Filed 1/5/18 Luca v. Deutsche Bank National Trust Co. CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
|ANDREA E. LUCAS et al.,
Plaintiffs and Appellants,
DEUTSCHE BANK NATIONAL TRUST COMPANY et al.,
Defendants and Respondents.
(Super. Ct. No. 30-2013-00651662)
O P I N I O N
Appeal from a postjudgment order of the Superior Court of Orange County, Deborah C. Servino, Judge. Affirmed.
Wright, Finlay & Zak, Robin P. Wright, and Joan C. Spaeder-Younkin for Defendants and Appellants.
Law Office of Ronald H. Freshman and Ronald H. Freshman for Plaintiffs and Respondents.
* * *
This action arises from an attempted foreclosure of a home. Plaintiffs took out a mortgage on the home. They failed to make the required payments, and foreclosure was scheduled. Prior to the trustee’s sale, plaintiffs sued, asserting a number of causes of action against the various banks and loan servicers involved, mostly premised on the claim that the promissory note and deed of trust were void. The court granted summary judgment in favor of defendants. In a companion appeal, we affirmed the judgment.
The present appeal concerns defendants’ motion for attorney fees. The court denied the motion, concluding neither the note nor the deed of trust authorized an award of fees. We agree and affirm.
In March 2007, plaintiff Barbara Bausch obtained a loan in the amount of $1,080,000 (the Loan). The Loan was secured by a deed of trust encumbering real property in Newport Beach, which was recorded in March 2007 with the Orange County Recorder’s Office. In addition to Barbara, plaintiffs Andrea Lucas and Jack Lucas were named on the deed of trust.
The loan was assigned multiple times, and ultimately securitized. Along the way it was modified once. Ultimately, after a second modification request was denied, Barbara fell behind in payments. In March 2013, a notice of default was recorded. In May 2013 plaintiffs filed the present suit. In July 2013, a notice of trustee’s sale was recorded, setting the initial sale date for July 26, 2013, but the sale was postponed. Andrea and Barbara continued to reside in the property. Plaintiffs did not tender the amounts due under the loan.
The verified second amended complaint asserts causes of action for declaratory relief, violation of Civil Code section 2924.12 et seq., negligent misrepresentation, fraudulent inducement, violation of the Unfair Practices Act (Bus. & Prof. Code, § 17000 et seq.), intentional infliction of emotional distress, and quiet title. These claims were mostly premised on the argument that the original lender did not exist, and thus the promissory note was void and could not be assigned. Alternatively, plaintiffs contended the note and deed of trust were forgeries. The named defendants were Meridian Foreclosure Service, Deutsche Bank National Trust Company, OneWest Bank FSB, Mortgage Electronic Registration Systems, Inc., and Ocwen Loan Servicing, LLC.
Defendants moved for summary judgment. The gist of the argument was that plaintiffs’ losses were due entirely to their overleveraged business failings, that the loan was valid, and that defendants’ loss mitigation efforts had been proper. Defendants also argued plaintiffs were estopped from asserting the invalidity of the Loan based on the language of the loan modification agreement, which affirmed the validity of the Loan. The court granted the motion for summary judgment.
Afterwards, defendants moved for attorney fees. The court denied the motion, finding neither the note nor the deed of trust provided for an award of attorney fees to the prevailing party. Defendants appealed from the order denying their motion for attorney fees.
“On appeal, a determination of the legal basis for an attorney fees award is reviewed de novo as a question of law. [Citation.] [¶] Each party to a lawsuit must pay his or her own attorney fees except where a statute or contract provides otherwise. [Citation.] Where a contract specifically provides for an award of attorney fees, Civil Code section 1717 allows recovery of attorney fees by whichever contracting party prevails, regardless of whether the contract specifies that party.” (Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 966.)
Defendants contend four distinct contract provisions authorize an award of attorney fees in this case. We conclude none of them do.
