I thought I was going to stridently disagree with today's opinion by Justice Butz. But in the end, I agree.
With one (important) caveat.
The statute says that the court can award attorney's fees to a prevailing party, and also says that a borrower is a prevailing party if s/he obtains injunctive relief and/or damages.
A borrower files a lawsuit and obtains a preliminary injunction. Can she obtain fees?
Ordinarily, I'd be inclined to say "No." When we talk about who's the prevailing party, we generally look at the end of the litigation. So the fact that you've obtained some provisional relief doesn't much matter to me. Similarly, my sense is that when the Legislature talks about someone getting injunctive relief and/or damages, it's referring to the stuff that happens at the end of a trial. Not in the middle (or at the beginning).
My intuitive sense in that regard was only magnified in the factual context presented by the present case. The borrower here was trying to stop the foreclosure of his home. He made some allegations, and the trial court decided to grant some provisional relief and temporarily delay the foreclosure. The balance of hardships in this situation comes out on the side of the borrower; if the foreclosure goes forward, it's irreperable.
But -- and this is important to me -- the injunction's granted only on the condition that the borrower put up a bond of $20,000 (or pay the pending mortgage payments). That will stop the borrower from just living in the house rent-free, which is sometimes/often the real objective of this type of litigation.
You could see why a trial court might enter such an order even if the borrower's lawsuit may be complete crap. If the borrower wants to pay the mortgage (or post a bond), there's no harm in enjoining the pending foreclosure process. Conversely, if the borrower won't pay, that's a decent sign that maybe he shouldn't get injunctive relief and is just gunning for free rent.
So a trial court might grant these orders simply as an equitable matter. May even make a great deal of sense to do so. Such provisional orders don't necessarily reflect the merits.
Which is another reason why it'd be unjust to award attorney's fees to a borrower just because it obtained such "put up or shut up" injunctive relief.
That was my sense as I read Justice Butz's opinion. So when she held that provisional relief did count, I was pretty skeptical. Even after reading the opinion.
There are, admittedly, several things in the opinion to recommend Justice Butz's conclusion. She does a very good job, for example, explaining that in a lot of these borrower lawsuits, there's nothing really at issue other than preliminary injunctive relief. So if you waited to see if the lender subsequently stopped the foreclosure process (thereby mooting damages and/or final injunctive relief), you might get a mistaken impression of who the true "prevailing party" really was.
That makes sense to me. Mind you, I'd still be extremely concerned that the Court of Appeal's ruling might grant fees merely to borrowers who got a "preserve the status quo" preliminary injunction. But I'd nonetheless at least understand where the Court of Appeal was coming from. Even if that policy concern didn't necessarily completely turn me around.
But, in the end, I'm ultimately good with Justice Butz's opinion.
With one caveat.
If the statute said that the court "shall" award attorney's fees to a prevailing party, than I'd be very concerned about the Court of Appeal's holding. And maybe even think it's wrong.
But it doesn't. It says "may". So I'm assuming that the statute's discretionary. The trial court could award fees if it wants. But it doesn't have to.
With that caveat, I'm more than fine with the Court of Appeal's opinion. Indeed, I'm affirmatively psyched for it.
If the trial court primarily granted the injunction simply to make the borrower put up or shut up, then I'm confident it wouldn't -- and shouldn't -- award fees. By contrast, if -- as perhaps here -- the trial court granted a preliminary injunction because it thought the plaintiff's case was indeed looking good, and that the foreclosure should indeed be halted on the merits, then, yeah, I think a fee award would be justified. As well as permissible under the statute.
But the caveat's nonetheless worth mentioning. Because it's critically important.
Justice Butz never mentions that the statutory fee award is (I think) discretionary. I think it is. And I think that's a critical point that's more than worth putting in the opinion.
Because, at least to me, that's a dispositive point. Without it, the merits perhaps should come out the other way.
