In re: Walker and Walker

In re: Anthony D. Walker and Denicia P. Walker, Misc. No. 8, September Term 2020.
Opinion by Hotten, J.
CERTIFIED QUESTION OF LAW – STATUTORY INTERPRETATION – LIENS
The United States Bankruptcy Court for the District of Maryland requested the Court of
Appeals of Maryland to answer the following certified question:
Can a community association’s lien perfected under the Maryland Contract
Lien Act, Md. Code Ann., Real Property (“Real Prop.”) §§ 14-201[–206]
secure unpaid damages, costs of collection, late charges, and attorney’s fees
arising under the association’s governing documents that accrue subsequent
to the recordation of the lien?
Pursuant to Md. Code Ann., §§ 12-601–613 of the Courts and Judicial Proceedings Article,
the Court of Appeals of Maryland answered the certified question in the negative. The
Court of Appeals held that the Maryland Contract Lien Act, Real Prop. §§ 14-201–206
does not permit a lien that secures unpaid damages, costs, charges, and fees which accrue
after the recordation of the lien, otherwise known as a continuing lien. The Court of
Appeals determined that the Maryland Contract Lien Act’s plain text, legislative history,
relevant case law, and comparison with other statutes precluded community associations
from using a continuing lien to secure debts, as a matter of law.
United States Bankruptcy Court
for the District of Maryland
Case No. 18-23752-NVA IN THE COURT OF APPEALS
Argued: February 4, 2021
OF MARYLAND
Misc. No. 8
September Term, 2020
__________________________________
IN RE: ANTHONY D. WALKER AND
DENICIA P. WALKER
__________________________________
Barbera, C.J.,
McDonald,
Watts,
Hotten,
Getty,
Booth,
Biran,
JJ.
__________________________________
Opinion by Hotten, J.
__________________________________
Filed: March 30, 2021
Pursuant to Maryland Uniform Electronic Legal
Materials Act
(§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2021-03-30 11:49-04:00
Suzanne C. Johnson, Clerk
The Maryland Uniform Certification of Questions of Law Act,1 Maryland Code, §§
12-601–613 of the Courts and Judicial Proceedings Article (“Cts. & Jud. Proc.”) empowers
this Court to “answer a question of law certified to it by a court of the United States . . . if
the answer may be determinative of an issue in a pending litigation in the certifying court
and there is no controlling appellate decision, constitutional provision, or statute of this
State.” Cts. & Jud. Proc. § 12-603. This Court has been asked to answer the following
certified question of law by the United States Bankruptcy Court for the District of
Maryland (“the Bankruptcy Court”):
Can a community association’s lien perfected under the Maryland Contract
Lien Act, Md. Code Ann., Real Property. (“Real Prop.”) §§ 14-201[–206]
secure unpaid damages, costs of collection, late charges, and attorney’s fees
arising under the association’s governing documents that accrue subsequent
to the recordation of the lien?
We answer this question in the negative. For reasons to be explained, we hold that
the Maryland Contract Lien Act (“MCLA”) does not permit liens that secure unpaid
damages, costs, charges, and fees which accrue after the recordation of the lien.
1
[The] Maryland [General Assembly] adopted the first version of the
Uniform Certification of Questions of Law Act in 1972 as part of a uniform
code promulgated by the Uniform Law Commission (also known as the
National Conference of Commissioners on Uniform State Laws) and codified
the Act as Article 26 §§ 161 to 172. 1972 Md. Laws, ch. 427. The following
year, Article 26 was recodified as the [Cts. & Jud. Proc.] Article. 1973 Md.
Laws 1st Spec. Sess., ch. 2. In 1995, the Uniform Law Commission issued
a new model Certification of Questions of Law statute, which Maryland then
adopted in 1996. 1996 Md. Laws, ch. 344. The Maryland Uniform
Certification of Questions of Law Act is currently codified at [Cts. & Jud.
Proc.] §§ 12-601 to 12-613, Maryland Code (1973, 2020 Repl. Vol.).
