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Capital Finance, LLC v. Rosenberg

United States District Court, D. Maryland

September 6, 2017

CAPITAL FINANCE, LLC, Plaintiff,
v.
OSCAR ROSENBERG, et al., Defendants.

          MEMORANDUM

          A. David Copperthite United Slates Magistrate Judge.

         This Memorandum Opinion addresses the Complaint for Confession of Judgment ("Complaint") (ECF No. 1) filed by Plaintiff Capital Finance, LLC, ("Capital") against Defendants Oscar Rosenberg and Josef Neuman (""Defendants"). For the reasons stated herein, I direct that the Clerk of the Court enter judgment by confession against Defendants.

         I. Procedural History

         On July 26, 2017. Plaintiff filed a Complaint for Confession of Judgment requesting that this court enter judgment by confession in favor of Plaintiff and against Defendants Oscar Rosenberg and Josef Neuman for breach of guarantees owed to Capital. The Complaint seeks damages, jointly and severally, in the principal amount of $1, 166.228.11, plus accrued interest and attorney's fees. On July 28, 2017, in accordance with 28 U.S.C. § 636 and Local Rules 301 and 302 of the United States Court for the District of Maryland, Judge Richard D. Bennett referred this case to Magistrate Judge A. David Copperthite for the purpose of reviewing Plaintiff's Complaint for Confession of Judgment. ECF No. 3.

         II. Discussion

         Local Rule 108.1 provides the framework under which this Court may enter confessed judgment in favor of the Plaintiff. Local Rule 108. La ("Judgment by Confession") provides:

A complaint requesting the entry of judgment by confession shall be filed by the plaintiff accompanied by the written instrument authorizing the confession of judgment and entitling the plaintiff to a claim for liquidated damages and supported by an affidavit made by the plaintiff or someone on that party's behalf stating the specific circumstances of the defendant's execution of said instrument and including, where known, the age and education of the defendant, and further including the amount due thereunder, and the post office address (including street address if needed to effect mail delivery) of the defendant.

Loc. R. 108. La. Local Rule 108. Lb further provides:

the Court may direct the entry of judgment upon a finding that the aforesaid documents prima facie establish (1) a voluntary, knowing, and intelligent waiver by the defendant of the right to notice and a prejudgment hearing on the merits of the claim of the plaintiff for liquidated damages and (2) a meritorious claim of the plaintiff for liquidated damages against the defendant.

Loc. R. 108.Lb. For the following reasons, the Court grants Plaintiffs request for entry of judgment by confession against Defendants.

         A. THE EXHIBITS ATTACHED TO THE COMPLAINT PRIMA FACTE ESTABLISH THAT DEFENDANTS VOLUNTARILY. KNOWINGLY, AND INTELLIGENTLY WAIVED THE RIGHT TO NOTICE AND A PREJUDGMENT HEARING ON THE MERITS OF PLAINTIFF'S CLAIM FOR LIQUIDATED DAMAGES.

         On July L 2015, Jeffery D. Stein, in his capacity as authorized representative of Capital Finance, LLC, and Josef Neuman, in his capacity as manager of Borrower companies, [1] entered into a Credit and Security Agreement whereby Capital as individual lender and administrative agent agreed to provide revolving credit financing to Borrower. See ECF No. 1-2 (hereinafter the Credit Agreement"). The Credit Agreement, attached as Exhibit A to Plaintiffs Complaint, was executed pursuant to a Revolving Loan Note (as subsequently amended, supplemented, and modified) (ECF No. 1-3) whereby Borrower agreed to receive revolving credit financing up to the amount of $9, 000, 000.00 from Capital in return for Borrower's obligation to pay back the loan(s) with interest. Borrower also was obligated under the terms of the Revolving Loan Note to provide Capital with a security interest in certain property belonging to Borrower to ensure payment and performance on the loan. ECF No. 1-3. The Credit Agreement further authorized the administrative agent (Capital) to exercise "all other rights, options, and remedies granted to Agent under this Agreement or at law or in equity" and "all rights and remedies granted to it under all Financing Documents" in the event that Borrower failed to perform its obligations. ECF No. 1-2 at 64.

         In addition to the Credit Agreement and the Revolving Loan Note. Defendants Oscar Rosenberg and Josef Neuman also signed and executed as Guarantors two individual Guaranty Agreements (attached to Capital's Complaint as Exhibits C and D). Each individual Guaranty Agreement contains a Confession of Judgment clause, wherein the Guarantors agree to the following terms:

SECTION 12. Confession of Judgment. If the Guarantor should fail to pay or perform the Guaranteed Obligations in accordance with this Guarantee, the Guarantor hereby authorizes any attorney designated by the Agent or any clerk of any court of record to appear for the Guarantor in any court of record and confess judgment against the Guarantor, without prior hearing, in favor of the Agent and Lenders for, and in an amount equal to, the total of the Guaranteed Obligations then due and payable by the Guarantor hereunder, all other amounts then due and payable by the Guarantor to the Agent and Lenders under the provisions of this Guarantee, costs of suit and attorneys' fees equal to 15% of the amount of such Guaranteed Obligations. In connection therewith, the Guarantor hereby releases, to the extent permitted by applicable laws, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which the Guarantor may otherwise be entitled under the applicable laws now in force and which may hereafter be enacted, including, without limitation, those of the United States of America. The authority and power to appear for and enter judgment against the Guarantor shall not be exhausted by one or more exercises thereof or by any imperfect exercise ...

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