Judge Blaine K. Bowman, Case Number: 37-2019-00062677-CU-FR-CTL, Date: 2024-05-03 Tentative Ruling

Judge: Blaine K. Bowman, Case: 37-2019-00062677-CU-FR-CTL, Date: 2024-05-03 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 02, 2024

05/03/2024 08:30:00 AM C-74 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited Fraud Motion Hearing (Civil) 37-2019-00062677-CU-FR-CTL KAYE VS JP MORGAN CHASE NATIONAL CORPORATE SERVICES INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

The court addresses the evidentiary issues. Defendant JPMorgan Chase Bank, N.A.'s request for judicial notice is GRANTED. Plaintiff's request for judicial notice is GRANTED. Chase's evidentiary objections are all OVERRULED.

The court then rules as follows. Defendant JPMorgan Chase Bank, N.A.'s motion for attorneys' fees is GRANTED. CC § 1717.

Chase brings this motion pursuant to CC § 1717(a). which provides: (a) 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 either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.

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As In re Tobacco Cases I (2011) 193 Cal.App.4th 1591 explains, []he term 'on a contract' in section 1717 'does not mean only traditional breach of contract causes of action. Rather, 'California courts 'liberally construe 'on a contract' to extend to any action '[a]s long as an action 'involves' a contract and one of the parties would be entitled to recover attorney fees under the contract if that party prevails in its lawsuit....' ' ' ' (Mitchell Land and Improvement Co. v. Ristorante Ferrantelli, Inc. (2007) 158 Cal.App.4th 479, 486, 70 Cal.Rptr.3d 9.) 'Actions for a declaration of rights based upon an agreement are 'on the contract' within the meaning of ... section 1717.' (Texas Commerce Bank v. Garamendi (1994) 28 Cal.App.4th 1234, 1246, 34 Cal.Rptr.2d 155.) In re Tobacco Cases I, 193 Cal.App.4th at 1601.

As pled, Plaintiff's original complaint, First Amended Complaint and Second Amended Complaint all involve the HELOC DOT and/or the Takeout Loan DOT. Plaintiff's original complaint and FAC allege that the HELOC, Modification Agreement and HELOC DOT were forged and also seek a declaration that these instruments are unenforceable [Cplt. ¶¶ 7, 32; FAC ¶¶ 24, 50]. Plaintiff's challenge to the validity and enforceability of the HELOC and related instruments was the basis for each of the causes of action pled in the original complaint and FAC [Cplt. ¶¶ 27-32, 34-40, 43-45, 50-55; FAC ¶¶ 45-50, 52-58, Calendar No.: Event ID: TENTATIVE RULINGS

3100900 12 CASE NUMBER: CASE TITLE: KAYE VS JP MORGAN CHASE NATIONAL CORPORATE SERVICES 37-2019-00062677-CU-FR-CTL 61-63, 68-73]. As a result, Chase was required to defend the validity and enforceability of the HELOC, Modification Agreement and HELOC DOT to protect Chase's lien interest. As set forth by the court in its ruling on Chase's demurrer to Plaintiff's SAC, each of the causes of action pled in the SAC is premised on the terms of Plaintiff's agreements with WaMu, including the HELOC DOT and the Takeout Loan DOT, and, the damages alleged all arise out of Plaintiff's loan agreements with WaMu [SAC ¶¶ 95, 118, 119, 138]. Such allegations support a finding that Plaintiff's original complaint, as well as Plaintiff's FAC and SAC are all based 'on a contract' including the HELOC DOT and Takeout Loan DOT.

The court is not persuaded by Plaintiff's arguments to the contrary. Under the analysis of In re Tobacco Cases I, the absence of a breach of contract cause of action is not dispositive. That Plaintiff was not in default is of no consequence. The critical issue is that, via the original complaint, FAC and SAC Plaintiff sought to avoid enforcement of the HELOC DOT and/or the Takeout Loan DOT and to recover all of the payments made by Plaintiff under these instruments. See, e.g., SAC ¶ 95 ['Plaintiff has been damaged by Defendants in the entire amounts paid on both the ARM takeout loan and the HELOC.']. As Turner v. Schultz (2009) 175 Cal.App.4th 974 explains, [w]here an attorney fee clause provides for an award of fees incurred in enforcing the contract, the prevailing party is entitled to fees for any action 'on the contract,' whether incurred offensively or defensively. (Shadoan v. World Savings & Loan Assn. (1990) 219 Cal.App.3d 97, 107, 268 Cal.Rptr. 207 (Shadoan ); see also IMO Development Corp. v. Dow Corning Corp. (1982) 135 Cal.App.3d 451, 464, 185 Cal.Rptr. 341.) Such fees are properly awarded under section 1717 'to the extent that the action in fact is an action to enforce-or avoid enforcement of-the specific contract.' (Shadoan, supra, 219 Cal.App.3d at p. 108, 268 Cal.Rptr. 207.) An action for declaratory relief can be an action 'on a contract.' (See City and County of San Francisco v. Union Pacific R.R. Co. (1996) 50 Cal.App.4th 987, 999–1000, 58 Cal.Rptr.2d 1; Milman v. Shukhat (1994) 22 Cal.App.4th 538, 545, 27 Cal.Rptr.2d 526.) [Emphasis added.] Turner, 175 Cal.App.4th at 980. Under this analysis, the allegations of Plaintiff's original complaint, FAC and SAC, seeking to negate the terms of the HELOC DOT and Takeout Loan DOT and to obtain a return of payments made by Plaintiff thereunder, are sufficient to establish this action as 'on the contract' for purposes of the award of CC § 1717 attorney's fees.

