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MARY KATE SULLIVAN (State Bar No. 180203)
mks@severson.com
MEGAN C. KELLY (State Bar No. 251293)
mck@severson.com
MEGAN F. CLARK (State Bar No. 301476)
mfc@severson.com
SEVERSON & WERSON
A Professional Corporation
One Embarcadero Center, Suite 2600
San Francisco, California 94111
Telephone: (415) 398-3344
Facsimile: (415) 956-0439
Attorneys for Defendant
HSBC Bank USA, National Association, as
Trustee for Nomura Asset Acceptance
Corporation, Mortgage Loan Pass-Through
Certificates, Series 2005-AR5
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
PAUL A. SNELL III and BLODELLA Case No. 17CV308013
SNELL,
SUPPLEMENTAL BRIEF IN SUPPORT
Plaintiffs, OF DEFENDANT’S MOTION TO
RECOVER BOND
Filed concurrently with Supplemental
HSBC BANK USA, NATIONAL Declaration of Megan F. Clark
ASSOCIATION AS TRUSTEE FOR
NOMURA ASSET ACCEPTANCE Date: June 6, 2019
CORPORATION MORTGAGE PASS Time: 9:00 a.m.
THROUGH CERTIFICATES, SERIES 2005- Dept.: 9
AR5; and DOES 1-20 Judge: Hon. Mary E. Arand
Defendants. Action Filed: March 30, 2017
Trial Date: February 11, 2019
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SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND
SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO RECOVER BOND
Defendant’s motion to recover bond was initially set for hearing on April 11, 2019. By
stipulation of the parties, the Court continued the hearing on the motion to recover bond to June 6,
2019 to allow Defendant to submit supplemental briefing to support the amount of attorney’s fees
it has incurred to procure a dismissal of the April 2017 preliminary injunction.
As Defendant incurred over $68,000 in attorneys’ fees and costs in procuring a dismissal
of the causes of action upon which the preliminary injunction was based, Defendant is entitled to
recover the $10,000 bond posted by Plaintiffs and respectfully requests an order from this Court
releasing the bond to Defendant.
10 I. FACTS
11 On April 19, 2017, this Court granted Plaintiffs’ application for a Preliminary Injunction,
12 which was predicated on their claims for violation of Civil Code sections 2924 and 2923.5 and the
13 Court ordered Plaintiffs to post a $10,000.00 bond with the Court, which they accomplished on
14 April 28, 2017. (Declaration of Megan F. Clark in support of Motion to Recover Bond (“Clark
15 Decl.”), ¶¶ 2-3, Exhibits A, B.) Thereafter, Defendant incurred fees and costs in preparing and
16 filing demurrers to the Complaint and First Amended Complaint, responding to Plaintiffs’
17 Requests for Production of Documents, Requests for Admissions, Form Interrogatories and
18 Special Interrogatories, propounding Requests for Production of Documents, Requests for
19 Admissions, Form Interrogatories and Special Interrogatories to Plaintiffs, meeting and conferring
20 with Plaintiffs’ regarding their responses to Defendant’s written discovery and preparing and
21 filing a Motion for Summary Judgment in order to obtain a dismissal of the causes of action upon
22 which the preliminary injunction was based. (Supplemental Declaration of Megan F. Clark
23 (“Supp. Clark Decl.”), ¶ 2.) In response to Defendant’s Motion for Summary Judgment, Plaintiffs
24 filed a voluntary dismissal of the action without prejudice on December 4, 2018, the same day
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Defendant HSBC Bank USA, National Association, as Trustee for Nomura Asset Acceptance
27 Corporation, Mortgage Loan Pass-Through Certificates, Series 2005-AR5 is hereinafter referred to
as “Defendant”. Plaintiffs Paul Snell and Blodella Snell are hereinafter referred to as “Plaintiffs.”
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SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND
their opposition was due. (Clark Decl. ¶ 5.) The Court entered the dismissal of the entire action
without prejudice on December 11, 2018. (Supp. Clark Decl., ¶ 3.)
