Mack Financial Services v. L3 Trucking LLC
3:20-cv-00693
M.D. La.Dec 16, 2021Background
- Mack Financial Services (assignee of a December 29, 2017 credit sales contract) financed a 2018 Mack truck for L3 Trucking and took a security interest in the equipment.
- Chad V. Landry executed a continuing guaranty personally guaranteeing L3 Trucking's obligations.
- L3 Trucking defaulted on payments; Landry failed to perform under the guaranty; plaintiff sued for breach of contract and guaranty and obtained entry of default and default judgment.
- The contract and guaranty expressly authorize recovery of "reasonable attorneys' fees and all other costs and expenses" but do not specify a percentage formula for fees.
- At suit commencement the outstanding principal and interest totaled $166,991.54; plaintiff sought attorneys' fees of $25,048.73 (15% of the balance) and costs of $1,429.90.
- The Court was asked to apply North Carolina law (choice-of-law issue) and to determine entitlement and amount of fees and recoverable costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to attorneys' fees under NC law | Contract and guaranty expressly authorize recovery of reasonable attorneys' fees | No opposition; defendants failed to respond | Fees allowed: contracts authorize fees; NC law requires statutory authorization but contract suffices |
| Method/amount of fee calculation | Apply N.C. Gen. Stat. § 6-21.2: when no percentage specified, fee = 15% of outstanding balance (15% of $166,991.54 = $25,048.73) | No opposition | Court applied § 6-21.2 and awarded $25,048.73 |
| Recoverability of litigation costs beyond §1920 | Contractual authorization permits recovery of contract costs incurred enforcing agreement (sequestration, etc.) | No opposition | Contractual authorization permits recovery; awarded $1,429.90 in costs |
Key Cases Cited
- Exxon Corp. v. Burglin, 4 F.3d 1294 (5th Cir. 1993) (attorney-fee award in diversity is governed by the law applicable to the substantive claims)
- Kneel v. Walter E. Heller & Co., 813 F.2d 67 (5th Cir. 1987) (same choice-of-law principle for fee awards)
- Enterprises, Inc. v. Equipment Co., 300 N.C. 286 (N.C. 1980) (attorneys' fees recoverable only if expressly authorized by statute or contract)
- D.P. Solutions, Inc. v. Xplore-Tech Servs. Pvt. Ltd., 225 N.C. App. 840 (N.C. Ct. App. 2013) (applying 15% rule where contract provides fees but no percentage)
- Cook Children's Medical Center v. The New England PPO Plan of General Consol. Mgmt., Inc., 491 F.3d 266 (5th Cir. 2007) (federal courts may only tax costs listed in §1920 absent contractual authorization)