Perdue Foods LLC v. Cal Premium Treats, Inc.

Filing 7

MEMORANDUM OPINION. Signed by Magistrate Judge J. Mark Coulson on 8/15/2016. (c/m 8/15/16 bmhs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
PERDUE FOODS LLC,

*

Plaintiff

*

v.

*

CAL PREMIUM TREATS, INC.,

*

Defendant.

Case No. 16-2722-CCB

*
*
*

*

*

*

*

*

MEMORANDUM OPINION
This Memorandum Opinion 1 addresses the Complaint for Confession of Judgment
(“Complaint”) (ECF No. 1) that Plaintiff, Perdue Foods LLC (“Perdue”), filed against
Defendant, Cal Premium Treats, Inc. (“Cal Premium”). For the reasons stated below, I direct that
the Clerk of the Court enter judgment by confession against Defendant.
Local Rule 108.1 (“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. 108.1(a) (D. Md. 2016). Upon review of the documents required to be submitted by
Local Rule 108.1,
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
1

On October 22, 2014, in accordance with 28 U.S.C § 636 and Local Rule 301.6(ak), Judge
Quarles referred this case to me to review Plaintiff’s Complaint for Judgment by Confession.
(ECF No. 6).
1

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. 108.1(b) (D. Md. 2016).
Here, Perdue attached to its Complaint a Promissory Note (the “Note”) (ECF No. 1-1), by
which Cal Premium borrowed the principal sum of $2,200,000.00 from Perdue. The Note is
signed by John Joseph Keller as President/CEO of Cal Premium. The Note provides that events
of default include “the failure by [Cal Premium] to pay when due any sums required to be paid
under this Note \within [sic] five (5) business days after the date on which such payment shall
first be due.” (Note ¶ 11(a)(i).) Upon the occurrence of default and during the continuance of
default, the Note provides that “all sums due hereunder shall, at the option of [Perdue], become
immediately due and payable in full.” (Note ¶ 11(b).) The Note also contains a “Confession of
Judgment” provision, which states in all capital letters that Cal Premium
irrevocably constitutes, appoints, and authorizes the clerk of any court or any
attorney to appear for [Cal Premium] in any state or federal court having
jurisdiction in the state of Maryland to waive the issuance of service of process
and to confess judgment against [Cal Premium] in favor of [Perdue] in the full
amount owing hereunder, plus court costs and attorneys’ fees equal to fifteen
percent (15%) of the outstanding amount owed (provided, however, in no event
shall [Perdue] collect attorneys’ fees in excess of actual, reasonable attorneys’
fees at customary hourly rates incurred by [Perdue] in enforcing this note).
Also attached to the Complaint are (1) an email from Diana Morgan, Perdue’s Director of
Customer Accounting, to Richard Allen and John Keller, the COO and President/CEO of Cal
Premium Respectively, dated July 8, 2016, identifying breaches of the Note due to non-payment
and informing the recipients that the Note was “in serious danger of being in default,” and
requesting immediate payment of the amount due (Morgan Email, ECF No. 1-2); (2) a letter
from Matthew R. Alsip, counsel for Perdue in connection with the Note, to Mr. Allen and Mr.
Keller, dated July 28, 2016, informing them that Cal Premium status of material default on the

2

Note 2 and expressing Perdue’s decision to exercise its option to immediately accelerate the
maturity date for all amounts due under the Note (Alsip Ltr., ECF No. 1-3); and (3) an affidavit
executed by Ms. Morgan, declaring (a) that the Note, the Morgan Email, and the Alsip Letter are
true and correct copies of said Note, Letter, and Email, (b) that the Note was executed on Cal
Premium’s behalf on April 7, 2016 by Mr. Keller who is an adult known to be the president and
CEO of Cal Premium, and (c) that as of the date of filing, July 29, 2016, Cal Premium has not
remitted any payment to Perdue pursuant to the Note, and that as of that same date the total
amount due and owing to Perdue from Cal Premium under the Note is $2,184,914.91 (Morgan
Aff., ECF No. 1-4). Because the original documents filed with the Complaint did not permit the
Court to evaluate the reasonableness of the sum of the attorneys’ fees and costs requested
therein, 3 the Court directed Plaintiff’s Counsel to supplement the Complaint with an affidavit in
support of the requested fees and costs. (ECF No. 5.) Accordingly, on August 11, 2016,
Plaintiff filed a Supplemental Affidavit executed by Matthew Alsip, counsel of record for
Plaintiff, setting forth the basis for the requested fees and costs. (Alsip Aff., ECF No. 6-1).
Having reviewed the Complaint, the exhibits, and the supplemental affidavit, I am
satisfied that the Note constitutes the “written instrument[s] authoriz[ing] the confessed
judgment and entitl[ing] Plaintiff to a claim for liquidated damages.” See Loc. R. 108.1(a). Ms.
Morgan’s affidavit authenticates the other exhibits attached to the Complaint and details
calculation of the requested confessed judgment. (Morgan Aff. ¶¶ 3-5, 7-8, Ex. A.) Ms. Morgan

2

Both Ms. Morgan’s email and Mr. Alsip’s letter reference a second promissory note, on which Cal Premium is also
apparently in default, but on which Perdue does not presently seek a judgment by confession.

