Trevino v. U.S. Bank Trust, N.A. (In re Trevino)
| Decision Date | 09 February 2023 |
| Docket Number | CASE NO: 10-70594,ADVERSARY NO. 13-7031 |
| Parties | IN RE: Jose Sr. TREVINO and Teresa Trevino, Debtors. Teresa Trevino and Jose Sr. Trevino, Plaintiffs, v. U.S. Bank Trust, N.A. and Caliber Home Loans, Inc., Defendants. |
| Court | United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Texas |
Theodore O. Bartholow, Karen L. Kellett, Caitlyn Nicole Wells, Kellett & Bartholow PLLC, Dallas, TX, Catherine Stone Curtis, Pulman, Cappuccio & Pullen, LLP, McAllen, TX, for Plaintiffs.
Zachery Z. Annable, Melissa S Hayward, Hayward & Associates PLLC, Dallas, TX, Michael Peter Parmerlee, Golden Operating Corporation, Richardson, TX, Julian Preston Vasek, Munsch Hardt Kopf & Harr P.C., Dallas, TX, for Defendants.
Eduardo V. Rodriguez, Chief United States Bankruptcy Judge "A request for attorney's fees should not result in a second major litigation."1 Nevertheless, U.S. Bank Trust, N.A., as trustee for LSF8 Master Participation Trust and Caliber Home Loans, Inc. has objected to the request of Jose Trevino and Teresa Trevino's counsel, Kellett & Bartholow PLLC and Stone Curtis, PLLC's, for a combined total of $798,686 in attorneys’ fees and $75,382.29 in expenses for a grand total of $874,068.29 stemming from extended litigation in a case that has been pending in this Court since 2013. The Court conducted a four-day trial commencing on September 19, 2022, and concluding on September 22, 2022. For the reasons stated herein, this Court finds that of the $763,846.50 in attorneys’ fees and $72,229.12 in expenses requested by Kellett & Bartholow, PLLC, only $230,448.20 in attorneys’ fees and $44,447.04 in expenses are reasonable and necessary and thus awarded to Kellett & Bartholow PLLC. Further, this Court finds that of the $34,839.50 in attorneys’ fees and $3,153.17 in expenses requested by Stone Curtis, PLLC, only $6,967.91 in fees and $2,454.17 in expenses are necessary and reasonable and thus awarded to Stone Curtis, PLLC.
This Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure ("Rule ") 52, which is made applicable to adversary proceedings pursuant to Federal Rule of Bankruptcy Procedure ("Bankruptcy Rule ") 7052. To the extent that any finding of fact constitutes a conclusion of law, it is adopted as such. To the extent that any conclusion of law constitutes a finding of fact, it is adopted as such. This Court made certain oral findings and conclusions on the record. This Memorandum Opinion supplements those findings and conclusions. If there is an inconsistency, this Memorandum Opinion controls.2
For the purposes of this Memorandum Opinion and, to the extent not inconsistent herewith, this Court adopts and incorporates by reference each of the Background Facts in this Court's June 19, 2015, January 12, 2017, January 31, 2020, December 21, 2020, and September 10, 2021, Memorandum Opinions.3
In late 2013, Jose Trevino and Teresa Trevino ("Plaintiffs ") filed suit against HSBC Mortgage Services, Inc. ("HSBC "), U.S. Bank Trust, N.A., as trustee for LSF8 Master Participation Trust ("USBT ") and Caliber Home Loans, Inc. ("Caliber ").4 In 2016, Plaintiffs settled with HSBC5 and HSBC was dismissed from the case,6 but litigation against USBT and Caliber ("Defendants ") continued. Finally, on August 7, 2019, a trial commenced7 and ultimately concluded on October 1, 2019.8
On January 31, 2020, the Court issued a memorandum opinion ("Trial Opinion ")9 and judgment ("Trial Judgment "), denying Plaintiffs relief on numerous causes of action and denying Plaintiffs’ claims for actual damages.10 The Court concluded, however, that Defendants violated the Fair Debt Collection Practices Act ("FDCPA ") and committed an abuse of process by not withdrawing the 3002.1 Notice during the period of time when Defendants owned Plaintiffs’ Loan. As a result, the Court found Defendants liable to Plaintiffs for $1,000 in statutory damages under the FDCPA and $9,000 in punitive damages.11 The Court further deemed Defendants liable for Plaintiffs’ reasonable and necessary attorneys’ fees and expenses pursuant to 11 U.S.C. § 105(a) and 15 U.S.C. § 1692k(a)(3), in an amount to be determined following further proceedings.12
The litigation didn't end there, however. On May 15, 2020, Kellett & Bartholow PLLC ("KB Firm ") and Stone Curtis, PLLC ("Stone Curtis " and together with KB Firm, "Applicants ") filed their "Application of Plaintiffs’ Counsel for Allowance of Compensation and Reimbursement of Expenses" ("Fee Application "), seeking, collectively, $676,576.50 in attorneys’ fees and $67,121.59 in expenses, for a grand total of $743,698.09.13 On August 14, 2020, Defendants objected to the Fee Application ("Fee Objection ") in its entirety.14 On March 19, 2021, Defendants filed their, "Motion for Summary Judgment as to Application of Plaintiffs’ Counsel for Allowance of Compensation and Reimbursement of Expenses" ("Motion for Summary Judgment ").15 Plaintiffs filed a response on April 16, 2021 ("MSJ Response ").16 Defendants filed their reply on April 23, 2021.17 Plaintiffs filed a sur-reply on April 30, 2021 ("Sur-Reply ").18 Plaintiffs’ Sur-Reply sought entry of summary judgment in their favor on limited matters.19