As of December 11, 2018, Defendant had incurred a total of $68,727.78 in attorneys’ fees
and costs in proving the causes of action upon which the preliminary injunction was based were
without merit and in procuring a dismissal thereof. This amount consists of $66,987.30 in
attorneys’ fees and $1,740.48 in costs. (Supp. Clark Decl., ¶ 3.)
On January 24, 2019, Defendant filed a Motion to Recover Bond and supporting
documents. (Supp. Clark Decl., ¶ 4.) Plaintiffs did not oppose Defendant’s Motion. (Supp. Clark
Decl., ¶ 4.) At the hearing on April 11, 2019, the parties stipulated to continue the hearing to allow
10 Defendant to submit a supplemental brief regarding the damages it has incurred in procuring a
11 dismissal of those causes of action upon which the issuance of the preliminary injunction had been
12 based. (Supp. Clark Decl., ¶ 5.) As a result, the Court continued the hearing on the Motion to June
13 6, 2019 to permit Defendant to file a supplemental brief regarding the damages it has incurred in
14 procuring a dismissal of the injunction and to permit Plaintiffs to file a response, if any. (Supp.
15 Clark Decl., ¶ 5.)
16 II. ARGUMENT
17 Code of Civil Procedure section 529(a) provides, in relevant part, “On granting an
18 injunction, the court or judge must require an undertaking on the part of the applicant to the effect
19 that the applicant will pay to the party enjoined any damages, not exceeding an amount to be
20 specified, the party may sustain by reason of the injunction, if the court finally decides that the
21 applicant was not entitled to the injunction.” (Code Civ. Proc., §529(a).) A prevailing party’s
22 “right to recover damages caused by an improperly issued injunction” is based solely on a
23 showing that the applicant was not entitled to the injunction. (Dickey v. Rosso (1972) 23
24 Cal.App.3d 493, 497 (citing Robinson v. Kellum (1856) 6 Cal. 399).)
25 Here, Defendant is entitled to recover the bond amount posted by Plaintiffs. Indeed, a
26 plaintiff's voluntary dismissal of the action has the same effect as a decision of the court that
27 plaintiff was not entitled to the injunction, and, for the purpose of a suit against the surety,
28 constitutes a final decision against the plaintiff. (Special Editions v. Kellison (1982) 129
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SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND
Cal.App.3d 803, 808, citing Asevado v. Orr (1983) 100 Cal. 293, 299 and 2 Witkin, Cal.
Procedure (2d ed. 1970) Provisional Remedies, § 114, pp. 1543-1544.)
In this instance, Defendant is entitled to recover the entire bond amount posted by Plaintiffs.
It is well settled the damage recoverable under an injunction bond,
such as the bond at bench, is for all loss proximately resulting from
the injunction; the factors to be considered in determining the loss
depend upon the circumstances of the case; the measure of damage
will vary with those circumstances; arbitrary rules do not govern;
equitable principles are applied; and the allowance, although often
difficult to measure accurately, should furnish just and reasonable
compensation for the loss sustained.
Surety Sav. & Loan Assn. v. National Automobile & Cas. Ins. Co. (1970) 8 Cal.App.3d 752, 757
10 (citing Rice v. Cook (1891) 92 Cal. 144, 148—150; Russell v. United Pacific Ins. Co. (1963) 214
11 Cal.App.2d 78, 87; Robinson v. Fidelity & Deposit Co. (1935) 5 Cal.App.2d 241, 245; Moore v.
12 Maryland Casualty Co. (1929) 100 Cal.App. 658, 663).)
13 "It is now well settled that reasonable counsel fees and expenses incurred in successfully
14 procuring a final decision dissolving the injunction are recoverable as 'damages' within the
15 meaning of the language of the undertaking, to the extent that those fees are for services that relate
16 to such dissolution [citations]." (ABBA Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 15-16,
17 citing Russell v. United Pacific Ins. Co. (1963) 214 Cal. App. 2d 78, 88-89; see also Surety Sav. &
18 Loan Assn., supra, 8 Cal.App.3d at 758-760.) Where an injunction is issued, if the defendant is
19 required “to defend against the main action in order to demonstrate that the injunction was
20 wrongfully issued, the prevailing defendant may recover that portion of his attorney's fees
21 attributable to defending against those causes of action on which the issuance of the preliminary
22 injunction had been based. (Russell, supra, 214 Cal. App. 2d at 85-86, 88-89.)
