller & Assocs., Inc. (1984) 35 Cal.3d 498, 504.) Its genesis lies in Prentice v. North Am. Title Guaranty Corp. (1963) 59 Cal.3d 618, in which the California Supreme Court described the general rule of Code of Civil Procedure section 1021 and then went on to create an exception to this rule:
A person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third party is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.
(Prentice v. North Am, Title Guaranty Corp., supra, 59 Cal.2d at 620.)
Plaintiffs insist that they had to sue US Bank because of wrongful/negligent action of Wells Fargo and therefore are entitled to attorney’s fees under the “third party tort” theory. Plaintiff’s assertion is without merit, as the doctrine is inapplicable to the case at bar because the requisite claim for implied indemnity does not exist. (See Code Civ. Proc., § 1021.6.) US bank is not a “third party” as Plaintiffs contend, but simply another tortfeasor according to the allegations of the 5AC. The Prentice rule was “not intended to apply to one of several joint tortfeasors in order to justify additional attorney fee damage.” (Id. at 57.)
Accordingly, based on the foregoing analysis and the absence of any other contractual or statutory basis for the recovery of attorney’s fees, the 5AC fails to demonstrate an entitlement to such fees. Therefore, Defendants’ motion to strike Plaintiffs’ request for attorney’s fees and allegations relating thereto is GRANTED WITHOUT LEAVE TO AMEND.
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