Chavis v. Blibaum Assoc. , 246 Md. App. 517 ( 2020 )

Larry S. Chavis, et al. v. Blibaum Associates, P.A., No. 334, Sept. Term, 2019; Bryione K.
Moore v. Peak Management LLC, No. 528, Sept. Term 2019. Opinion filed on July 2,
2020, by Berger, J.
DEBT COLLECTION – MCDCA– METHODS– AMOUNT OF DEBT
The MCDCA may be used by a debtor to challenge methods of debt collection. A debtor
may not use the MCDCA to challenge the amount of a debt, which the creditor had a right
to collect.
DEBT COLLECTION – MCDCA – WRIT OF GARNISHMENT
A creditor does not violate the MCDCA, § 14-202(8) of the Commercial Law Article, by
using wage garnishment to collect the filing fee for a writ of garnishment.
DEBT COLLECTION – MCDCA – RETROACTIVITY
The 2018 amendments to the MCDCA, which added § 14-202(11) to the Commercial Law
Article, do not apply retroactively. There is a presumption that a statute operates
prospectively, unless there is clear legislative intent otherwise.
CLASS ACTION CERTIFICATION – HEARING REQUIREMENT
A trial court is not obligated to grant the moving party a hearing when it files a second
motion for class certification, following the denial of the first.
Circuit Court for Baltimore County
Case No. 03-C-18-010602
Circuit Court for Baltimore City
Case No. 24-C-17-000033
REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
Nos. 334, 528
September Term, 2019
______________________________________
LARRY S. CHAVIS, ET AL.
v.
BLIBAUM ASSOCIATES, P.A.
______________________________________
BRYIONE K. MOORE, ET AL.
v.
PEAK MANAGEMENT LLC
______________________________________
Berger,
Arthur,
Gould,
JJ.
______________________________________
Opinion by Berger, J.
______________________________________
Pursuant to Maryland Uniform Electronic Legal
Materials Act
Filed: July 2, 2020
(§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2020-07-02 14:32-04:00
Suzanne C. Johnson, Clerk
This appeal arises out of two consolidated cases from the Circuit Court for
Baltimore City and the Circuit Court for Baltimore County involving the collection
activities of two judgment creditors. Appellants are residential tenants who defaulted on
their leases with their landlord, Appellee, Peak Management LLC (“Peak”). Peak hired
Blibaum & Associates (“Blibaum”), Appellee, which sought to collect on the judgments
entered against the tenants.1 Appellants challenged the debt collection activities of Peak
and Blibaum in separate actions in Baltimore City and Baltimore County. Appellants
sought damages for violations of the Maryland Consumer Debt Collection Act
(“MCDCA”), the Maryland Consumer Protection Act (“MCPA”), as well as declaratory
and injunctive relief.
On appeal, Appellants present the following issues for review, which we rephrase
in accordance with the consolidation of the two cases:
I. Whether the circuit court erred when it dismissed
Appellants’ claims under the Maryland Consumer Debt
Collection Act.
II. Whether the circuit court erred when it dismissed
Appellants’ claims under the Maryland Consumer
Protection Act.
III. Whether the 2018 Amendments to the Maryland
Consumer Debt Collection Act apply retroactively.
IV. Whether the circuit court erred when it denied
Appellants’ Second Motion for Class Certification.
1
Although we collectively refer to the tenants as “Appellants” throughout this
Opinion, we recognize that not all Appellants are the same in both cases.
V. Whether the circuit court erred when it denied
Appellants’ request for attorney’s fees pursuant to the
Maryland Consumer Protection Act.
For the reasons explained herein, we hold that neither the Circuit Court for
Baltimore City nor the Circuit Court for Baltimore County erred in dismissing Appellants’
MCDCA or MCPA claims. Additionally, the Circuit Court for Baltimore City did not err
in finding that the 2018 Amendments to the MCDCA did not apply retroactively. In light
of our holding that Appellees did not violate the MCDCA or the MCPA, we need not
address whether the Circuit Court for Baltimore County erred in denying Appellants’
request for attorney’s fees.
FACTS AND PROCEEDINGS
Although we have consolidated both appeals into one opinion, we shall outline the
procedural history of both cases separately. Tenants Bryione Moore, Albert Grantham,
Patricia Grantham, Sharone Crowell, and Larry S. Chavis defaulted on their residential
leases with Peak. Peak hired Blibaum to obtain judgments against the tenants for damages
caused by the breaches of their leases. Blibaum obtained judgments against the tenants,
which they failed to satisfy. Blibaum, therefore, initiated collection activities against the
tenants, which included filing and obtaining writs of garnishments. Blibaum sought to
collect the fee that it incurred for filing the writs of garnishment, as well as post-judgment
interest in the amount of 10%. Chavis and Grantham satisfied the judgments obtained
against them in full. Moore and Crowell did not satisfy the judgments entered against
them.
