First National Bank of Pennsylvania v. United Corrosion Control LLC et al

Filing 5

MEMORANDUM OPINION. Signed by Magistrate Judge J. Mark Coulson on 11/21/2017. (c/m 11/21/17 bas, Deputy Clerk) .

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
FIRST NATIONAL BANK OF
PENNSYLVANIA,

*
*

Plaintiff
*

Case No. 17–02916–JFM

v.
*
UNITED CORROSION CONTROL LLC,
et al,

*

Defendants.

*
*

*

*

*

*

*

MEMORANDUM OPINION
This Memorandum Opinion1 addresses the Complaint for Confession of Judgment that
Plaintiff First National Bank of Pennsylvania (“First National Bank” or the “Bank”) filed against
Defendants United Corrosion Control LLC and James R. Hecht (collectively, the “Defendants”).
(ECF No. 1). For the reasons stated below, I direct that the Clerk of the Court enter judgment by
confession against Defendants.
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,

1

On October 3, 2017, in accordance with 28 U.S.C § 636 and Local Rule 301.6(ak), Judge Motz
referred this case to me to review Plaintiff’s Complaint for Judgment by Confession. (ECF No.
1).
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
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, First National Bank attached to its Complaint multiple documents, including a
Second Amended and Restated Promissory Note (the “Note) dated May 2, 2016, which reaffirms
that Defendants (“Borrowers”) borrowed the principal sum of $1,500,000.00 from First National
Bank (“Lender”), (ECF No. 1-1) as well as a First Modification Agreement dated October 15,
2015, a Second Modification Agreement dated May 2, 2016, and the original Loan Agreement
between the parties, dated July 31, 2015, (ECF No. 1-2).

The Loan Agreement, First

Modification Agreement, Second Modification Agreement, and Note are all signed by Defendant
James R. Hecht, President of United Corrosion Control. The Note incorporates by reference the
First and Second Modification Agreements and the Loan Agreement.

Under the Loan

Agreement, “failure to pay,” or when “Borrower fails to pay when due any of the Liabilities,”
constitutes an event of default. (ECF No. 1-2 at ¶ 61(a)). Upon default, the Note provides that
Lender may declare the entire principal balance outstanding under this Note, plus
accrued interest and all other sums owed under this Note, immediately due and
payable without presentment, protest, or notice of any kind, reference is made to
the Loan Documents for further and additional rights on the part of Lender to
declare the entire balance outstanding under this Note, plus accrued interest and
all other sums owed under this Note, immediately due and payable.
(ECF No. 1-1 at ¶ 23(a)). The Note also contains a “Confession of Judgment” provision, which
states, “Borrower authorizes any attorney designated by Lender or any clerk of any court of
record to appear for Borrower and confess judgment against Borrower in favor of Lender for the
full amount due on this Note (including principal, accrued interest, charges and fees), plus court
costs, plus attorneys’ fees equal to fifteen percent (15%) of the amount due.” Id. at ¶ 23(c).
2

Attached to its Complaint, First National Bank included two additional documents in
support of its claim. First, the Bank included a letter from David V. Fontana, counsel to the
Bank, to Defendants dated August 29, 2017 requesting that, due to various events of default and
the Defendants’ total cessation of ongoing business operations, the total principal and interest
amount due and owing from the Defendants be paid to the Bank by September 5, 2017. (ECF
No. 1-3). Second, First National Bank attached the affidavit of Paul Shickel, an Assistant Vice
President at the Bank and the loan officer responsible for collecting the commercial loan that the
Bank made to Defendants. (ECF No. 1-4).
Having reviewed the Complaint and other exhibits submitted by First National Bank, I
find that the Note and other loan documents constitute 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).

In his affidavit, Mr. Shickel certifies the truthfulness of the assertions in the

Complaint, authenticates the exhibits attached to the Complaint, provides the circumstances of
the execution of the Note, and details calculation of the requested confessed judgment. (ECF
No. 1-4). Mr. Shickel’s affidavit states that the Note was executed by Mr. Hecht, United
Corrosion Control’s President, who was born in 1954, and provides the mailing addresses for
Defendants. Id. Thus, I find that First National Bank has complied with the requirements of
Local Rule 108.1 and 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 further find that First National Bank, through its submissions, has established a
“meritorious claim . . . for liquidated damages against” Defendants. See id. Mr. Shickel’s
affidavit provides that, as of September 13, 2017, Defendants had an outstanding balance under

3

the Note of $1,507,269.39, the sum of $1,500,00.00 in unpaid principal and $7,269.39 in accrued
interest through September 13, 2017. The affidavit also provides that interest on the principal
amount would continue to accrue on the unpaid principal balance at a rate of $166.20 per day
after September 13, 2017 until the entry of judgment. Through the date of this Memorandum
Opinion and implementing Order, $11,467.80 in additional interest has accrued in the sixty-nine
days that have passed since September 13, 2017.

Thus, Defendants currently have an

outstanding balance under the Note of $1,518,737.19.
In summary, I find that First National Bank’s Complaint and the exhibits incorporated
therein prima facie establish that Defendants voluntarily, knowingly, and intelligently waived the
right to notice and a prejudgment hearing on the merits of the Bank’s claim for liquidated
damages, and that the Bank has presented a meritorious claim for liquidated damages in the
amount of $1,518,737.19. Therefore, I direct the Clerk to enter the confessed judgment against
Defendants in the amount of $1,518,737.19, which includes $1,500,000.00 in outstanding
principal, $7,269.39 in interest accrued through September 13, 2017, and $11,467.80 in interest
accrued between September 13, 2017 and the date of this Memorandum Opinion and
implementing Order. After the culmination of its collection efforts, Plaintiff will be permitted to
submit a specific amount claim for attorneys’ fees and collection expenses with an affidavit in
support of the requested fees and costs.
I further direct the Clerk to ensure that notice of this entry is provided to Defendants at
the addresses listed below.
United Corrosion Control LLC
7954 Baltimore-Annapolis Boulevard
Glen Burnie, MD 21146

4

James R. Hecht
105 St. Ives Drive
Severna Park, MD 21146

An implementing Order will follow.
Date: November 21, 2017

/s/
J. Mark Coulson
United States Magistrate Judge

5