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Washoe-Mill Apartments v. U.S. Bank National Association

United States District Court, D. Nevada

March 27, 2015

WASHOE-MILL APARTMENTS, Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, Defendant. U.S. BANK NATIONAL ASSOCIATION, Counterclaimant,
v.
WASHOE-MILL APARTMENTS; SECRETARY SHAUN DONOVAN, Counter-Defendants.

ORDER

MIRANDA M. DU, District Judge.

I. SUMMARY

Before the Court are two motions for fees and costs filed by U.S. Bank National Association ("U.S. Bank"). (Dkt. nos. 54, 55.)

II. BACKGROUND

A. Relevant Facts

The relevant facts are recited in the Court's previous Orders. The Court will summarize the facts relevant to the Motions.

Plaintiff and Counter-Defendant Washoe-Mill Apartments ("WMA") entered into a partnership agreement in order to construct and operate a United States Department of Housing and Urban Development ("HUD") subsidized facility for seniors and disabled citizens, the Washoe-Mill Apartments. In 1993, Bank of America Nevada ("BOAN") and the Washoe Housing Finance Corporation ("WHFC") entered into a Trust Indenture Agreement ("Agreement") regarding bonds used to refinance WMA's mortgage loans for the WMA facility. Under the Agreement, BOAN was the trustee of the bond proceeds and was charged with making payments to bondholders. These bonds were tax-exempt, the mortgage was insured by HUD, and WMA received rental subsidies from HUD. U.S. Bank is BOAN's successor in interest under the Agreement.

The WMA facility was sold on January 21, 2011, and the payoff amount for the mortgage loan was remitted as full settlement of the mortgage. A year later, in January 2012, a trust officer for U.S. Bank informed WMA that it had conducted an audit that revealed the existence of $229, 160.81 remaining in the trust account. U.S. Bank conducted an investigation to determine who the funds belonged to but was unable to reach a conclusion; U.S. Bank asserts no beneficial interest in the remaining balance.

B. Procedural History

On August 8, 2012, WMA initiated this action against U.S. Bank, asserting a single claim for conversion. On October 9, 2012, U.S. Bank answered and brought a counterclaim for interpleader against WMA and HUD. (Dkt. no. 6.) On February 5, 2013, the Court held a scheduling conference in response to U.S. Bank's request. The parties advised the Court of their respective positions, including HUD's plan to seek summary judgment and U.S. Bank's plan to file a motion to interplead the disputed funds. (Dkt. no. 19.) The parties stipulated to interplead the funds without requiring U.S. Bank to file a motion. (Dkt. no. 22.) HUD subsequently moved for summary judgment, which the Court granted. The Court found that the funds belong to HUD, and further ruled that it would order disbursement once U.S. Bank's request for fees and costs had been adjudicated. (Dkt. no. 43.) In a subsequent Order, the Court found that U.S. Bank is entitled to reasonable attorneys' fees and costs in its role as interpleader, but was unable to determine an appropriate calculation because U.S. Bank failed to delineate the fees and costs it incurred as interpleader. (Dkt. no. 53.) The Court gave U.S. Bank leave to bring another motion for attorneys' fees relating to its role as interpleader and a separate motion for attorneys' fees relating to its defense of the conversion claim. ( Id. )

These motions are now before the Court. Although HUD filed responses to both motions, the responses are the same. (Dkt. nos. 62, 63.) WMA opposed the motion for fees relating to U.S. Bank's defense of WMA's claim and joined in HUD's responses. (Dkt. nos. 61, 64.) U.S. Bank filed reply briefs. (Dkt. nos. 70, 71.)

III. MOTION FOR FEES AND COSTS RELATED TO THE INTERPLEADER ACTION (DKT NO. 54)

The Court has determined that U.S. Bank is entitled to reasonable attorneys' fees and costs relating to its role as interpleader. (Dkt. no. 53.) The only issue remaining is whether U.S. Bank's requested fees are reasonable. In its first motion for fees, U.S. Bank requested $39, 674.92 for fees and costs, but failed to delineate fees and costs relating to its role as interpleader. (Dkt. no. 38 at 13.) In its current motion, U.S. Bank requests $29, 148.41 as fees and costs relating to the interpleader action. (Dkt. no. 54.) The Court agrees with HUD that the fees requested exceed the scope of U.S. Bank's role as interpleader.

The parties agree that the determination of the amount of fees to be awarded in an interpleader action is committed to the Court's discretion. See Trs. of Dirs. Guild of Am. v. Tise, 234 F.3d 415, 426 (9th Cir. 2000) (citing Schirmer Stevedoring Co. v. Seaboard Stevedoring Corp., 306 F.2d 188, 194 (9th Cir. 1962)). "Because the interpleader plaintiff is supposed to be disinterested in the ultimate disposition of the fund, attorneys' fee awards are properly limited to those fees that are incurred in filing the action and pursuing the [interpleader's] release from liability, not in litigating the merits of the adverse claimants' ...


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