Kivalu v. Carrington Mortgage Servicer LLC et al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Taniela Fakalolo Kivalu,
Plaintiff,
v.
Carrington Mortgage Servicer LLC, et al.,
Defendants.
No. CV-25-04221-PHX-MTL
ORDER
Before the Court are (1) the Court’s order that Plaintiff Taniela Kivalu show cause
for why he should not be sanctioned under Federal Rules of Civil Procedure 11 and 16(f),
Arizona Revised Statutes § 12-349(A)(1), and the Court’s inherent authority (Doc. 56), to
which Kivalu has responded (Doc. 57); (2) Defendant UWM LLC’s (“UWM”) motion for
attorneys’ fees and costs (Doc. 58); and (3) Kivalu’s motion for a certificate of
appealability (“COA”) to the Ninth Circuit (Doc. 74). The Court held a hearing on March
31, 2026, at which Kivalu was present. (See Doc. 79.) For the following reasons, Kivalu
will be sanctioned under Rule 11 and the Court’s inherent authority in the amount of
$1,215.00, UWM’s motion for attorneys’ fees and costs will be granted in part in that
UWM will be awarded $6,840.00 in fees under Arizona Revised Statutes § 12-341.01, and
Kivalu’s COA motion will be denied without prejudice.
I.
The Court set out the background of this case and Kivalu’s previous litigation
against Defendants in its order dismissing Kivalu’s claims with prejudice. (See Doc. 51.)
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 1 of 21

- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
The Court therefore does not recount that background in detail. In a nutshell, Kivalu “has
brought approximately eight lawsuits since 2016 in federal court.” (Id. at 1.) None have
been meritorious. (See id. at 1-2.) In the two actions Kivalu brought before this one,
Kivalu’s claims against UWM were dismissed with prejudice, the first time for failure to
state a claim and the second time because the claims were barred by claim preclusion. (Id.
at 2-3.) Kivalu’s claims against other defendants, including that Defendant Carrington
Mortgage Services, LLC (“Carrington”) could not collect payments from him after it
became the new servicer of his mortgage contract, met the same fate of dismissal for failure
to state a claim. (Id.)
Undeterred, Kivalu brought this action in state court, rather than in federal court,
making the same allegations against UWM that had been found insufficient to state a claim
and, later, barred. (Id. at 2-3.) He also made similar allegations against Carrington and
Defendants Axen Mortgage (“Axen”) and Nexa Mortgage (“Nexa”)1 that were alleged
previously and dismissed for failure to state a claim. (Id.; id. at 7-8.) Both UWM and
Carrington moved to dismiss in part on grounds that Kivalu’s claims were barred by claim
preclusion. (See id. at 4.)
The Court set a hearing on the motions to dismiss (Doc. 30), which Kivalu did not
attend (see Doc. 51 at 1 & n.1). The Court granted UWM’s and Carrington’s motions to
dismiss and sua sponte dismissed Kivalu’s claims against Axen and Nexa because all of
his claims were barred by claim preclusion. (Id. at 4-8.) The Court denied Kivalu’s motions
for leave to amend to, among other things, add defendants Brandon Harvy and Michael A.
Bosch, Jr. (Id. at 8-9.)2 Judgment was entered thereafter. (See Doc. 52.)
The Court also issued an Order to Show Cause requiring Kivalu to show why he
should not be sanctioned
under (1) Rule 11 of the Federal Rules of Civil Procedure, Arizona Revised
1 Axen and Nexa did not appear in this action and do not appear to have been served. (See
Doc. 51 at 7.)
2 By seeking the Court’s leave to add Brandon Harvy as a defendant, Kivalu acknowledged
that amendment was required to properly name Harvy in this action. He was therefore never
properly a defendant in this case.
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 2 of 21

- 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Statute § 12-349(A)(1), and the Court’s inherent authority for bringing this
lawsuit without substantial justification and without basis in law or fact, for
abusing the judicial system and wasting the Court’s limited resources by
bringing multiple meritless lawsuits, and for causing defendants to expend
unnecessary resources to defend against his continued meritless claims; and
(2) under Rule 16(f) of the Federal Rules of Civil Procedure and the Court’s
inherent authority for failing to appear at the January 13, 2026 Motion
Hearing.
(Doc. 56 at 1.) Kivalu responded with a “counter-motion to vacate [the] dismissal and
reinstate [the] case.” (Doc. 57 at 1 (citation modified).) He argues, as he has in other
briefing, that the Court failed to notify him about the hearing on the motions to dismiss.
(Id. at 2.) He also argues that, while his Ninth Circuit appeal in his September 2024 case
was pending, this Court was divested of jurisdiction to dismiss this action, and claim
preclusion was not applicable for lack of a final judgment in the case with a pending appeal.
(Id. at 2-3.)3 Finally, he argues that his allegations against Axen that Axen failed to provide
him with a copy of his mortgage contract are “distinct and not precluded.” (Id. at 4.)
UWM filed a motion for attorneys’ fees and costs pursuant to Arizona Revised
Statutes §§ 12-341.01 and 12-349(A)(1). (Doc. 58.) UWM seeks an award of $6,930.00 in
fees and $5.55 in costs. (See id. at 22-23.) Kivalu responded to UWM’s motion, not
addressing why he brought claims that had been found meritless or barred or addressing
any of the factors for awarding fees under Arizona’s fee-shifting statute for cases arising
out of contract, but instead restating the factual basis for his claims. (See Doc. 62 at 1-5.)
The closest Kivalu comes to providing his basis for asserting these claims is that he
“believes he has a strong case.” (Id. at 6.) He also argues in conclusory fashion buried at
the end of his brief that “[t]he attorney fees pleaded in Defendants’ favor have no legitimate
legal grounds and therefore must be denied.” (Id. at 8.) In another brief filed later, Kivalu
appears to argue that UWM cannot be considered a prevailing party for purposes of
obtaining fees because his September 2024 case has a pending appeal before the Ninth
3 Although the Court interprets Kivalu’s argument to mean that he does not think his claims
against the defendants to be precluded, he curiously states that his two previous lawsuits
“were dismissed with prejudice[], establishing privity,” such that “[c]laims against UWM
and Carrington are barred and must be dismissed with prejudice.” (Doc. 57 at 4.)
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 3 of 21

