Apportionment And Excessive Fee Challenges Did Not Prevail On Appeal.
In Thompson v. T.D. Service Co., Case No. A148281 (1st Dist., Div. 5 Jan. 31, 2018) (unpublished), a trustee under a deed of trust made a mistaken full credit bid at an initial nonjudicial foreclosure sale even though the mistake was corrected in a second trustee’s sale. Guarantors for borrower and lender reached a settlement, and lender assigned its claims against trustee relating to the mistaken sale to guarantors. Guarantors lost in litigation having both a complaint and cross-complaint, such that the trial judge awarded trustee attorney’s fees of $400,002.50 based on a fee clause in one of the assigned operative documents.
Guarantors appealed, but could not hurdle discretionary apportionment and reasonableness adjudications with respect to requested fees (with just about all of the claimed fees awarded to two different sets of firms after four years of litigation).
The problem on guarantors’ allocation argument was that all activities related to the “mistaken” first trustee sale in the operative proceedings such that the trial judge had to threshold determine whether issues were so intertwined that allocation would be impossible. The lower court decided the issues were interrelated, such that no abuse of discretion was shown.
The main challenge on reasonableness was that a larger firm associated into the case one month before a scheduled trial date and billed as many hours in one year as the prior firm did in five years. That contention did not resonate given the belief that new trial counsel associated in a later stage of the game would be expected to bill a lot of hours to get up to speed. Beyond that, guarantors failed to identify specific billing entries that they claimed to be unreasonable in nature—a particularity standard often enforced by reviewing courts, as here.