2
The tenants filed a lawsuit against Peak Management in the Circuit Court for
Baltimore City, seeking damages for the debt collection activities by Peak. In their First
Amended Class Action Complaint, which was filed on March 24, 2017, the tenants sought
declaratory and injunctive relief, damages for violations of the MCDCA, Md. Code (1975,
2013 Repl. Vol.), § 14-202(8), of the Commercial Law Article (“CL”), damages and
attorney’s fees for violations of the Maryland Consumer Protection Act (“MCPA”), CL §
13-301 et. seq., as well as restitution in the amount of the overpayments made to Peak. The
tenants’ primary contention was that Blibaum’s utilization of a 10% post-judgment interest
rate was contrary to Maryland law, which authorizes a post-judgment interest rate of 6%
for the collection of rent of residential premises.
On April 19, 2017, the Honorable Barry Williams dismissed both the MCDCA and
the MCPA counts against Peak. Thereafter, the tenants filed a Fourth Amended Complaint
on May 1, 2018, which added claims for permanent injunctive relief, a new MCPA claim
based on CL § 13-303(1) and a claim, pursuant to CL § 15-605, that Peak was not entitled
to collect a fee in order to file a writ of garnishment. Following a motion to dismiss filed
by Peak, the new claims under the MCPA and CL § 15-605 were dismissed by the
Honorable Michael DiPietro. Judge DiPietro additionally denied the tenants’ request for
the entry of a declaratory judgment, permanent injunction, and an order for restitution.
The tenants filed their first Motion for Class Certification on May 14, 2018. The
only remaining count at that time was an action for unjust enrichment. Following a hearing,
the Honorable Videtta A. Brown denied the motion on September 10, 2018. In an effort to
resolve the concerns expressed by the court when it denied the first motion, the tenants
3
subsequently filed a Second Motion for Class Certification that included the deposition
testimony of Gary Blibaum. The circuit court denied the second motion for class
certification without a hearing on February 6, 2019. Both Peak and the tenants filed cross-
motions for summary judgment, which were considered by the Honorable Julie R. Rubin.
The circuit court granted judgment in favor of Peak with respect to Moore and Crowell’s
unjust enrichment claims. The court further entered judgment in favor of Albert Grantham,
Patricia Grantham, and Larry S. Chavis with respect to their claims of restitution. The
judgments were entered on May 3, 2019 and this timely appeal was filed on May 7, 2019.
The second of these consolidated cases involves the following undisputed facts.
Tenants Larry S. Chavis, Patricia Grantham, Laronda T. Green, and Cassandra J. Reid
defaulted on their residential leases with Peak. Blibaum was retained by Peak to file claims
against the tenants for breach of contract, seeking damages caused by the breaches.
Blibaum obtained judgments against the tenants, on behalf of Peak, which included a 10%
pre-judgment interest rate. When the tenants failed to satisfy the judgments entered against
them, Blibaum began to garnish their wages. Blibaum utilized a 10% post-judgment
interest rate when calculating the amount the tenants owed on the judgments.
On October 22, 2018, the tenants filed a Complaint against Blibaum in the Circuit
Court for Baltimore County, similarly alleging violations of the MCDCA and requesting
attorney’s fees pursuant to the MCPA. Blibaum filed a motion to dismiss the complaint
and requested a hearing. While the motion was pending, the tenants filed their First
Amended Class Action Complaint on January 4, 2019. Blibaum filed a motion to dismiss
the First Amended Class Action Complaint and requested a hearing. Following a hearing
4
on the motion to dismiss, the Honorable Paul J. Hanley granted Blibaum’s motion to
dismiss the complaint in its entirety in an order dated April 11, 2019.
The core of Appellants’ arguments on appeal is based on Appellees charging the
incorrect post-judgment rate pursuant to Md. Code (1974, 2013 Repl. Vol.), § 11–107, of
the Courts and Judicial Proceedings Article (“CJ”). Three related cases are currently
pending in Federal Court and are relevant to this issue on appeal. See Amber Ben-Davies
v. Blibaum & Associates P.A., CCB-16-2783 (D. Md. 2019); Bryione K. More v. Blibaum
& Associates, P.A., CCB-16-3546 (D. Md. 2019); Larry Chavis v. Blibaum & Associates,
P.A., CCB-17-2220 (D. Md. 2019). The U.S. District Court for the District of Maryland
certified the following question to the Maryland Court of Appeals regarding the proper
post-judgment interest rate:
Is the legal rate of post-judgment interest on a judgment
awarded in a breach of contract action where the underlying
contract is a residential lease ten percent (10%)[,] as stated in
[CJ] § 11–107(a)[,] or is it six percent (6%)[,] as stated in [CJ]
§ 11–107(b), which states that it is applicable to ‘a money
judgment for rent of residential premises,’ where the judgment
in the breach of contract action does not specifically delineate
what portion, if any, of the judgment was awarded for unpaid
rent?
Ben-Davies v. Blibaum & Assocs., P.A., 457 Md. 228, 232–33 (2018). The Court of
Appeals explained that “under Md. Code Ann., Cts. & Jud. Proc. (1974, 2013 Repl. Vol.)
