Blaylock v. JOHNS HOPKINS CREDIT

• Decision Date: 09 September 2003
• Docket Number: No. 1994,1994
• Citation: 831 A.2d 1120,152 Md. App. 338
• Parties: Paulette D. BLAYLOCK v. JOHNS HOPKINS FEDERAL CREDIT UNION.
• Court: Court of Special Appeals of Maryland

831 A.2d 1120

152 Md. App. 338

Paulette D. BLAYLOCK v. JOHNS HOPKINS FEDERAL CREDIT UNION.

No. 1994, Sept. Term, 2001.

Court of Special Appeals of Maryland.

September 9, 2003.

Philip O. Foard (Foard, Gisriel, O'Brien & Ward, LLC on the brief); Kieron F. Quinn and Richard S. Gordon (Quinn, Gordon & Wolf, Chtd. on the brief), Towson, for appellant.

Dennis W. King (Danoff, King & Hofmeister, P.A. on the brief), Towson, for appellee.

Argued before HOLLANDER, SALMON, KENNEY, JJ.

SALMON, Judge.

In November 1997, the automobile of Paulette Blaylock was repossessed and sold by Johns Hopkins Federal Credit Union ("the credit union"). After the sale, the credit union instituted suit in the District Court for Baltimore City, seeking a deficiency judgment against Ms. Blaylock of approximately $8,200. Ms. Blaylock retained the law firm of Quinn, Gordon & Wolf, Chartered, to represent her in the matter. The law firm filed a jury trial demand and a counterclaim against the credit union. In her counterclaim, Ms. Blaylock alleged that the credit union had violated the Maryland Consumer Protection Act, which prohibits unfair or deceptive trade practices in the extension of consumer credit. See Md.Code Ann., Com. Law II ("CL") §§ 13-303-13-408(a) (1975, 2000 Repl.Vol.). Much later, in December 1999, she filed an amended counterclaim alleging that the credit union had violated the Uniform Commercial Code by failing to give her accurate pre-sale information concerning when her automobile was to be sold at auction.

After about two-and-a-half years of litigation, the case, save for the issue of attorney's fees due to Ms. Blaylock's counsel, was settled. The terms of the settlement agreement, which was approved by the court, were:

1. The Johns Hopkins Federal Credit Union ("JHFCU"), Plaintiff/Counter-Defendant in this matter, dismisses with prejudice the case against Paulette Blaylock ("Blaylock"), Defendant/Counter-Plaintiff, and releases her and her co-signer Lawrence Smith ("Smith") from further liability.

2. JHFCU agrees to pay Blaylock $7,300.00 in damages.

3. JHFCU agrees that Blaylock is a prevailing party in this matter.

4. Blaylock releases JHFCU from further liability, though Blaylock will retain the right to petition the [c]ourt for reasonable attorney's fees upon the following schedule:

a. Blaylock will submit a Petition for Attorney's Fees on or before September 22, 2000;

b. JHFCU shall respond to the Petition for Attorney's Fees on or before October 10, 2000; and

c. Blaylock shall file a reply brief, if necessary, on or before October 28, 2000.

5. JHFCU agrees to notify and request that the credit reporting bureaus remove any adverse or negative reference on Blaylock's and Smith's credit reports in respect of the automobile loan at issue in this case.

A hearing was held before the circuit court regarding the attorney's fees issue. At the hearing, Ms. Blaylock introduced detailed time records from Quinn, Gordon & Wolf, showing that the law firm had expended 263.8 hours in total paralegal and attorney time in regard to the subject case. According to the bill, paralegal time was billed at $95 per hour; one attorney charged $230 per hour; and a senior partner charged $350 hourly. Total fees were $48,951.97. In addition, Ms. Blaylock was charged $1,038.30 in expenses.

The circuit court awarded Ms. Blaylock's counsel $5,000 for fees and $1,038.30 expenses. Ms. Blaylock filed this timely appeal in which she raises one question, viz:

Did the trial judge err in allowing appellant only $5,000 in attorney's fees?

The credit union filed a cross-appeal in which it asks:

Did the trial court err in finding that appellant was entitled to any award of attorney's fees?

I. BACKGROUND

Ms. Blaylock, an employee of Johns Hopkins and a member of the Johns Hopkins Federal Credit Union, purchased an automobile in 1990. To finance the purchase, she borrowed $9,765.74 from the credit union and agreed to repay the loan, plus interest, in sixty equal monthly payments of $211.38. She signed a note evidencing the debt, as did a co-signer, one Lawrence Smith.

The loan agreement had the following provisions, which are here pertinent:

Property Insurance: If I obtain a loan secured by a motor vehicle or other tangible property, I must obtain insurance which protects the credit union from financial loss. Such a policy must provide at least fire, theft, combined additional coverages and collision insurance. It must contain a Loss Payable clause endorsement naming the credit union as lien holder. I may obtain this insurance from any agent of my choice and direct the agent to send you a copy of the policy.