- 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Circuit. (Doc. 69 at 2-3.)
Last, Kivalu filed a document entitled “Certificate of Appeallibility [sic] (COA),”
which the Court interprets as requesting a certificate of appealability so that he may pursue
in forma pauperis status on appeal. (See Doc. 74 at 1 (requesting a copy of the COA “as
soon as possible” and stating that a “request for one” was enclosed).) Defendants have not
indicated their position on this motion.
II.
The Court first addresses its Order to Show Cause and whether Kivalu should be
sanctioned under Rule 11, Arizona Revised Statutes § 12-349(A)(1), Rule 16(f), and the
Court’s inherent authority.
A.
The Court analyzes Kivalu’s conduct under Rule 11.4 Rule 11 provides that, by
“presenting to the court a pleading, written motion, or other paper—whether by signing,
filing, submitting, or later advocating it—an . . . unrepresented party certifies,” among other
things, “that to the best of the person’s knowledge, information, and belief, formed after
an inquiry reasonable under the circumstances,” the “claims . . . and other legal contentions
are warranted by existing law or by a nonfrivolous argument for extending, modifying, or
reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b)(2). By its own
terms, Rule 11 applies to pro se litigants. Id.; see also United States v. Merrill, 746 F.2d
458, 465 (9th Cir. 1984) (“A pro se [party] is subject to the same rules of procedure . . . as
[parties] who are represented by counsel.”), overruled on other grounds as stated in United
States v. Hanna, 293 F.3d 1080, 1088 n.5 (9th Cir. 2002). The Court may, on its own
initiative, order a party to “show cause why conduct specifically described in the order has
not violated Rule 11(b).” Fed. R. Civ. P. 11(c)(3). Possible sanctions include “nonmonetary
directives” or “an order to pay a penalty into court.” Id. (c)(4).
4 Because the Court finds Kivalu’s claims are sanctionable under Rule 11, it need not
address whether Section 12-349(A)(1) applies in this action. See In re Larry’s Apartment,
L.L.C., 249 F.3d 832, 838 (9th Cir. 2001) (noting that “attorneys’ fees [under state law]
may be awarded by a district court when they are part of the state’s substantive, rather than
procedural, requirements” but that federal law applies “when fees are based upon
misconduct by an attorney or party in the litigation itself”).
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 4 of 21

- 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
If the complaint is the “primary focus of Rule 11 proceedings, a district court must
conduct a two-prong inquiry to determine (1) whether the complaint is legally or factually
baseless from an objective perspective, and (2) if the [party] has conducted a reasonable
and competent inquiry before signing and filing it.” Holgate v. Baldwin, 425 F.3d 671, 676
(9th Cir. 2005) (citation omitted). “In analyzing whether a complaint is sanctionable under
Rule 11, [courts] employ an objective standard of reasonableness and do not consider . . .
subjective good faith.” Lake v. Gates, 130 F.4th 1064, 1068 (9th Cir. 2025); see also G.C.
& K.B. Invs., Inc. v. Wilson, 326 F.3d 1096, 1109 (9th Cir. 2003) (“The subjective intent
of the movant to file a meritorious document is of no moment. The standard is
reasonableness.” (citation modified)). And courts consider whether the paper, “taken as a
whole, is subject to sanction,” even in the presence of “one non-frivolous claim.” Lake,
130 F.4th at 1068 (citation omitted).
As for the first prong of the Rule 11 inquiry, the Court finds that Kivalu’s complaint
was legally baseless from an objective perspective. See Holgate, 425 F.3d at 676. As the
Court explained in its order dismissing Kivalu’s claims, all of the allegations asserted in
this action (1) were “largely identical” to the allegations levied against the same defendants
in previous cases or (2) could have been alleged in those actions, and judgment was entered
against him on the merits. (See Doc. 51 at 4-8.) His claims fit squarely within the doctrine
of claim preclusion. (See id.) Kivalu’s claims against UWM were even found precluded
once already. (See id. at 2-3.) Kivalu’s claims were therefore not warranted by existing
law. See Fed. R. Civ. P. 11(b)(2); see also Zone Sports Ctr. Inc. v. Red Head, Inc., No. 11-
cv-00634-JST, 2013 WL 2252016, at *5 (N.D. Cal. May 22, 2013) (“Courts in this circuit
routinely hold that a claim that is barred by res judicata is frivolous.”).
As for the second prong of the Rule 11 inquiry, the Court finds that Kivalu did not
conduct a reasonable and competent inquiry before signing and filing his complaint. See
Holgate, 425 F.3d at 676. In Kivalu’s most recent case, his claims against UWM were
dismissed on claim preclusion grounds. He was thus on notice before bringing this action
that claim preclusion barred his claims against UWM and would bar the same claims
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 5 of 21