(“CJ”) § 11–107, different post-judgment interest rates apply to different types of
judgments.” Id. at 231. Moreover, “[g]enerally, under CJ § 11–107(a), except as provided
otherwise, a post-judgment interest rate of 10% applies to all judgments. Meanwhile, under
CJ § 11–107(b), a post-judgment interest rate of 6% applies to ‘money judgment[s] for rent
5
of residential premises[.]’” Id. Blibaum and Peak argued that “the plain language of CJ §
11–107(b) demonstrates that it does not apply to judgments in actions for breach of
contract, even if the damages include rental payments under a lease.” Id. at 244. The Court
of Appeals agreed with the Tenants’ reading of CJ § 11-107(b) and held the following:
Here, we conclude that, where a landlord sues a tenant for
breach of contract based on a residential lease, and the trial
court enters judgment in the landlord’s favor against the tenant
and the judgment includes amounts for unpaid rent and other
expenses, a post-judgment interest rate of 6% applies to the
judgment pursuant to CJ § 11–107(b).
Id. at 265.
We shall add additional facts as they become relevant to the issues on appeal.
I. MCDCA Claims.
Appellants allege that Blibaum and Peak violated the MCDCA, CL § 14-202(8), for
their collection of two “unauthorized charges.” First, Appellants argue that it was a
violation of the MCDCA to collect 10% post-judgment interest when the legal rate was
6%.2 Second, Appellants contend that Appellees violated the MCDCA by collecting the
filing fees associated with obtaining writs of garnishments by adding those fees to the
amounts it sought to collect through the garnishments.
2
Appellants in Case No. 334 additionally challenge Blibaum’s utilization of a 10%
pre-judgment interest rate. We agree with Appellants, that the legal rate of pre-judgment
interest in Maryland is 6%, not 10%. Harford Cty. v. Saks Fifth Ave. Distribution Co., 399
Md. 73, 96 (2007) (holding that “pre-judgment interest shall be calculated at the legal rate
of six percent per annum.”). We undertake the same analysis for both the collection of pre-
judgment and post-judgment interest as it relates to the MCDCA.
6
Both the Circuit Court for Baltimore County and the Circuit Court for Baltimore
City granted motions to dismiss the Appellants’ MCDCA and MCPA claims. “A trial court
may grant a motion to dismiss if, when assuming the truth of all well-pled facts and
allegations in the complaint and any inferences that may be drawn, and viewing those facts
in the light most favorable to the non-moving party, ‘the allegations do not state a cause of
action for which relief may be granted.’” Sutton v. FedFirst Fin. Corp., 226 Md. App. 46,
73 (2015) (quoting Latty v. St. Joseph’s Soc. of Sacred Heart, Inc., 198 Md. App. 254,
262–63 (2011)). This Court reviews the grant of a motion to dismiss de novo. Advance
Telecom Process LLC v. DSFederal, Inc., 224 Md. App. 164, 173 (2015). “We will affirm
the circuit court’s judgment ‘on any ground adequately shown by the record, even one upon
which the circuit court has not relied or one that the parties have not raised.’” Id. at 174(quoting Monarc Constr., Inc. v. Aris Corp., 188 Md. App. 377, 385 (2009)).
A. Collection of 10% post-judgment and pre-judgment interest was not a
violation of the MCDCA § 14-202(8).
We shall first address whether the Appellees violated the MCDCA by collecting
post-judgment and pre-judgment interest at a rate of 10%, when the legal rate is 6%. CL §
14-202(8) provides that “[i]n collecting or attempting to collect an alleged debt a collector
may not . . . [c]laim, attempt, or threaten to enforce a right with knowledge that the right
does not exist[.]”3 “The MCDCA, and in particular § 14–202, is meant to proscribe
3
The “knowledge” requirement of CL § 14-202(8) “has been held to mean that a
party may not attempt to enforce a right with actual knowledge or with reckless disregard
as to the falsity of the existence of the right.” Allen v. Bank of Am., N.A., 933 F. Supp. 2d
716, 729 (D. Md. 2013) (quoting Kouabo v. Chevy Chase Bank, F.S.B., 336 F. Supp.2d
471, 475 (D. Md. 2004)).
7
certain methods of debt collection and is not a mechanism for attacking the validity of the
debt itself.” Fontell v. Hassett, 870 F. Supp. 2d 395, 405 (D. Md. 2012). “A collector who
violates any provision of this subtitle is liable for any damages proximately caused by the
violation, including damages for emotional distress or mental anguish suffered with or
without accompanying physical injury.” CL § 14-203.
Appellants rely heavily on Allstate Lien & Recovery Corp. v. Stansbury, 219 Md.
App. 575, 577 (2014) and Mills v. Galyn Manor Homeowner’s Ass’n, Inc., 239 Md. App.
663, 676 (2018), aff’d sub nom., Andrews & Lawrence Prof’l Servs., LLC v. Mills, 467 Md.
