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HEADNOTE: Monmouth Meadows Homeowners Association, Inc. v. Tiffany Hamilton, No. 43, September Term, 2009 Montpelier Homeowners Association, Inc. v. Bode and Bonike Thomas-Ojo, No. 44, September Term, 2009 Constant Friendship Homeowners Association, Inc. v. Kevin Tillery, No. 45, September Term, 2009
CIVIL PROCEDURE -- REMEDIES -- COSTS & ATTORNEY'S FEES -- REASONABLE FEES -- Homeowners associations sought review of attorneys' fee awards in a debt-collection case, where district courts had awarded fees equal to a flat percentage of amounts in controversy and circuit courts had relied on a reasonableness standard on appeal. The associations argued that the lodestar method was appropriate for calculating fee awards. While the district courts erred in awarding fees as a flat percentage of amounts in controversy, the circuit courts correctly addressed the fee awards on appeal, and their judgments were affirmed. It is improper to use the lodestar method of calculating fees in a contractual debt-collecting case. The lodestar method is meant to be applied in cases where a statutory fee-shifting provision encourages litigation in the public interest. An action for debt-collection on a breach of contract is a strictly private matter, and does not address any broader public ills. In such cases, Rule 1.5 of the Maryland Lawyers' Rules of Professional Conduct is the starting point for considering a fee award. Such awards, including the award of fees relating to an appeal, still remain within the trial judge's discretion.

In the Circuit Court for Harford & Prince George's Counties Case Nos.: 12-C-08-003496; CAL08-17167; 12-C-08-003148

IN THE COURT OF APPEALS OF MARYLAND No. 43 September Term, 2009 ON MOTION FOR RECONSIDERATION

Monmouth Meadows Homeowners Association, Inc. v. Tiffany Hamilton ______________________________________ No. 44 September Term, 2009 ______________________________________ Montpelier Homeowners Association, Inc. v. Bode and Bonike Thomas-Ojo ______________________________________ No. 45 September Term, 2009 ______________________________________ Constant Friendship Homeowners Association, Inc. v. Kevin Tillery Bell, C.J., Harrell Battaglia Greene Murphy Adkins Barbera JJ. Opinion by Adkins, J. Battaglia, J., joins in judgments only. Filed: October 25, 2010

In this appeal we address how courts should determine the amount of attorneys' fees to be awarded in suits by homeowners associations against property owners to collect annual assessments in cases where recovery of fees is governed by contractual provisions in the homeowners agreement. Petitioner homeowners associations (the "Associations") appeal the amount of attorneys' fees awarded to them by the Circuit Courts for Harford and Prince George's Counties. These courts assessed the reasonableness of the attorneys' fees requested by the Associations and correctly declined to apply the "lodestar method" in calculating fees. We affirm. FACTS & LEGAL PROCEEDINGS The litigation in these cases stems from an attempt to collect attorneys' fees for services rendered to the Petitioners, three homeowners associations (the Monmouth Meadows Homeowners Association, the Constant Friendship Homeowners Association, both in Harford County, and the Montpelier Hills Homeowners Association, in Prince George's County). The legal services in question involved, among other things, the pursuit of delinquent homeowners association fees from residents living within each association (Tiffany Hamilton, Bode and Bonike Thomas-Ojo, and Kevin Tillery, respectively; collectively, the "Residents").1 These legal services were performed by the law firm of Nagle & Zaller, P.C. ("Nagle & Zaller")
1

The Residents did not file briefs in these cases or enter appearances before this Court. A brief was entered on behalf of the Residents by a coalition of amici curiae, comprising the Public Justice Center, Civil Justice, Inc., the Legal Aid Bureau, and the Maryland Consumer Rights Coalition. At oral argument, the Public Justice Center argued the cases for the Residents, with this Court's approval. For the purposes of this opinion, the arguments presented by amici will stand in the Residents's stead.

The facts in each case are similar. As a condition of membership in the Associations, the Residents were contractually obligated to pay annual assessments to the Associations. Delinquent assessments resulted in charged interest on past due amounts plus late fees.2 The Residents were also contractually required to pay costs and attorneys' fees incurred by the Associations in the pursuit of delinquent assessment payments.3 In each case, the Residents failed to pay the assessments in a timely fashion and, in each case, the Associations directed Nagle & Zaller to collect on the debt. Nagle & Zaller contacted the Residents in writing in an effort to resolve their situations, but the Residents did not make payments sufficient to settle their debts. Because the Residents were unable or unwilling to make the required payments, the Associations established and recorded liens on the Residents' properties in accordance with the Maryland Contract Lien Act ("CLA"), which allows for the creation of a lien on real property as the result of a breach of contract. See Md. Code (1974, 2003 Repl. Vol.),

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