United Bank v. Buckingham, Misc. No. 1, Sept. Term, 2020, 2021 WL 865246, at *1 n.1
(Md. Mar. 9, 2021).
FACTUAL AND PROCEDURAL BACKGROUND
In accordance with Cts. & Jud. Proc. § 12-605(a), “the court certifying a question
of law” to this Court “shall issue a certification order.” Pursuant to Cts. & Jud. Proc. § 12-
606(a)(2), the certification order must contain “[t]he facts relevant to the question, showing
fully the nature of the controversy out of which the question arose[.]” We accept the facts
provided by the certifying court, Price v. Murdy, 462 Md. 145, 147, 198 A.3d 798, 799
(2018), and supplement with additional facts as necessary.
The Underlying Incident
Appellee and debtor, Denicia P. Walker,2 purchased a unit at the Long Reach Knolls
Condominium, Inc. (“Appellant”) in Columbia, Maryland. Walker formally accepted the
deed on June 30, 2000. Appellant serves as the governing body of the condominium unit
owners. Unit owners must adhere to Appellant’s bylaws and the Maryland Condominium
Act (“MCA”), Real Prop. §§ 11-101–143.3 Appellant’s bylaws require unit owners to pay
monthly “assessments” or fees, which Appellant uses to cover common expenses,
including insurance, landscaping, property management, and improvement of common
areas.
2
Denicia Walker married co-debtor Anthony D. Walker after she purchased the
property. An ownership interest was never conveyed to Anthony Walker.
“In exchange for the benefits of owning property in common, condominium
3
owners agree to be bound by the rules governing the administration, maintenance, and use
of the property.” Ridgely Condominium Ass’n, Inc. v. Smyrnioudis, 343 Md. 357, 359, 681
A.2d 494, 495 (1996) (footnote omitted). Condominium rules and bylaws must conform
with the MCA, which “regulates the formation, management, and termination of
condominiums in Maryland.” Id. at 360, 681 A.2d at 495.
2
Walker defaulted multiple times on her monthly assessments. While Appellant has
never restricted Walker’s access to common areas, it recorded eight liens against Walker’s
unit between December 31, 2002, and April 4, 2014. The liens secured unpaid assessments,
interest, and attorney’s fees. Appellant also obtained three personal judgments against
Walker during this time span.
On October 6, 2015, Appellant notified Walker of its intent to record a ninth lien
against her unit to secure unpaid assessments, interest, and attorney’s fees arising on or
after January 1, 2015. The lien notice stated that it would secure $4,702.80 in unpaid
damages owed as of October 6, 2015, “plus all sums becoming due thereafter[.]” Walker
neither paid the owed amount nor challenged the intended lien. Appellant recorded its
ninth lien on December 22, 2015 and obtained a fourth personal judgment against Walker
in the District Court of Maryland for Howard County on August 9, 2016. The court entered
a judgment of $13,933.99 against Walker, which included unpaid assessments from
January 1, 2014 through December 31, 2016.
Legal Proceedings
Walker filed for Chapter 13 bankruptcy relief on January 12, 2017. The Bankruptcy
Court denied Walker’s Chapter 13 plan without leave to amend on August 17, 2017 and
dismissed Walker’s case on September 8, 2017. Walker paid four monthly assessments
between January and September 2017. Walker filed a second petition for Chapter 13
bankruptcy on September 11, 2017. The Bankruptcy Court denied Walker’s Chapter 13
plan without leave to amend on September 24, 2018. The Bankruptcy Court dismissed the
3
second petition on October 16, 2018. Walker paid three monthly assessments during the
pendency of the second petition.
Walker filed a third petition for Chapter 13 relief on October 16, 2018. Appellant
filed proof of a secured claim for $42,298.89 on October 31, 2018.4 This amount partly
consisted of assessments, interest, and other costs that did not accrue until after Appellant
recorded its ninth lien.
