Reasonableness Of Fees, Section 1717: Summary Judgment And Attorney Fees Awarded Against Borrowers Who Defaulted On Commercial Property Loan Affirmed On Appeal

Borrowers Repeatedly Failed To Cite To The Record – Thus Forfeiting Their Arguments – But Awarded Fees Were Nonetheless Reasonable.

            In Polycomp Trust Co. v. Agbede, Case Nos. E070613 and E071376 (4^th Dist., Div. 2 June 15, 2020) (unpublished), borrowers defaulted on their commercial property loan and their four lenders successfully filed an action for judicial foreclosure.  Lenders were also awarded attorney fees, pursuant to Civ. Code § 1717, as the prevailing parties. 

            On appeal, borrowers argued that the trial court erred by granting summary judgment because there were triable issues of material fact relating to the amount owed, whether there was a novation, and whether the borrowers are entitled to antideficiency protection.  They also argued the awarded attorney fees were excessive.

            The 4/2 DCA affirmed – finding borrowers’ arguments to lack merit, with some issues raised for the first time on appeal.  Turning to borrowers’ appeal of the section 1717 attorney fees, the 4/2 DCA found the award reasonable.  Without showing that the travel hours were unreasonable, borrowers argued that fees should not have been awarded for “sitting in traffic” travel time to and from depositions, but offered no explanation as to how an attorney could take or defend a deposition without being there, nor how the attorneys could have avoided traffic on their way.  They also argued against fees awarded for lenders’ attorneys’ time spent settling with borrowers’ codefendants (City of Barstow and County of San Bernardino), but this argument failed as City and County claimed liens on the property and were necessarily named as defendants for the purpose of resolving their claims as part of the judicial foreclosure action.  Finally, borrowers argued against the hourly rates awarded – claiming the trial court relied on the billing rates of “transactional” attorneys.  The 4/2 DCA rejected this argument, concluding the trial court had simply misspoke in its reference to going rates awarded for “transactional” attorneys when it was clearly referring to litigators, and finding borrowers suffered no prejudice as a result.

            Importantly, however, there was a common fatal flaw among all of borrowers’ arguments against the attorneys’ fees award.  While the 4/2 DCA found none of borrowers’ arguments against the fees to have merit, it would not have otherwise mattered because each argument would still have failed due to borrowers’ failure to cite to the record – which thereby forfeited each of the arguments.