Plaintiff's argument that this case arises out of Chase's loan servicing failures also fails. Such theory does not avoid the allegations of the original complaint, FAC and SAC seeking to avoid enforcement of the HELOC DOT and Takeout Loan DOT. Plaintiff's reliance on the general statement of the rule that '[a] tort action for fraud arising out of a contract is not, however, an action 'on a contract' within the meaning of' CC § 1717 in Stout v. Turney (1978) 22 Cal.3d 718, 730 and Cussler v. Crusader Entertainment, LLC (2012) 212 Cal.App.4th 356, 366, is of little assistance. Neither case addresses the circumstances presented on this motion. Although Plaintiff also raises arguments with respect to a 'Lease Agreement' Chase does not rely on any 'Lease Agreement' to support its motion for attorney's fees.

The court finds that the terms of the HELOC DOT and Takeout Loan DOT both allow for the award of attorney's fees to Chase as prevailing party in this case. The HELOC DOT provides in relevant part: 9. Fees and Costs. Trustor shall pay Beneficiary's and Trustee's reasonable cost of searching records, other reasonable expenses as allowed by law, and reasonable attorney's fees, in any lawsuit or other proceeding to foreclose this Deed of Trust; in any lawsuit or proceeding which Beneficiary or Trustee prosecutes or defends to protect the lien of this Deed of Trust; and in any other action taken by Beneficiary to collect the Debt, including without limitation any disposition of the Property under the State Uniform Commercial Code; and, any action taken in bankruptcy proceedings as well as any appellate proceedings. [Emphasis added.] [Chase, Request for Judicial Notice, Exhibit 2.] The Takeout Loan DOT provides, in relevant part: Calendar No.: Event ID: TENTATIVE RULINGS

3100900 12 CASE NUMBER: CASE TITLE: KAYE VS JP MORGAN CHASE NATIONAL CORPORATE SERVICES 37-2019-00062677-CU-FR-CTL 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument . . . or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument . . . . Lender's actions can include, but are not limited to . . . (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument. . . . [Emphasis added.] [Chase, Request for Judicial Notice, Exhibit 5.] Via Plaintiff's pleadings, Plaintiff challenged Chase's interest in the properties as lender/beneficiary under the HELOC DOT and Takeout Loan DOT and, as a result, Chase was required to protect its interests in the properties. None of the arguments Plaintiff raises supports a different conclusion.

Plaintiff's argument that Plaintiff's default is required ignores both the terms of the HELOC DOT specifically allowing for recovery of attorney's fees 'in any lawsuit or proceeding which Beneficiary or Trustee prosecutes or defends to protect the lien of this Deed of Trust' and also ignores 'or' in the terms of the Takeout Loan DOT, under which default is only one of three grounds for the recovery of attorney's fees.

On the issue of prevailing party, pursuant to the Judgment entered on August 24, 2022 [ROA 341] the court finds Chase is the prevailing for purposes of the award of CC § 1717 attorney's fees. Plaintiff does not argue to the contrary.

Plaintiff raises issues as to the amount of fees Chase seeks.

PLCM Group v. Drexler (2000) 22 Cal.4th 1084 sets forth the applicable analysis.

[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.' (Margolin v. Regional Planning Com. (1982) 134 Cal.App.3d 999, 1004-1005 [185 Cal.Rptr. 145].) The reasonable hourly rate is that prevailing in the community for similar work. (Id. at p. 1004; Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 1002 [39 Cal.Rptr.2d 506].) 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.

(Serrano v. Priest, supra, 20 Cal.3d at p. 49.) PLCM Group, 22 Cal.4th at 1095. These factors include ' ' the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.' ' PLCM Group, 22 Cal.4th at 1096 citing Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623-624.

The court finds the hourly rates charged by Chase's attorneys reasonable. Based on the evidence and authorities Chase submits, and based on the court's own experience, and absent any argument to the contrary from Plaintiff, the court finds the rates charged are commensurate with counsel's skill and experience and within the range of market rates charged by attorneys of equivalent experience, skill and expertise. PLCM Group, 22 Cal.4th at 1095 ['[t]he reasonable hourly rate is that prevailing in the community for similar work'].

Based on the court's own experience and review of the court file in this matter, the court finds the hours spent, while significant, are reasonable. The court is not persuaded by any of Plaintiff's general arguments for reductions to the hours spent. Plaintiff fails to establish that Chase's fee request is 'unreasonably inflated' such that Chase's motion should be denied outright as allowed for under Serrano. To the extent Plaintiff seeks apportionment, Plaintiff fails to provide any authority to support Calendar No.: Event ID: TENTATIVE RULINGS

3100900 12 CASE NUMBER: CASE TITLE: KAYE VS JP MORGAN CHASE NATIONAL CORPORATE SERVICES 37-2019-00062677-CU-FR-CTL apportionment in this case and also fails to articulate any viable method of apportionment. Plaintiff also fails to establish that the hours spent on Chase's motion for protective order or motion for summary judgment as unreasonable. Plaintiff does not specify any objectionable billing entries associated with these motions. Plaintiff does not identify any objectionable billing entries at all. Plaintiff also argues that this case was 'unnecessarily over-litigated.' While the court finds this case was over-litigated, based on the court's review of the pleadings and filings in this matter, the court finds that Chase is not solely responsible for such circumstances.

Based on the foregoing, the court exercises its discretion in favor of a finding of attorneys' fees of $302,148.80 as reasonable. The court directs the clerk to interlineate the judgment [ROA 335] to reflect the award of CC § 1717 attorneys' fees of $302,148.80 in favor of Defendant JPMorgan Chase Bank, N.A. and against Plaintiff Marc D. Kaye.

If this tentative ruling is confirmed the Minute Order will be the final order of the court and the parties shall not submit any further order on this motion.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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