Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 1 of 19 PageID #: 803
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`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
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`NSEW HOLDINGS LLC
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`v.
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`WELLS FARGO BANK, N.A.
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`§
`§
`§
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`§
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`MEMORANDUM ADOPTING REPORT AND
`RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
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`Came on for consideration the report of the United States Magistrate Judge in this action,
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`Civil Action No. 4:15-CV-828
`(Judge Mazzant/Judge Nowak)
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`this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636.
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`On December 6, 2016, the report of the Magistrate Judge (Dkt. #50) was entered containing
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`proposed findings of fact and recommendations that Defendant Wells Fargo Bank, N.A.’s
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`(“Defendant”) Motion for Final Summary Judgment Against Plaintiff’s Claims and in Support of
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`Its Own Claims (“Motion for Summary Judgment”) (Dkt. #30) be granted. The Magistrate Judge
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`recommended Plaintiff’s claims be dismissed with prejudice, and Defendant be granted summary
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`judgment on its counterclaim. Having received the report of the Magistrate Judge (Dkt. #50),
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`having considered each of Plaintiff’s timely filed objections (Dkt. #54), Defendant’s Response
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`(Dkt. #58), and having conducted a de novo review, the Court is of the opinion that the findings
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`and conclusions of the Magistrate Judge are correct, and the Court hereby adopts the Magistrate
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`Judge’s report (Dkt. #50) as the findings and conclusions of the Court. The Court also considers
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`herein Defendant’s Motion for Entry of Final Judgment (Dkt. #56) and Defendant’s Supplement
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`to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total Amount of Attorney Fees
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`(Dkt. #60).
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 2 of 19 PageID #: 804
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`BACKGROUND
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` This suit arises from the foreclosure of a homeowners’ association lien against a property
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`located at 437 Crest View Point Drive, Lewisville, Texas 75067 (the “Property”). The underlying
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`facts recited in the Report and Recommendation are pertinent and thus are restated herein. Lloyd
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`Payne (the “Borrower”) purchased the Property on or about March 31, 2000; he financed the
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`purchase with a $143,500 purchase-money, first-lien mortgage loan (the “First Loan”) from
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`Provident Home Loans, a Division of Provident Funding Associates, L.P., a California Limited
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`Partnership, secured by a Deed of Trust dated March 31, 2000, and recorded on April 10, 2000.
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`On June 14, 2000, Provident assigned and transferred the First Loan to Norwest Mortgage, Inc.,
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`which later became Wells Fargo Home Mortgage, Inc. (“Wells Fargo Mortgage”).
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`On or about December 14, 2001, Borrower refinanced the Property, obtaining a $144,700
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`second first-lien mortgage loan from Wells Fargo Mortgage (the “Second Loan”), which paid off
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`the Borrower’s indebtedness under the First Loan. The Second Loan Deed of Trust included a
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`Renewal and Extension Rider reflecting that the proceeds of the Second Loan were a renewal and
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`extension of the amounts owing from the First Loan. The Renewal and Extension Rider expressly
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`subrogated Wells Fargo Mortgage “to all the rights, powers, and equities of the original owners
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`and holders of the prior promissory notes (whether such current holder shall assign and transfer its
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`respective liens to the holder hereof or shall release its respective liens upon satisfaction of the
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`indebtedness owing to such holder).” This deed of trust was recorded on December 26, 2001.
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`Defendant Wells Fargo Bank later succeeded Wells Fargo Mortgage by merger.
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`Borrower subsequently entered into a Texas Home Equity Note (Fixed Rate – First Lien)
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`with Defendant. This Note was secured by a Texas Home Equity Security Instrument (First Lien),
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`recorded on February 18, 2010, that expressly stated Defendant “shall be subrogated to any and
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`2
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 3 of 19 PageID #: 805
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`all rights, superior title, liens and equities owned or claimed by any owner or holder of any liens
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`and debts outstanding immediately prior to the execution hereof, regardless of whether said liens
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`or debts are acquired by [Defendant] by assignment or are released by the holder thereof upon
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`payment.” A portion of the proceeds from this Loan, specifically $83,552.89, was used to pay off
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`the remaining balance of the Second Loan.
