United States District Court, D. Maryland
MEMORANDUM OPINION AND ORDER
Xinis United States District Judge
Memorandum Opinion and Order address Plaintiff Thrivest
Specialty Funding, LLC's motion for default judgment, ECF
No. 9. Defendant Michael P. Beasley, Jr. has not filed a
response or entered his appearance, and the time for doing so
has passed. See Loc. R. 105.2.a. On April 13, 2018,
the Court GRANTED Plaintiff's motion for default judgment
as to damages, but requested supplemental briefing on the
question of attorney's fees. For the reasons stated
herein, Plaintiff's motion for damages to include
requested attorneys' fees is DENIED with leave to file a
final supplemental pleading to support requested
Thrivest Specialty Funding, LLC (“TSF”) is a
limited liability company incorporated in Delaware with its
principal place of business in Pennsylvania. ECF No. 1 at
¶ 1. Defendant Michael P. Beasley, Junior
(“Beasley”) is a citizen of California, residing
in California. Id. at ¶ 2.
January 7, 2014, Beasley executed a Promissory Note, Loan and
Security Agreement, and Pledge and Security Agreement
(hereinafter “Loan Documents”) in favor of
Congressional Bank, as successor-by-merger to American Bank.
ECF No. 1 at ¶ 6; see also ECF No. 1-2. As
security for the Loan, Beasley pledged his interest in a
deposit account. ECF No. 1-2 at 14. All agreements within the
Loan Documents included language that allowed Congressional
Bank to assign the Note at any time, and that Congressional
Bank's assigns could enforce their rights against
Beasley. ECF No. 1 at ¶ 7; see also ECF No. 1-2
at 10, 16, 28.
August 21, 2017, TSF purchased the Loan Documents from
Congressional Bank. ECF No. 1 at ¶ 6; see also
ECF No. 1-1. Soon thereafter, TSF notified Beasley via letter
of the purchase. Id. at ¶ 9; ECF No. 1-3.
TSF's letter further informed Beasley that TSF required
Beasley's notarized signature on an attached Deposit
Account Control Agreement (“Control Agreement”)
to apply the funds in his account to the amounted owed on the
Promissory Note. Id. at ¶ 9; see also
ECF Nos. 1-1, 1-2, 1-3. Beasley also received notification
from Congressional Bank regarding the transfer of his Note
and Loan Documents. See ECF No. 1-2 at 25.
TSF's initial letter to Beasley was ignored, TSF
attempted to contact Beasley through his agent and business
manager on multiple occasions. ECF No. 1 at ¶ 10. In a
final attempt to avoid legal action, TSF sent written notice
to Beasley on October 5, 2017, again informing him of
TSF's purchase of the Loan Documents and status as
Congressional Bank's assignee under the Promissory Note.
The notice reminded Beasley of his obligation to execute the
Control Agreement so that the Promissory Note could be
serviced. ECF No. 1 at ¶ 11; see also ECF No.
1-5. The October 5, 2017 letter further noted that
Beasley's failure to execute the Control Agreement was an
“Event of Default, ” which could trigger the
following: (1) acceleration on the entire principal balance,
plus accrued interest; (2) an increase in the interest
accruing on the principal balance by five percent; and (3)
attorneys' fees equaling fifteen percent of the amount
due, plus costs. Id. at ¶ 13; see also
ECF No. 1-5. The October 5 letter gave Beasley through
October 12, 2017, to execute the Control Agreement, after
which time TSF would initiate a claim against Beasley for the
full outstanding amount of the Note. ECF No. 1-5 at 3.
Despite the October 5 letter, Beasley failed to execute the
Control Agreement or otherwise contact TSF.
filed a claim for breach of contract on October 25, 2017. ECF
No. 1. Beasley was validly served on November 10, 2017, at
his place of employment in Tarrytown, New York.ECF No. 8. Beasley
failed to enter his appearance or otherwise respond, and an
Order of Default was entered on December 19, 2017. ECF No. 8.
TSF moved for default judgment on December 26, 2017. On April
13, 2018, default judgment was granted, and ordered
supplemental briefing regarding the award of attorney's
fees, which the Court received on April 27, 2018. ECF No. 11.
general, contractual clauses providing for specific
attorney-fees in the event of breach are valid and
enforceable. See Monmouth Meadows Homeowners Assoc., Inc.
v. Hamilton, 416 Md. 325, 333 (2010) (citing Myers
v. Kayhoe, 391 Md. 188, 207-08 (2006)). The Court must
nonetheless “examine the prevailing party's fee
request for reasonableness.” Id. (quoting
Myers, 391 Md. at 207); see also Osche v.
