Lofton v. Wells Fargo Home Mortgage, No. A146282 (D1d3 Sept. 28, 2018)
Four years ago, the First District upheld a preliminary injunction against a Law Firm, preventing it from using a shady settlement tactic to obtain fees from a class action settlement outside the judicially supervised case by bringing, and allegedly settling a parallel individual case in a different jurisdiction. On remand, and after further development of the record on just how deceptive the Firm’s tactics were, the trial court found that the $6 million obtained from the individual settlement should have rightly been part of the common fund settlement to benefit the class. And on top of that, Law Firm wasn’t entitled to receive any fees and it had to pay the class back for incentive awards paid to three individual clients. The Court of Appeal affirms. And then it orders its opinion to be sent to the state bar.
Affirmed.
Showing posts with label wells fargo. Show all posts
Showing posts with label wells fargo. Show all posts
Friday, December 7, 2018
Wednesday, April 25, 2018
Angry, But Not Frivolous
Ponce v. Wells Fargo, No. C080680 (D3 Mar. 13, 2018)
Code of Civil Procedure §128.7(b)(1) authorizes sanctions against a party or attorney who signs a document “presented primarily for an improper purpose[.]” In this case—some kind of confusing mortgage mod/foreclosure dispute on its fourth iteration—the court found that Plaintiffs brought their complaint for an improper purpose and entered terminating sanctions under § 128.7(b)(1).
Plaintiffs don’t seem to dispute that they might have been subjectively malicious. But they say they nonetheless can’t be sanctioned under § 128.7, because their lawsuit was based on an at least colorable theory. Relying mostly on federal authority interpreting Rule 11, the Court of Appeal agrees. The standard for “improper purpose” sanctions requires the signed paper to be without objective merit. If the paper—whether a motion, complaint, or otherwise—isn’t frivolous, it has not been brought for an “improper purpose,” as a matter of law.
Reversed.
Code of Civil Procedure §128.7(b)(1) authorizes sanctions against a party or attorney who signs a document “presented primarily for an improper purpose[.]” In this case—some kind of confusing mortgage mod/foreclosure dispute on its fourth iteration—the court found that Plaintiffs brought their complaint for an improper purpose and entered terminating sanctions under § 128.7(b)(1).
Plaintiffs don’t seem to dispute that they might have been subjectively malicious. But they say they nonetheless can’t be sanctioned under § 128.7, because their lawsuit was based on an at least colorable theory. Relying mostly on federal authority interpreting Rule 11, the Court of Appeal agrees. The standard for “improper purpose” sanctions requires the signed paper to be without objective merit. If the paper—whether a motion, complaint, or otherwise—isn’t frivolous, it has not been brought for an “improper purpose,” as a matter of law.
Reversed.
Saturday, October 8, 2016
She'll Have to Wait Too.
Sese v. Wells Fargo Bank, No. C074663 (D3 Aug 18, 2016)
A recently enacted statute addressing mortgage litigation permits the award of attorneys’ fees to a prevailing borrower. Te Homeowner here won a PI, and claims that she was entitled to an immediate interim fee award. The trial court denied the request and the Homeowner took an interlocutory appeal. But regardless of whether the Homeowner was right about the statute’s authorizing awards of interim fees, nothing in the Code makes the denial of such a request immediately appealable. Although Homeowner argued that the appellate jurisdiction statute—Code of Civil Procedure § 904.1—makes various kinds non-final orders immediately appealable, the order here isn’t one of them.
Appeal dismissed.
A recently enacted statute addressing mortgage litigation permits the award of attorneys’ fees to a prevailing borrower. Te Homeowner here won a PI, and claims that she was entitled to an immediate interim fee award. The trial court denied the request and the Homeowner took an interlocutory appeal. But regardless of whether the Homeowner was right about the statute’s authorizing awards of interim fees, nothing in the Code makes the denial of such a request immediately appealable. Although Homeowner argued that the appellate jurisdiction statute—Code of Civil Procedure § 904.1—makes various kinds non-final orders immediately appealable, the order here isn’t one of them.
Appeal dismissed.
