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Bertelsen v. CitiMortgage, Inc.

United States District Court, D. Montana, Butte Division

July 26, 2017

JONATHAN CHARLES BERTELSEN, Plaintiff,
v.
CITIMORTGAGE, INC., and JOHN DOES 1-10, Defendants.

          ORDER

          Jeremiah C. Lynch United States Magistrate Judge.

         Following the entry of final judgment in its favor, Defendant CitiMortgage, Inc. moves to recover $296,569.87 in attorney fees incurred in defending against Plaintiff Jonathon Bertelsen's claims. CitiMortgage's motion is granted to the extent set forth below.

         I. Background

         Bertelsen commenced this action in state court in December 2015, alleging breach of contract, violations of Montana's Consumer Protection Act, and tort claims based on CitiMortgage's alleged wrongful failure to modify the terms of his home mortgage loan. Bertelson also sought declaratory and injunctive relief prohibiting CitiMortgage from foreclosing on his property. CitiMortgage removed the case to this Court based on diversity jurisdiction, and ultimately prevailed on summary judgment.

         Final judgment was entered in CitiMortgage's favor on April 7, 2017, and CitiMortgage filed the pending motion for attorney fees two weeks later, on April 21, 2017. CitiMortgage seeks fees under Federal Rule of Civil Procedure 54, as authorized by Mont. Code Ann. § 28-3-704 and the terms of the promissory Note and Deed of Trust between the parties.

         II. Legal Standards

         Where, as here, federal jurisdiction is based on diversity of citizenship, a motion for an award of attorney fees is governed by federal procedural law and state substantive law. See Mangold v. California Public Util. Comm 'n, 67 F.3d 1470, 1478 (9th Cir. 1995). The procedural requirements applicable to a motion for attorney fees are set forth in Fed. R. Civ. P. 54, which states that the motion must:

(i) be filed no later than 14 days after the entry of judgment; (ii) specify the judgment and the statute, rule or other grounds entitling the movant to the award; (iii) state the amount sought or provide a fair estimate of it; and (iv) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made.

Fed. R Civ. P. 54(d)(2)(B).

         Montana follows the general American Rule, pursuant to which a prevailing party is not entitled recover attorney fees unless expressly provided for by statute or contract. Mountain West Farm Bureau Mut. Ins. Co. v. Hall, 2001 Mt 115, 18 (Mont. 2001). When "one party to the contract...has an express right to recover attorneys' fees from any other party to the contract..., then in any action on the contract...the prevailing party...is entitled to recover reasonable attorneys' fees from the losing party or parties." Mont. Code Ann. § 28-3-704. Where there is a contractual provision for attorney fees, the right created is reciprocal. See e.g. First Citizens Bank v. Sullivan, 200 P.3d 39, 46 (Mont. 2008).

         Generally speaking, whether to award fees is within the discretion of the court. In re Marraige of Szafryk, 232 P.3d 361, 365 (Mont. 2010). But when a contract "requires an award of attorney's fees and the contract is conscionable," the court "lacks discretion to deny attorney's fees." Szafryk, 232 P.3d at 365. See also In re Estate of Burrell, 245 P.3d 1106, 1111-1112 (Mont. 2010).

         III. Discussion

         There is no dispute that CitiMortgage has satisfied the procedural requirements of Fed. R. Civ. P. 54(d)(2)(B). CitiMortgage timely filed its motion on April 21, 2017 - within 14 days of the final judgment entered on April 7, 2017. The motion states the amount of attorney fees sought, and specifies that CitiMortgage claims it is entitled to fees based on terms of the Note and Deed of Trust between the parties.

         The Note signed by Bertelsen contains a provision for "Payment of Note Holder's Costs and Expenses," which reads as follows:

If the Note Holder has required me to pay immediately in full as described above, 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 ...

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