* * *

... I will maintain insurance to cover any vehicle or other property in which you have a security interest. This insurance will be in a form and an amount satisfactory to you. I will supply you with proof of such insurance until all sums owed to you and secured by this property are repaid. If I fail to maintain such insurance, you may, but are not required to obtain insurance of your own and add the cost of such to the sums owed. This cost may bear interest at the contract rate until paid....

(Emphasis added.)

In addition, on June 7, 1990, Ms. Blaylock signed a document titled "Borrowers Agreement to Provide Automobile Insurance," which provided:

In consideration for the granting of the loan given on this date I/we agree to provide and maintain in force for the term of such loan, and any extension or renewals thereof, an insurance policy including Comprehensive and Collision Coverages. With loss payable to the JOHNS HOPKINS FEDERAL CREDIT UNION.

It is understood that proof of insurance is to be delivered to the CREDIT UNION at the earliest possible date.

To facilitate repayment of the loan, Ms. Blaylock authorized her employer to deduct $60 per week and deposit it directly into an account at the credit union. The credit union, in turn, was authorized to deduct $211.38 per month from the account to repay the loan.

For approximately six years, $211.38 was deducted each month to pay off the car loan. For the first six years, Ms. Blaylock, apparently, did not carefully read the periodic loan statements sent to her by the credit union, because, each year, the statement would have a "loan add on" line. The "add ons" were as follows:

1990 $ 1,869.00 1991 $ 1,956.00 1992 $ 1,247.00 1993 $ 1,121.00 1994 $ 944.00 1995 $ 1,075.00 __________ TOTAL $ 8,212.00

In 1996, Ms. Blaylock retained John Rhines, Esq., of the law firm of Stancil and Rhines, to find out why she still owed money on the car loan, despite the fact that she had been making her payments regularly for over six years. The credit union was contacted by Mr. Rhines, and sometime in 1996, the credit union, apparently for the first time, advised Ms. Blaylock that they had purchased insurance on her behalf and charged her for it because she had failed to send them proof that she had insured her vehicle.

When insurance is purchased by a creditor on behalf of a debtor, in situations such as this, the purchase is known in the loan business as forced-placement insurance ("FPI").

As a result of Mr. Rhines having contacted the credit union, the latter advised Ms. Blaylock that she would receive a full refund of any monies charged against her account for FPI if she would supply the credit union with proof that her car had the required insurance during the periods that FPI was purchased. Thereafter, Ms. Blaylock supplied proof that she had car insurance for 1996. Accordingly, the credit union deducted $1,001 from the balance she (purportedly) owed. Although Ms. Blaylock maintained that she had her own automobile insurance ever since she purchased the car, she could not provide the credit union with proof of insurance for the period between the date the loan was made in 1990 and the end of 1995.

After the $1,001 deduction, the credit union continued to deduct $211.38 per month for car payments from Ms. Blaylock's account. But in June of 1997, Ms. Blaylock was laid off from her job at Johns Hopkins. As a consequence of the layoff, no additional funds were placed in the credit union account, and her payments ceased. At the time the payments were stopped, Ms. Blaylock had paid $17,775.92 to the credit union on her loan.

Not long after Ms. Blaylock ceased to make payments, the car was repossessed. The credit union, by letter dated October 10, 1997, informed Ms. Blaylock that she still owed $9,124.92 in principal and interest on the car loan. The letter informed Ms. Blaylock that if she did not redeem the vehicle by tendering the full amount due, plus $275 to reimburse the credit company for repossessing the car, the automobile would be sold at public auction on November 11, 1997.

Ms. Blaylock's automobile was sold at public auction on November 1, 1997, i.e., ten days prior to the date mentioned in the credit union's notice. The auction price of the vehicle was $1,600. After crediting Ms. Blaylock in that amount, and deducting costs for repossessing and selling the vehicle, the deficiency owing to the credit union was calculated to be $8,235.54.

In December of 1997, the credit union filed suit against Ms. Blaylock in the District Court of Maryland for Baltimore County. In its statement of claim, the credit union contended that Ms. Blaylock owed $8,235.54 in principal, $224.82 in interest, and $1,235.33 in attorney's fees. Thus, the total amount at issue was approximately $9,695.

As mentioned earlier, Ms. Blaylock prayed for a jury trial, and the case was removed to the Circuit Court for Baltimore County. On March 13, 1998, Ms. Blaylock's attorneys filed a fifteen-page counterclaim against the credit union. Count I of the counterclaim alleged a violation of Maryland's Consumer Protection Act. According to the counterclaim, the credit union was guilty of deceptive trade practices in the extension of consumer credit by charging illegal FPI premiums, making improper "add ons" to...