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Elyazidi v. Suntrust Bank

United States District Court, D. Maryland

February 28, 2014



DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution are motions to dismiss filed by Defendants SunTrust Bank ("SunTrust") (ECF No. 17) and Mitchell Rubenstein & Associates, P.C. ("MRA") (ECF No. 18), as well as a motion for sanctions filed by SunTrust (ECF No. 24). The relevant issues have been briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, the motions to dismiss will be granted and the motion for sanctions will be denied.

I. Background

A. Factual Background

On June 12, 2012, SunTrust, through MRA, its counsel, filed a collection action against Plaintiff Mounia Elyazidi ("Plaintiff" or "Ms. Elyazidi") in the General District Court of Fairfax County, Virginia, to recover "an overdraft that resulted from cashing a check on... a consumer checking account[.]" (ECF No. 16 ¶ 11). The state court complaint, known as a "warrant in debt, " recited that Ms. Elyazidi owed SunTrust "a debt in the sum of $9490.82 net of any credits, with interest at 6.0000% from [the] date of 10/14/2010 until paid, $58.00 costs[, ] and $2372.71 attorney's fees with the basis of this claim being... [c]ontract." (ECF No. 18-2, at 1).[1] Attached to the warrant in debt was an "Affidavit of Account, " in which a SunTrust representative asserted that "[t]he amount of [$9, 490.82] plus reasonable attorney fees of 25% and the costs of this proceeding is justly due and owing from debt to SunTrust Bank pursuant to the attached copies of the debt[.]" ( Id. at 2). Also included was SunTrust's "Rules and Regulations for Deposit Accounts, " which recited, in relevant part:

[Ms. Elyazidi is] liable for all amounts charged to [her] Account, whether by offset, overdraft, lien or fee. If [SunTrust] take[s] court action or commence[s] an arbitration proceeding against [her] to collect such amounts, or if [she] elect[s] arbitration of a collection action [SunTrust has] brought against [her] in court, [she] will also be liable for court or arbitration costs, other charges or fees, and attorney's fees of up to 25 percent, or an amount as permitted by law, of the amount owed to [SunTrust].

( Id. at 27). SunTrust additionally attached a "Personal Account Signature Card, " in which Ms. Elyazidi agreed "to be bound by the terms and conditions set forth in the Bank's Rules and Regulations for Deposit Accounts" ( id. at 9); account statements showing a negative balance in the amount SunTrust sought to recover ( id. at 10-11); and a demand for repayment of the overdraft amount ( id. at 7).

In support of a claim for attorneys' fees, an MRA attorney executed an affidavit in which she averred, as relevant here, that SunTrust was "entitled to indemnification for 25% to the contract, note or other instrument of agreement executed between the parties"; that she "ha[d] a billable rate of $250.00 per hour and ha[d] expended approximately 1 hour in preparation of the Warrant in Debt/Motion for Judgment filed herein"; that she would "require an additional 3 hours for Court appearances and travel"; and that she "anticipate[d] at least 20 additional hours in order to satisfy [the expected] judgment by execution, based upon similar cases and known asset information." ( Id. at 3). SunTrust's counsel "request[ed] an award of 25%" of the principal debt "as a just and reasonable fee, which [was] equal to or less than the actual arrangement with [SunTrust] in this case." ( Id. ).

The case proceeded to a bench trial on December 19, 2012. At the outset of the trial, Ms. Elyazidi's counsel, Ernest P. Francis, orally moved for summary judgment on the grounds that SunTrust failed to redact his client's social security number from account statements attached to a bill of particulars and that the same bill of particulars was filed two days late. (ECF No. 18-3, at 3-5). The court asked Mr. Francis to make a showing of prejudice, which he failed to do, and suggested that SunTrust redact the social security number from the exhibits. ( Id. at 5). Counsel for SunTrust agreed to do so, and Mr. Francis said nothing further. ( Id. ). Thereafter, he waived an opening statement ( id. at 6), declined to cross-examine SunTrust's only witness ( id. at 69), and presented no evidence ( id. at 69-70) or closing argument ( id. at 73). At the conclusion of the trial, judgment was entered in favor of SunTrust for $9, 490.82, the amount sought in the warrant in debt. ( Id. at 78).

At a separate hearing on attorneys' fees, held February 27, 2013, counsel for SunTrust submitted a supplemental affidavit, asserting that she had "expended approximately 13.9 hours" on the case and providing a detailed description of her work, broken down by task, showing a total billable amount of $4, 025.00. (ECF No. 16-1, at 2). Like the affidavit attached to the warrant in debt, SunTrust's counsel averred in the supplemental affidavit that she "anticipate[d] at least 20 additional hours in order to satisfy [SunTrust's] judgment by execution, based upon similar cases and known asset information" and "request[ed] an award of 25% percent as a just and reasonable fee[.]" ( Id. at 3). After the attorney for SunTrust testified in support of her request, Mr. Francis argued at length that "a contractual attorney's fee provision is a contract of indemnity" and that there had been "no showing that [SunTrust] actually paid anything... [s]o there's nothing to be indemnified for." (ECF No. 18-4, at 12). The court disagreed and awarded "fees in the amount requested" of $2, 372.71 - i.e., 25% of the $9, 490.82 principal. ( Id. at 20).

B. Procedural Background

Plaintiff, again represented by Mr. Francis, commenced the instant action on June 12, 2013, by filing a complaint against SunTrust and MRA in the Circuit Court for Montgomery County, Maryland, alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and analogous state law related to alleged false statements and other misconduct by Defendants in the Virginia state court. (ECF No. 2). MRA was served on July 12, 2013, and, with the consent of SunTrust, timely removed on the basis of federal question and supplemental jurisdiction. (ECF No. 1). When both defendants filed motions to dismiss (ECF Nos. 6, 11), Plaintiff responded by filing an amended complaint, asserting additional claims.[2]

On August 23, SunTrust renewed its prior motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). (ECF No. 17). Six days later, MRA filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6). (ECF No. 18). Plaintiff opposed both motions (ECF Nos. 19, 27) and MRA filed a reply (ECF No. 28). On October 2, SunTrust filed a motion for sanctions. (ECF No. 24). Plaintiff was not directed to respond.

II. Motions to Dismiss

A. Standards of Review

The arguments raised by Defendants in their motions to dismiss implicate different standards of review. MRA's motion to dismiss for lack of subject matter jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(1). Generally, "questions of subject matter jurisdiction must be decided first, because they concern the court's very power to hear the case.'" Owens-Illinois, Inc. v. Meade, 186 F.3d 435, 442 n. 4 (4th Cir. 1999) (quoting 2 James Wm. Moore, et al., Moore's Federal Practice § 12.30[1] (3d ed. 1998)). The Plaintiff always bears the burden of proving that subject matter jurisdiction properly exists in federal court. See Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir. 1999). The ...

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