Mortgage lender protests 'bloated' Boies Schiller fee bid for $19 mln

Fidelity National Financial

10/10/2023 19:43

By Mike Scarcella
       Oct 10 (Reuters) - Housing lender Freedom Mortgage has
asked a U.S. judge to deny what it called a "bloated" demand for
$19 million in legal fees and expenses from Boies Schiller
Flexner and another law firm for their work defending a
subsidiary of Fidelity National Financial  FNF.N  in a dispute
over a loan-servicing contract.
    Attorneys for Freedom said in a filing on Monday in New
Jersey federal court that Boies Schiller's client, mortgage
subservicer LoanCare LLC, had only limited success in the
litigation and that the firm's hourly rates were "unreasonably
high."
    Freedom's attorneys said LoanCare is not entitled to recoup
legal fees at all under a disputed contract provision. But the
company also argued that any award must be reduced because of
Boies Schiller's inflated rates and hourly billings.
    Fidelity National Financial and Boies Schiller partner
Stuart Singer did not respond to requests for comment.
    Florida-based Freedom sued LoanCare in 2016, accusing the
mortgage loan subservicer of violating the terms of a contract
for handling hundreds of thousands of mortgage loans for
Freedom.
    LoanCare's contract required it to collect principal
payments, inspect properties and deal quickly with delinquent
borrowers. Freedom accused LoanCare of missing deadlines,
failing to file certain claims and otherwise improperly
servicing defaulted loans.
    LoanCare denied the allegations. It also brought a
counterclaim, accusing Freedom of keeping funds that LoanCare
had advanced in connection with servicing or foreclosing upon
certain loans. LoanCare said it sent funds to Freedom to cover
loan-related expenses including taxes and foreclosure costs.
Freedom, according to LoanCare, was obligated to reimburse
LoanCare.
    At a 10-day jury trial in July, LoanCare defeated Freedom's
claim for $40 million in damages and won a $23 million award on
its counterclaim. In its fee petition, LoanCare said it had
"substantially" prevailed at trial.
    Boies Schiller was lead counsel, working with New Jersey
lawyers from Friedman Kaplan Seiler Adelman & Robbins. The fee
request is on behalf of both firms.
    The fee dispute before U.S. District Judge Renée Marie Bumb
in Camden, New Jersey, will test a contract provision that
requires Freedom to cover "any and all losses" sustained by
LoanCare, which is based in Virginia Beach, Virginia.
    LoanCare said that under the "quite broad" contract
provision, "losses" include legal fees.
    Freedom had no immediate comment. It said in its brief
opposing LoanCare's fee petition that it acted in good faith in
suing LoanCare and that filing a complaint is not "misconduct"
that would require Freedom to cover LoanCare's losses.
    Freedom's court filing also questioned the necessity of
LoanCare's "48 attorneys and support staff" and argued LoanCare
"does not even try to justify the 20,391 hours of its two law
firms."
    Boies Schiller's Singer said in a declaration that the firm
discounted its regular hourly rates in its work for LoanCare.
    Singer recently billed LoanCare at $950, reduced from his
standard rate of $1,290.
    
    
    The case is Freedom Mortgage Corp v. LoanCare LLC, U.S.
District Court, District of New Jersey, No.
1:16-cv-02569-RMB-AMD.
    For Freedom Mortgage: Wayne Mack and James Steigerwald of
Duane Morris; Jerry Cuomo and Timothy Collazzi of Landman Corsi
Ballaine & Ford 
    For LoanCare: Stuart Singer and Sabria McElroy of Boies
Schiller Flexner; Robert Lack and Andrew Englander of Friedman
Kaplan Seiler Adelman & Robbins
    
    Read more:
    David Boies reveals $2,110 billing rate in Deutsche Bank fee
bid
    Law firm Gibson Dunn's 'unreasonable' Miami rates gut
legal-fee award in securities case
    Class lawyers defend $667 mln fee award in insurance
antitrust case


 (Reporting by Mike Scarcella)
 ((Mike.Scarcella@thomsonreuters.com;))