- 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
brought against other defendants or claims that could have been brought in previous
actions. Given this notice, a reasonable and competent inquiry would have included
carefully reviewing his claims in previous lawsuits to determine if his claims would be
precluded in a new suit. Given the overlapping nature of the allegations in this action and
his previous suits, the Court concludes that such an inquiry did not take place.5
Kivalu therefore violated Rule 11 by bringing this action. See Buster v. Greisen, 104
F.3d 1186, 1190 (9th Cir. 1997) (affirming Rule 11 sanctions where a suit was deemed
frivolous because it was “barred by the res judicata and collateral estoppel effects of [a]
prior judgment” and “a reasonable and competent inquiry would have led to the same
conclusion”). His response to the Order to Show Cause does not persuade the Court
otherwise. His first substantive argument is that the Court lacked jurisdiction to dismiss his
case because of his pending Ninth Circuit appeal of his September 2024 case, stating that
“appeal of this case stemmed from the origin of complaint stemmed to [the pending
appeal].” (Doc. 57 at 2.) “The fact that [Kivalu] filed a notice of appeal in a separate, but
related, case does not divest this Court of jurisdiction . . . .” United States v. Mendoza, 390
F. Supp. 2d 925, 930 (N.D. Cal. 2005). And his argument that the issues pending in his
Ninth Circuit appeal of his September 2024 case are so bound up with the issues in this
case as to deprive the Court of jurisdiction here further confirm that Kivalu knew of the
overlapping nature of his allegations between that action and this one and should have
known that he lacked a legal basis to bring this action.
His second substantive argument is that the pending Ninth Circuit appeal of his
September 2024 case means that there has not been a “final judgment” for claim preclusion
to apply. (Doc. 57 at 2-3.) This argument is baseless. As the Ninth Circuit stated almost
forty years ago, “[t]he established rule in the federal courts is that a final judgment retains
all of its res judicata consequences pending decision of the appeal.” Tripati v. Henman,
5 To be clear, the Court considers the history in Kivalu’s two previous cases to show that
Kivalu was on notice in this litigation that claim preclusion stood as a bar to subsequent
actions against the defendants based on the same allegations or allegations that could have
been brought earlier, not as an independent or exacerbating ground for imposing sanctions.
See Christian v. Mattel, Inc., 286 F.3d 1118, 1130 (9th Cir. 2002) (indicating that Rule 11
does not permit a court to rely on “conduct in other litigation” in imposing sanctions).
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 6 of 21

- 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
857 F.2d 1366, 1367 (9th Cir. 1988) (per curiam) (citation omitted). The court reasoned
that to hold otherwise would “lead to an absurd result: Litigants would be able to refile
identical cases while appeals are pending, enmeshing their opponents and the court system
in tangles of duplicative litigation.” Id. A reasonable and competent inquiry would have
revealed this long-established rule.
Additionally, even if Kivalu were correct that the pending Ninth Circuit appeal of
his September 2024 case meant that there was no final judgment of that dismissal, he fails
to consider that his claims against UWM, Carrington, and Nexa would still have been
barred by the final judgment in his June 2025 case; his claims were dismissed with
prejudice and he did not appeal that judgment. (See Doc. 51 at 2-3, 4-8.) His claims against
three of the four defendants in this action would therefore have been barred even
considering the June 2025 judgment alone, and this would not allow Kivalu to avoid Rule
11 sanctions. See Lake, 130 F.4th at 1068 (noting that Rule 11 sanctions may still apply
even in the presence of “one non-frivolous claim” (citation omitted)).
Kivalu’s third substantive argument is that there is not claim identity because “the
current suit involves distinct contracts and new forgery allegations, creating a separate
transactional nucleus.” (Doc. 57 at 3.) But as the Court explained in its previous order, his
argument cannot be squared with the allegations made in his previous suits (see Doc. 51 at
5-8), and merely labeling claims “distinct” does not make them so. He also argues his
claims against Axen arising out of its failure to provide him with a copy of his mortgage
contract are “distinct and not precluded.” (Doc. 57 at 4.) Even accepting Kivalu’s
description of his claims,6 Kivalu fails to consider that claim preclusion applies not just to
claims that were brought but also those that could have been brought. (See Doc. 51 at 6.)
This concept was explained to him in the dismissal of his June 2025 case. (See id. at 3.)
Claims against Axen arising out of its failure to provide Kivalu with a copy of his original
2022 mortgage contract could have been brought in his September 2024 action. (See Doc.
6 The complaint in this action does not allege that Axen failed to provide Kivalu with a
copy of his mortgage contract. Rather, it alleges that Carrington was “unable” to do so
when he spoke with Carrington about its collection efforts. (See Doc. 1-1 at 11.)
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 7 of 21

