Fourth District, Division 3 Affirms Lower Court Fees/Costs Award.
Here is a sign of the times. Delinquent borrower enters into a Forbearance Agreement with lender. There is a mistaken tax refund paid to lender as part of the forbearance that gets disgorged, with borrower indicating that lender took a risk with respect to paying past tax delinquencies. Borrower sues and loses. Borrower is assessed with attorney’s fees under the loan’s promissory note. Borrower appeals. Result? Read on.
These facts arose in Gharib v. Novastar Mortgage, Inc., Case No. G039602 (4th Dist., Div. 3 Mar. 3, 2009) (unpublished). The Fourth District, Division 3 affirmed the fee award, in a 3-0 decision authored by Acting Presiding Justice Moore (who recently participated as a panel member on the California Supreme Court’s Tobacco II argument in San Francisco).
The case involved de novo review of unambiguous note language allowing the Note Holder to obtain recovery of “costs and expenses in enforcing [the] Note.” Because Lender prevailed, the procedural status of the case was inconsequential. “Because Gharib initiated this lawsuit, its defense became part and parcel of all ‘costs and expenses in enforcing this Note.’” There is no distinction in the law between offensive and defensive attorney fees. (Shadoan v. World Savings & Loan Assn. (1990) 219 Cal.App.3d 97, 107.”
BLOG UNDERVIEW—Borrower did argue that no fee recovery was allowable because there was no fees clause in the Forbearance Agreement. However, the appellate panel rejected this argument because it was so poorly developed.