Brosio v. Deutsche Bank National Trust Co. (In Re Brosio), 505 B.R. 903

Brosio filed a chapter 13 bankruptcy, involving her residence and related note and DOT with Paul Financial; Deutsche Bank later recorded an assignment of the DOT.
DOT provisions authorized lender protections, including paying fees and costs to protect its interest, including in bankruptcy; Paragraph 9 allowed such fees.
Paragraph 14 permitted charging fees for services in default, and Paragraph 22 authorized recovery of expenses and attorneys' fees; Note Paragraph 7(E) allowed recovery of costs and expenses in enforcing the note.
GMAC filed a POC on behalf of Deutsche Bank asserting a secured claim for over $587k, including $425 in attorney fees for filing, reviewing plan, and notice requests; Brosio objected only to the $425 fee.
Deutsche Bank amended the POC to remove the $425 fee; Brosio sought attorney’s fees for filing the objection, arguing she prevailed under CA law § 1717; the bankruptcy court did not rule on the POC or objection.
The bankruptcy court held Brosio was not the prevailing party and that her requested fees were not reasonable; it denied the Fee Motion, leading to an appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Brosio the prevailing party under § 1717?	Brosio contends she prevailed by removing the $425 fee via Deutsche Bank's amended POC.	Deutsche Bank argues there was no final decision on the claim or objection and it retained rights under Paragraph 9; no prevailing party.	No; Brosio was not the prevailing party.
Were Brosio's requested fees reasonable, assuming any fee award?	If prevailing, her hours were reasonable for objecting and pursuing the Fee Motion.	Fees were excessive relative to the actual $425 challenged and to the relief obtained; the court should not award excessive fees.	The issue was not reached because Brosio was not the prevailing party.

Hsu v. Abbara, 9 Cal.4th 863 (Cal. 1995) (prevailing party depends on main objective and final resolution)
Santisas v. Goodin, 17 Cal.4th 599 (Cal. 1998) (contract attorney fees reciprocal rights when clause exists)
Kandy Kiss of Cal., Inc. v. Tex-Ellent, Inc., 209 Cal.App.4th 604 (Cal. App. 2012) (fee shifting where matter resolved on procedural grounds is recoverable)
Idea Place Corp. v. Fried, 390 F.Supp.2d 903 (N.D. Cal. 2005) (fees denied when contract claim not resolved yet in merits)
Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796 (Cal. App. 2008) (fee awards under 1717 where contract merits unresolved)
Profit Concepts Mgmt., Inc. v. Griffith, 162 Cal.App.4th 950 (Cal. App. 2008) (fee awards under 1717 despite dismissal context)
In re Edwards Theatres Circuit, Inc., 281 B.R. 675 (Bankr. C.D. Cal. 2002) (analogies of claims and defenses in bankruptcy and fee awards)
In re Cont'l Airlines, 928 F.2d 127 (5th Cir. 1991) (claims and defenses in bankruptcy context analogous to civil action)
PNEC Corp. v. Meyer, 190 Cal.App.4th 66 (Cal. App. 2010) (court discussion of contract and fee-shifting considerations)