- 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1-1 at 26 (stating that the original mortgage contract was signed in 2022).)7
Finally, the Court finds that Kivalu has been provided with sufficient process as to
his sanctionable conduct. “Ordinarily a court proposing to impose sanctions notifies the
person charged both of the particular alleged misconduct and of the particular disciplinary
authority under which the court is planning to proceed.” In re DeVille, 361 F.3d 539, 548
(9th Cir. 2004). The Court provided Kivalu with this notice in its Order to Show Cause,
and Kivalu was provided with an opportunity to respond both in writing and at the March
31, 2026 hearing. (See Docs. 56, 57, 79.)
The Court thus must consider an appropriate sanction under Rule 11. The sanction
“must be limited to what suffices to deter repetition of the conduct or comparable conduct
by others similarly situated.” Fed. R. Civ. P. 11(c)(4). In the circumstances of this case, the
Court finds that an appropriate sanction is that Kivalu pay a monetary penalty to the Court
of $1,215.00 (i.e., three times the filing fee to bring a civil action in this Court). The Court
finds that a lesser sanction would not be sufficient to deter Kivalu’s conduct, but that this
sanction is not greater than necessary to achieve the Court’s goal of deterring such conduct.
B.
The Court also finds that the above sanction could be imposed under its inherent
authority. “Federal courts possess certain inherent powers, not conferred by rule or statute,
to manage their own affairs so as to achieve the orderly and expeditious disposition of
cases.” Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101, 107 (2017) (quotation marks
omitted). To be sanctioned under the Court’s inherent authority “requires a finding of bad
faith.” DeVille, 361 F.3d at 548 (citation omitted). “A finding of bad faith is warranted
where [a party] knowingly or recklessly raises a frivolous argument, or argues a
meritorious claim for the purpose of harassing an opponent.” Primus Auto. Fin. Servs., Inc.
v. Batarse, 115 F.3d 644, 649 (9th Cir. 1997) (quotation marks omitted). That other rules
and statutes may support sanctions does not “displace[] the inherent power to impose
7 Kivalu’s other arguments do not pertain to the objective merit of his claims when they
were brought and therefore are not considered in this analysis. (See Doc. 57 at 3, 5-6 (due
process arguments about lack of notice of the hearing on the motions to dismiss); id. at 3
(arguments that Kivalu was not properly served with UWM’s motion to dismiss).)
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 8 of 21

- 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
sanctions for bad faith conduct.” DeVille, 361 F.3d at 551. This inherent authority permits
the Court to “fashion an appropriate sanction for conduct which abuses the judicial
process.” Goodyear Tire, 581 U.S. at 107 (citation omitted).
The Court finds that in this case, Kivalu’s conduct in bringing this baseless action
was tantamount to bad faith and is sanctionable under the Court’s inherent authority. As
discussed, Kivalu brought these claims against the defendants—and maintained them
throughout—despite knowing or being on notice, given his previous cases, that his claims
against the defendants were barred by claim preclusion. Thus, either Kivalu knowingly or
recklessly brought these claims and pursued them. See Primus Auto., 115 F.3d at 649.
Although either would be sufficient for a bad faith finding, Kivalu’s conduct in this case
suggests to the Court that his actions were taken knowingly. First, that Kivalu filed this
action in state court after two previous losses in federal court involving overlapping claims
is indicative that he knew his claims were barred and was going to try his hand in a different
forum. Second, that Kivalu has argued throughout this case that the pending Ninth Circuit
appeal in the September 2024 case controls the disposition here is also indicative that he
knew his previous claims overlap with claims in this action. (See Doc. 51 at 6 & n.4
(addressing Kivalu’s request for a stay of proceedings in this action pending resolution of
the appeal); Doc. 57 at 2 (arguing the Court lacked jurisdiction to dismiss because of the
pending appeal); Doc. 66 at 10 (same); Doc. 69 at 2 (same).) Indeed, at a previous hearing,
Kivalu indicated that the basis for his complaint in this action was “under review” at the
Ninth Circuit.
The Court is mindful that its inherent powers “must be exercised with restraint and
discretion.” Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). That Kivalu has continued
to bring these claims in an attempt to evade two adverse judgments, however, is an abuse
of the legal system and has imposed significant costs on both the Court and the defendants.
As for the defendants, the ones who appeared were forced to incur fees and spend time to
defend against his baseless lawsuit, including to file successful motions to dismiss. As for
the Court, it was required to spend precious time and resources addressing claims that
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 9 of 21

- 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
should never have been brought—and Kivalu’s bevy of other motions and filings—taking
its time and attention away from cases with meritorious claims. See Maxwell v. MOAB Inv.
Grp., LLC, No. 14-cv-03095-WHO, 2014 WL 4757429, at *6 (N.D. Cal. Sep. 24, 2014)
(stating that plaintiffs “placed [an] unnecessary burden on the courts by forcing them to
address claims that were previously and conclusively decided in other tribunals”). And
Kivalu has taken other abusive actions in this baseless case, including filing a motion for a
temporary restraining order and preliminary injunction to prevent Carrington from
proceeding with a foreclosure sale due to Kivalu’s admitted decision to stop paying his
mortgage for, at that time, sixteen or seventeen months. (See Doc. 14.) Carrington delayed
exercising a legal remedy so the Court could rule on the motions to dismiss. (See Doc. 28
at 1-2); Woodruff v. Mason McDuffie Mortg. Corp., No. 3:22-cv-03124-WHO, 2022 WL
4487011, at *6 (N.D. Cal. Sep. 12, 2022) (“This serial filing of nearly identical meritless
suits also has another real-world consequence: it interferes with disposition of the property
at issue. . . . [The plaintiff] should not be permitted to use the backdoor of frivolous suit
upon frivolous suit to indefinitely delay a foreclosure.”). The logical inference that the
Court draws from these facts is that Kivalu filed this action, without regard to whether his
claims are meritorious or not (and in the face of two judgments that they are not), to delay
the inevitable result of his failure to make mortgage payments. That is not the purpose of
this Court. See Maxwell v. Deutsche Bank Nat’l Tr. Co., No. 13-cv-03957-WHO, 2014 WL
296873, at *2 (N.D. Cal. Jan. 27, 2014) (“The courts are not vehicles for hindering proper
foreclosure proceedings that occur due to the plaintiffs’ default on their mortgage. To date,
and across multiple courts, the plaintiffs have failed to show any cognizable claim for
relief.”).
Given the circumstances of this case, the Court therefore determines that the
monetary penalty imposed under Rule 11 could also be imposed under the Court’s inherent
authority.
As with the Court’s analysis under Rule 11, the Court finds that Kivalu has been
provided with due process regarding the Court’s intention to impose sanctions under its
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 10 of 21