126 (2020), in support of their argument that Appellees collected or attempted to collect
two “unauthorized charges.” In Allstate, supra, 219 Md. App. at 577, a vehicle repair shop
placed a “garageman’s lien” on a vehicle that it repaired, when the owner could not pay for
the repairs in full. The repair shop included a $1,000 processing fee in the lien amount that
the owner was required to pay in order to redeem his vehicle. Id. The vehicle owner
alleged that the processing fees were not authorized by statute, and therefore, the repair
shop violated the MCDCA by including the processing fee in the lien amount. Id. The
repair shop argued that it had an “absolute legal right to execute upon the lien and sell the
vehicle because of the garageman’s lien on the vehicle, even if a portion of the lien amount
[was] disputed.” Id. at 590. The repair shop further argued that “the MCDCA addresses
the method of debt collection, as opposed to a challenge to the amount of the underlying
debt.” Id.8
This Court first determined that CL § 16-202, which authorizes a garageman’s lien,
did not authorize including processing fees as part of the lien amount. We next addressed
whether the inclusion of those fees constituted a violation of the MCDCA. We rejected
the repair shop’s reliance on Fontell, supra, 870 F. Supp. 2d at 406, where a homeowner
challenged the validity of an underlying homeowner’s association debt under the MCDCA.
The Fontell Court held that the MCDCA is “meant to proscribe certain methods of debt
collection and is not a mechanism for attacking the validity of the debt itself.” Id. at 405.
This Court observed that Fontell was unhelpful to the repair shop, because the vehicle
owner was not disputing the underlying debt, but rather the “method of collecting the debt,
i.e., front-loading processing fees and including those fees as part of the lien.” Allstate,
supra, 219 Md. App. at 530. Accordingly, we held that because the repair shop did not
have the right to include the processing fees as part of the lien amount, the vehicle owner
could recover under the MCDCA. Id. at 591.
More recently in Mills, supra, 239 Md. App. at 676, we considered whether a
Homeowner’s Association violated the MCDCA. The homeowners challenged the
Association’s right to file liens against them because the statute of limitations had expired.
Additionally, the homeowners alleged that the Association levied fines against them that
were unauthorized by the Association’s governing documents. We held that “the
Homeowners may pursue a MCDCA claim because they challenge [the Association’s]
methods in filing liens.” Further, we remanded the case to the trial court to determine
whether the fines levied against the homeowners “are the type of ‘unauthorized’ charges
9
covered by the statute.” By “unauthorized charges,” we addressed charges that the
Association did not have the right to assess at all.
Critical to both the Allstate and Mills holdings was that the creditors sought to
collect fees that it did not have the right to collect. Neither holding suggests that a debtor
may use the MCDCA to challenge the amount of a debt, which the creditor had a right to
collect. Indeed, there is no dispute that Appellees had a right to collect pre-judgment and
post-judgment interest. The only dispute pertains to the amount of pre-judgment and post-
judgment interest. Accordingly, we affirm the judgments of both the Circuit Court for
Baltimore City and the Circuit Court for Baltimore County with respect to dismissal of
Appellants’ MCDCA claims.4
4
Relying on Mills, supra, 239 Md. App. at 679 and Allstate, supra, 219 Md. App.
591, the United States District Court for the District of Maryland issued an interlocutory
order denying summary judgment, in connection with similar claims asserting violations
of the MCDCA. Ben-Davies v. Blibaum & Assocs., P.A., 421 F. Supp. 3d 94, 99-100 (D.
Md. 2019). We disagree with the Court’s interpretation of our holdings
in Mills and Allstate. The Federal Court observed that in Allstate, this Court “held that a
plaintiff’s claim was proper under the MCDCA where he disputed the inclusion of a
processing fee on top of the valid underlying debt.” Id. at 100 (citing Allstate, supra, 219
Md. App. at 591). The Court further observed that in Mills we “suggested that the levying
of fines not authorized by the contract governing the underlying debt might constitute a
violation of the MCDCA.” Id. (citing Mills, supra, 239 Md. App. at 679). As we explained
above, in both Mills and Allstate, the creditors sought to collect fees that they did not have
the right to collect at all. In the instant case, Appellees clearly had a right to collect pre-
judgment and post-judgment interest. The parties, however, disagreed on the amount of
the interest. Blibaum and Peak were incorrect in their legal assessment of the amount they
were entitled to collect. After certification of this legal question from the District Court,
the Court of Appeals issued a comprehensive opinion holding the proper rate of post-
judgment interest is 6%. In our view, the parties’ legal disagreement --that was ultimately
resolved by the Court of Appeals -- does not result in a cognizable claim under the
MCDCA.
10
B. Using wage garnishment to collect the filing fee for a writ of garnishment
does not constitute a violation of the MCDCA § 14-202(8).
Appellants next contend that Appellees assessed an “unauthorized charge” by
including the fee for the filing of a writ of garnishment in the amount they attempted to
collect through the garnishments. Appellants argue that the cost of the filing fee for the
writ of garnishment was not included in the costs “actually assessed in the cause,” as
required by CL § 15-605. We, therefore, address whether the Appellants had a right to
include the filing fee in the amount it was attempting to collect through garnishing the
Appellants’ wages.
Generally, Maryland Rule 3-603 provides that “the prevailing party is entitled to the
allowance of costs.” When a judgment debtor fails to satisfy a judgment, the creditor may
garnish their wages, by first filing a writ of garnishment. Pursuant to Maryland Rule 3-646,
a “judgment creditor may obtain issuance of a writ of garnishment by filing in the same
action in which the judgment was obtained a request that contains (1) the caption of the
action, (2) the amount owed under the judgment, (3) the name and last known address of
the judgment debtor, and (4) the name and address of the garnishee. Upon filing of the
request, the clerk shall issue a writ of garnishment directed to the garnishee together with
a blank answer form provided by the clerk.” The District Court of Maryland published
Form Number DC-CV-065 (Rev. 01/2020), which a creditor utilizes in order to do so.
