Thursday, September 20, 2018
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C.A. Division Overlooks Previous Day’s Decision on Same Issue
Div. Five of This District Holds—as Div. Eight Did on Monday—That Attorney-Fee Award Is Not Authorized by Provision in Deed of Trust That Says Lender’s Attorney Fees Are Added to Debt
By a MetNews Staff Writer
Div. Five of this district’s Court of Appeal yesterday held that where a deed of trust provides that attorney fees incurred by the lender in enforcing obligations are to be tacked onto the debt, this did not provide authority for a judge to award attorney fees as costs in a failed wrongful foreclosure case, echoing a ruling one day earlier by Div. Eight, yet proclaiming the holding to be novel.
Acting Presiding Justice Lamar Baker authored yesterday’s opinion in Chacker v. JPMorgan Chase Bank, N.A., 2018 S.O.S. 4609. Its reasoning parallels that of Div. Eight’s Justice Lawrence Rubin, who wrote Monday’s decision in Hart v. Clear Recon Corp., 2018 S.O.S. 4613.
In each case, a financial institution was sued over a foreclosure and prevailed. Attorney fees were awarded under identical language in deeds of trust providing that the lender’s expenses in protecting its interests, including monies paid to its lawyers, would “become additional debt of Borrower secured by this Security Instrument.”
First California Case
Baker observed that “no published California case has analyzed the import of the trust deed attorney fee provisions at issue here.” Rubin’s opinion was certified for publication, and becomes final a day ahead of Baker’s.
Baker’s resolution of the issue appears in the published portion of an opinion certified for partial publication; it affirms, in part, and reverses, in part, decisions by Los Angeles Superior Court Judge Stephanie Bowick.
Bowick awarded the defendant, JP Morgan Chase Bank, $46,827.40 in attorney fees. The plaintiff, Melody Chacker, who was rebuffed in the trial court and on appeal in seeking to block a foreclosure, argued on remand that the deed of trust did not authorize an award of attorney fees, but Bowick responded:
“Plaintiff cites to no case authority for that proposition.”
Baker’s Retort
Baker yesterday retorted that “the terms of the trust deed itself are all the ‘authority’ that is necessary under the circumstances.”
He proceeded to proclaim that “there is additional persuasive authority,” pointing, as Rubin did, to federal District Court decisions which interpret the language in question as not authorizing an award of fees. The jurist added:
“Insofar as the Chase Defendants would contend even these cases are still insufficient authority, we have one further rejoinder: every legal proposition has at one time or another been without authority; novel questions often arise in the law. Going forward, this opinion will serve as the authority the Chase Defendants believe is lacking.”
Second Provision
Both opinions deal with the language in ¶9 as to the attorney fees expended by the lender becoming an “additional debt of Borrower.” Rubin’s opinion deals only cursorily, in a footnote, with ¶14, which was raised for the first time at oral argument.
That paragraph, in the deeds of trust dealt with in both cases, provides that the lender “may charge Borrower fees for services performed in connection with Borrower’s default, for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys’ fee….”
Baker said:
“The plain text of these two clauses authorizes attorney fees to be added to the loan amount; section 9 does not provide for a separate award of attorney fees….[¶]…There is no language in section 14 that indicates the trust deed permits a freestanding contractual attorney fees award.”
The case was remanded “for the entry of a new order authorizing this amount to be added to the outstanding balance plaintiff owes as the result of her default on the promissory note.”
Saugus attorney Richard L. Antognini represented Chacker and John M. Sorich, Bryant Delgadillo and Mariel Gerlt-Ferraro of the Costa Mesa firm of Parker Ibrahim & Berg were counsel for Chase.
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