Deeds Of Trust, Section 1717: $28,645 In Contractual Fees To Lender Reversed As A Matter Of Law

Reason Is That There Was No True Attorney’s Fees Clause, Just One Where It Was Added As Additional Debt.

            Borrower in Tang v. JPMorgan Chase Bank, N.A., Case Nos. H045898/H046697 (6^th Dist. Dec. 9, 2020) (unpublished) was not happy when he lost challenges to a nonjudicial foreclosure by the lender under a deed of trust and then was hit with contractual attorney’s fees of $28,645 (out of a requested $31,338.18) in favor of lender.

            Although the merits decision against him remained, borrower should be somewhat happier because the attorney’s fees award was reversed as a matter of law on appeal.  The reason why is that the operative deed of trust clause was not a true attorney’s fees provision, given that it only indicated fees would be added to the loan as additional debt.  Under the circumstances, this did not give entitlement to fees as would be case under a classic contractual fees provision.  (Accord, Hart v. Clear Recon Corp., 27 Cal.App.5^th 322, 325-329 (2018), cited by the Tang court in support of its opinion and discussed in our September 19, 2018 post.)