Indeed, Rule 3-303 requires that “[a]s far as practicable, all pleadings shall be prepared on
District Court forms prescribed by the Chief Judge of the District Court.” The form
provides spaces for the creditor to fill in “the amount now due on the judgment.” It includes
11
a line for “[t]otal court costs, including this writ.” Appellees correctly completed the form
and filed it with the district court.
Appellants aver that the collection of the filing fee, however, was contrary to the
mandate in CL §15-605, which establishes the duties of a judgment creditor who garnishes
a debtor’s wages. CL § 15-605(c) requires that “[a]ll payments received by a judgment
creditor shall be credited first against the accrued interest on the unpaid balance of the
judgment, if any, second upon the principal amount of the judgment, and third upon those
attorney’s fees and costs actually assessed in the cause.” Appellants argue that the post-
judgment cost of the writ fee was not “actually assessed” as a cost. We disagree. CL § 15-
605(c) refers to the order that a judgment creditor must follow when it receives payments
from a garnishee. It does not restrict the types of costs that a creditor is entitled to receive.
We, therefore, agree with Appellees that they were entitled to recover the fee for filing the
writ of garnishment.
II. MCPA Claim.
Appellants next contend that Peak violated CL § 13-301(1) because the reports sent
to Appellees when it garnished their wages included 10% post-judgment interest and
misstated the amount of the court costs. Appellants aver that these reports deceived them
into believing that they owed more than what they legally did, and that they suffered an
economic loss when their wages were garnished for a greater amount than they legally
owed.
Pursuant to CL § 13-303 “[a] person may not engage in any unfair, abusive, or
deceptive trade practice . . . in . . . [t]he collection of consumer debts.” “Unfair, abusive,
12
or deceptive trade practices include any [f]alse, falsely disparaging, or misleading oral or
written statement, visual description, or other representation of any kind which has the
capacity, tendency, or effect of deceiving or misleading consumers[.]” CL § 13-301.
Generally, “any person may bring an action to recover for injury or loss sustained by him
as the result of a practice prohibited by [the MCPA].” CL § 13-408. The MCPA is to be
“construed and applied liberally to promote its purpose.” CL § 13-105. “A consumer
bringing a private action under § 13–408 must allege (1) an unfair or deceptive practice or
misrepresentation that is (2) relied upon, and (3) causes them actual injury.” Bey v. Shapiro
Brown & Alt, LLP, 997 F. Supp. 2d 310, 319 (D. Md. 2014), aff’d, 584 F. App’x 135 (4th
Cir. 2014) (quoting Stewart v. Bierman, 859 F.Supp.2d 754, 768 (D. Md. 2012)).
Appellants contend that the incorrect statements of the amounts owed on their
judgments were “deceptive,” pursuant to CL § 13-303, because the statements caused them
to believe they owed more on their judgments than they did, and that it caused more of
their wages to be garnished than should otherwise have been garnished. In response,
Appellees observe that Appellants cite to no law where a party has been held liable under
the MCPA for asserting a legal position on a novel issue of law that turned out to be
incorrect.
Appellants cite Powell v. Palisades Acquisition XVI, LLC, 782 F.3d 119 (4th Cir.
2014) in support of their argument that a misstatement of the amount due on a judgment is
deceptive and can influence a consumer’s decision on what to pay or agree to as a
settlement. In Powell, a debtor received reports which included incorrect amounts due on
a judgment obtained against her, and represented that she had not made any payments
13
toward the judgment, when in fact she had. Id. at 127. The report included an award of
attorney’s fees in the total judgment, but also reflected that the attorney’s fees represented
a separate amount due. Id. at 122. The trial court held that this false misrepresentation did
not violate the FDCPA5 because it was not “material.” Id. at 126. On appeal, the Fourth
Circuit explained the following concerning what communications are actionable under the
FDCPA:
“Whether a communication is false, misleading, or deceptive
in violation of § 1692e is determined from the vantage of the
‘least sophisticated consumer,’” evaluating how that consumer
“would interpret the allegedly offensive language.” Russell v.
Absolute Collection Servs., Inc., 763 F.3d 385, 394–95 (4th
Cir.2014). A logical corollary of the least sophisticated
consumer test is that false, deceptive, and misleading
statements must be material to be actionable.
***
The materiality requirement limits liability under the FDCPA
to genuinely false or misleading statements that “may frustrate
a consumer's ability to intelligently choose his or her
response.” Donohue, 592 F.3d at 1034; see also Hahn, 557
F.3d at 758(“The statute is designed to provide information
that helps consumers to choose intelligently ...”). Thus, only
misstatements that are important in the sense that they could
objectively affect the least sophisticated consumer’s
decisionmaking are actionable.
5
The Fair Debt Collection Practices Act, 15 U.S.C. § 1692e, is the federal corollary
to the MCPA. It provides, in pertinent part that “[a] debt collector may not use any false,
deceptive, or misleading representation or means in connection with the collection of any
debt.”