Walker objected to Appellant’s proof of secured claim on August 5, 2019. Walker
asserted that the MCLA does not permit a lien to secure assessments, costs of collection,
and attorney’s fees that accrue following the recordation of the lien. Appellant filed a
response on August 29, 2019. The parties agreed to petition the Bankruptcy Court to certify
the instant question to this Court. The parties also agreed to a joint stipulation of facts and
documents on February 19, 2020. At the time of the joint stipulation, Walker had not paid
a monthly assessment since August 29, 2019. According to Appellant, Walker resumed
making monthly payments beginning April 28, 2020, but remains in default of her post-
bankruptcy petition assessments. The Bankruptcy Court ordered certification on
September 23, 2020.
4
A proof of secured claim indicates the amount of secured debt that the debtor owed
a creditor on the date of the bankruptcy filing. When calculating the total debt owed, the
United States Bankruptcy Court, Official Form 410, part 2:7, permits creditors to include
“in addition to [the] principal amount, . . . interest, fees, expenses, or other charges[.]” Fed.
R. Bankr. P. 3001(c)(2)(A). Walker owed Appellant a principal judgment balance of
$24,205.89 at the time of bankruptcy filing. Appellant added $18,093.00 to this claim,
reflecting subsequent delinquent assessments, interest, attorney’s fees and costs that
accrued subsequently to the lien’s recordation, for a total secured claim of $42,298.89.
4
DISCUSSION
Standard of Review
This Court may answer a question of law certified by a federal court if “the answer
may be determinative of an issue . . . in the certifying court and there is no controlling
appellate decision, constitutional provision, or statute of this State.” Fangman v. Genuine
Title, LLC, 447 Md. 681, 690, 136 A.3d 772, 777 (2016) (citing Cts. & Jud. Proc. § 12-
603). This Court cabins its review of certified questions to issues of Maryland law, not to
issues of fact. Parler & Wobber v. Miles & Stockbridge, 359 Md. 671, 681, 756 A.2d 526,
531 (2000). This Court “may go no further than the question certified.” Price, 462 Md. at
147, 198 A.3d at 799 (quoting AGV Sports Grp., Inc. v. Protus IP Solutions, Inc., 417 Md.
386, 389 n.1, 10 A.3d 745, 746 n.1 (2010)).
The certified question of law concerns the interpretation of the MCLA. Statutory
interpretation requires ascertaining and effectuating the intent of the General Assembly.
Montgomery County v. Phillips, 445 Md. 55, 62, 124 A.3d 188, 192 (2015). We review
questions of statutory interpretation under a de novo standard of review without deference
to other courts’ interpretation of the statute. Harvey v. Marshall, 389 Md. 243, 257, 884
A.2d 1171, 1179 (2005) (citing Mohan v. Norris, 386 Md. 63, 66-67, 871 A.2d 575, 577
(2005)).
Parties Contentions
According to Appellant, as long as a lien complies with the procedural requirement
for creation under the MCLA, a lien can secure unpaid damages that arise after the
5
recordation of the lien.5 In short, Appellant argues that the MCLA permits continuing
liens.6
For Appellant, the strongest support for continuing liens comes from the plain text
of the statute, which neither prohibits continuing liens, nor requires a lienholder to impose
a new lien to secure additional unpaid damages that arise after a lien’s recordation.
According to Appellant, finding a prohibition against continuing liens in the MCLA would
impermissibly require the insertion of new language “as to reflect an intent not evidenced
in the plain and unambiguous language of the statute[.]” Woznicki v. GEICO Gen. Ins.
Co., 443 Md. 93, 108, 115 A.3d 152, 161 (2015) (quoting Stickley v. State Farm Fire &
Cas. Co., 431 Md. 347, 358-59, 65 A.3d 141, 148 (2013)).
Appellant also notes that this Court has never held that the MCLA requires multiple
liens to secure unpaid sums arising from a single contract. Instead, the past cases of this
Court have focused on the purpose of the MCLA in creating a framework for recording
and enforcing liens that accord with the minimum requirements of due process. See, e.g.,
Golden Sands Club Condo., Inc. v. Waller, 313 Md. 484, 495, 545 A.2d 1332, 1337-38
5
These subsequent damages must also be provided by contract, governing bylaws,
or statute.