23 Here, on April 13, 2017, the Court issued an order granting Plaintiffs’ motion for a
24 preliminary injunction, which was based on Plaintiffs’ causes of action for violation of Civil Code
25 sections 2924(a)(6) and 2923.5. Thereafter, Defendant incurred fees and costs to defend against
26 those causes of action on which the preliminary injunction was based by preparing and filing
27 demurrers to the Complaint and First Amended Complaint, responding to Plaintiffs’ Requests for
28 Production of Documents, Requests for Admissions, Form Interrogatories and Special
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SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND
Interrogatories, propounding Requests for Production of Documents, Requests for Admissions,
Form Interrogatories and Special Interrogatories to Plaintiffs, meeting and conferring with
Plaintiffs’ regarding their responses to Defendant’s written discovery and preparing and filing a
Motion for Summary Judgment. (Supp. Clark Decl., ¶ 2.) After Defendant filed a demurrer to the
First Amended Complaint, the Court sustained the demurrer as to all of Plaintiffs’ causes of action
except the Civil Code 2923.5 claim. Thereafter, Defendant filed a motion for summary judgment
as to Plaintiffs’ remaining Civil Code 2923.5 claim. In response, Plaintiffs dismissed the entire
action with prejudice, which has the same effect as decision of the Court that Plaintiffs were not
entitled to the injunction. (Special Editions, supra, 129 Cal.App.3d 803, 808.) From the time the
10 preliminary injunction went into effect on April 28, 2017 and the Court’s entry of dismissal
11 without prejudice on December 11, 2018, Defendant incurred $66,987.30 in attorneys’ fees and
12 $1,740.48 in costs in proving the causes of action upon which the preliminary injunction was
13 based were without merit and in procuring a dismissal thereof. (Supp. Clark Decl., ¶ 3.) These fees
14 and costs were incurred in the “period during which the preliminary injunction was in force” in
15 order to procure a dismissal of the causes of action upon which the preliminary injunction was
16 predicated. (Russell, supra, 214 Cal. App. 2d at 85-86, 88-89; Surety Sav. & Loan Assn., supra, 8
17 Cal.App. 3d at 756.) Of these total fees and costs, $18,797.20 in attorney’s fees and $542.27 in
18 costs were incurred to prepare and file the motion for summary judgment as to Plaintiffs’
19 remaining Civil Code 2923.5 claim. (Supp. Clark Decl., ¶ 3.)
20 As stated above, the total amount of the bond posted by Plaintiffs is $10,000. Because the
21 amount of attorneys’ fees and costs incurred by Defendant in procuring a dismissal of the causes
22 of action upon which the injunction was based is greater than the amount of the bond posted,
23 Defendant is entitled to recover the entire bond amount. Plaintiffs do not dispute that Defendant is
24 entitled to recover the entire bond amount, as evidenced by their decision not to oppose
25 Defendant’s Motion to Recover the Bond filed on January 24, 2019. (See Supp. Clark Decl., ¶ 2.)
26 Defendant therefore respectfully requests that this Court grant its Motion and order the
27 clerk to release the bond amounts deposited by Plaintiffs to Defendant.
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SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND
III. CONCLUSION
For the foregoing reasons, Defendant’s Motion should be granted in its entirety and the
clerk should be ordered to release the $10,000 bond to Defendant.
DATED: May 6, 2019 SEVERSON & WERSON
A Professional Corporation
By:
Megan F. Clark
Attorneys for Defendant HSBC Bank USA, National
Association, as Trustee for Nomura Asset Acceptance
Corporation, Mortgage Loan Pass-Through Certificates,
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