Henry, 216 Md.App. 439, 458-60 (Md.App. 2014)
(“Above all, a court's duty in fashioning an award
pursuant to a contract is to determine the reasonableness of
a party's request.”). Accordingly, “[a]
contractual provision providing for a fee determined by
percentage is not per se unenforceable, but it must
be reasonable and must reflect the actual billing
arrangement.” Sun Trust Bank v. Goldman, 201
Md.App. 390, 402 (Md. Ct. Spec. Ap. 2011) (emphasis added);
see also Mortgage Investors of Washington v. Citizens
Bank & Trust Co. of Maryland, 278 Md. 505, 509
(1976) (affirming an award less than the attorneys' fees
provision in the loan document, which provided for an
automatic award of 15% of the outstanding balance at the time
of the suit). Further, “[t]he party requesting fees has
the burden of providing the court with the necessary
information to determine the reasonableness of its
request.” Myers, 391 Md. at 207 (citing
Atlantic v. Ulico, 380 Md. 285, 316 (2004)). Whether
to award the requested fees rests with the sound discretion
of the Court. Id.
evaluate the reasonableness of a contractual clause awarding
specific attorneys' fees, courts look to the factors set
out in Rule 1.5(a) of the Maryland Lawyers' Rules of
Professional Conduct. See Monmouth, 416 Md. at
336-337. These factors include: the professional time and
labor invested, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal
service properly; the likelihood, if apparent to the client,
that the lawyer's acceptance of the particular engagement
will preclude other employment; the fee customarily charged
in the locality for similar legal services; the amount in
controversy and the results obtained; the time limitations
imposed by the client or by the circumstances; the nature and
length of the professional relationship with the client; the
experience, reputation, and ability of the lawyer or lawyers
performing the services; and whether the fee is fixed or
contingent. See Md. R. Prof. Conduct 1.5(a).
these factors to Plaintiff's request, Plaintiff has
failed to demonstrate that $29, 171.18 is a reasonable fee.
Plaintiff represents, without supporting documentation, that
Heitner Legal, P.L.L.C. has billed approximately thirty (30)
hours of “professional services, ” and local
counsel has incurred approximately nine (9) hours pursuing
this matter. See ECF No. 11 at ¶ 6; accord
Rauch v. McCall, 134 Md.App. 624, 639 (2000), cert.
denied, 362 Md. 625 (“[W]ithout such records, the
reasonableness, vel non, of the fees can be
determined only be conjecture or opinion of the attorney
seeking the fees and would therefore not be supported by
competent evidence.”). The Court is hard-pressed to
understand how thirty-nine professional hours was necessary
to pursue a routine default judgment to enforce a Promissory
Note. See Id. (noting that “[t]his is a
contractual dispute that required no novel or difficult
questions of law, or any specific level of skill.”).
Additionally, to the extent that Plaintiff continues to seek
fees totaling 39 professional hours, it must submit
supporting documentation demonstrating such fees were
actually incurred. See, e.g. Rauch, 134 Md.App. at
the Court eventually accepts that thirty-nine hours, at
counsel's charged fee of $300 per hour, was a reasonable
attorney fee, that would only amount to $11, 700 - far less
than the amount awarded under the Promissory Note.
Id. Plaintiff nonetheless urges the Court to award
the full $29, 171.18 because “collection efforts are
ongoing” and “attorneys' fee awards in the
amount of 15% of the total due under a promissory note are
routinely awarded.” Id.; but see
SunTrust, 201 Md.App. at 401; Monmouth, 416 Md.
at 333; LNV Corp. v. Harrison Family Business, LLC,
2015 WL 7454044, at *8 (D. Md. Nov. 23, 2015); Wells
Fargo Bank, Nat. Ass'n v. Global Research Serv.,
LLC, No. RWT-13-3785, 2015 WL 302828, at *1 (D. Md. Jan.
22, 2015); Manning v. Mercantanti, Nos. ELH-11-2964,
12-00195, 2014 WL 1418322, at *2-*3 (D. Md. Apr. 10, 2014).
Plaintiff's generalized expectation of possible future
expenses does not justify the requested award. Rather, to the
extent future expenses are included, those future expenses
must be supported by “evidence of fees that will, with
certainty, be incurred in addition to those actually incurred
at that time . . . consistent with the general rule that
costs of collection are not recoverable.”
SunTrust, 201 Md.App. at 406-07;
Plaintiff has not provided records to support attorneys'
fees or estimated future expenses, the Court cannot
calculate the appropriate award of attorneys' fees at
this juncture. Likewise, because Plaintiff relies in part on
amorphous future expenses to support an award far in excess
of the hourly earned wage, the Court declines to conclude
that $29, 171.18 is a reasonable fee. Accord Flores v.
City Certified Building Services, No. ELH-15-2135, 2016
WL 6780209, at *4 (D. Md. Nov. 16, 2016) (“when
entering a default judgment, the Court may make an award of
attorney's fees for a lesser amount ...