The Supreme Court defined a continuing lien as one “cover[ing] property or rights
6
to property in the delinquent’s hands at any time prior to expiration.” Glass City Bank of
Jeanette, Pa. v. United States, 326 U.S. 265, 267, 66 S. Ct. 108, 110 (1945). A continuing
lien, in the context of a condominium association lien, constitutes not only the amount
claimed in the lien, but the aggregate of unpaid charges, fees, and interest that have accrued
since its recordation. See Bd. of Mgrs. of Netherlands Condo. v. Trencher, 128 A.D.3d
452, 453, 9 N.Y.S.3d 213, 214 (1st Dept. 2015) (“plaintiff is entitled to not only the amount
claimed in the lien, but also the amount of unpaid common charges and fees that have
accrued since the filing of the lien[.]”) (emphasis added).
6
(1988) (“We hold that procedural due process does not prevent the approach to hearing
which the [General Assembly] has taken [under the MCLA]. In balancing the interests of
the parties, the General Assembly has looked to economy, efficiency, and minimal
involvement of the judiciary. At the same time, it has given the unit owner a reasonably
simple and not unduly expensive way to secure a hearing and judicial action as prerequisites
to the creation of a lien on the unit.”) (emphasis added).
Appellant contends that a continuing lien satisfies the minimum requirements of due
process outlined by this Court in Golden Sands because continuing liens conserve time and
expense for unit owners, condominiums, and the judiciary without increasing the risk of
erroneous deprivation of the unit owner’s property. See id. at 495, 545 A.2d at 1338 (citing
Matthews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903 (1976)) (“[D]ue process
generally requires consideration of three distinct factors: [f]irst, the private interest that will
be affected . . . second, the risk of an erroneous deprivation . . . and the probable value, if
any, of additional or substitute procedural safeguards; and finally, . . . the fiscal and
administrative burdens that the additional or substitute procedural requirement would
entail.”). The interest of a council of unit owners would be furthered by conserving time
and expense in filing multiple liens. A continuing lien also protects the interests of the
entire condominium because it ensures that accruing costs and interests from a delinquent
unit owner are covered by a single lien. Unit owners meanwhile would still receive prior
notice and an opportunity to challenge putative charges in a formal proceeding before the
lien is recorded. Requiring successive liens would not in any meaningful way decrease the
7
risk of erroneous deprivation of a unit owner’s property interests compared to a continuing
lien.
Appellant argues that prohibiting continuing liens could produce absurd results and
deleterious consequences for both condominium associations as a whole and individual
unit owners. See Blue v. Prince George’s County, 434 Md. 681, 689, 76 A.3d 1129, 1133
(2013) (“An examination of interpretive consequences, either as a comparison of the results
of each proffered construction, or as a principle of avoidance of an absurd or unreasonable
reading, grounds the court’s interpretation in reality.”). The prohibition of continuing liens
would subject the lienholder and property owner to unnecessary time and expense of
additional proceedings. These proceedings could lead to contradictory results. Less
sophisticated parties, or those with financial constraints, may incur greater hardship when
trying to comply with the multiple lien requirement. According to Appellant, prohibiting
continuing liens would increase the fiscal and administrative burdens on the council of unit
owners, and any other party subject to the MCLA’s lien procedures.
Appellant also urges this Court to rely on non-Maryland authority to resolve this
undecided question of Maryland law. Appellant cites Archie v. Nagle & Zaller, P.C., No.
GJH-17-2524, 2018 WL 3475429 (D. Md. Jul. 19, 2018), in which the United States
District Court for the District of Maryland stated in an unreported memorandum opinion
that prohibiting continuing liens, under the MCLA, “would be bizarre [and] idiosyncratic
and not tenable[]” because it would require a creditor to file a new lien every time an
additional cost accrued. Id. at *6 (internal quotation and citation omitted).
