Lawyers Funding Group, LLC and Alan R. Zibelman, Esquire appeal a judgment from the Court of Common Pleas of Philadelphia County in favor of L.G. Financial Consultants, Inc., resulting in a liability of $63,003.50, which includes $40,000 in principal, plus interest and attorneys' fees. The appeal arises from the denial of post-trial motions, but it is clarified that the appeal should be directed at the judgment itself, not the post-trial order. Lawyers Funding contends that the court wrongly assessed damages due to the loan service agent's lack of standing and failure to provide evidence of the loan balance, and that summary judgment on liability improperly shifted the burden of proof. However, the court found these arguments meritless and affirmed the judgment.
The factual background indicates that Lawyers Funding, a law firm managed by Zibelman, received a $100,000 loan from LG in 2009, secured by a Confession of Judgment Promissory Note. Subsequent loan modifications occurred, with the last modification in April 2013 extending the loan amount to $250,000 and maturing in March 2018. The loan required monthly payments and included a confession of judgment provision for attorney fees. Following a good payment history, GFCIB was engaged by LG in 2016 to service the loan, which included collecting payments and managing related legal matters.
LG provided Miller with all relevant documentation concerning Lawyers Funding, including loan documents, modifications, payment history, and correspondence. The servicing agreement mandated that written consent from LG and entities controlled by Rodney Green was necessary to initiate litigation. On August 11, 2016, Rodney Green notified clients of his retirement and instructed them to direct future payments to GFCIB. Following this, on August 29, 2016, GFCIB informed all LG clients, including Lawyers Funding, that they would be managing the loan and that payments should be sent to them starting September 2016. GFCIB's correspondence indicated that they would not send monthly invoices, prompting Lawyers Funding to refuse payments without invoices. GFCIB subsequently provided some invoices, but Lawyers Funding was generally responsible for calculating the interest due each month.
On April 1, 2018, LG and GFCIB amended the servicing agreement to extend its term for two years, effective March 1, 2018, with provisions for automatic renewal unless a party provided sixty days' notice of withdrawal. It was undisputed that neither GFCIB nor LG provided such notice. Lawyers Funding defaulted on the loan, making no payments after December 6, 2017, and LG, through GFCIB, confessed judgment against Lawyers Funding for $93,280.28 on October 16, 2018, due to this breach. Lawyers Funding filed a petition to contest the judgment, asserting that the principal owed was only $40,000, which led the trial court to open the judgment on December 26, 2018, due to factual disputes regarding the amount owed.
LG subsequently moved for summary judgment on October 4, 2019, which Lawyers Funding acknowledged as being in breach but disputed the total amount due. The trial court granted summary judgment in favor of LG on liability on February 27, 2020, while denying it regarding damages due to ongoing factual disputes. During the damages assessment hearing, evidence was presented by both parties, with Miller testifying as the managing member of GFCIB, responsible for loan servicing and legal matters on behalf of LG.
Miller testified regarding his communications with Rodney and Anthony Green about ongoing legal proceedings, confirming their awareness and participation in financing the legal action. He stated that GFCIB had not regularly sent billing statements to Lawyers Funding since July 2016 but would provide them upon request. There was no evidence presented showing written notice of the monthly amounts due to Lawyers Funding. Despite objections, the court admitted Exhibit P-3, a spreadsheet detailing Lawyers Funding’s loan payments, which indicated missed payments and late fees from December 2014 to July 2020, culminating in an ending balance of $157,825.30. Miller confirmed that this document, although prepared after litigation began, was maintained in GFCIB's regular business practice. Rubin and Zibelman, representing Lawyers Funding, submitted Exhibit D-23, a QuickBooks history of checks paid, showing missed payments in 2016 and 2017, with a balance of $40,000 by December 2017. The trial court found Lawyers Funding’s evidence credible and ruled in favor of LG, awarding $63,003.50, which included principal, interest, and attorneys' fees. The court determined that LG failed to provide credible evidence of the loan balance at the time of default, ultimately concluding that the actual principal loan balance was $40,000, supported by the comprehensive payment history in Exhibit D-23.
Exhibit D-23 does not provide a running balance of the loan principal but details the dates, check numbers, and payments made. It confirms that Lawyers Funding defaulted with a principal balance of $40,000 at the time of default, supported by Exhibit D-15 and Rubin’s testimony. In 2016, Lawyers Funding missed payments in July and August and missed three payments in 2017. Rubin calculated the loan balance to be $76,000 in January 2017, considering the missed payments and only counting ten payments made in 2016. After nine timely payments in 2017 and three missed payments, the remaining balance was confirmed as $40,000, with no further payments made. The court ruled that Lawyers Funding was entitled to 24% annual default interest, late fees on the missed payments, and attorney's fees at 20% of the principal balance.
On December 29, 2020, Lawyers Funding filed a motion to vacate the damage assessment, arguing trial court errors, including reliance on the expired amended servicing agreement and Jack Miller’s testimony, and improper assessment of attorneys’ fees and interest. The court denied this motion on March 2, 2021, citing waiver or lack of merit. Lawyers Funding appealed, raising four issues: improper assessment of damages based on an unauthenticated affidavit and business records, reliance on Miller’s testimony, errors in granting summary judgment on liability, and Miller’s lack of standing. In particular, Lawyers Funding contends that Exhibit P-3, which indicated a debt of $157,825.30, should not have been admitted as it was prepared for litigation purposes, and argues that this lack of admissible evidence undermines the monetary award.
The trial court did not rely on Exhibit P-3 or Jack Miller's testimony in calculating the judgment amount for Lawyers Funding, instead using the admitted sum of $40,000. P-3, which documented the loan balance and late fees, was deemed irrelevant to determining the principal and late fees owed. Lawyers Funding's claim that the trial court erred in granting summary judgment on liability due to an invalid affidavit from Miller is incorrect. The court's decision was based on Lawyers Funding's admissions of default and acknowledgment of the amount owed, not on the affidavit's representations. Additionally, Lawyers Funding's argument regarding the authority of GFCIB to initiate litigation was waived because it was not raised in a post-trial motion, which is necessary for preserving issues for appeal. Failure to object timely to alleged errors results in waiver, even for constitutional issues.
Lawyers Funding failed to raise the issue of authority regarding Miller as an agent for LG in earlier proceedings, resulting in waiver of the argument for review. Lawyers Funding's counsel acknowledged Miller's authority to testify without objection. The trial court determined that the servicing agreement automatically renewed since neither party notified the withdrawal from the agreement prior to its termination; thus, GFCIB had the authority to initiate the action. The court found no error in its interpretation of the servicing agreement, which stated that it would automatically renew upon expiration. The default occurred in 2017, and the case was filed in October 2018, within the renewed term. GFCIB was acting on behalf of LG, which had an interest in the litigation outcome. Although the trial court did not address Lawyers Funding’s waived claim regarding GFCIB's standing due to lack of written consent from Green, the amendment to the servicing agreement included LG and entities owned by Green. Evidence showed that LG authorized the legal action since Green discussed the matter with Miller and paid legal fees, thus ratifying the action. The judgment from October 16, 2020, is affirmed.
