Such a reading is not inequitable. If a reinstatement is necessary, presumably there has been a default which necessitated institution of a foreclosure action. Between the mortgagee, which is merely enforcing its security interest, and the mortgagor, who has defaulted, it is reasonable to determine that the latter should bear the costs resulting from the default. If the foreclosure action results in a judgment favorable to the mortgagor, or if for some other reason recovery of part or all of the costs and attorneys' fees would be inappropriate, the court retains the power to deny costs and fees accordingly. Indeed, this power is recognized in the mortgage contract, which provides for allowance of a "reasonable" sum.
In this case, therefore, defendants' motion to preclude recovery of any costs and attorneys' fees as a matter of law is denied. Defendants' motion for reinstatement, however, is granted. It appears that defendants' failure to reinstate within the ninety-day time period was a result of good-faith disputes concerning the appropriate amount which needed to be tendered. Defendants apparently attempted to tender the necessary payment, and their attempts were rejected on the basis that they had not tendered the appropriate amount. Furthermore, the defendants' motion to reinstate was filed before the expiration of the reinstatement period, and it would be unfair not to toll the period while the parties were briefing and awaiting a ruling on the legal question of plaintiffs' entitlement to attorneys' fees as part of the reinstatement amount.
Finally, the parties have presented some argument as to whether the amount of costs and attorneys' fees sought by plaintiff is reasonable. Defendants contend that the foreclosure proceeding was not necessary in the first place and that it is plaintiff's fault that it has dragged on. Indeed, defendants argue that it is they who are entitled to recover costs and attorneys' fees. However, the parties have presented insufficient information to allow the Court to rule on these issues. The Court is inclined to agree with defendants that plaintiff is not entitled to recover all of its costs and fees, in light of defendants' consistent good-faith desire to reinstate the mortgage. The Court cannot, however, at this time take a position as to whether plaintiff is entitled to costs and attorneys' fees at all or, if so, what is a reasonable amount. If the parties are unable to agree on an appropriate amount of reasonable costs and attorneys' fees, plaintiff may bring a motion by February 8, 1989.
Because the Court is granting defendants' motion for reinstatement, conditioned upon the payment of all defaults and any reasonable costs and attorneys' fees, judgment will be entered at this time pursuant to Fed. R. Civ. P. 58. The Court retains jurisdiction until March 30, 1989, to enforce this order and to entertain a motion for costs and attorneys' fees or a motion for reinstatement, both of which the Court hopes will not be necessary.
DATED: January 24, 1989
JUDGMENT IN A CIVIL CASE
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS ORDERED AND ADJUDGED defendants' motion for reinstatement is granted. Defendants' motion to preclude recovery of costs and attorneys' fees is denied.
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