8
Appellant also cites to a line of cases from New York, culminating in a 2015
intermediate appellate court decision, that concluded the equivalent New York
condominium association lien statute permits continuing liens. Trencher, 128 A.D.3d at
453, 9 N.Y.S.3d at 214; see also Bd. of Managers of Soho Greene Condo. v. Clear, Bright
& Famous LLC, 2012 N.Y. slip op. 33273(U) (Trial Order), 2012 WL 5877658 (N.Y. Sup.
Ct. Nov. 5, 2012) (“To read into this statute, as has been suggested, a requirement that the
board of managers update its liens monthly in order to protect additional amounts accruing
each month would be an interpretation which would be costly, burdensome and contrary
to the . . . legislative objective.”).
Walker argues that the MCLA prohibits any sum from being secured by a statutory
lien before the property owner has an opportunity to contest the sum prior to attachment.
According to Walker, continuing liens are prohibited by the plain language, legislative
history, and due process requirements previously recognized by this Court.
Walker contends that the plain language of the MCLA excludes continuing liens
because it enumerates an exhaustive and bounded list of payment categories that may be
secured by a lien, namely damages, costs, late charges, and attorney’s fees. According to
Walker, the plain language of the statute only covers these payment categories when they
are actually due. A continuing lien impermissibly stretches the meaning of the statutory
language because it would cover payments that are not actually due. As future sums, they
have not yet, nor may ever, become due.
According to Walker, continuing liens would contravene the purpose of the MCLA,
which was amended by the General Assembly to conform with due process and ensure
9
debtors have the right to contest amounts allegedly owed. The Senate hearings indicated
that debtors must have an opportunity to challenge a debt before the lien attaches. A
continuing lien would circumvent the purpose of the statute because it would deny debtors
the opportunity to challenge the precise amounts owed before the recordation of the lien.
Walker also asserts that a continuing lien conflicts with the precedent of this Court. In
Golden Sands, this Court upheld the constitutionality of the MCLA because “no lien
attaches until after the unit owner has an opportunity to be heard . . . the lien claimant has
the burden of proof . . . these provisions give the necessary opportunity for hearing and
provide a reasonable procedure for testing the validity of the lien prior to its creation[.]”
313 Md. at 493, 545 A.2d at 1337 (emphasis added). Walker maintains that this Court
underscored again, in Select Portfolio Servicing, Inc. v. Saddlebrook West Utility
Company, LLC, 455 Md. 313, 167 A.3d 606 (2017), the importance of unit owner’s ability
to challenge putative costs before the lien is imposed. Id. at 336, 167 A.3d at 619 (“Under
the [MCLA], . . . no lien attaches until after the [property] owner has an opportunity to be
heard.”). A continuing lien contradicts this Court’s previous decisions that upheld a
debtor’s due process right in being able to challenge the amount of debt putatively owed
before the governing body of a condominium records a lien.
Analysis of the MCLA
A. Overview of Maryland Statutory Liens and the MCLA
Legislatures have the power, subject to due process constraints, to authorize liens
that secure payments, debts, or other obligations—like unit owner assessments—by statute.
Hon. William Houston Brown & Lawrence R. Ahern, III, The Law of Debtors and
10
Creditors: Bankruptcy, Security Interests, Collection § 9:7 (Nov. 2020). The creation and
enforcement of a statutory lien is entirely limited to and governed by its statutory terms.
MacBride v. Gulbro, 247 Md. 727, 729, 234 A.2d 586, 588 (1967) (noting that when a
statute “creates a cause of action which did not exist at common law, [it is] in derogation
of the common law [and thus] is to be strictly construed.”). Maryland courts construe
statutory liens “strictly” in favor of the debtor to protect a debtor’s common law rights.
Patapsco Trailer Serv. & Sales, Inc. v. Eastern Freightways, Inc., 271 Md. 558, 564, 318
A.2d 817, 820 (1974); T.R. Ltd. v. Lee, 55 Md. App. 629, 635, 465 A.2d 1186, 1191 (1983)
(“Consent being an important element of a common law lien, any statutory attempt to create
such lien without the element of consent would have to be strictly construed in derogation
of the common law.”).