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`The Property is part of the Vista Ridge Estates Homeowners Association, and the
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`Declaration of Covenants, Conditions and Restrictions for Vista Ridge Estates (the “HOA
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`Declaration”) authorizes Vista Ridge Estates Homeowners Association to charge assessments to
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`their property owners. The HOA Declaration explicitly empowers Vista Ridge Estates
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`Homeowners Association to secure the payment of assessments levied on the Property by lien;
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`however, “such lien shall be specifically made secondary, subordinate and inferior to all liens,
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`present and future, given, granted and created by or at the insistence of the [Borrower] . . . to secure
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`the payment of monies advanced on account of the purchase price and/or the improvement of [the
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`Property].” Vista Ridge Estates Homeowners Association executed a lien on the Property on
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`April 25, 2013 to secure the payment of assessments levied on the Property, and subsequently
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`foreclosed on such interest. On May 5, 2015, the Sheriff of Denton County, Texas conducted a
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`foreclosure sale, at which Plaintiff NSEW Holdings LLC (“Plaintiff”) purchased the Property for
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`$40,100, and the Sheriff’s Deed was recorded on May 7, 2015.
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`The Magistrate Judge entered a report and recommendation on December 6, 2016,
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`recommending Defendant’s Motion for Summary Judgment be granted (Dkt. #52). Specifically,
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`the Magistrate Judge recommended that the Court find as follows: (1) Defendant is entitled to
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`contractual subrogation; (2) Defendant is entitled to equitable subrogation; (3) the HOA
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`Declaration establishes the homeowners’ association’s lien is expressly subordinate to Defendant’s
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`3
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`lien; (4) Defendant is entitled to a declaratory judgment; and (5) Defendant’s lien is valid to the
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`extent the lien is subrogated to the purchase money liens, attorney’s fees, hazard insurance, and
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`real property taxes. Subsequently, on December 20, 2016, Plaintiff filed its objections to the
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`Magistrate Judge’s report and recommendation (Dkt. #54). Also on December 20, 2016,
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`Defendant filed its Motion for Entry of Final Judgment (Dkt. #56). On January 3, 2017, Defendant
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`filed its Response to Plaintiff’s objections to Magistrate Judge’s Recommendation (Dkt. #58). On
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`January 27, 2017, Defendant filed its Supplement to Wells Fargo’s Motion for Entry of Final
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`Judgment to Amend Total Amount of Attorney Fees (Dkt. #60). To date, Plaintiff has failed to
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`file a response to either Defendant’s Motion for Entry of Final Judgment and/or its Supplement.
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`ANALYSIS
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`Under the law, a party who files timely written objections to a magistrate judge’s report
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`and recommendation is entitled to a de novo determination of those findings or recommendations
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`to which the party specifically objects. 28 U.S.C. § 636(b)(1)(c); Fed. R. Civ. P. 72(b)(2)-(3).
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`Plaintiff objects to each of the Magistrate Judge’s findings; specifically, Plaintiff argues that:
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`(1) contractual subrogation does not apply; (2) equitable subrogation does not apply; (3) the HOA
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`Declaration did not subordinate assessment liens to Defendant’s lien; (4) Defendant is entitled to
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`a declaratory judgment; and (5) Defendant is not entitled to recover attorney’s fees or prior escrow
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`advances. The Court now addresses each of Plaintiff’s objections in turn.
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`Objection 1: Contractual Subrogation
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`Plaintiff first objects to the Magistrate Judge’s finding that contractual subrogation applies.