- 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
inherent authority. See In re Lehtinen, 564 F.3d 1052, 1060 (9th Cir. 2009) (“[W]hen using
the inherent sanction power, due process is accorded as long as the sanctionee is provided
with sufficient, advance notice of exactly which conduct was alleged to be sanctionable,
and [was] furthermore aware that [he] stood accused of having acted in bad faith.” (second
and third alterations in original) (quotation marks omitted)), abrogated on other grounds
as stated in In re Gugliuzza, 852 F.3d 884, 898 (9th Cir. 2017). As stated, the Court issued
its Order to Show Cause, which identified the conduct for which he could be sanctioned
(Doc. 56); Kivalu was given an opportunity to provide a written response, and he did so
(id.; Doc. 57); and the Court held a hearing at which Kivalu was given an opportunity to
be heard in response to the Order to Show Cause (see Doc. 79).
C.
The Court next considers whether to impose sanctions for Kivalu’s failure to appear
at the hearing on the motions to dismiss. Rule 16(f)(1) provides that “the court may issue
any just orders . . . if a party or its attorney” (1) “fails to appear at a scheduling or other
pretrial conference,” (2) “is substantially unprepared to participate . . . in the conference,”
or (3) “fails to obey a scheduling or other pretrial order.” “Rule 16(f)’s explicit reference
to sanctions reflects the Rule’s intention to encourage forceful judicial management” and
“vests a district court with discretion to impose whichever sanction it feels is appropriate
under the circumstances.” Huebner v. Midland Credit Mgmt., Inc., 897 F.3d 42, 53 (2d Cir.
2018) (quotation marks omitted); see also Sherman v. United States, 801 F.2d 1133, 1135
(9th Cir. 1986) (per curiam). And as mentioned, the Court may also “fashion an appropriate
sanction for conduct which abuses the judicial process” pursuant to its inherent authority
to “manage [its] own affairs so as to achieve the orderly and expeditious disposition of
cases.” Chambers, 501 U.S. at 43-45 (citation omitted).
Kivalu’s failure to appear at the hearing on the motions to dismiss has been the
subject of several motions and orders concerning his claims that he did not receive
sufficient notice of the hearing due to his malfunctioning email. (See Docs. 54, 55, 66, 72.)
Kivalu again raised this issue at the March 31, 2026 hearing, at which the Court put Kivalu
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 11 of 21

- 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
under oath to answer whether he had notice of the hearing on the motions to dismiss. It was
the Court’s impression that, once Kivalu was put under oath, he became more equivocal
about his supposed lack of notice. Additionally, his explanations did not at times make
sense or were contradicted by the facts. For example, Carrington’s counsel sent Kivalu an
email on December 15, 2025, informing him that the Court set a consolidated hearing on
the motions to dismiss on January 13, 2026, and providing him with copies of the Court’s
orders. (Doc. 78 at 4-8.) The Court notes that counsel’s email responded to an email from
Kivalu on that same day, undercutting that his email address was not functioning. (See id.
at 4-5.) Kivalu has also previously submitted evidence of receiving emails at this email
address. (Doc. 57 at 24 (email from UWM’s counsel on December 15, 2025).) And, as the
Court noted at the March 31, 2026 hearing, that Kivalu filed many documents in this case,
such as his responses to briefs filed by defense counsel, is inconsistent with the notion that
he did not receive notice of anything filed while his email was supposedly malfunctioning.
Considering the circumstances and all the information before the Court, the Court finds
that Kivalu and his explanations for missing the hearing are untrustworthy.
Even accepting Kivalu’s explanations as true, however, as the Court explained in
its orders, Kivalu was on notice long before the Court set the hearing on Defendants’
motions that his email was not properly functioning, yet he still signed up for electronic
noticing with that supposedly malfunctioning email. (Doc. 55 at 1; Doc. 72 at 2-3.) Kivalu
also admitted that he reviewed the Court’s docket at least twice before the hearing and
therefore “lack[ed] an excuse for his failure to properly review the Court’s orders that were
issued during the time he was having issues with his email address.” (Doc. 55 at 1; see also
Doc. 72 at 2.) Further, the Court noted that Kivalu had been warned to “comply with all
rules, keep current his contact information with the Court, and carefully review the Court’s
docket.” (Doc. 72 at 2.)
Although Kivalu did not appear at the motion hearing, and although he lacked a
valid excuse for failing to appear (see Docs. 55, 72), the Court will decline to sanction him
for his failure to appear because the other sanction the Court will impose is, in the Court’s
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 12 of 21

