Deeds of Trust: And Now The Second District, Div. 5, Holds That Deed Of Trust Authorizes Adding Attorney Fees To Loan Amount, Not A Separate Award To Pay Fees

Opinion Reaches Same Conclusion As The Hart Case Did A Day Earlier.

            In an opinion certified for partial publication, the Court of Appeal holds that section 9 of the standard deed of trust authorizes adding attorney fees to the loan amount, not a separate award to pay fees, reversing the trial court. Chacker v. JPMorgan Chase Bank, N.A., et al., B281874 (2/5 9/19/18) (Baker, Moor, Kim).

                        The Court also considered whether the attorney fees provisions could be invoked by California Reconveyance Company and JPMorgan Chase Bank, N.A., despite the fact that the trust deed had been assigned to another financial institution, and whether the Rosenthal Fair Debt Collections Act separately authorized a fee award. Citing Justice Scalia’s observation in another context, the Court explained that “the Chase Defendants ‘must take the bitter with the sweet’”, and thus could not repudiate their position that they stood in the lender’s shoes and acted as the lender’s agents, and had assigned the loan. As to the availability of fees under the Rosenthal Act, the Court held that even though it disagreed with the plaintiff that liability could be had under the statute, “plaintiff responsibly advanced a colorable argument to the contrary.” So no fees to Chase under the Rosenthal Act, “[p]utting aside the issue of whether Chase is a ‘creditor’ under the statute.”

            COMMENT: In Chacker, the Court relies on multiple federal cases, and states that “no published California case has analyzed the import of the trust deed attorney fee provisions at issue here . . . “ Actually, the Second District, Division 8, in the published Hart opinion authored by Justice Rubin, beat the Chacker court to the punch by one day.