Maddox v. Cohn, 199 Md. App. 63

Maddox owned property in Wicomico County and obtained a mortgage from Beneficial in 2007, defaulted in 2009, and faced foreclosure proceedings.
Prior to the foreclosure sale, weekly advertisements stated a $295 fee to the bidders’ attorneys for review of settlement documents.
Foreclosure sale occurred on November 9, 2009; Beneficial was the successful bidder and the trustees sold the property for $77,044.
Maddox objected to ratification, arguing the fee was unauthorized by the debt instrument or applicable rules and could deter bidding.
The circuit court acknowledged the fee was outside typical rules but found no evidence of a chilling effect and ratified the sale; Maddox appealed, challenging standing and the fee’s propriety.
The court later held the fee was improper but affirmed ratification on the basis that it was not charged in this case and Maddox lacked standing to challenge the advertisement.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is it improper to require a successful bidder to pay an attorney’s fee for reviewing settlement documents?	Maddox argues the fee is not authorized by the debt instrument or rules.	The trustees contend the practice is customary and reasonable in foreclosure proceedings.	The fee must be authorized by statute, rule, or instrument; the court found it improper but not charged here.
Does advertising the fee have a chilling effect on bidders?	The advertisement could deter bidders from bidding.	There is no evidence that bidders were deterred by the fee.	No standing shown to prove a chilling effect; advertisement alone did not injure Maddox.
Does Maddox have standing to challenge the advertisement and fee?	The advertisement caused injury-in-fact by potentially deterring bids.	No actual injury shown since the fee was not charged and no higher bid proven.	Maddox did not demonstrate injury-in-fact; standing lacked.
Is the attorney/trustee fee permissible where not provided for in the debt instrument or rules?	The debt instrument lacks explicit authorization for such a fee.	Local rules and practice allow trustee compensation and potential attorney’s fees.	Imposition of the fee is improper absent explicit authorization in the deed of trust or rules.

Greenbriar Condo. v. Brooks, 387 Md. 683 (2005) (standards for validity of foreclosure sales and irregularities)
Bates v. Cohn, 417 Md. 309 (2010) (burden to prove irregularities; injury-in-fact standard)
J. Ashley Corp. v. Burson, 131 Md.App. 576 (2000) (burden on objector; particularity of allegations)
Tolzman v. Gwynn, 22 Md.App. 564 (1974) (attorney’s fee in debt instrument; fixed sum vs. reasonable fee)
Walker v. Haywood, 65 Md.App. 1 (1985) (attorney’s fees in deed of trust; fixed or percentage terms)
Mortgage Investors of Washington v. Citizens Bank and Trust Co. of Maryland, 278 Md. 505 (1976) (attorney’s fees permissible with explicit amount/percentage in debt instrument)
Bunn v. Kuta, 109 Md.App. 53 (1996) (court review of trustee/fees; equity jurisdiction)
Fowler v. Fitzgerald, 82 Md.App. 166 (1990) (local rules governing trustee compensation and double-charging)