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`Plaintiff argues that the Magistrate Judge conflates contractual subrogation with equitable
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`subrogation and improperly relied on cases analyzing equitable subrogation rather than contractual
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`subrogation—specifically Vogel v. Veneman, 276 F.3d 729, 735 (5th Cir. 2002), and TFHSP LLC
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`4
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 5 of 19 PageID #: 807
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`v. Wells Fargo Bank, N.A., No. 4:12CV554, 2013 WL 12114023, at *1 (E.D. Tex. May 21, 2013).
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`Plaintiff is incorrect. The Fifth Circuit in Vogel specifically held that a chain of financings from
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`one lienholder to another, in which each lender advanced money to extinguish prior amounts
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`owing, and executed a deed of trust on the property at issue, established that the subsequent
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`lienholder was both equitably and contractually subrogated to the previous lienholder’s valid
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`purchase money lien. 276 F.3d at 735 (“The chain of financings from Westside to FSA, in which
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`each lender advanced money to extinguish prior amounts owing, and executed a deed of trust on
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`the property, establish that FSA was both equitably and contractually subrogated to Westside’s
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`valid purchase money lien on the Vogels’ homestead.”). Plaintiff similarly argues that TFHSP
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`LLC “relies on considerations arising out of equitable subrogation, not contractual.” One court in
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`the Eastern District of Texas found in TFHSP LLC that the homeowner’s association assessment
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`lien therein was contractually subrogated to the valid purchase money lien when “the chain of
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`financings from Sebring to Bank of America in which money was advanced to extinguish prior
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`amounts owing, coupled with the assignment from Bank of America to Wells Fargo.” TFHSP
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`LLC, 2013 WL 12114023, at *2. The case law relied upon by the Magistrate Judge, contrary to
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`Plaintiff’s assertion, discusses contractual subrogation.1
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`Moreover, here, as in Vogel, Defendant has proffered competent summary judgment
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`evidence showing a chain of financing from Provident Home Loans to (Norwest Mortgage, Inc.,
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`which later became Wells Fargo Mortgage, and subsequently) Defendant in which money was
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`1 Plaintiff also argues that Leonard v. Brazosport Bank of Tex., 628 S.W.2d 216, 219 (Tex. App.—Houston [14th Dist.]
`1982, writ ref’d n.r.e.) is distinguishable because the plaintiff was in privity with the party seeking contractual
`subrogation. This argument is unavailing because, as the Magistrate Judge properly concluded, “contractual
`subrogation arises out of privity between one lienholder paying off the prior lienholder, thus stepping into the shoes
`of the prior lienholder.” Vogel v. Glickman, 117 F. Supp. 2d 572, 579 (W.D. Tex. 2000) (holding contractual
`subrogation is created by and between successive lenders; thus, “[c]ontractual privity between the borrower and the
`new lender is not required”).
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`5
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`advanced to extinguish prior amounts owing. The Magistrate Judge properly found that Defendant
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`is entitled to contractual subrogation; accordingly, Plaintiff’s first objection is overruled.
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`Objection 2: Equitable Subrogation
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`Plaintiff next objects to the Magistrate Judge’s finding that equitable subrogation applies.
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`Plaintiff argues that the Magistrate Judge did not consider the principles of equity, namely that
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`Plaintiff’s principal, Jeffrey Morser, and his family will suffer pecuniary loss and would be forced
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`to move from their home. Plaintiff further asserts AMC Mortgage Services, Inc. v. Watts, 260
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`S.W.3d 582 (Tex. App.—Dallas 2008, no pet.) applies to the instant case and dictates a different
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`result from that recommended by the Magistrate Judge. Defendant argues, to the contrary, that the
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`equities favor Defendant and allowing Plaintiff to take the Property free and clear of Defendant’s
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`lien despite the fact that Plaintiff conducted an independent title examination of the Property (and
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`thus had actual notice of the lien) would be inequitable and also that Watts is readily
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`distinguishable from the instant case.
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` “Equitable subrogation ‘is a legal fiction’ whereby an obligation, extinguished by a
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`payment made by a third person, is treated as still subsisting for the benefit of this third person, so
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`that by means of it one creditor is substituted to the rights, remedies, and securities of another.”
