Lenders and Servicers Beware – You Are at Risk of Having to Pay Attorneys’ Fees to Borrowers Who Obtain TROs to Hold Up Trustee’s Sales

Hardie v. Nationstar Mortgage LLC is a significant decision out of the Fifth District Court of Appeal holding that a plaintiff/borrower may obtain attorney’s fees under CC 2294.12(h) after prevailing at a TRO hearing. It relies heavily upon the Third District’s prior decision in Monterossa v. Sup. Ct. (2015) 237 Cal. App.4th 747, 751 which set forth the rule that attorney’s fees could be obtained from a preliminary injunction hearing because such a hearing involved “injunctive relief.” Hardie extended that right to hearings on motions for TRO.

In Hardie, the plaintiffs filed an ex parte application for a TRO, seeking to enjoin a trustee’s sale of the property. As is often the case, the trial court granted the application so as to maintain the status quo, and the fee order followed. As a result of this opinion, lenders should consider TRO hearings seriously and make a reasoned decision whether to contest the application on the merits so as to avoid having to pay attorney’s fees.

– Keesal, Young & Logan Consumer and Business Lending Practice Group

This information has been prepared by Keesal, Young & Logan for informational purposes only and is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between you and Keesal, Young & Logan. You should not act upon this information without seeking professional counsel.