Appeal from the United States District Court for the Central District of California James M. Ideman, District Judge, Presiding
Before: Jerome Farris, Diarmuid F. O'Scannlain, and Ferdinand F. Fernandez, Circuit Judges.
The opinion of the court was delivered by: Fernandez, Circuit Judge:
Opinion by Judge Fernandez
Larry M. Siegel appeals the district court's grant of sum- mary judgment in favor of Federal Home Loan Mortgage Corp. ("Freddie Mac") in his tort and breach of contract action regarding foreclosures upon two properties referred to as the "Windbell property" and the "Dalton Place property." Siegel claims that the district court erred when it concluded that this action is barred by res judicata, and when it awarded Freddie Mac attorney's fees incurred in defending the action.*fn1 We affirm both the district court's grant of summary judg- ment and its award of attorney's fees.
On November 22, 1989, Siegel and Gerber, his partner, executed and delivered a Multifamily note (the Windbell note) in which they promised to pay the J. I. Kislak Mortgage Corporation (Kislak) the principal sum of $840,000 in monthly installments. The note was secured by a Deed of Trust, Assignment of Rents and Security Agreements, and by a Collateral Assignment of Leases. On November 27, 1989, Siegel and Gerber executed and delivered another Multi- family note (the Dalton Place note) in which they promised to pay Kislak the principal sum of $900,000. That note was also secured by a Multifamily Deed of Trust, Assignment of Rents and Security Agreements, and a Collateral Assignment of Leases. The rider to the Dalton Place deed of trust provided that the borrower could sell or transfer his interest in the prop- erty without acceleration of the entire debt provided that "the transferee's creditworthiness and management ability are sat- isfactory to Lender and the transferee has executed . . . a writ- ten assumption agreement." Kislak subsequently sold and assigned the notes and deeds of trust to Freddie Mac.
Siegel and Gerber experienced constant financial difficulty in maintaining the Dalton Place property. By the end of 1991, they attempted to sell the property. Two parties submitted offers -- Andrew Hansen and Cunningham Capital Corpora- tion. Freddie Mac determined that Hansen was an unaccept- able buyer because of his lack of managerial experience, the condition of his other properties, and his limited financial resources. The second offer from Cunningham Capital Corpo- ration was withdrawn before Freddie Mac acted on it.
In December 1992, Siegel and Gerber defaulted on their obligations under the Windbell loan, and Freddie Mac fore- closed on that property. Seeking a deficiency judgment, Fred- die Mac filed an action in federal district court in the Northern District of Texas. Prior to trial, Siegel declared bankruptcy. Siegel and Gerber also defaulted on the loan on the Dalton Place property.
Freddie Mac filed two proofs of claim against Siegel in the bankruptcy proceeding. One related to the Windbell property and the other to the Dalton Place property. Siegel did not file objections to those proofs of claim. Nor did the bankruptcy trustee. In March 1994, the bankruptcy court granted Freddie Mac relief from the stay so that it could foreclose on the Dal- ton Place property. On June 10, 1994, Siegel was discharged from bankruptcy, and ...