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`Bank of Am. v. Babu, 340 S.W.3d 917, 925 (Tex. App.—Dallas 2011, no pet.); Premium Plastics
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`v. Seattle Specialty Ins. Servs., Inc., No. CIV.A. H-10-3960, 2012 WL 1029528, at *4 (S.D. Tex.
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`Mar. 26, 2012), aff’d, 544 F. App’x 287 (5th Cir. 2013). The trial court must balance the equities
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`in view of the totality of the circumstances to determine whether a party is entitled to equitable
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`subrogation. Babu, 340 S.W.3d at 926. Factors a court may consider in conducting this balancing
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`test are the negligence of the party claiming subrogation, whether that party had notice of the
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`intervening lien, and whether the intervening lienholder will be prejudiced if equitable subrogation
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`6
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`is allowed. Id. The determination of whether subrogation prejudices intervening interests is made
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`as of the time of the transaction supporting subrogation, and the consequences of subsequent
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`transactions or events are not relevant to this inquiry. Id.
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`Assuming arguendo that the HOA assessment lien in this case was in fact an intervening
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`interest to Defendant’s liens (discussed more fully infra), equity does weigh in favor of allowing
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`Plaintiff to take the Property free and clear. Plaintiff argues—unsupported by case law—that
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`forcing the Plaintiff’s principal and his family to move out of the Property which they use as their
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`homestead would cause prejudice. Courts must however determine whether subrogation
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`prejudices an interest by looking to the time of the transaction; the consequences of subsequent
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`events are not relevant therefore to the Court’s analysis. Id.; see Sonia Vou Books, LLC v. BAC
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`Home Loans Servicing, LP, No. CIV.A. H-11-1809, 2011 WL 3438435, at *3 (S.D. Tex. Aug. 5,
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`2011) (“Texas law clearly provides that a purchaser at a foreclosure sale takes the property subject
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`to any properly filed lien.”). As such, the fact that Plaintiff’s principal and his family now occupy
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`the Property—an event which occurred well after the creation of the HOA assessment lien—is
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`generally not relevant to the Court’s determination of whether subrogation prejudices Plaintiff’s
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`interest. Moreover, Plaintiff conducted an independent examination of the Property, and thus had
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`actual notice of the lien.
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`Plaintiff further argues that the Fifth District Court of Appeals decision in Watts should
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`instruct the Court’s analysis of equitable subrogation in this case. In Watts, Lillie Gonzalez
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`purchased a property in 1996 with two loans, one from Long Beach Mortgage, secured by a deed
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`of trust, and one from the seller, Richard Smith, secured by a deed of trust stating it was subordinate
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`to the Long Beach deed of trust. AMC Mortg. Servs., Inc., 260 S.W.3d at 584. Smith subsequently
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`sold and assigned his note and deed of trust to HSH Corporation. Id. In 1999, Gonzalez refinanced
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`the Long Beach loan with a loan from “Ameriquest,” and Ameriquest filed a release of lien
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`applicable to the Long Beach deed of trust. Id. In September 2000, Gonzalez obtained a home
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`equity extension of credit from Ameriquest. Id. In November 2000, Ameriquest filed a release of
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`lien that specifically identified and released the 1999 deed of trust and stated, “Further, Holder
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`hereby releases the property from all other liens held by Holder.” Id. In October 2003, Gonzalez
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`obtained another home equity extension of credit from Ameriquest. Id. Ameriquest executed and
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`filed of record a release of the 2000 deed of trust in November 2003. Id. Gonzalez then later
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`defaulted on the note to Smith that had been assigned to HSH Corporation. Id. At a May 2005
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`foreclosure sale, HSH Corporation sold the property to the Wattses. Id. In December 2005,
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`Ameriquest foreclosed on the 2003 home equity loan. Id. Ameriquest filed suit to evict the
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`Wattses, and the Wattses sued to quiet title. Id. The court of appeals stated, in part, that the
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`summary judgment evidence showed the Wattses purchased the property with “full knowledge
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`and constructive notice” that the 1999 lien had been released, and nothing showed the 1996 Smith
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`deed of trust did not become the superior lien. Id. at 587. Further, the court stated, “Nothing in
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`the summary judgment evidence shows [the Wattses] were on notice of the claim that equitable
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`subrogation made the November 2003 deed of trust a renewal of the 1999 deed of trust.” Id.
