Consumer Statutes, Prevailing Party: Reversal Of Fees Awarded To Borrowers Who Obtained Temporary Restraining Order Enjoining A Non-Judicial Foreclosure Sale But Submitted Procedurally Defective Fee Request

Remand For Further Proceedings Gives Borrowers A Second Chance At Fees Allowed Under Civ. Code § 2924.12 (h) If They Choose To Bring Properly Noticed Motion

        Section 2924.12 was enacted in 2012, and is commonly known as the Homeowner Bill of Rights. It was intended to address California’s foreclosure crisis and prohibit against “dual tracking” where a lender pursues foreclosure at the same time a borrower seeks a loan modification.

        Here, Plaintiff Borrowers in Hardie v. Nationstar Mortgage LLC, Case No. F075858 (5^th Dist., February 27, 2019) (published) brought an action under section 2924.12 and prevailed in obtaining a temporary restraining order enjoining a non-judicial foreclosure sale on residential property. A few days after filing their complaint, Borrowers filed an ex parte application for a TRO along with an accompanying memorandum of points and authorities that contained a request for attorney’s fees and costs of $3,500.00. In granting the TRO, the trial court stated that it believed the requested attorney’s fees and costs under Civ. Code section 2924.12 was premature – permitted only to a party who obtains a preliminary injunction, not a TRO. However, the form order submitted by Borrowers and signed by the court ordered Defendants to pay attorney’s fees in the amount of $3,500.00.

        In a conflict between a trial court’s oral pronouncement and its written order, the written order is controlling (Brown, Winfield & Canzoneri, Inc. v. Superior Court (2010) 47 Cal.4^th 1233). So, one of three Defendants in this matter appealed the order – arguing that section 2924.12 does not permit an award of attorney’s fees to a borrower who prevails in obtaining a TRO.

        Not true, said the Fifth District – citing the reasoning provided in Monterossa v. Superior Court (2015) 237 Cal.App.4^th 747 (discussed in our June 14, 2015 post). Section 2924.12 “permits a court to award attorney’s fees to a ‘prevailing borrower,’ and deems a borrower to have prevailed if the borrower ‘obtained injunctive relief or was awarded damages pursuant to this section.’” The Monterossa court concluded that the language and purpose of the statutory scheme demonstrate ‘the Legislature intended to authorize an award of attorney fees and costs when a preliminary injunction issues.’ The Fifth District further declared that a TRO is a form of injunctive relief – that the statute does not distinguish between temporary, preliminary, and permanent relief – and, therefore, entitles Borrowers in this matter to attorney’s fees.

        However, the Fifth District did agree with Defendant – that the request for attorney’s fees was procedurally defective in that it was not brought in a properly noticed motion. On that basis, the Fifth District reversed and remanded for further proceedings – noting that the Borrowers may elect to bring a properly noticed motion.