14
Id. The Court concluded that “the least sophisticated consumer who previously believed
that she had paid her debt in full could, upon receiving a copy of an assignment of
judgment, be led to realize that she did indeed have a debt outstanding.” Id. Moreover,
“when that assignment contained an overstatement in excess of 50 percent, the least
sophisticated consumer could be led to decide to pay far more than she otherwise would
have paid.” Id. Accordingly, the Court held that the district court erred in concluding that
the misrepresentations were not material.
We are not persuaded by Appellant’s reliance on Powell. Critically, the reports sent
to Appellants did not inaccurately reflect payments that were made toward the satisfaction
of the judgments. Further, the reasons for the inflated amounts in Powell are
distinguishable from the instant case. In Powell, the consumer was sent a report that
essentially charged attorney’s fees twice, which was reflected in the total judgment amount,
and listed separately. Here, the Appellants charged the incorrect amount of post-judgment
interest based on their interpretation of a novel legal issue. Moreover, we have already
determined that Appellees had the right to collect the fee associated with filing the writ of
garnishment. Appellants’ argument that the court costs were reflected inaccurately because
this fee was included, is, therefore, unavailing. Accordingly, we hold that Appellees that
cannot be liable under the MCPA for asserting a legal position on a novel issue of law,
which turned out to be incorrect. We, therefore, affirm the dismissal of the Appellant’s
claims pursuant to the MCPA.
III. The 2018 amendments to the MCDCA, which added 14-202(11), do not apply
retroactively.
15
In 2018, the Maryland General Assembly amended the MCDCA to include
protections for consumers under federal law. Effective October 1, 2018, “[i]n collecting
or attempting to collect an alleged debt a collector may not. . . [e]ngage in any conduct that
violates §§ 804 through 812 of the Federal Fair Debt Collection Practices Act.” CL § 14-
202(11). Appellants urge us to apply this provision retroactively and apply it to the conduct
of Blibaum.
“Generally, the presumption is that statutes operate prospectively unless there is
evidence of a contrary intent.” John Deere Const. & Forestry Co. v. Reliable Tractor, Inc.,
406 Md. 139, 146 (2008). “This rule of construction is particularly applicable where
the statute adversely affects substantive rights, rather than only altering procedural
machinery.” Id. at 146-47 (quoting State Farm Mut. Auto. Ins. Co. v. Hearn, 242 Md. 575,
582 (1966)); see also Landsman v. Maryland Home Improvement Comm'n, 154 Md. App.
241, 251 (2003) (quoting State of Maryland Comm'n on Human Relations v. Amecom Div.
of Litton Sys., Inc., 278 Md. 120, 123 (1976)) (“‘Because of the potential for interference
with substantive rights, however, and because of the resulting prejudice against retroactive
application,’ a statute that affects substantive rights is presumed to operate prospectively.”)
“Indeed, ‘the presumption against retroactive legislation is deeply rooted in our
jurisprudence, and embodies a legal doctrine centuries older than our Republic.’” Johnson
v. Mayor & City Council of Baltimore, 203 Md. App. 673, 693–94 (2012), aff’d, 430 Md.
368 (2013) (quoting Landgraf v. USI Film Products, 511 U.S. 244, 265 (1994)).
Moreover, “pursuant to Maryland law, a proper retroactive application of
a statute requires a two part analysis: first, a determination that the legislature clearly
16
intended the statute to apply retroactively, and second, a determination that retroactive
application does not “impair vested rights, deny due process, or violate the prohibition
against ex post facto laws.” John Deere, supra, 406 Md. at 145-46 (quoting Allstate Ins.
Co. v. Kim, 376 Md. 276, 289 (2003)). The Court of Appeals has noted that
“‘[r]etroactivity, even where permissible, is not favored and is not found, except upon the
plainest mandate in the act.’” Id. at 146 (quoting State Farm Mut. Auto. Ins. Co., supra,
242 Md. at 582).
Appellants focus their argument on the second part of the analysis, that is, whether
retroactive application would impair any rights, deny due process, or violate the prohibition
against ex post facto laws. John Deere, supra, 406 Md. at 145–46. Indeed, however, we
must first “determine whether the Legislature intended the statute to have the kind of
retroactive effect that is asserted.” Allstate, supra, 376 Md. at 289. In determining
legislative intent, we begin with the plain meaning of the statutory language. If the intent
is clear from that language, there is no need to search further.” Id. at 290. But, “[i]f the
intent for which we search cannot be gleaned from the statutory language alone, we may,
and often must, look for evidence of intent from legislative history or other sources.” Id.
The 2018 Amendments affect a substantive right because the Amendments afford
consumers a new cause of action under Maryland law. Critically, there is no indication
that the legislature intended for the MCPA Amendments to be applied retroactively. The
MCPA does not contain any express language which indicates an intent to apply the
Amendment retroactively. Moreover, the parties have not cited, nor have we found, any
17
legislative history that supports retroactive application. Accordingly, inasmuch as there is
no clear legislative mandate to apply the statute retroactively, we refuse to do so.
IV. The trial court was not obligated to grant a hearing for the second motion for
class certification and did not abuse its discretion in denying Appellant’s
motion for class certification.
