In June 2012, Stewart A. Sutton resolved a claim arising from a confessed judgment note obtained by an attorney against a client. Two days before a critical hearing, an attorney coerced a client into signing a confessed judgment note for the balance in fees that she owed. (Query: If the client owed the fees, why did the attorney have her sign a promissory note with a confessed judgment provision? The attorney erroneously thought that a confessed judgment note would be an easy way to obtain a judgment against the client for the fees owed plus interest and attorney’s fees ). After the client terminated the attorney for an egregious act of legal malpractice, the attorney filed a complaint for a confessed judgment and the court entered a judgment for the amount stated in the note, plus interest, and attorney’s fees. This judgment became a lien against the client’s home.
The client discovered the judgment lien when she tried to sell her home a year later. Stewart A. Sutton had the confessed judgment vacated on the grounds that the attorney never served the client with process. This allowed the client to litigate on the merits whether the confessed judgment note was enforceable. She asserted the following defenses: (a) that she had been coerced to sign the note; (b) that she was not advised by the attorney to seek independent representation before signing the confessed judgment note, and (c) that she was entitled to a complete setoff due to the attorney’s legal malpractice. After Stewart Sutton filed a Motion for Summary Judgment that the confessed judgment note was unenforceable, the transgressing attorney agreed to a confidential settlement.
Practice pointer for clients: During the existence of the attorney-client relationship, a Maryland attorney is NOT allowed to change the terms of the retainer agreement in his or her favor or have the client sign a promissory note for fees owed, unless the client is advised in writing of the desirability of seeking the advice of independent counsel. See Rule 1.8(a) of the Maryland Lawyers’ Rules of Professional Conduct
Practice pointer for Maryland attorneys: After a confessed judgment is entered in Maryland, the plaintiff is required to serve the Complaint and Notice of Confessed Judgment on the judgment debtor. The Court Clerk does not serve Notices of Confessed Judgments. See Maryland Rule 2-611(c). If the judgment debtor is not served with process within 120-days, the court can vacate the judgment and dismiss the complaint. See Maryland Rule 2-507(b) and the 14th Amendment of the U.S. Constitution, which prohibits the taking of property without due process. Once the judgment debtor is served with process, he or she has 30-days to move to vacate the confessed judgment on the grounds that a meritorious defense exists or to modify the amount of the confessed judgment. Maryland Rule 2-611(d).
Stewart Suton’s comprehensive article on confessed judgments will be published in the November 2012 issue of the Maryland Bar Journal.