Monday, May 18, 2015
Relief Under § 437c(h) Does Not Exist Just to Delay Foreclosures
Granadino v. Wells Fargo Bank, N.A., No. B256511 (D2d2 Apr. 29, 2015)
In a foreclosure case, plaintiff tried to delay the inevitable by opposing summary judgement under Code of Civil Procedure § 437c(h), claiming that he needed more time to get evidence. Plaintiff’s § 437c(h) declaration complained of discovery shenanigans, but failed to detail what additional information could be discovered that was material to his opposition. And indeed, there was no reason why the additional discovery plaintiff wanted—the deposition of one of defendant’s employees—couldn’t have been obtained during the sixteen month window from the filing of the complaint until plaintiff’s opposition was due.
Affirmed.
In a foreclosure case, plaintiff tried to delay the inevitable by opposing summary judgement under Code of Civil Procedure § 437c(h), claiming that he needed more time to get evidence. Plaintiff’s § 437c(h) declaration complained of discovery shenanigans, but failed to detail what additional information could be discovered that was material to his opposition. And indeed, there was no reason why the additional discovery plaintiff wanted—the deposition of one of defendant’s employees—couldn’t have been obtained during the sixteen month window from the filing of the complaint until plaintiff’s opposition was due.
Affirmed.
Wednesday, January 7, 2015
Arbitration Appeals Fail for Lack of Jurisdiction
Judge v. Nijjar Realty, No. B248533 (D2d7 Dec. 17, 2014)
When an arbitration has not yet proceeded to an award on the merits, a superior court’s order vacating an interim ruling construing the scope of the arbitration clause is not an order vacating a final arbitration award appealable under Code of Civil Procedure 1294(c). This appeal was thus premature and merited dismissal. That’s the case even though the interim award might have been appealable under the FAA, because the procedural rules under the federal act don’t preempt state procedures that govern arbitration and because state procedure applies absent an express agreement otherwise. Nor did the fact that the interim award was made under the AAA’s rules make the order appealable. The right to appeal is governed by statute, not the rules of an arbitral body or the parties’ agreement.
Appeal dismissed.
Wells Fargo Bank, N.A. v. The Best Service Co., Inc., No B253861 (D2d5 Dec. 17, 2014)
The defendant unsuccessfully moved to stay this case in connection with an arbitration that it demanded. But—for some tactical reason not apparent from the opinion—it did affirmatively not move to compel the arbitration, which throws a wrench in the appeal. That’s because Code of Civil Procedure § 1294(a) affords appellate jurisdiction over the denial of a petition to compel arbitration, but not from an order denying a stay in favor of an uncommenced arbitration. No jurisdiction, no appeal.
Appeal dismissed.
When an arbitration has not yet proceeded to an award on the merits, a superior court’s order vacating an interim ruling construing the scope of the arbitration clause is not an order vacating a final arbitration award appealable under Code of Civil Procedure 1294(c). This appeal was thus premature and merited dismissal. That’s the case even though the interim award might have been appealable under the FAA, because the procedural rules under the federal act don’t preempt state procedures that govern arbitration and because state procedure applies absent an express agreement otherwise. Nor did the fact that the interim award was made under the AAA’s rules make the order appealable. The right to appeal is governed by statute, not the rules of an arbitral body or the parties’ agreement.
Appeal dismissed.
Wells Fargo Bank, N.A. v. The Best Service Co., Inc., No B253861 (D2d5 Dec. 17, 2014)
The defendant unsuccessfully moved to stay this case in connection with an arbitration that it demanded. But—for some tactical reason not apparent from the opinion—it did affirmatively not move to compel the arbitration, which throws a wrench in the appeal. That’s because Code of Civil Procedure § 1294(a) affords appellate jurisdiction over the denial of a petition to compel arbitration, but not from an order denying a stay in favor of an uncommenced arbitration. No jurisdiction, no appeal.
Appeal dismissed.
Thursday, November 13, 2014
Shady, Shady Stuff
Lofton v. Wells Fargo, No. A136626 (D1d3, as modified Nov. 20, 2014)
There are two wage-and-hour cases against Wells Fargo. One is a class action. The other is a 600 plaintiff mass joinder case with no certified class. One is in LA, the other in San Francisco. Although they are not coordinated, both cases allegedly resolve at the same mediation. The deal was that the class will settle for $19 million, the 600 plaintiffs will opt out, and then the 600 will settle for $6 million.