A corollary of this Court’s strict interpretation of statutory liens is that a court cannot
create or impose a lien itself based on what it considers just in a particular case. See
Equitable Trust Co. v. Imbesi, 287 Md. 249, 271, 412 A.2d 96, 107 (1980) (“[t]he creation
of a lien is an affirmative act, and the intention to do such act [cannot] be implied from an
express negative.”).
The General Assembly enacted the MCLA, in part, for condominiums and their
council of unit owners to secure the payment of assessments with a lien. Real Prop. § 14-
202(a)(1) (“A lien on property may be created by a contract and enforced under this subtitle
if: [] The contract expressly provides for the creation of a lien[.]”). The MCLA gives
condominium associations “limited senior priority” over first recorded mortgage liens to
ensure condominium associations receive some financial recoupment after a unit owner
11
defaults. Grahame K. Wells, The Use of Super-Liens to Promote Cooperation Between
Condominium Associations and Lenders, 13 Ann. Rev. Banking L. 477, 479 (1994).
Prior to the MCLA, when a condominium unit owner defaulted, the mortgage lender
would ordinarily have first priority in a foreclosure and would acquire all of the debtor’s
assets—leaving nothing for the condominium association. In response, Maryland, along
with most states, created a statutory lien (sometimes called a “super lien”) that enabled
condominium associations to jump the foreclosure line and deduct some delinquent
assessments and related costs from the sale proceeds. Real Prop. § 11B-117(c) (creating a
super lien for a portion of unpaid unit owner assessments). In sum, the MCLA created a
shortcut for condominium associations to recover delinquent unit owner assessments by
placing a lien on the unit owner’s unit.
The parties dispute whether the MCLA grants a different type of legislative shortcut
for condominium associations: whether the MCLA permits continuing liens—i.e., the
securing of damages, fees, and interest that arise after the recordation of the lien. As we
shall explain, the MCLA does not permit continuing liens. The plain text and legislative
history of the statute, as well as relevant case law of the statute, both from Maryland and
our sister jurisdictions, support our conclusion.
B. Statutory Interpretation of the MCLA
The first indication that the MCLA prohibits continuing liens comes from the
statutory text itself. “The cardinal rule of statutory interpretation is to ascertain and
effectuate the real and actual intent of the [General Assembly]. . . . To ascertain the intent
of the General Assembly, we begin with the normal, plain meaning of the statute.” State
12
v. Bey, 452 Md. 255, 265, 156 A.3d 873, 878 (2017). “[T]he plain language must be viewed
within the context of the statutory scheme to which it belongs, considering the purpose,
aim, or policy of the [General Assembly] in enacting the statute.” Id. at 266, 156 A.3d at
878. “Where the words of a statute are ambiguous and subject to more than one reasonable
interpretation, or where the words are clear and unambiguous when viewed in isolation,
but become ambiguous when read as part of a larger statutory scheme, a court must resolve
the ambiguity by searching for legislative intent in other indicia, including the history of
the legislation or other relevant sources intrinsic and extrinsic to the legislative process.”
Id., 156 A.3d at 879.7
Real Prop. § 14-202(b) provides the four types of payments that may be secured by
a lien provided for by contract:
A lien may only secure the payment of:
(1) Damages;
(2) Cost of collection;
(3) Late charges permitted by law; and
(4) Attorney’s fees provided for in a contract or awarded by a court
for breach of contract.
(Emphasis added).
While the plain text of Real Prop. § 14-202 does not prohibit continuing liens,
Archie v. Nagle & Zaller, P.C., 790 F. App’x 502, 505 (4th Cir. 2019) (per curiam), the
term “only” clearly limits the four types of payments that may be secured by a lien: “(1)
7
This Court also will construe a statute so “as to avoid a conflict with the
Constitution whenever that course is reasonably possible.” Koshko v. Haining, 398 Md.