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`Unlike Watts where the Wattses purchased an interest that was created before the 2000
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`home equity extension of credit, here, the interest Plaintiff purchased—the HOA assessment lien—
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`was created subsequent to the creation and recording of each of Defendant’s liens. For example,
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`the Fourth Loan Security Instrument was recorded on February 12, 2010, while the Vista Ridge
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`Estates Homeowners Association’s lien was not executed until April 25, 2013. Plaintiff asserts
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`Defendant’s lien is subsequent in time, but absolutely no evidence exists to support Plaintiff’s
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`assertion. Vista Ridge Estates Homeowners Association’s lien could not be an intervening
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`8
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`lienholder here when it was executed and recorded more than three years in time after the Fourth
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`Loan Security Instrument. In addition, the summary judgment evidence shows an unbroken chain
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`of financing from one lien to the next secured by deeds of trust expressly demonstrating
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`Defendant’s entitlement to subrogation. Further, each of the deeds of trust were properly recorded
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`in the official records of Denton County, Texas, prior to the foreclosure sale at which Plaintiff
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`purchased its interest in the Property. Watts is readily distinguishable. There is no fact issue
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`regarding whether the liens at issue here were recorded prior to the date the assessments became
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`due; Defendant is entitled to equitable subrogation. Vogel, 276 F.3d at 735. Plaintiff’s second
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`objection is overruled.
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`Objection 3: Subordination of Assessment Lien by HOA Declaration
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`Plaintiff also objects to the Magistrate Judge’s finding that the HOA Declaration expressly
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`subordinated the HOA lien to Defendant’s lien. Plaintiff argues that the Magistrate Judge
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`improperly relied upon TFHSP LLC to make such finding and that the HOA Declaration in this
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`case is more narrow than that in TFHSP LLC. In TFHSP LLC, the Court held that a Deed of Trust
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`related to a refinance loan was superior to a homeowners’ association assessment lien when the
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`conditions of the subsequent loans were expressly included in the language of the homeowners’
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`association declaration. Notably, the Magistrate Judge did not apply language from the
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`Declaration of Covenants, Conditions & Restrictions in TFHSP LLC to find subordination in this
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`case, but rather applied the express language from Vista Ridge Estates Homeowners Association’s
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`HOA Declaration, thus the fact that the HOA Declaration may be narrower is not relevant. Indeed,
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`here, the HOA Declaration empowered Vista Ridge Estates Homeowners Association to secure
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`the payment of assessments levied on the Property by lien; however, “such lien shall be specifically
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`made secondary, subordinate and inferior to all liens, present and future, given, granted and created
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`9
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`by or at the insistence of the [Borrower] . . . to secure the payment of monies advanced on account
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`of the purchase price and/or the improvement of [the Property].” Competent summary judgment
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`evidence reflects the proceeds from Defendant’s loans were used to satisfy previous liens securing
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`the loans for the purchase price; Defendant’s lien was granted to secure the payment of monies
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`advanced on account of the purchase price and/or improvement of the Property. Accordingly, the
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`HOA Declaration expressly subordinated the HOA assessment lien to Defendant’s lien.
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`Defendant’s lien is superior. Plaintiff’s third objection is overruled.
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`Objection 4: Defendant’s Counterclaim
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`Plaintiff objects to the Court’s finding that Defendant’s counterclaim should be granted.
