Barrett Daffin Frappier Teder & Weiss, LLP v. Chu
- Richard Seeborg
- 3:21-cv-08739
- U.S. District Court · Northern District of California
- 4
In Barrett Daffin v. Chu, Judge Seeborg awarded the stakeholder $2,604.18 in fees and costs from Yeganeh’s share of interpleaded foreclosure-sale funds.
Barrett Daffin received $2,604.18 from the portion of the interpleaded funds allocated to Ray Yeganeh. Yeganeh’s distribution was reduced by that amount, while the United States’ federal tax lien was not reduced.
What happened
Barrett Daffin Frappier Teder & Weiss, LLP v. Chu involved an interpleader action over surplus funds from a non-judicial foreclosure sale. Barrett Daffin asked the court to resolve competing claims to those funds.
Ray Yeganeh and the United States later agreed that Yeganeh’s judgment lien had priority over the United States’ federal tax lien. Barrett Daffin requested $13,125.86 in attorney fees and costs, and Yeganeh did not challenge that amount’s reasonableness.
Judge Richard Seeborg awarded Barrett Daffin $2,604.18 from Yeganeh’s share, rather than the full amount requested. The court ordered that Yeganeh’s lien be paid first, minus that amount, followed by payment to the United States, and directed the parties to take steps toward a final disposition.
The detailed version
- Barrett Daffin Frappier Teder & Weiss, LLP v. Chu · No. 3:21-cv-08739
- Richard Seeborg
- Sept. 19, 2023
Background
Barrett Daffin Frappier Teder & Weiss, LLP filed an interpleader action in state court concerning surplus funds from a non-judicial foreclosure sale of real property in Foster City, California. An interpleader action allows a stakeholder holding disputed funds to ask the court to determine which claimants are entitled to them.
Barrett Daffin moved for attorney fees and costs from the interpleaded funds. The court had previously denied that motion without prejudice because the priority between Ray Yeganeh’s claim and the United States’ federal tax lien had not yet been decided. Yeganeh and the United States later stipulated that Yeganeh’s judgment lien had priority.
Fees and Costs
The court explained that it has discretion to award a faultless stakeholder attorney fees and costs when doing so is fair and equitable. But the award cannot reduce funds needed to fully satisfy the federal government’s tax lien. When a claimant has a superior claim to the United States, that claimant may be charged a proportional share of the stakeholder’s fees and costs.
The court stated that $364,651.96 had been deposited with the court. Yeganeh claimed $72,347.28, while the United States claimed $748,745.16 based on its federal tax lien. Barrett Daffin sought $13,125.86 in fees and costs, including the amount requested for its reply papers. Yeganeh did not contest the reasonableness of the requested sum.
Because Yeganeh was entitled to approximately 19.84% of the available interpleaded funds, the court determined that he should bear 19.84% of Barrett Daffin’s fees and costs. That calculation produced an award of $2,604.18. The court declined to charge the remaining fees and costs against funds to which the United States was entitled because doing so would reduce the federal tax lien.
Disposition
Judge Richard Seeborg determined that Barrett Daffin was entitled to $2,604.18 from Yeganeh’s claim, but not the full $13,125.86 requested. The court ordered that the interpleaded funds be distributed first to Yeganeh to satisfy his lien, less the $2,604.18 owed to Barrett Daffin, and then to the United States. The parties stated that this fee issue was the sole remaining issue, and the court directed them to take appropriate steps toward a final disposition of the case.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.