Stewart A. Sutton’s article about the enforcement and vacation of confessed judgments was published in the November 2012 issue of the Maryland Bar Journal. The article explains that a promissory note with a confessed judgment provision is a powerful instrument to enforce a debt. However, this tool should not be used by an attorney to ensure payment from a current client, unless the client is advised in writing of the desirability of obtaining independent representation. See Rule 1.8(a) of the Maryland Lawyers’ Rules of Professional Conduct; Maryland State Bar Association’s Ethic Opinion 83-82.
It a common mistake, even among attorneys, not to serve the Confessed Judgment Complaint and Notice of Confessed Judgment on the defendant/debtor. See Maryland Rule 2-611(c).
Once a debtor is served with process, the debtor has 30-days to move to vacate or alter the confessed judgment on the grounds that the debt is either not owed or that a different amount is actually owed. Maryland Rule 2-611(d). Another defense is that the amount owed should be reduced by a set-off, because the creditor owes money to the debtor. Because the execution and enforcement of confessed judgment notes are ripe for abuse, courts liberally vacate confessed judgments so that the defendant/debtor may assert his or her defenses. See Maryland Rule 2-611(e).
A confessed judgment note sometimes states that the attorney retained to obtain a confessed judgment is entitled to a fixed percentage (typically 15%) of the amount owed. Such a provision is unenforceable, because the reasonableness of an award of attorney’s fees must be determined by the court, not by the maker of the note. Meyer v. Gyro Transport Systems, Inc. 263 Md. 518, 531 (1971).
If an attorney is suing a client to enforce a confessed judgment note and the attorney is representing himself or herself, the attorney is not entitled to an award of attorney’s fees. The reason is that a lawyer, who represents himself or herself, has not incurred any legal fees. Frison v. Mathis 188 Md.App. 97 109 (2009).