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California 5th Appellate District Reverses an Award of Attorney’s Fees Following Granting of Temporary Restraining Order

Posted By USFN, Wednesday, December 18, 2019



by Kayo Manson-Tompkins, Esq.
The Wolf Firm
USFN Member (CA)

One provision of the California Homeowner Bill of Rights (“HBOR”) awards a borrower attorney’s fees and costs for violating HBOR.  See Civil Code section 2924.12.  If a foreclosure sale has not taken place, a borrower can file an action and seek to enjoin the sale due to a material violation of the HBOR statutes. 

Typically, the borrower will seek a temporary restraining order (“TRO”) and will provide only one day's notice that he/she will be going into court to seek the TRO.  Since there is little prior notice, and/or often counsel is unable to obtain authorization to appear at the TRO hearing, the court grants the TRO.  The court schedules an order to show cause (OSC) hearing for approximately 15 days in the future.  It is at this hearing that the parties have an opportunity to present to the court the arguments and evidence as to whether a preliminary injunction should be granted by the court.

In Lana Hardie v. Nationstar Mortgage LLC (2019), 32 Cal. App. 5th 714, Hardie filed an ex parte application for a TRO and requested fees and costs within the body of the memorandum of points and authorities.  Although there was a discussion during the hearing that the court was only granting a TRO and not awarding fees and costs, the actual form order awarded $3,500.00.  Nationstar Mortgage immediately filed an appeal.

The trial court had a lengthy discussion on whether it was appropriate to grant fees and costs at the TRO stage.  It looked first to the statute itself.  Section 2924.12 states:

 

 “A court may award a prevailing borrower reasonable attorney’s fees and costs in an action brought pursuant to this section.  A borrower shall be deemed to have prevailed for purposes of this subdivision if the borrower obtained injunctive relief or was awarded damages pursuant to this section.”

 

The court stated that the plain meaning of the statute is to award fees and costs to a borrower who obtained “injunctive relief.”  The statute does not distinguish between temporary, preliminary or permanent, so under this plain meaning, the attorney's fees are authorized.  Therefore, section 2924.12 authorizes a court, "in its discretion", to award fees and costs to a prevailing party who obtains a TRO.  However, the appellate court reversed the lower court's ruling, based on a procedural issue as the request for the TRO was not adequately noticed.

The importance of the Hardie decision is to send a clear message that one cannot ignore an ex parte hearing for entry of a TRO.  The risk of an award of attorney fees is very real.  It is important to remember that some orders are issued on a court form which includes fees and costs, regardless of whether it was properly requested.   As a result, irrespective of whether or not the ex parte papers notice a request for fees and costs, steps should always be taken to appear at all TRO hearings.

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December e-Update

 

Tags:  California  California Homeowner Bill of Rights  Lana Hardie v. Nationstar Mortgage LLC 

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