- 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
view, sufficient.
III.
The Court next considers UWM’s motion for attorneys’ fees. (Doc. 58.) UWM
moves for fees under Arizona Revised Statutes §§ 12-341.01 and 12-349(A)(1).
Under the “American Rule,” a litigant’s attorneys’ fees are not ordinarily
recoverable unless there is a statute or enforceable contract that provides for them.
Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717 (1967); see also
Astrue v. Ratliff, 560 U.S. 586, 591 (2010); London v. Green Acres Tr., 159 Ariz. 136, 145
(Ct. App. 1988). In this Court, parties requesting an award of fees must meet the content
and formatting requirements outlined in the Local Rules of Civil Procedure. See LRCiv.
54.2.
A.
Arizona Revised Statutes § 12-341.01 permits a “successful party” to recover
reasonable fees for any “contested action arising out of a contract, express or implied.”
A.R.S. § 12-341.01(A). The fee award need not equal, but cannot exceed, the actual
attorneys’ fees paid, and it is the role of the Court, not the jury, to award such fees. Id. 12-
341.01(B)-(C).
First, the Court finds that this action arises out of a contract. Arizona courts have
interpreted the “arising out of a contract” requirement of A.R.S. § 12-341.01 broadly. See,
e.g., Marcus v. Fox, 150 Ariz. 333, 334 (1986) (en banc). The prevailing test for
determining whether an action arises out of a contract is whether the cause of action could
have existed “but for” the existence of a contract. See Sparks v. Republic Nat’l Life Ins.
Co., 132 Ariz. 529, 543 (1982) (en banc). This does not mean that a party must assert an
explicit breach of contract claim, however. See ML Servicing Co. v. Coles, 235 Ariz. 562,
570 (Ct. App. 2014). A trial court may award attorneys’ fees to the successful party even
when tort claims are “interwoven” with contract claims. Rudinsky v. Harris, 231 Ariz. 95,
102 (Ct. App. 2012); see also Sparks, 132 Ariz. at 543 (“[A]ttorney’s fees may be
recoverable in tort cases which find their basis in contract.”).
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 13 of 21

- 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
But the mere existence of a contract “somewhere in the transaction” is insufficient
for the purposes of § 12-341.01. Marcus, 150 Ariz. at 335. If a particular contract “merely
puts the parties within tortious striking range of each other,” it “does not convert ensuing
torts into contract claims.” Dooley v. O’Brien, 226 Ariz. 149, 152 (Ct. App. 2010) (citation
omitted). Moreover, the fee statute does not apply to purely statutory causes of action or
where a contract is a factual predicate to the action but not its essential basis. Hanley v.
Pearson, 204 Ariz. 147, 151 (Ct. App. 2003); see also Kennedy v. Linda Brock Auto. Plaza,
Inc., 175 Ariz. 323, 325 (Ct. App. 1993).
This action, although based in part on statutory causes of action, nevertheless arises
out of contract because the contract—and Kivalu’s theories about the lack of existence of
a valid contract, fraudulent modification of a contract, forgery of his signatures on the
contract, and breaching the escrow agreement—was the “but-for” cause of his claims, as
his statutory claims would not have existed apart from the alleged fraudulent contract
modifications. (See Doc. 1-1 at 11-12, 14-16); see also ML Servicing Co., 235 Ariz. at 570
(defining the test as “whether the plaintiff would have a claim even in the absence of a
contract” (quotation marks omitted)). Kivalu himself described his claims as based on the
“unlawful attempts to collect payments based on a fraudulent modification of [his] original
VA mortgage loan contract” and based on changes made to his contract to which he did
not consent. (Doc. 1-1 at 11-12.) Kivalu also requested as part of his relief that the
“modified contract [be declared] null and void” and that the defendants be enjoined from
“collecting payments based on the fraudulent contract.” (Id. at 17); see Marcus, 150 Ariz.
at 335-36 (“[I]n the present case, Marcus was attempting to invalidate the contract with
Fox. It was that contract which prompted this suit and also served as the basis for his claim.
Stated otherwise, Marcus’ cause of action for tort could not have existed but for the
fraudulently induced contract.”); see also Tribe v. Ariz. Snowbowl Resort Ltd. P’ship, No.
1 CA-CV 16-0521, 2020 WL 3526664, at *5 (Ariz. Ct. App. June 30, 2020) (finding a suit
arose out of contract where, even though the claim “traditionally sound[ed] in tort,” the
claim “brought constitute[d] a direct attack on the contract”). Viewing Kivalu’s complaint
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 14 of 21

- 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
as a whole, the contract therefore has “some causal connection with [Kivalu’s] claim[s]”
that permits an award under Section 12-341.01. See Ramsey Air Meds, L.L.C. v. Cutter
Aviation, Inc., 198 Ariz. 10, 14 (Ct. App. 2000).
B.
The Court also concludes that UWM was a “successful party” for purposes of the
statute. UWM succeeded in having all of Kivalu’s claims against it dismissed with
prejudice. (See Doc. 51 at 4-7.)
C.
“A finding of eligibility under § 12-341.01(A), without more, does not establish
entitlement to fees.” Rindlisbacher v. Steinway & Sons Inc., No. CV-18-01131-PHX-MTL,
2021 WL 2434207, at *6 (D. Ariz. May 26, 2021). The Court must therefore weigh the
“six factors which courts must consider when deciding whether to award attorney’s fees to
a prevailing party” under the statute. See Velarde v. PACE Membership Warehouse, Inc.,
105 F.3d 1313, 1319 (9th Cir. 1997). These factors are
(1) the merits of the unsuccessful parties’ claim or defense; (2) whether
litigation could have been avoided or settled; (3) whether assessing fees
against the unsuccessful party would cause extreme hardship; (4) whether
the successful party prevailed with respect to all relief sought; (5) the novelty
of the issues; and (6) whether the award will overly deter others from
bringing meritorious suits.
Id.
The first factor—the “merits of the unsuccessful parties’ claim or defense”—weighs
in UWM’s favor. See Velarde, 105 F.3d at 1319. As discussed in the Court’s order granting
UWM’s motion to dismiss and in this Order, Kivalu’s claims against UWM were meritless
because they were barred by claim preclusion twice over. (Doc. 51 at 4-7.)
The second factor—“whether litigation could have been avoided or settled”—also
weighs in UWM’s favor. See Velarde, 105 F.3d at 1319. “[T]he express and recognized
purposes of § 12-341.01 . . . are to mitigate the burden of the expense of litigation . . . and
to encourage an early and ongoing assessment of the merits . . . .” Fields v. Elected Offs.
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 15 of 21