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`Plaintiff argues that the Magistrate Judge relied on the erroneous findings regarding Defendant’s
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`entitlement to contractual and equitable subrogation, and that the HOA Declaration expressly
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`subordinated the HOA assessment lien to Defendant’s lien in recommending that Defendant’s
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`counterclaim be granted. Because the Court has already adopted the Magistrate Judge’s findings
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`for each of these issues, the Court agrees that summary judgment should be granted in favor of
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`Defendant on its counterclaim. Plaintiff’s fourth objection is overruled.
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`Objection 5: Extent of Subrogation
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`Plaintiff’s final objection relates to the Magistrate Judge’s determination that Defendant is
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`entitled to recover attorney’s fees and/or prior escrow advances. Plaintiff asserts Defendant is not
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`entitled to recover any attorney fees or prior escrow amounts and asks the Court to deny all fees.
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`Plaintiff again cites Watts in support. Defendant asks by way of its Motion for Entry of Final
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`Judgment (Dkt. #56) and Supplement to Wells Fargo’s Motion for Entry of Final Judgment to
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`Amend Total Amount of Attorney Fees (Dkt. #60) that the Court affirm the recommendation of
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`10
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`the Magistrate Judge and further award additional attorney’s fees accrued following the filing of
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`Defendant’s Motion for Summary Judgment.
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`In support of its position that fees are not warranted, Plaintiff turns again to Watts. In
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`Watts, the Fifth District Court of Appeals reversed the trial court’s award for attorney’s fees in
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`conjunction with a declaratory judgment pursuant to Texas Civil Practice and Remedies Code
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`§ 37.009. 260 S.W.3d at 588. In Texas, attorney’s fees may not be recovered from an opposing
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`party unless such recovery is provided for by statute or by contract between the parties. Id. The
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`court found that a party may not recover attorney’s fees under section 37.009 when the only issues,
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`aside from attorney’s fees, concern clearing title or trespass to try title. However, the Magistrate
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`Judge did not find that Defendant was entitled to its attorney’s fees under section 37.009, but rather
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`that Defendant was entitled to its attorney’s fees under the language of the First Loan Deed of
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`Trust, which permits recovery of attorney’s fees incurred to protect Defendant’s interest in the
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`property or rights under the Deed of Trust. As such, the Court adopts the Magistrate Judge’s
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`recommendation that Defendant is entitled to attorney’s fees.
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`Entry of Final Judgment
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`The Court now turns to Defendant’s request for entry of final judgment and request therein
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`for interest and additional attorney’s fees. Defendant is entitled to any interest that accrues on the
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`money paid to satisfy the balance of the Second Loan and any future escrow advances. See, e.g.,
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`Vogel, 276 F.3d at 736; Chase Home Fin., L.L.C. v. Cal W. Reconveyance Corp., 309 S.W.3d 619,
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`634 (Tex. App.—Houston [14th Dist.] 2010). Defendant is also entitled to its attorney’s fees
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`incurred to protect its interest in the Property. See In re Velazquez, 660 F.3d 893, 899 (5th Cir.
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`2011); see also King v. Wells Fargo Bank, N.A., No. 3-11-CV-0945-M-BD, 2012 WL 3283473, at
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`*1 (N.D. Tex. July 10, 2012), report and recommendation adopted, No. 3-11-CV-0945-M-BD,
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 12 of 19 PageID #: 814
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`2012 WL 3289961 (N.D. Tex. Aug. 13, 2012), aff’d, 533 F. App’x 431 (5th Cir. 2013). The
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`Magistrate Judge found Defendant entitled to $39,350.33 for fees and costs allowed under the
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`Deed of Trust; Defendant, in its Motion for Entry of Final Judgment (Dkt. #56) and Supplement
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`(Dkt. #60) seeks additional attorney’s fees incurred since filing its Motion for Summary Judgment.