Appellants further argue that the Circuit Court for Baltimore City erred in denying
their second motion for class certification without a hearing. “The Maryland Rules allow
for an action to be litigated as a class action when there are questions of law or fact common
to a group of potential litigants who are too numerous to be joined as parties to the action.”
Frazier v. Castle Ford, Ltd., 430 Md. 144, 152–53 (2013). Maryland Rule 2-231 governs
class action litigation and provides in pertinent part:
(b) Prerequisites to a Class Action. One or more members of a
plaintiff class may sue as representative parties on behalf of all
only if (1) the class is so numerous that joinder of all members
is impracticable, (2) there are questions of law or fact common
to the class, (3) the claims of the representative parties are
typical of the claims of the class, and (4) the representative
parties will fairly and adequately protect the interests of the
class.
[]
(c) Class Actions Maintainable. Unless justice requires
otherwise, an action may be maintained as a class action if the
prerequisites of section (b) are satisfied, and in addition:
(1) the prosecution of separate actions by individual members
of the class would create a risk of (A) inconsistent or varying
adjudications with respect to individual members of the class
that would establish incompatible standards of conduct for the
party opposing the class, or (B) adjudications with respect to
individual members of the class that would as a practical matter
be dispositive of the interests of the other members not parties
18
to the adjudications or substantially impair or impede their
ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on
grounds generally applicable to the class, thereby making
appropriate final injunctive relief or corresponding declaratory
relief with respect to the class as a whole; or
(3) the court finds that the questions of law or fact common to
the members of the class predominate over any questions
affecting only individual members and that a class action is
superior to other available methods for the fair and efficient
adjudication of the controversy. The matters pertinent to the
findings include: (A) the interest of members of the class in
individually controlling the prosecution of separate actions,
(B) the extent and nature of any litigation concerning the
controversy already commenced by members of the class, (C)
the desirability or undesirability of concentrating the litigation
of the claims in the particular forum, (D) the difficulties likely
to be encountered in the management of a class action.
(d) Certification. On motion of any party or on the court’s own
initiative, the court shall determine by order as soon as
practicable after commencement of the action whether it is to
be maintained as a class action. A hearing shall be granted if
requested by any party. The order shall include the court’s
findings and reasons for certifying or refusing to certify the
action as a class action. The order may be conditional and may
be altered or amended before the decision on the merits.
Rule 2–231(b) “presents four threshold requirements: numerosity, commonality, typicality,
and adequacy of representation. These requirements are necessary but not alone sufficient;
a putative class also must fall into one of three subcategories of Rule 2–231[c].”6 Creveling
6
Maryland Rule 2-231 was amended in 2019 to provide that “[o]nly plaintiff classes
may be named in an action and certified by the court. Defendant classes shall not be named
or certified.” This was added as subsection (a) of the Rule. The four prerequisites of a
class action are now codified at Rule 2-231(b). The subcategories that a class must fall
into at least one of are now codified at Rule 2-231(c).
19
v. Gov’t Employees Ins. Co., 376 Md. 72, 88 (2003). “The party seeking class certification
bears the burden of proving that all of the Rule’s requirements have been satisfied.” Id. at
88-89. In deciding whether to certify a class, “a trial court should accept a plaintiff's
allegations as true, but may look beyond the pleadings to determine whether class
certification is appropriate.” Id. at 89 (citations omitted).
The Court of Appeals has articulated the following standard for reviewing the grant
or denial of class certification:
We ordinarily review a [Circuit Court’s] decision regarding
whether to certify a class action for an abuse of
discretion.” Creveling v. Gov’t Employees Ins. Co., 376 Md.
72, 90, 828 A.2d 229, 239 (2003). “[T]he basis of the
certification inquiry is essentially a factual one, and thus,
deference is due.” Id., 828 A.2d at 240. Our standard of review
for determining whether a Circuit Court used a correct legal
standard in determining whether to grant or deny class
certification is de novo. Philip Morris, Inc. v. Angeletti, 358
Md. 689, 726, 752 A.2d 200, 220 (2000).
Anne Arundel Cty. v. Halle Dev., Inc., 408 Md. 539, 569 (2009). Moreover, “[i]mplicit in
this standard is a recognition that the basis of the certification inquiry is essentially a factual
one, and thus, deference is due.” Creveling, supra, 376 Md. at 90.
Appellants filed two motions for class certifications. Appellant’s first motion for
class certification was denied following a hearing. Their second motion for class
certification was denied without a hearing. Appellants argue that they were entitled to a
hearing on their second motion for class certification. We disagree.
20
Pursuant to Maryland Rule 2-231(d), “[a] hearing shall be granted if requested by
any party” when seeking class certification. Critically, the trial court held an extensive
hearing on Appellants’ first motion for class certification. Appellants made a tactical
decision to file the first motion for class certification prior to discovery. Appellants argue,
however, that subsequent to taking the deposition of Gary Blibaum, Esquire, as the
corporate designee of Blibaum, many of the circuit court’s concerns were addressed. The
circuit court, in its discretion, disagreed, and denied their second motion without a hearing.
We disagree that Appellants are entitled to a hearing each time they file the same motion.