- 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Ret. Plan, 248 Ariz. 241, 244 (Ct. App. 2020) (quotation marks omitted). The Court agrees
with UWM that, had Kivalu conducted a reasonable assessment of the merits of his claims
in light of the previous two judgments dismissing his claims against UWM with prejudice,
this litigation could have been avoided. (See Doc. 58 at 8); see also Rindlisbacher, 2021
WL 2434207, at *7 (finding this factor weighed in favor of movant because the plaintiffs
had been “informed . . . that their claims were likely time barred” and the “decision to
pursue their claims with knowledge of their shortcomings . . . support[ed] an award of
attorneys’ fees”).
The third factor—“whether assessing fees against the unsuccessful party would
cause extreme hardship”—is neutral. See Velarde, 105 F.3d at 1319. “[T]he party asserting
financial hardship has the burden of coming forward with prima facie evidence of financial
hardship,” by “present[ing] specific facts by affidavit or testimony.” Woerth v. City of
Flagstaff, 167 Ariz. 412, 420 (Ct. App. 1990). Kivalu has not presented any affidavit or
testimony of financial hardship in response to UWM’s motion; rather, Kivalu chose to
attack UWM’s motion on the merits of its entitlement and of his claims. (See Docs. 62,
69.) That said, in light of Kivalu’s pro se status, the Court considers this action as a whole,
and notes that Kivalu was granted a fee deferral in state court (Doc. 1-2 at 1) and has
maintained throughout that he is disabled (see, e.g., Doc. 54 at 2). The Court considers
these facts as suggestive that assessing fees against Kivalu could cause extreme hardship,
but they are not sufficient to make this factor weigh against awarding fees, especially
considering that Kivalu has not offered any evidence or argument about his ability to pay
a fee award to UWM. See Rindlisbacher, 2021 WL 2434207, at *8 (“Although the
Rindlisbachers have presented some indication of hardship, they have not provided enough
evidence for the Court to assess the type of hardship that a fee award would cause.”). In
addition, at the March 31, 2026 hearing, Kivalu indicated that he was financially capable
of starting to make his mortgage payments again, which also suggests that fees in the
amount UWM requests would not cause extreme hardship.
The fourth factor—“whether the successful party prevailed with respect to all relief
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 16 of 21

- 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
sought”—weighs in UWM’s favor. See Velarde, 105 F.3d at 1319. UWM obtained
dismissal with prejudice of all Kivalu’s claims against it. (See Doc. 51 at 4-7.)
The fifth factor—“the novelty of the issues”—weighs in UWM’s favor. See
Velarde, 105 F.3d at 1319. Because Kivalu’s claims against UWM were barred at the outset
by claim preclusion and had been previously decided against Kivalu twice, there were no
novel legal issues presented, which supports an award of fees. See Rindlisbacher, 2021 WL
2434207, at *8 (“When an issue is not novel, parties can more thoroughly and accurately
evaluate the merits of their claims and associated risks.”).
The sixth factor—“whether the award will overly deter others from bringing
meritorious suits”—weighs in UWM’s favor. See Velarde, 105 F.3d at 1319. The Court
agrees with UWM that granting fees in this case would not deter meritorious claims. (Doc.
58 at 9-10.) Rather, granting an award in this case would deter unmeritorious claims and
would encourage litigants to seriously consider whether to “aggressively persist in
litigation” in the face of previous adverse judgments. Cf. Rindlisbacher, 2021 WL
2434207, at *8.
Because the Court finds that the majority of the Section 12-341.01 factors weigh in
favor of UWM and awarding fees, the Court exercises its discretion to award fees.8 See
Schweiger v. China Doll Rest., Inc., 138 Ariz. 183, 186 (Ct. App. 1983) (“[T]he award of
fees is one way to discourage the filing of frivolous or meritless claims.”).
D.
Having determined that the Court will award fees to UWM under Section 12-
341.01, the Court must determine whether UWM’s requested fee award is reasonable. In
doing so, the Court must consider “(1) whether the hourly billing rate is reasonable, and
(2) whether the hours expended on the case are reasonable.” Rindlisbacher, 2021 WL
2434207, at *9. “Once a party establishes its entitlement to fees and meets the minimum
requirements in its application and affidavit for fees, the burden shifts to the party opposing
the fee award to demonstrate the impropriety or unreasonableness of the requested fees.”
8 The Court therefore does not consider whether UWM would be entitled to fees under
Section 12-349(A)(1). (Doc. 58 at 3, 5-6.)
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 17 of 21