404, 425-26, 921 A.2d 171, 183 (2007) (quoting In re James D., 295 Md. 314, 327, 455
A.2d 966, 972 (1983)).
13
Damages; (2) Cost of collection; (3) Late charges permitted by law; and (4) Attorney’s fees
provided for in a contract or awarded by a court for breach of contract.” Real Prop. § 14-
202(b). The circumscribed list demonstrates the legislature’s intent in restricting the scope
of payments secured by liens. Within this bounded list, Real Prop. § 14-202(b) notably
omits mention of payments that accrue subsequent to the lien’s recordation. Construing
Real Prop. § 14-202(b) to authorize a continuing lien would cut against the limiting
language used by the General Assembly and impermissibly require the insertion of
additional statutory language. Woznicki, 443 Md. at 108, 115 A.3d at 161.
A continuing lien also contradicts the time-limited definition of “Damages”
provided in the statute. Real Prop. § 14-201(c)(1) defines “Damages” as “unpaid sums due
under contract, plus interest accruing on the unpaid sums due under a contract or as
provided by law, including fines levied under the Maryland Condominium Act or the
Maryland Real Estate Time-Sharing Act.” (Emphasis added). The definition of damages
plainly limits payments that may be secured by the lien to those that are “due.” A
continuing lien would allow a condominium association to place liens on future damages
that have not accumulated yet. Future, unaccumulated damages cannot logically be “due”
at the time of the lien’s recording.
For example, when Appellant recorded its ninth lien against Walker on December
22, 2015, it cannot be said, contrary to Appellant’s assertion, that Walker’s future
assessments were due under contract. A continuing lien does not comport with a common
sense reading of the plain text of the statute, and we decline to interpret the MCLA to allow
a lien that is not grounded in the specific language chosen by the legislature. Kushell v.
14
Dep’t of Nat. Res., 385 Md. 563, 576-77, 870 A.2d 186, 193 (2005) (“A court may . . .
[not] construe the statute with forced or subtle interpretations that limit or extend its
application.”); 5500 Coastal Highway Ltd. P’ship v. Elec. Equip. Co., Inc., 305 Md. 532,
536, 505 A.2d 533, 535 (1986) (“It follows, therefore, that there can be no lien for anything
which does not fall within the statutory provision.”).
Reading Real Prop. § 14-202 in context with the broader statute lends additional
support to our interpretation. “[W]e analyze the statutory scheme as a whole and attempt
to harmonize provisions dealing with the same subject so that each may be given effect.”
Kushell, 385 Md. at 577, 870 A.2d at 193. Real Prop. § 14-204(d)(2) provides in pertinent
part:
[A] governing body [i.e., council of unit owners] may foreclose on a lien
against a unit owner or lot owner only if the damages secured by the lien:
(i) Consist of:
1. Delinquent periodic assessments or special assessments and any
interest; and
2. Reasonable costs and attorney’s fees directly related to the filing of
the lien that do not exceed the amount of the delinquent assessments,
excluding any interest; and
(ii) Do not include fines imposed by the governing body or attorney’s fees or
costs related to recovering the fines.
(Emphasis added).
The language “directly related to the filing of the lien” suggests that recoverable
costs and fees must cover the cost of creating and enforcing the lien, not future costs and
fees that may eventually spring from the lien. It would untenably stretch the meaning of
15
“directly related to” if the lien could encompass costs and fees that accumulate years after
the lien is recorded.8 While the statute does not expressly prohibit continuing liens, its
language read in its entirety, restricts damages only to those accrued at the time of recording
the lien.
We are not persuaded by Appellant’s argument that because the plain text does not
prohibit continuing liens, condominium associations may secure costs and fees that arise
after a lien is recorded with proper notice.9 Appellant finds support of its argument in
Archie v. Nagle & Zaller, P.C., 790 F. App’x 502 (4th Cir. 2019), an unreported per curiam
8
The General Assembly could have used different language if it had intended to
permit reasonable costs and attorney’s fees that accumulate subsequent to the lien’s
recordation. The equivalent condominium association statute in Oregon, for example,
omits any limiting language and permits the lien to continue indefinitely. Or. Rev. Stat.