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`As an initial matter, Defendant avers in its Supplement to Wells Fargo’s Motion for Entry
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`of Final Judgment to Amend Total Amount of Attorney Fees (Dkt. #60) that “counsel for Wells
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`Fargo has learned that on account of a billing software upgrade, the August 19, 2015 invoice,
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`which Wells Fargo submitted with its motion for summary judgment was rejected (after the motion
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`for summary judgment was filed) and the time entries contained on the August 19, 2016 invoice
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`were billed on subsequent invoices” (Dkt. #60 at 2). “[T]o correct the discrepancies in its prior
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`filings and ensure the Court has accurate information,” Defendant filed its “Supplement to its
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`Motion for Entry of Final Judgment to amend the total amount of attorney fees that should be
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`included in the mortgage indebtedness secured by Wells Fargo’s lien” (Dkt. #60 at 2). That amount
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`is $69,235.69. Plaintiff has not objected or filed any response to these invoices.
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`To reiterate, the Court adopts the Magistrate Judge’s recommendation that Defendant is
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`entitled to attorney’s fees in this case; however, in light of Defendant’s averment that there were
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`discrepancies in its prior filings, the Court uses the affidavit and invoice attached to the Supplement
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`to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total Amount of Attorney Fees
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`to make a de novo determination as to the total amount of reasonable attorney’s fees recoverable
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`under the First Loan Deed of Trust. The Court uses the lodestar method to calculate attorney’s
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`fees. Iglehart v. Wells Fargo Bank, N.A., No. 4:13-CV-131, 2015 WL 5813400, at *2 (E.D. Tex.
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`Sept. 30, 2015) (applying lodestar method to calculate reasonable attorney’s fees under a mortgage
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`contract); see also TFHSP, LLC Series 10147 v. U.S. Bank Nat’l Ass’n, No. 3:14-CV-2589-M-BN,
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`12
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 13 of 19 PageID #: 815
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`2016 WL 2856006, at *4 (N.D. Tex. Apr. 18, 2016) (same), report and recommendation adopted
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`sub nom. TFHSP, LLC v. U.S. Bank Nat’l Ass’n, No. 3:14-CV-2589-M-BN, 2016 WL 2853565
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`(N.D. Tex. May 13, 2016), appeal dismissed (July 20, 2016); Simicek v. Wells Fargo Bank, N.A.,
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`No. CIV.A. H:12-1545, 2013 WL 5425126, at *5 (S.D. Tex. Sept. 26, 2013) (same). The lodestar
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`is calculated by multiplying the number of hours that an attorney reasonably spent on the case by
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`an appropriate hourly rate, which is the market rate in the community for this work. See Smith &
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`Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). The parties seeking
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`reimbursement of attorney’s fees bear the burden of establishing the number of hours expended
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`through the presentation of adequately recorded time records as evidence. See Watkins v. Fordice,
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`7 F.3d 453, 457 (5th Cir. 1993).
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`To determine the amount of reasonable attorney’s fees, the Court must thus review the
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`records and exclude all time that is excessive, duplicative, or inadequately documented. See
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`Hensley v. Eckerhart, 103 S. Ct. 1933, 1939 (1983); Von Clark v. Butler, 916 F.2d 255, 259 (5th
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`Cir. 1990). The hours that survive this vetting process are those reasonably expended on the
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`litigation. See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). The court then must determine
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`a reasonable hourly rate. “Where counsel requests compensation at his normal billing rate and that
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`rate is shown to be within the range of market rates for attorneys of similar skill and experience,
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`the burden is on the opposing party to show that a lower rate should be used.” United States v.
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`Cornerstone Wealth Corp., Inc., No. 3–98–CV–0601–D, 2006 WL 1524592 at *2 (N.D. Tex. Jun.
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`2, 2006), citing Islamic Ctr. of Miss., Inc. v. City of Starkville, 876 F.2d 465, 469 (5th Cir. 1989);
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`see also Watkins, 7 F.3d at 459 (court must articulate reasons for rejecting normal billing rate).