- 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Nolan v. Starlight Pines Homeowners Ass’n, 216 Ariz. 482, 491 (Ct. App. 2007).
The Court finds that UWM provided sufficient supporting documentation in support
of its motion for fees. See LRCiv 54.2(d); (see also Doc. 58 at 14-15 (statement of
consultation), 18-20 (declaration establishing billing rate, counsel’s experience, and
reasonableness of time spent), 22 (itemized statement of fees)).
The billing rate in this case was reasonable. “[T]he rate charged by the lawyer to the
client is the best indication of what is reasonable under the circumstances of the particular
case.” Schweiger, 138 Ariz. at 187-88. The Court has reviewed the declaration of Kristin
McDonald in support of the pending motion. (Doc. 58 at 18-20.) The hourly billing rate for
her time as a partner was $300 per hour. (See id. at 19.) Kivalu has not made any objection
to the billing rate, and the Court concludes the rate is reasonable. See, e.g., Angel Jet Servs.,
LLC v. Giant Eagle, Inc., No. CV-09-01489-PHX-SRB, 2013 WL 11311729, at *7 (D.
Ariz. Apr. 17, 2013) (finding hourly rates ranging from $255 to $520 per hour were
reasonable for the Phoenix market).
The hours expended were also reasonable. The successful party is “entitled to
recover a reasonable attorney’s fee for every item of service which, at the time rendered,
would have been undertaken by a reasonable and prudent lawyer to advance or protect his
client’s interest.” Schweiger, 138 Ariz. at 188 (citation omitted). “The affidavit of counsel
should indicate the type of legal services provided, the date the service was provided, the
attorney providing the service . . . , and the time spent in providing the service.” Id. The
Court may reduce a fee award for hours not reasonably expended. See id. (“Just as the
agreed upon billing rate between the parties may be considered unreasonable, likewise, the
amount of hours claimed may also be unreasonable.”); see also Hensley v. Eckerhart, 461
U.S. 424, 434 (1983) (“Counsel for the prevailing party should make a good faith effort to
exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary,
just as a lawyer in private practice ethically is obligated to exclude such hours from his fee
submission.”).
In support of the pending motion, UWM submitted billing entries disclosing all the
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 18 of 21

- 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
information required by Schweiger. (See Doc. 58 at 22); see also LRCiv 54.2(d)(3), (e).
Ms. McDonald billed 23.1 hours, and UWM argues in its motion that it “conducted its
defense in a manner to minimize the expense of litigation, particularly given [Kivalu’s]
history of repeated filings,” including “proceed[ing] directly to bringing a dispositive
motion rather than filing an Answer and propounding discovery.” (See Doc. 58 at 11, 22.)
Kivalu has not objected to the reasonableness of the hours claimed by UWM, see LRCiv
54.2(f) (requiring responses to “identify with specificity all disputed issues of material fact
and . . . identify each and every disputed time entry or expense item”), and upon the Court’s
review of the billing entries, the Court finds that the hours spent for counsel to (1) respond
to Kivalu’s complaint, (2) prepare for and attend court hearings and comply with the
Court’s Orders, (3) keep her client apprised of the status of the case, (4) correspond with
co-counsel, and (5) prepare the motion for fees, were generally reasonable and not
excessive. See Schweiger, 138 Ariz. at 188. The Court will reduce by 20% the December
22, 2025 time entry for improper block billing because the Court could not determine how
much time was spent on preparing the brief versus sending the brief to counsel’s client; the
Court will therefore reduce the requested fee for that task from $450.00 to $360.00. See
LRCiv 54.2(e); Rindlisbacher, 2021 WL 2434207, at *12 (reducing block billing entries
by 20%). The Court did not find any other billing entries seeking fees for unreasonable,
clerical, or duplicative tasks or billing entries with an inadequate description.
The Court therefore will award UWM its fees in the amount of $6,840.00. (See Doc.
58 at 22.) UWM also requests costs in the amount of $5.55, consisting of mailing expenses.
(Id. at 23.) UWM did not explain these mailing costs or verify them by, for example,
attaching any receipt or invoice. See LRCiv 54.2(e)(3). The Court therefore will not award
UWM its requested expenses.
IV.
The Court considers Kivalu’s motion for a certificate of appealability so that he may
pursue in forma pauperis status on appeal. (Doc. 74.) Based on the Court’s review of the
docket in Kivalu’s pending appeal of this action, the Court notes that the Ninth Circuit
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 19 of 21

- 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
appears to be considering whether Kivalu’s appeal is frivolous such that it will deny him
permission to proceed in forma pauperis. See Doc. 9.1, Kivalu v. Axen Mortg., LLC, No.
26-781 (Mar. 19, 2026) (“It appears that this appeal may be frivolous. If the appeal is
frivolous, the court will deny permission to proceed in forma pauperis and dismiss the
appeal.”). Because it appears the Ninth Circuit intends to rule on whether Kivalu should be
allowed to proceed in forma pauperis, the Court declines to address Kivalu’s motion in this
Court absent further direction from the Ninth Circuit. The Court thus denies Kivalu’s
motion without prejudice.
V.
Accordingly,
IT IS ORDERED that Kivalu is hereby sanctioned under Federal Rule of Civil
Procedure 11 and the Court’s inherent authority in an amount of $1,215.00 to be paid to
the Court as a monetary penalty.
IT IS FURTHER ORDERED that Kivalu must make payment to the Clerk of
Court by May 7, 2026 and must file a Notice of Compliance within 14 days of making
payment.
IT IS FURTHER ORDERED that if payment is not made by May 7, 2026, interest
will be imposed on a daily basis at the rate of 3.69% until received, including weekends
and including up to the day prior to payment.
IT IS FURTHER ORDERED that Defendant UWM’s motion for attorneys’ fees
and costs (Doc. 58) is granted in part and denied in part. UWM is awarded $6,840.00 in
attorneys’ fees under Arizona Revised Statutes § 12-341.01.
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 20 of 21

- 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
IT IS FINALLY ORDERED that Kivalu’s COA motion (Doc. 74) is denied
without prejudice.
Dated this 7th day of April, 2026.
Case 2:25-cv-04221-MTL Document 81 Filed 04/07/26 Page 21 of 21