Brosio v. Deutsche Bank National Trust Company (In re Brosio)

Summarized by Emil Khatchatourian , Foley & Lardner LLP
11 years 11 months ago

Citation:

Brosio v. Deutsche Bank National Trust Company (In re Brosio), BAP No. NC-13-1119-KiDJu (B.A.P. 9th Cir. Mar. 7, 2014)

Tag(s):

Ruling:

Affirming the bankruptcy court, the Bankruptcy Appellate Panel of the Ninth Circuit held that the bankruptcy court did not err in determining that debtor was not the "prevailing party" within the meaning of Cal. Civ. Code § 1717 and that it was unnecessary to reach the issue of whether the requested fees were reasonable.

Procedural context:

Debtor appealed from the bankruptcy court’s order denying her motion for attorney’s fees on the basis that she was not the prevailing party under Cal. Civ. Code § 1717 and that the requested fees were not reasonable.

Facts:

Loan servicer filed a proof of claim in debtor’s chapter 13 case on behalf of secured lender, asserting a secured claim, including “attorney fees for filing proof of claim, reviewing plan and filing request for special notice[.]” Debtor filed an objection to claim, disputing only the attorney’s fees. In response, secured lender filed an amended proof of claim, removing the attorney’s fees from the total amount of the claim. Subsequently, debtor moved for an order awarding her attorney’s fees “for her successful objection” to secured lender’s proof of claim. The bankruptcy court denied debtor’s motion for attorney’s fees. In affirming the bankruptcy court, the panel reasoned as follows: "For [debtor] to be the prevailing party, we conclude that the bankruptcy court had to first enter some sort of disposition on [secured lender's proof of claim or debtor's objection to claim]. [Debtor]'s 'self-proclaimed' victory is insufficient to trigger an award under [Cal. Civ. Code] § 1717." Under that section of the Civil Code, some order or judgment must exist before a party can move for attorney's fees. Alternatively, the panel concluded, section 1717(b)(2) prevented debtor from being a "prevailing party" because secured lender's abandonment of its claim for attorney's fees was akin to a voluntary dismissal within the purview of that subsection.

Judge(s):

KIRSCHER, DUNN, and JURY

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