Victory for Homeowners: Court of Appeal Rules in their Favor to Recover Attorney Fees under the Homeowners Bill of Rights

california-homeowner-bill-of-rights-hbor

Court of Appeal Rules in Favor of Homeowners to Recover Attorney Fees under HBOR.

On June 12, 2015, the California Court of Appeals for the Third Appellate District ruled in favor of homeowners who incurred attorney fees and costs as a result of stopping the foreclosure process of their homes.

The ruling, Monterossa v. The Superior Court of Sacramento, Case No C077683 2015 WL 3653319, was issued after the court reviewed the Homeowners Bill of Rights (HBOR) that was passed in 2012 and took effect January 1, 2013. The ruling came after the court was asked to interpret the provision that states a borrower who successfully obtains an injunction stopping a foreclosure is able to recover attorney fees and costs against the foreclosing entity, regardless if the entity was the servicer and/or the lender. California Civil Code Sec. 2924.12(i) states, “A borrower shall be deemed to have prevailed for purposes of this subdivision if the borrower obtained injunctive relief or was awarded damages pursuant to this section.”

While clarity of the intent of the legislature to incorporate this language into the HBOR is not in question, debate ensues over whether or not this section permits a borrower to obtain attorney fees after successfully getting the court to issue a preliminary injunction, but before the merits of the lawsuit are determined. California statutes traditionally award attorney fees to the prevailing party at the conclusion of the litigation.

In question by the legal counsel of banks and servicers was the reference to the term, “injunction.” Their position stated the “injunction” referred to a permanent injunction rather than a preliminary injunction.

In Monterossa, the court correctly adopted a proper reading of the statute and held that a borrower who obtains a preliminary injunction is entitled to an award of attorney fees whether or not the borrower prevails on his or her HBOR claim: As stated in Monterossa. “In enacting the statutory scheme, the Legislature mandated a process for fair consideration of options other than foreclosure. As we have explained, when a lender fails to comply with that process, the borrower prevails by obtaining a preliminary injunction requiring the lender to comply with the process…. The Legislature’s purpose is fulfilled by providing attorney fees and costs to a borrower who successfully forces the lender to comply with the statutory process by obtaining a preliminary injunction. Finally, the legislature history demonstrates unequivocally that the Legislature intended to authorize an award of attorney fees and costs when a trial court grants a preliminary injunction as a result of a lender’s violation of sections 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11 or 22924.17.” Monterossa at page 10 & 11.

The Law Offices of Jason W. Estavillo Can Help

Every day, we come across people who have been the victims of unlawful foreclosure practices, and we are passionate about helping you stay in your home. If you:

  • Are facing a foreclosure
  • Feel the servicer/lender is in violation of statues

you might be entitled to attorney fees and costs if we or another attorney brings a motion for preliminary injunction and the court grants the motion.

Contact us today for a complimentary consultation. We have relieved many people from the burden, stress, and hassle of recovering money spent on attorney fees and costs. Let us help you put money back in your pocket.

 

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