On September 10, 2021, this Court issued its Memorandum Opinion and Judgment resolving the Motion for Summary Judgment and notified Plaintiffs and Defendants that it intended to grant summary judgment in part, in favor of Plaintiffs pursuant to Plaintiffs’ Sur-Reply.20 On October 21, 2021, this Court entered a Judgment resolving Plaintiffs’ Sur-Reply.21 In the interim, on September 24, 2021, Plaintiffs filed their "Plaintiffs’ Limited Motion to Reconsider Opinion and Judgment at Docket Nos. 445 and 446" ("Limited Motion to Reconsider ").22 After reviewing the Limited Motion to Reconsider, this Court entered an Amended Judgment on October 22, 2021.23
On January 10, 2022, Plaintiffs filed their "Supplemental Application of Plaintiffs’ Counsel for Allowance of Compensation and Reimbursement of Expenses," ("Supplemental Fee Application "), seeking reimbursement of $122,109.50 in attorneys’ fees and $8,260.70 in expenses accumulated defending the Fee Application against Defendants’ Objection.24 On February 7, 2022, Defendants filed "The Caliber Parties’ Objection to the Supplemental Application of Plaintiffs’ Counsel for Allowance of Compensation and Reimbursement of Expenses" ("Supplemental Fee Objection ").25 In total, KB Firm seeks $641,737.00 in fees and $63,968.42 in expenses from the Fee Application and $122,109.50 in fees and $8,260.70 in expenses from the Supplemental Fee Application for a total award sought of $836,075.62. Stone Curtis seeks $34,839.50 in fees and $3,153.17 in expenses from the Fee Application for a total award sought of $38,037.67. Together, Applicants seek a total award of $874,068.29 in fees and expenses.
On September 19, 2022, this Court conducted a four day trial on the Fee Application and the Supplemental Fee Application concluding on September 22, 2022. After the trial concluded, the Court ordered Applicants and Defendants to submit post-trial briefing, to be filed no later than December 6, 2022, on why various requested fees should or should not be awarded in light of the evidence presented at trial.26 On December 5, 2022 the Court granted "Defendant's Unopposed Motion for an Extension of Time to File Post-Trial Briefs" extending the deadline to file the post-trial briefs to December 13, 2022.27 On December 13, 2022 Applicants timely filed their "Plaintiffs’ Post-Trial Brief in Support of Their Counsel's Application and Supplemental Application for Allowance of Compensation and Reimbursement of Expenses"28 ("Applicant's Post-Trial Brief ") and Defendants timely filed their "The Caliber Parties’ Post-Trial Brief"29 ("Defendant's Post-Trial Brief "). The matter is now concluded and ripe for determination.
It is the Court's duty to assess and weigh the credibility of witnesses.30 At the September 19-22, 2022, trial, the Court heard testimony from six witnesses: (1) Ellen Stone, (2) Caitlyn Wells, (3) Karen Kellett, (4) Marcos Oliva, (5) Abelardo Limon, and (6) Catherine Curtis. After observing the witnesses and listening to their testimony, the Court makes the following observations regarding the credibility of the witnesses, as set forth below.
Ellen Stone served as counsel to Plaintiffs in their underlying bankruptcy. At trial, Ellen Stone responded to questions clearly, completely, and directly.31 Thus, the Court finds that she is a very credible witness and gives substantial weight to her testimony.
Caitlyn Wells is an attorney for the KB Firm and has worked on the present Adversary Case on behalf of Plaintiffs. At trial, Caitlyn Wells responded to questions clearly, completely, and directly.32 Thus, the Court finds that she is a very credible witness and gives substantial weight to her testimony.
Karen Kellett is a partner at the KB Firm and has worked on the present Adversary Case on behalf of Plaintiffs. At trial, Karen Kellett responded to questions clearly, completely, and directly.33 Thus, the Court finds that she is a very credible witness and gives substantial weight to her testimony.
Marcos Oliva is consumer bankruptcy attorney in the Rio Grande Valley. At trial, Marcos Oliva responded to questions clearly, completely, and directly.34 Thus, the Court finds that he is a very credible witness and gives substantial weight to his testimony.
Abelardo Limon is consumer bankruptcy attorney in the Rio Grande Valley. At trial, Abelardo Limon responded to questions clearly, completely, and directly.35 Thus, the Court finds that he is a very credible witness and gives substantial weight to his testimony.
Catherine Curtis served as bankruptcy counsel for the Plaintiffs in the underlying bankruptcy...
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