We separately address each provision below, but they essentially all share the same problem. Civil Code section 1717, subdivision (a), provides: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” (Italics added.) Here, none of the provisions authorize an award of fees to the prevailing party in a lawsuit. Instead, they authorize the lender to collect attorney fees in various circumstances. We interpret these provisions to authorize the lender to charge such fees to the borrower’s account, but not to seek an independent award of attorney fees as a prevailing party.
The first provision defendants rely on is section 9 of the deed of trust. Defendants partially quote that section as follows: “[If] there is a legal proceeding that might significantly affect Lender’s interest in the Property and/or rights under this Security Instrument . . . then Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument” including “paying reasonable attorneys’ fees to protect its interest in the Property and/or rights under this Security Instrument . . . .”
The full quote from that section, however, tells a much different story: “If . . . there is a legal proceeding that might significantly affect Lender’s interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations) . . . then Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender’s actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys’ fees to protect its interest in the Property . . . including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows,” etc. (Italics added.) “Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.” (Italics added.)
This provision does not provide for an award of attorney fees for two reasons. First, the lawsuits it contemplates are third party actions or bankruptcy, that might impact the lender’s security interest in the property. It does not contemplate simple contractual disputes between the parties. Second, even if this lawsuit were to apply, the lender’s express remedy is not a separate award of attorney fees, but instead is to add the fees incurred to the borrower’s account on the note.
The next provision defendants rely on is section 14 of the deed of trust, which provides, “Lender may charge Borrower fees for services performed in connection with Borrower’s default, for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys’ fees, property inspection and valuation fees.” (Italics added.) Our analysis of this section is essentially the same. It does not contemplate simple contractual disputes between the parties, but instead focuses on outside threats to the Lender’s security interest. But even if this provision applied to the current suit, the lender’s remedy is to “charge” the borrower. Nowhere does this section mention an award of fees to a prevailing party in a lawsuit.
The third provision defendants rely on is section 22 of the deed of trust, entitled “Acceleration; Remedies.” That section begins by describing the procedure for declaring the borrower in default, as well as borrower’s rights for curing the default. It goes on: “If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees and costs of title evidence.” Section 22 goes on to describe the procedure for a trustee’s sale, and concludes by describing how the proceeds of the trustee’s sale are to be distributed: “(a) to all expenses of sale, including, but not limited to reasonable Trustee’s and attorneys’ fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.”
Again, this section does not mention an award of fees to the prevailing party in a lawsuit. It authorizes the lender to “collect” attorney fees in connection with a foreclosure, and then provides a method for collecting them: by applying the proceeds of the trustee’s sale.
Defendant’s final attempt relies on paragraph 7(E) of the note (which would apply only to Barbara), which states, “If the Note Holder has required me to pay immediately in full . . . , the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys’ fees.” This provision does not apply for the same reasons as the previously three: it authorizes the Lender to be “paid back,” but does not authorize a separate award of attorney fees to the prevailing party in a lawsuit.
Ultimately, Civil Code section 1717 requires a contract to “specifically” provide for attorney fees. There are many challenges facing attorneys drafting transactional documents. But in general, a specific attorney fee provision is not one of those challenges. In most cases, it can be accomplished in a single sentence, and a specific citation to Civil Code section 1717, though not required, makes the parties’ intent abundantly clear. For that reason, we are not inclined to indulge vague fee provisions like those relied on here.
The postjudgment order is affirmed. Plaintiffs shall recover their costs incurred on appeal.
FYBEL, ACTING P. J.
 It was intended that Andrea and Jack also be on the promissory note, but for reasons not disclosed in the record, only Barbara ended up as a party to the promissory note. Since two of the parties share the same surname, we refer to the plaintiffs by their first names. No disrespect is intended.
 Our opinion in case number G053615, contains a more detailed recitation of these background facts, but the details are not relevant to the issue here.
 This section authorizes a cause of action for injunctive relief for the violation of certain foreclosure laws.
 Defendant Meridian Foreclosure Service did not join in the motion and, likewise, did not join in this appeal. Any further reference to “defendants” excludes Meridian unless otherwise noted.