2010-00090975-CU-OR

Thomas Witte vs. Wells Fargo Bank NA

Nature of Proceeding: Motion for Attorney Fees

Filed By: Lee, Jane K.

Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) motion for attorney fees is
GRANTED for the total amount of $53,177.50.

Background Facts/Procedure

In 2010, Plaintiff Thomas Witte (“Witte”) commenced this action challenging nonjudicial
foreclosure proceedings. Witte alleged Wells Fargo to be the successor-in-interest to
the original lender and beneficiary under the Deed of Trust. (Compl., ¶ 3, First Am.
Compl. (“FAC”), ¶ 3; Second Am. Compl. (“SAC”), ¶ 2-3.)

In the original complaint, Witte pleaded causes of action against Wells Fargo for deceit
(in funding the loan and commencing the nonjudicial foreclosure process), conspiracy
(to place Witte in a loan on which he was likely to default), negligence (in funding a
loan who terms were misrepresented and which did not conform to traditional
underwriting guidelines), violation of B&P Code § 17200, violation of CC § 2923.5 (for
failing to contact Witte to explore financial options prior to recording a notice of
default), and declaratory/injunctive relief (as to the parties’ rights and duties under the
Note and Deed of Trust).

While the original complaint was operative, Witte moved for and obtained an injunction
against the sale of the property until Wells Fargo and its agents complied with CC §
2923.5. Witte also filed a Notice of Pendency of Action. Wells Fargo moved to strike
portions of the complaint, but Witte filed the FAC before the motion was heard.

At some point before Witte filed the FAC in April 2011, his property was sold at a
trustee’s sale. Witte apparently failed to post the bond needed to give effect to the
preliminary injunction.

In July 2011, the court consolidated this case with Wells Fargo’s related unlawful
detainer action against Witte. The cases were later severed.

Witte’s FAC in the instant case contained all the causes of action against Wells Fargo
that the original complaint did, but it contained a new cause of action for wrongful foreclosure (for failing to comply with CC § 2923.5 and “failing to modify or dissolve the
injunction granted by the court on or about January 3, 2011 enjoining the foreclosure
sale,” FAC, ¶ 108.) In addition, the declaratory relief cause of action encompassed
new allegations that Wells Fargo had failed to comply with the preliminary injunction.
Wells Fargo demurred to the FAC, and the court sustained the demurrer in part with
leave to amend and in part without leave to amend.

The court granted Wells Fargo’s motion to expunge lis pendens.

The SAC contained causes of action against Wells Fargo for deceit (for
misrepresentations and concealments committed in the course of the original loan),
deceit (for commencing and conducting the nonjudicial foreclosure), negligence,
violation of B&P § 17200, and declaratory relief. Wells Fargo moved for judgment on
the pleadings, which the court granted without leave to amend.

The court entered a judgment in Wells Fargo’s favor on November 15, 2013.

Discussion

Wells Fargo Is the Prevailing Party

CC § 1717(b)(1) defines a prevailing party as one who recovered greater relief in the
action. Here, Wells Fargo achieved an unqualified win, since it obtained a judgment
on the pleadings that completely disposed of Witte’s lawsuit. The court thus finds that
Wells Fargo is the prevailing party.

Wells Fargo is entitled to Attorney Fees under CC § 1717 and the Fee-Shifting
Provisions in the Note

Wells Fargo’s current motion for contractual attorney’s fees is based on the provisions
in the Note and Deed of Trust. Wells Fargo relies on the following provisions in the
Note:

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 costs.

(Request for Judicial Notice, Exh. A.)

Witte’s prayers in the Complaint, FAC and SAC all contained requests for judgments
rescinding the Note. Those requests corresponded with Witte’s allegations that the
loan was based on misrepresentations and concealment. Hence, Wells Fargo’s
defense as to those allegations and to the prayers for rescission was an effort to
demonstrate the Note’s validity and thus enforce the Note. (See Siligo v. Castellucci
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(1994) 21 Cal.App.4 873, 878 [citation omitted].) Wells Fargo is entitled to fees
incurred in connection with this effort.

