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  • Paul Snell, III et al vs HSBC Bank USA, National Association Other Real Property Unlimited (26)  document preview
  • Paul Snell, III et al vs HSBC Bank USA, National Association Other Real Property Unlimited (26)  document preview
  • Paul Snell, III et al vs HSBC Bank USA, National Association Other Real Property Unlimited (26)  document preview
  • Paul Snell, III et al vs HSBC Bank USA, National Association Other Real Property Unlimited (26)  document preview
						
                                

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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 ./.1 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 25 26 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.” 28 ./.1 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 ./.1 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 ./.1 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. 28 ./.1 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, 10 Series 2005-AR5 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ./.1 SUPPLEMENTAL BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO RECOVER BOND