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Maidmore Realty Co. v. Maidmore Realty Co.

decided: February 27, 1973.


Appeal from the District Court of the Virgin Islands Division of St. Croix, Christiansted Jurisdiction (D.C. Civil Action No. 105-1971).

Van Dusen, Rosenn, and Hunter, Circuit Judges.

Author: Per Curiam


In this appeal from the judgment of the District Court of the District of the Virgin Islands, the National Bank of North America, appellant, asks this court to vacate that portion of the judgment awarding attorney fees and to remand to the district court for an evidentiary hearing. National Bank of North America was awarded $3,000 in attorney's fees by the district court; it claims the district court erred in calculating this sum by not considering evidence that considerably more than $3,000 had been incurred in legal expenses in collecting the debt which was satisfied in this judgment. We find no error in the district court's calculation of attorney fees and therefore affirm.

Determination of the proper assessment of attorney fees in the present case hinges on a close look at the progress of the underlying law suit. In 1966 the West Indies Hotel Corporation borrowed One Million Dollars from, and in exchange delivered a mortgage note to, the Meadow Brook National Bank. Ten days later Lorayne S. Hooper subordinated her prior mortgage on the West Indies property to the Meadow Brook mortgage.

Nearly five years later Hooper brought a foreclosure action against West Indies in the district court. Meadow Brook National Bank, as holder of the senior mortgage, was joined as a defendant. The National Bank of North America, as successor to Meadow Brook, filed an answer admitting all the allegations of Hooper's complaint and cross-complaining against West Indies for foreclosure of its senior mortgage. The cross-complaint sought entry of a consent judgment for the outstanding principal and interest due National, order of a foreclosure sale of the mortgaged property, a judgment and execution against West Indies for any deficiency remaining after the sale, and "court costs of this action, including a reasonable attorney's fee and such other and further relief as to the Court may seem just and proper."

Appellee, Maidmore Realty Company, by purchasing the West Indies property and the Hooper mortgage, became the successor in interest to both plaintiff and defendant after the filing of this suit. On November 10, 1971, Maidmore was substituted for the original parties by order of the court. At the same time the court granted National's motion for summary judgment against Maidmore, as cross-defendant in the original action. Maidmore filed a motion for reconsideration; but, before the court ruled on this motion, Maidmore tendered to National payment for the outstanding principal and interest. When National, after receipt of the tender, refused to discharge the mortgage lien, Maidmore requested from the court an order accomplishing such a result.

In contesting the motion for a discharge, National for the first time sought more than reasonable attorney fees for the suit at bar. It argued at a hearing before the court that paragraph 8 of the original West Indies/Meadow Brook mortgage should be considered in awarding fees. That paragraph states:

In the event this mortgage and the note which it secures are placed in the hands of an attorney for the collection of any payment due thereunder or for the enforcement of any of the terms, covenants and conditions thereof, the Mortgagor agrees to pay all costs of collection, including reasonable attorneys' fees incurred by the Mortgagee, either with or without the institution of an action or proceeding, and in addition, all other costs, disbursements and allowances provided by law. All such costs so incurred shall be deemed to be secured by this mortgage and collectible out of the Premises in any manner permitted by law or by this mortgage.

National argued that before the mortgage was discharged it should be awarded the $18,500 which had been incurred over the previous five years to collect overdue payments from West Indies, as provided by the aforesaid language. National offered to provide documentation that this sum had been incurred, but the district court judge refused to hear it.

Following the hearing, the district court issued a final judgment which:

Ordered, ADJUDGED AND DECREED, that the National Bank of North America be, and it is hereby awarded attorney's fees in the sum of $3,000.00, pursuant to the Courts [sic] discretionary powers as contained in Title 5 V.I.C. ยง 541; and

It is further Ordered that this action shall be herewith dismissed with prejudice and the aforesaid mortgage lien against the properties now owned by Maidmore Realty Co., Inc., . . . shall be and the same is hereby discharged of record. . .

In appealing from that portion of the judgment awarding attorney's fees of $3,000, National alleges that the district court ignored the explicit language of paragraph 8 of the mortgage by awarding attorney fees only in accordance with the Virgin Island statute.*fn1 National argues that paragraph 8 was valid, that by its terms the court was required to consider any evidence National could ...

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