Mortensen v. Mortgage Elec. Registration Sys. Inc.
| Decision Date | 04 May 2011 |
| Parties | ROBERT MORTENSEN, Plaintiff, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., et al., Defendants. BAC HOME LOANS SERVICING, LP, Counterclaim Plaintiff, v. ROBERT MORTENSEN, Counterclaim Defendant. |
| Court | U.S. District Court — Southern District of Alabama |
This matter comes before the Court on defendant / counterclaim plaintiff BAC Home Loans Servicing, LP's Motion for Award of Attorney's Fees and Expenses (doc. 82).1 The Motion has been briefed and is ripe for disposition at this time.
In December 2009, Robert Mortensen (by and through counsel of record) sued BAC Home Loans Servicing, LP ("BAC Servicing"), and four other defendants on well over a dozenstatutory and common-law theories.2 Mortensen's stated basis for bringing these claims was that BAC Servicing and other defendants had failed to provide him with a mortgage loan modification to his liking after he became unable to meet his payment obligations on the existing loan, and then threatened to initiate foreclosure proceedings. Beginning with his Complaint, and at every step thereafter, Mortensen consistently stated that the relief he sought in this action included not only money damages, but also injunctive relief "enjoining any foreclosure sale" of the subject property. In other words, Mortensen expressly sought to use this lawsuit to block BAC Servicing from exercising its contractual remedies arising from his admitted default on the loan.
BAC Servicing responded by bringing counterclaims against Mortensen for, inter alia, breach of contract based on Mortensen's default of the promissory note he had used to obtain funds to purchase the rental property in question. BAC Servicing's position was that Mortensen had executed a note in the principal amount of $110,051, had executed a mortgage on the property to secure repayment, and had subsequently defaulted, thereby entitling BAC Services to foreclose the mortgage and to a money judgment for the owed funds. Mortensen has never disputed that he is, in fact, in default on the subject loan.
This action was fiercely litigated from its inception. Indeed, the docket sheet reflects a contentious discovery period including multiple motions to compel, as well as unsuccessful Rule12(b) and Rule 15 motions by Mortensen. At the close of discovery, the parties filed cross-motions for summary judgment. After briefing, the Court entered a pair of lengthy Orders (docs. 78 and 79) on December 23, 2010. Those rulings denied Mortensen's Motion for Summary Judgment, granted defendants' and BAC Servicing's Motion for Summary Judgment, dismissed all of Mortensen's claims against all defendants, declared that Mortensen is in default under the mortgage and note and that BAC Servicing is entitled to foreclose the mortgage, and awarded BAC Servicing damages of $127,442.44 on its breach of contract and money had and received claims against Mortensen. A corresponding Judgment in BAC Servicing's favor was entered on that date.
More than a month later, on January 29, 2011, Mortensen filed a Motion for Rehearing (doc. 84) seeking reconsideration of the December 23 summary judgment orders and judgment. Via Order (doc. 88) entered on February 9, 2011, the undersigned denied this request on the grounds that Mortensen's Motion was in derogation of well-settled legal standards for reconsideration, that he was repeating (often in verbatim form) arguments the Court had previously considered and rejected, and that he improperly sought to develop previously available facts and legal arguments for the first time via his post-judgment motion.
BAC Servicing now petitions the Court for an award of its expenses and attorney's fees incurred in this action, which it contends Mortensen is contractually obligated to pay pursuant to the terms of the applicable mortgage and promissory note. All told, BAC Servicing seeks to recover $112,821.20 in attorney's fees and $9,651.61 in expenses, for a total fees and expenses award of $122,472.81. Movant has submitted nearly 200 pages of itemized billing records, as well as a detailed Declaration of Alan Warfield ("Warfield Decl.") to document those fees and expenses, and a Declaration of Patrick Sims ("Sims Decl.") as further evidence of the reasonableness of the rates charged and hours accrued by the billing attorneys. (See doc. 85.)
The threshold question, of course, is whether BAC Servicing is entitled to a fee award at all. "Alabama follows the American rule, whereby attorney fees may be recovered if they are provided for by statute or by contract..." Jones v. Regions Bank, 25 So.3d 427, 441 (Ala. 2009) (citations omitted); see also Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala. 1995)(same).3 Here, BAC Servicing maintains that attorney's fees were provided for by the subject contracts, namely, the Mortgage and Note. In this context, the Alabama Supreme Court has explained that "[t]he allowance of attorney's fees as a part of the secured debt is dependent upon the agreement of the contracting parties, within the terms of which the claim for fees must fall." Taylor v. Jones, 276 So.2d 130, 134 (Ala. 1973) (citation omitted). As such, the initial inquiry is whether BAC Servicing's claim for fees falls within the scope of the relevant agreements authorizing recovery of attorney's fees.
BAC Servicing identifies two contractual provisions that it contends bind Mortensen to pay its attorney's fees and expenses. First, the Note executed by Mortensen includes his acknowledgment that if he defaults and the note holder accelerates the debt, (Doc. 66, Exh. 3, § 6(E).) Second, the Mortgage executed by Mortensen specifies that in the event of a default that is not timely cured, (Doc. 66, Exh. 1, § 22.)
These provisions are valid and enforceable. Under Alabama law, "[a] mortgagee... may recover the attorney fees incurred in the enforcement of the mortgage where the mortgage contractually imposes a duty on the mortgagor to pay those fees." Austin Apparel, Inc. v. Bank of Prattville, 872 So.2d 158, 166 (Ala.Civ.App. 2003); see also Lunceford v. Monumental LifeIns. Co., 641 So.2d 244, 247 (Ala. 1994) (); Wells Fargo, N.A. v. Pierre, 2010 WL 1753789, *5 (M.D. Ala. Apr. 13, 2010) (). Thus, the fee-shifting provisions of the Mortgage and Note are both cognizable and enforceable under Alabama law.4
Significantly, Alabama law does not restrict the fees recoverable under contractual fee-shifting provisions to those that a lender incurs in pursuit of direct claims to enforce mortgage and note obligations. Rather, a lender may also recover its attorney's fees incurred in defending against the borrower's claims challenging the validity or enforceability of a mortgage or note. The leading Alabama Supreme Court case on a mortgagee's right to recover attorney's fees for defending against a mortgagor's claims is Taylor v. Jones, 276 So.2d 130 (Ala. 1973). In Taylor, the borrower filed suit seeking a declaration that it owed no indebtedness to the lender under a mortgage, and the lender likewise brought claims against the borrower requesting leave to foreclose. After the lender prevailed, the lender sought recovery of attorney's fees accrued in litigating both the offensive and defensive claims, pursuant to a provision in the note that obligated the borrower "to pay all costs of Collecting or Securing, or attempting to Collect or Secure, this note, including a reasonable attorney's fee." Id. at 133. The Taylor Court affirmed an award of attorney's fees under that provision, even for fees incurred in the lender's defense of the borrower's claims, reasoning as follows: Id.5
Under Taylor and its progeny, then, it is unnecessary to separate BAC Servicing's attorney's fees into those incurred in pursuing its direct claims against Mortensen, on the one hand, and those incurred in defending against Mortensen's claims, on the other. The record shows that Mortensen initiated his myriad claims against BAC Servicing for the express purpose of canceling and invalidating his repayment obligations, as well as BAC Servicing's foreclosure rights, under the Mortgage and Note. As such, BAC Servicing's costs of defending against Mortensen's claims plainly constitute "costs and expenses in enforcing this Note" and "expenses incurred in pursuing the remedies provided" in the Mortgage, such that those expenses (including reasonable attorney's fees) are recoverable under...
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