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`Once the Court calculates the “lodestar” fee, the lodestar may be adjusted upward or downward
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`depending on the twelve (12) factors set forth in Johnson v. Georgia Highway Express, Inc., 488
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 14 of 19 PageID #: 816
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`F.2d 714 (5th Cir. 1974). These factors are: (1) the time and labor required for the case; (2) the
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`novelty and difficulty of the issues involved; (3) the skill required to litigate the case; (4) the ability
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`of the attorney to accept other work; (5) the customary fee for similar work in the community; (6)
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`whether the fee is fixed or contingent; (7) time limitations imposed by the client or the
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`circumstances of the case; (8) the amount involved and the results obtained; (9) the experience,
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`reputation, and ability of the attorney; (10) the “undesirability” of the case; (11) the nature and
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`length of the attorney-client relationship; and (12) awards in similar cases. Johnson, 488 F.2d at
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`717-19; see also Shipes v. Trinity Indus., 987 F.2d 311, 319-20 (5th Cir.), cert. denied, 510 U.S.
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`991 (1993). Of these factors, the court should give special heed to the time and labor involved,
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`the customary fee, the amount involved and the result obtained, and the experience, reputation,
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`and ability of counsel. See Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).
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`There is a strong presumption of the reasonableness of the lodestar amount. See Perdue v. Kenny
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`A., 559 U.S. 542, 552 (2010). Because the lodestar is presumed to be reasonable, it should be
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`modified only in exceptional cases. See Watkins, 7 F.3d at 457.
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`Defendant is represented by Locke Lord LLP in this matter. The Court has considered the
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`declaration of Robert Mowrey, a Locke Lord LLP partner, who declares, under penalty of perjury,
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`that he has been licensed in the state of Texas and has practiced in commercial litigation, including
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`consumer finance and mortgage litigation. Mowrey declares that Locke Lord partner Jennifer
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`Kinney Parnell and associates Matthew B. Buongiorno and Matthew K. Hansen regularly assisted
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`him in this matter. Mowrey declares he received limited assistance from partners Jason L. Sanders
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`and Johnathan Collins. Mowrey also received assistance from Locke Lord paralegals and litigation
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`assistance employees M. Barras, A. Wilson, Nelsene Richards, Shelly Sheets, and M. Robbins,
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`and Lee Bernstein. Mowrey’s billing rate is $569.00, Sanders’ rate is $439.00, Collins’ and Kinney
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`Case 4:15-cv-00828-ALM-CAN Document 63 Filed 03/17/17 Page 15 of 19 PageID #: 817
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`Parnell’s rates are $321.00 each, Buongiorno’s and Barras’ rates are $325.00 each, Hansen’s rate
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`is $258.00, Wilson’s rate is $250.00, Richards’, Sheets’, and Robbins’ rates are $180.00 each, and
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`Bernstein’s rate is $150.00. Mowrey declares that “[t]he rates and fees charged for work done by
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`Locke Lord attorneys, paralegals, and litigation assistance employees in this matter are both
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`reasonable and consistent with the rates charged by comparable firms in Texas[,] . . . [and]
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`consistent with the rates charged by Locke Lord in similar matters in which Locke Lord represents
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`Wells Fargo.” Mowrey further avers that the total amount of fees incurred (not including taxable
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`costs, discussed infra) is $69,235.69 and resulted from no duplication of effort.
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`Defendant also submitted Locke Lord’s billing invoices to establish the number of hours
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`that Locke Lord expended in this matter. The invoices show that Locke Lord performed legal
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`work to advance Defendant’s counterclaims and protect Defendant’s interest in the Property.
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`Locke Lord charged U.S. Bank for the following hours expended by the aforementioned attorneys,
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`paralegals, and litigation support employees: Mowrey—10.4; Sanders—2.7; Collins—8.3; Kinney
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`Parnell—21.6; Buongiorno—83.2; Hansen—91.8; Barras—2.8; Wilson—2.5; Richards—3.4;
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`She