Similarly, through his declaratory relief causes of action, Witte sought a judicial
declaration that the Note was invalid and that Wells Fargo had no right to pursue
remedies under the Note. Wells Fargo thus undertook to defend and enforce its rights
under the Note. Wells Fargo is entitled to its reasonable fees associated with this aspect of its defense as well.

The court need not decide whether Witte’s other causes of action independently
required Wells Fargo to enforce the Note. Rather, the court concludes Wells Fargo’s
defense against the other causes of action was directly related to and inextricably
intertwined with its efforts to enforce the Note based on the causes of action cited
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above. (See Abdallah v. United Savings Bank (1996) 43 Cal.App.4 1101, 1111
[citations omitted]; Garbielian v. Hovhannisian (C.D. Cal., Nov. 6, 2013) 2013 U.S.
Dist. LEXIS 184588, at *4-8.)

Because the court concludes that Wells Fargo is entitled to fees under provisions in
the Note, it does not consider the parties’ further dispute whether the Deed of Trust
provides an independent basis for an award of attorney fees.

Wells Fargo’s Fees Were Reasonably Incurred

[T]he fee setting inquiry in California ordinarily begins with the “lodestar,”
i.e., the number of hours reasonably expended multiplied by the
reasonable hourly rate. “California courts have consistently held that a
computation of time spent on a case and the reasonable value of that
time is fundamental to a determination of an appropriate attorneys’ fee
award.” [Citation.] The reasonable hourly rate is that prevailing in the
community for similar work. [Citations.] The lodestar figure may then be
adjusted, based on consideration of factors specific to the case, in order
to fix the fee at the fair market value for the legal services provided.

(PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 [citations omitted; brackets
added].)

[T]he lodestar…may be adjusted by the court based on factors including,
as relevant herein, (1) the novelty and difficulty of the questions involved,
(2) the skill displayed in presenting them, (3) the extent to which the
nature of the litigation precluded other employment by the attorneys, (4)
the contingent nature of the fee award. [Citation.] The purpose of such
adjustment is to fix a fee at the fair market value for the particular action.
In effect, the court determines, retrospectively, whether the litigation
involved a contingent risk or required extraordinary legal skill justifying
augmentation of the unadorned lodestar in order to approximate the fair
market rate for such services.

(Gorman v. Tassajara Develop. Corp. (2009) 178 Cal.App.4th 44, 64 [citations omitted;
brackets and ellipsis added].)

The court finds Wells Fargo’s attorneys’ hourly rates ($200-$365) to be reasonable for
similar work performed in this community. Based on the court’s review of its file, the
Flewelling Declaration (including the attached time records and voluntary reduction in
fees sought), and the legal factors governing adjustments to lodestar amounts, the
court concludes that Wells Fargo is entitled to an award in the amount of $51,437.50
for fees incurred until Wells Fargo brought the instant motion, plus $1,740.00 in fees to
bring the instant motion. The court thus makes a total award of $53,177.50. In making
this award, the court declines to make any upward or downward lodestar adjustment. The court rejects Witte’s arguments raised in the Opposition. First, Witte argues that
the one-action rule bars the instant motion. That rule, however, only prohibited Wells
Fargo from suing to obtain a deficiency judgment after selling the property at trustee’s
sale. (See Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1236.) Absent
citation to an authority holding that the one-action rule bars recovery of attorney fees
associated with defending against a borrower’s action, the court is not persuaded.
(See Sami v. Wells Fargo Bank (N.D. Cal., Aug. 3, 2012) 2012 U.S. Dist. LEXIS
109251, at *12-16 [rejecting Witte’s argument and collecting authorities].)

Finally, Witte argues that the motion must be denied because it is only based on
hearsay evidence. As Wells Fargo points out, its billing records are business records
and therefore fall under a recognized exception to the hearsay rule. In this regard, the
court finds that the Flewelling Declaration contains sufficient foundational facts to
trigger the business records exception. (See Flewelling Decl., ¶ 6; Truong v. Glasser
(2009)181 Cal.App.4th 102, 119 [attorney billing records may be admitted under the
business records exception].) Consequently, the court rejects Witte’s evidentiary
argument.

Wells Fargo’s request for judicial notice is GRANTED.

Conclusion

The motion is granted for the amount of $53,177.50.

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or
further notice is required.