3

The Note includes a choice of law provision stating that the rights and obligations of the parties under the Note are
governed by Maryland law. (Note ¶ 18.) Maryland law limits attorneys’ fee awards to the reasonable fees actually
incurred. SunTrust Bank v. Goldman, 29 A.3d 724, 730 (Md. Ct. Spec. App. 2011). Additionally, the language of
the Note itself limits attorneys’ fees awarded thereunder to those actually and reasonably incurred. (Note ¶ 22.)
Accordingly, the Plaintiff here may recover only actual and reasonable fees. See Wells Fargo Bank, National
Association v. Global Reseach Services, LLC, No. 13-cv-3785-RWT, 2015 WL 302828, at *1 (D. Md. 2015).

3

stated that the Note was executed by Mr. Keller, who is Cal Premium’s president and CEO and is
of adult age, on April 7, 2016, but that she was unaware of his specific age and education.
(Morgan Aff. ¶ 6.) Finally, Ms. Morgan’s affidavit states the last known address for Cal
Premium. (Morgan Aff. ¶ 9.) I thus find that Perdue has complied with the requirements of
Local Rule 108.1.a. Furthermore, having reviewed the documents submitted by Perdue, I find
that the documents attached to the Complaint “prima facie establish . . . 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.” See Loc. R. 108.1(b).
I also find that Perdue, through its submissions, has established a “meritorious claim . . .
for liquidated damages against” Cal Premium. See id. Ms. Morgan’s affidavit (excepting
attorney’s fees and costs, addressed below) provides that, as of July 29, 2016, the total amount
due and owing to Perdue from Cal Premium under the Note includes: the outstanding principal
of $2,200,000.00, accrued and unpaid interest of $19,709.51, and late charges of $5,947.21, less
a credit of $54,159.21 which Perdue Owes to Cal Premium under an unrelated contract, totaling
$2,171,497.51. 4 (Morgan Aff. ¶ 9, Ex. A.)
Additionally, Mr. Alsip’s affidavit sets forth the basis for a modified sum of attorneys’
fees and costs, totaling $10,680.68. As to the reasonableness of the requested fees, Mr. Alsip is
the attorney of record for Perdue, has been admitted to practice in Maryland for ten years, and
requests a (reduced) hourly rate of 287.5 in this case. (Alsip Aff. ¶ 6.) Mr. Alsip was assisted
one partner, Anne-Therese Bechamps (admitted for 25 years) at an hourly rate of $387.50, and
three associates: Christine Carey and Melissa McLaughlin (both admitted for five years) at an
hourly rate of $232.50, and Hannah Levin (admitted for one year) at an hourly rate of $187.50.
4

Ms. Morgan’s affidavit also includes a request for $400.00, as reimbursement of the filing fee for this case.
However, Mr. Alsip’s calculation of the costs for which Perdue seeks reimbursement also includes the $400.00
filing fee. This sum cannot be recovered twice, and so it has not been included here.

4

(Alsip Aff. ¶ 6.) These hourly billing rates fall within the presumptively reasonable range in this
district for attorneys with comparable experience, as set forth in Appendix B to this Court’s
Local Rules. Mr. Alsip spent 28.5 hours working on this case, Ms. Bechamps spent 1.2 hours
working on this case, and the various associates spent a total of 5.3 hours working on this case.
(Alsip Aff. ¶¶ 5, 6.) I find this reasonable and will award Perdue attorneys’ fees in the amount of
$9,801.00.

Additionally, Perdue seeks reimbursement of the costs incurred in this case,

including the Court filing fee, a messenger fee, legal research service fees, and postal fees. I find
that these costs were reasonably expended and Perdue is entitled to reimbursement for costs
equaling $879.68. (Alsip Aff. ¶ 7.) Accordingly Perdue is entitled to an award of attorneys’ fees
and costs totaling $10,680.68.
In summary, I find that Perdue’s Complaint and the exhibits incorporated therein prima
facie establish that Cal Premium voluntarily, knowingly and intelligently waived the right to
notice and a prejudgment hearing on the merits of Perdue’s claim for liquidated damages, and
that Perdue has presented a meritorious claim for liquidated damages in the amount of
$2,182,178.19 against Cal Premium.
Therefore, I direct the Clerk to enter the confessed judgment against Cal Premium in the
amount of $2,182,178.19, which includes the outstanding principal of $2,200,000.00, accrued
and unpaid interest of $19,709.51, late charges of $5,947.21, and attorneys’ fees and costs in the
amount of $10,680.68, less a credit of $54,159.21.
I further direct the Clerk to ensure that notice of this entry is provided to:
Cal Premium Treats, Inc.
20343 Harvill Avenue
Perris, California 92570

5

An implementing Order will follow.
Date: August 15, 2016

/s/
J. Mark Coulson
United States Magistrate Judge

6