Deeds of Trust: Attorney Fees Of $60,337.83 Awarded Pursuant To Deed Of Trust Provision To Prevailing Lender Defendant Reversed On Appeal

Deed Of Trust Provision Authorized Incurred Reasonable Attorney Fees To Become Additional Debt Secured By The Deed Of Trust, Not An Award Of Fees In A Judgment

            In Bidasha v. Novastar, Case No. B290634 (2d Dist., Div. 5 October 26, 2020) (unpublished), plaintiff sued her lender for rescission or cancellation of the deed of trust on her residence after she defaulted on her loan.  After lender successfully defended the action, it sought $95,337.83 in attorney fees – claiming entitlement pursuant to a provision of the subject deed of trust.  The trial court agreed and awarded $60,337.83 after some reduction based on plaintiff’s arguments as to lender’s defense of issues materially affecting its interest in the property.

            On appeal, plaintiff argued that the trial court erred in finding the deed of trust authorized an award of fees as part of the judgment – with the provision relied upon by the lender for an award of fees authorizing only that reasonably incurred attorney fees “. . . shall become additional indebtedness of Borrower secured by this Deed of trust.”

            The 2/5 DCA agreed and reversed – finding both Hart v. Clear Recon Corp. (2018) 27 Cal.App.5^th 322 and Chacker v. JPMorgan Chase Bank, N.A. (2018) 27 Cal.App.5^th 351 governed.  Hart and Chacker answered the question of whether a deed of trust provision stating that attorney fees become additional debt of the borrower authorized the award of attorney fees in a judgment – with each determining that it did not.