But when it comes time to get approval, the individuals don’t opt out. Instead, they file claims in the class settlement, apparently because that’s what their lawyers tell them to do. And nobody tells the court during the approval process that the individual case attorneys—the appropriately named “Initiative Legal Group”—now contend that the whole $6 million was to address their attorneys’ fees.
When one of the individual plaintiffs gets word of ILG’s initiative to steal the settlement fund from their clients, he sues ILG for breach of fiduciary duty. He also intervenes in the (already approved) class action case and gets a TRO from that court preventing ILG from dissipating the $6 million.
The court here affirms that injunction, finding: (1) that issuing the TRO was within the trial court’s ongoing jurisdiction over a class action settlement under Code of Civil Procedure § 664.6, which includes the authority to act in equity; (2) that the trial court did not abuse its discretion in issuing the TRO; (3) that ILG’s constitutional and privacy objections are bogus; and (4) that ILG’s Evidence Code § 1152 settlement privilege objections were harmless or unfounded.
Affirmed.
There are two wage-and-hour cases against Wells Fargo. One is a class action. The other is a 600 plaintiff mass joinder case with no certified class. One is in LA, the other in San Francisco. Although they are not coordinated, both cases allegedly resolve at the same mediation. The deal was that the class will settle for $19 million, the 600 plaintiffs will opt out, and then the 600 will settle for $6 million.
But when it comes time to get approval, the individuals don’t opt out. Instead, they file claims in the class settlement, apparently because that’s what their lawyers tell them to do. And nobody tells the court during the approval process that the individual case attorneys—the appropriately named “Initiative Legal Group”—now contend that the whole $6 million was to address their attorneys’ fees.
When one of the individual plaintiffs gets word of ILG’s initiative to steal the settlement fund from their clients, he sues ILG for breach of fiduciary duty. He also intervenes in the (already approved) class action case and gets a TRO from that court preventing ILG from dissipating the $6 million.
The court here affirms that injunction, finding: (1) that issuing the TRO was within the trial court’s ongoing jurisdiction over a class action settlement under Code of Civil Procedure § 664.6, which includes the authority to act in equity; (2) that the trial court did not abuse its discretion in issuing the TRO; (3) that ILG’s constitutional and privacy objections are bogus; and (4) that ILG’s Evidence Code § 1152 settlement privilege objections were harmless or unfounded.
Affirmed.
Monday, June 23, 2014
Holding the Line on Alter Ego
Wells Fargo Bank, NA v. Weinberg, No. E057011 (D4d2 June 18, 2014)
Wells got a judgment against a solo practice law firm. Afterwards, it successfully moved under Code of Civil Procedure § 187 to add the lawyer to the judgment as an alter ego of the judgment debtor firm. The court here affirms. For good reason. It looks like, post-judgment, the lawyer sucked the firm’s accounts dry and engaged in some dodgy “loan” accounting while continuing his practice under his own name. Unfortunately, the court relies principally on Greenspan v. LADT LLC, 191 Cal. App. 4th 486 (2011), which—as I have previously discussed—contains some unfortunately loose language about the “fraud or injustice” prong of the alter ego analysis. Indeed, here, the court doesn’t really discuss that element at all. It seems clear from the evidence that the standard would have been satisfied anyway by way of the lawyer’s deliberate undercapitalization of the firm in light of the pending judgment. But the failure to cite the element of the test is a little concerning.
Affirmed.
Wells got a judgment against a solo practice law firm. Afterwards, it successfully moved under Code of Civil Procedure § 187 to add the lawyer to the judgment as an alter ego of the judgment debtor firm. The court here affirms. For good reason. It looks like, post-judgment, the lawyer sucked the firm’s accounts dry and engaged in some dodgy “loan” accounting while continuing his practice under his own name. Unfortunately, the court relies principally on Greenspan v. LADT LLC, 191 Cal. App. 4th 486 (2011), which—as I have previously discussed—contains some unfortunately loose language about the “fraud or injustice” prong of the alter ego analysis. Indeed, here, the court doesn’t really discuss that element at all. It seems clear from the evidence that the standard would have been satisfied anyway by way of the lawyer’s deliberate undercapitalization of the firm in light of the pending judgment. But the failure to cite the element of the test is a little concerning.
Affirmed.
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