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 attorneys' fees. For the foregoing reasons,
Thrivest Specialty Funding, LLC is GRANTED $6, 060 in
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. ECF No. 11. TSF then requested fifteen percent of the
total amount due under the contract, or $29, 171.18, arguing
that such an award was reasonable because counsel had
performed approximately 39 hours of work on this matter.
Counsel also argued that “attorneys' fee awards in
the amount of 15% of the total due under a promissory note
are routinely awarded, ” but did not cite any law
within this District to support such an assertion.
Id. Further, TSF's counsel did not provide any
documentation to support the alleged 39 hours of work
performed. See ECF No. 11.
on May 23, 2018, the Court again denied TSF's motion for
attorneys' fees, noting that “[t]he 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 ECF No. 12. The Court
also referred to a line of cases in which Maryland courts
awarded an amount less than that provided by an
attorneys' fees contractual clause because the requested
sum did not reflect the actual billing agreement and was not
reasonable. See id.; see also Monmouth Meadows
Homeowners Assoc., Inc. v. Hamilton, 416 Md. 325, 333
(2010) (citing Myers v. Kayhoe, 391 Md. 188, 207-08
(2006)); Mortgage Investors of Washington v. Citizens
Bank & Trust Co. of Maryland, 278 Md. 505, 509
(1976); Osche v. Henry, 216 Md.App. 439, 458-60
(Md.App. 2014); Sun Trust Bank v. Goldman, 201
Md.App. 390, 402 (Md. Ct. Spec. Ap. 2011); 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). The Court thus
denied the requested attorneys' fees and permitted TSF,
once again, to submit appropriate briefing and documentation
necessary to award attorneys' fees. ECF No. 12.
noted in the Court's two previous Opinions, contractual
clauses providing for specific attorney-fees in the event of
breach are generally 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)). However, the Court is required by law to
“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.”). “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). “The 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.
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).
latest supplemental filing, TSF argues that the Rule 1.5(a)
factors support an award of $10, 260 in attorneys' fees,
based on counsels' records showing 34.2 total hours spent
on this matter, multiplied by a rate of $300.00 per hour.
See ECF Nos. 13, 13-1, 13-2. TSF's requested
rate of $300.00 per hour is reasonable, given counsels'
years of experience. See ECF No. 13 at ¶ 4(g);
Md. R. Prof. Conduct 1.5(a). However, given the protracted
history in what should have been a simple case, as well as
the quality of the briefing, 34.2 hours is simply not
underlying billing records, for example, reflect counsel
collectively having spent 3.5 hours preparing TSF's
original motion for default judgment. See ECF Nos.
13-1 & 13-2. This motion totaled five (5) pages,
inclusive of a two-page affidavit, and did not cite any legal
authority. See ECF No. 9. The original motion also
erroneously urged the court to award ...