Further, Appellants cite no authority in support of their contention that they are entitled to
multiple hearings on each of their motions for class certification.
We next turn to the circuit court’s basis for denying Appellant’s second motion for
class certification. In denying Appellants’ second motion for class certification, the circuit
court noted that it was “not persuaded to alter or amend the order denying class certification
dated September 17, 2018.” In light of our holding that the circuit court did not err in
denying the second motion without holding a hearing, we necessarily need to review the
reasons set forth by the circuit court in its denial denying the first motion for class
certification.
When Appellants filed their first motion for class certification, the only remaining
claim was Appellants’ claim for unjust enrichment. A hearing was held on August 10,
2018, in which Appellant Moore designated three class representatives, Larry Chavis,
Albert Grantham, and Patricia Grantham. Moore defined the class as “[a]ll natural persons
against whom Peak Management LLC obtained a judgment that was not satisfied prior to
21
January 4, 2014 in a lawsuit brought in Maryland by Blibaum & Associates, LLC on behalf
of Peak Management LLC and who have since satisfied that judgment.”7 Moore did not
identify or include any persons who may be excluded from the class. In support of its
motion for class certification, Appellants relied heavily on a spreadsheet of 160 lawsuits
by Blibaum, on behalf of Peak, in which a judgment was entered in favor of Peak and
satisfied after January 4, 2014.
The circuit court concluded that Appellants did not satisfy several of the
requirements necessary for class certification. First, it found that the class definition did
not sufficiently address the issues in question or readily identify the members of the class.
The court concluded that it would have to conduct mini-trials to determine whether the
judgments were ones where Peak charged a 10% post-judgment interest rate or whether the
judgment was a money judgment for the rent of a residential lease. The classes were,
therefore, not identifiable and ascertainable. Similarly, the circuit court found that the
prerequisite of numerosity was not satisfied because the class definition was deficient and
it could not ascertain who would be included in the class. The court further found that the
typicality requirement was also not satisfied based on the definition of the class. It reasoned
that the spreadsheet failed to demonstrate that all or any of the putative class members were
charged 10% post-judgment interest; that the persons actually satisfied their judgments by
paying more than a 6% interest rate; or that any of the 160 persons had money judgments
7
The italicized text reflects an amendment made to the class definition during the
hearing.
22
against them for unpaid rent and other damages which would entitle them to a 6% post-
judgment interest rate.
The circuit court further found that Appellants failed to satisfy the requirement of
class certification regarding the adequacy of the class representative. In doing so, the
circuit court recognized that the typicality and adequacy requirements are often
intertwined. It found that Appellants had offered no evidence to suggest that the class
representatives had knowledge of the case or were interested in pursuing the matter and
taking on the duties as class representatives. Relying on Cutler v. Wal-Mart Stores, Inc.,
175 Md. App. 177, 180, 196 (2007), the court also found that unjust enrichment claims
could not be determined on a class wide basis. Indeed, the trial court concluded that there
would need to be individual assessments of whether or not any benefit was conferred and
accepted, retained, or even known to the defendant.
The circuit court reviewed each of the requirements for class certification and did
not abuse its discretion in denying Appellant’s first motion for class certification. The
record demonstrates that many of the requirements necessary for class certification were
not satisfied because the class definition was deficient. Moreover, based upon the
information presented to the circuit court at the time, it was impossible to ascertain whether
the proposed class members were actually charged the incorrect amount of interest,
whether the judgments obtained against them were for unpaid rent, and whether they
23
satisfied those judgments based on an incorrect interest rate.8 We, therefore, affirm the
circuit court’s denial of class certification.
V. Appellants are not entitled to attorney’s fees because they have not prevailed
on their MCDCA or MCPA claims.
Lastly, Appellants argue that Blibaum is not exempt from paying attorney’s fees, if
they were to prevail on their MCDCA claims. Pursuant to CL § 13-408(b) “[a]ny person
who brings an action to recover for injury or loss under this section and who is awarded
damages may also seek, and the court may award, reasonable attorney’s fees.” The General
Assembly has provided that a violation of the MCDCA is a per se violation of the MCPA.
See CL 13-301(14)(iii). The MCPA, however, does not apply to the professional services
of a lawyer. CL §13-104. In light of our holding that the trial court did not err in finding
that Blibaum did not violate the MCDCA or the MCPA, we need not undertake an analysis
of whether § CL 13-408(b) is applicable to Blibaum.9
JUDGMENTS OF THE CIRCUIT COURT
FOR BALTIMORE COUNTY AND THE
CIRCUIT COURT FOR BALTIMORE
CITY AFFIRMED. COSTS TO BE PAID BY
APPELLANTS.
8
Indeed, Appellants made a tactical decision to file the first motion for class
certification prior to discovery.
9
The Court of Appeals recently affirmed our decision in Mills, supra, 239 Md. App.
663, and addressed whether the MCPA exemption for the professional services of a lawyer,
applies to all services of a lawyer when engaging in a debt collection activity. Andrews &
Lawrence Prof’l Servs, supra, 467 Md. at 168-69. The Court held that “in the context of
debt collection activity, not all services provided by a lawyer or a law firm fall within the
‘professional services’ exemption under the CPA.” Id. at 168.
24