Ann. § 100.450(1) (“Whenever an association of unit owners levies any assessment against
a unit, the association of unit owners shall have a lien upon the individual unit. . . . The
lien includes interest, late charges, attorney fees, costs or other amounts levied under the
declaration or bylaws.”) & (2)(d) (“as long as the original or any subsequent unpaid
assessment remains unpaid, the unpaid amount of assessments automatically continue to
accumulate with interest without the necessity of further recording”) (emphasis added).
9
Appellant notes that this argument, also known as the negative implication canon
of construction, has been used many times before by this Court in aid of its statutory
interpretation. Walzer v. Osborne, 395 Md. 563, 574 n.6, 911 A.2d 427, 433 n.6 (2006)
(acknowledging that this Court has extensively employed the negative implication canon
in its case law, embodied in the maxim expression unius est exclusion alterius—“to express
or include one thing implies the exclusion of the other, or of the alternative”). For the
reasons we have previously stated, we decline to apply the negative implication canon to
the interpretation of the MCLA in this case. See S.E.C. v. C.M. Joiner Leasing Corp., 320
U.S. 344, 350, 64 S. Ct. 120, 123 (1943) (“However well these rules [of statutory
construction] may serve at times to aid in deciphering legislative intent, they long have
been subordinated to the doctrine that courts will construe the details of an act in
conformity with its dominating general purpose, will read text in light of context and will
interpret the text so far as the meaning of the words fairly permits so as to carry out in
particular cases the generally expressed legislative policy.”) (footnote omitted).
16
decision from the Fourth Circuit. In Archie, the Fourth Circuit affirmed the United States
District Court for the District of Maryland that held a condominium association’s
continuing lien was not prohibited under Maryland law, or at the very least, was not a
violation of the Fair Debt Collection Practices Act—the relevant federal statute in the case.
Id. at 505-06 (“[The condominium association’s] conduct – ‘pursuing its clients’
contractual rights in a way that was not proscribed’ under state law – did not amount to a
violation of the [Fair Debt Collection Practices Act].”). The district court reasoned that
because the unit owner signed the condominium association’s governing documents, the
unit owner was “on notice that the amount of the lien may change, and also on notice as to
exactly what those costs may be.” Id. at 505 (internal quotations omitted). The Fourth
Circuit approved of the district court’s reasoning that the MCLA must tolerate continuing
liens otherwise the statute “would lead to an impractical and costly result, with creditors
obliged to file a new lien every time an additional cost accrued or a partial payment was
made.” Id.
The Archie opinion has minimal persuasive weight in the determination of this
certified question. The opinion is unreported and comes from a different jurisdiction. The
Fourth Circuit mostly repeats the district court’s decision, which did not analyze the
language of the MCLA, did not consult the legislative history of the statute, and did not
cite any of the Maryland cases on the statute. The Fourth Circuit, in affirming the district
court on appeal, explained that the district court’s dismissal of state law claims left the
issue of MCLA interpretation open for Maryland courts to resolve. Id. at 506 n.3
17
(“allowing state courts to decide any remaining state law claims in this case would ‘best
accommodate the values of economy, convenience, fairness, and comity.’”).10
We are also not persuaded by Appellant’s argument that interpreting the MCLA to
prohibit continuing liens would lead to impractical results. This Court explained in Select
Portfolio that the MCLA’s lien procedure did not harm the condominium association’s or
future creditors’ interests. By recording a lien, the condominium association has already
put future creditors on notice that the property is encumbered. 455 Md. at 327, 167 A.3d
at 614 (“Discovery of a recording . . . might prompt further inquiry into whether payment
of the assessment was current.”). The MCLA also established a quick and formulaic way
to record liens under the statute, so requiring additional liens to secure future costs and fees
(after they become due) would not impose an undue burden on condominium associations.
The statute includes a short template for creditors to fill in the blanks and quickly file. Real
Prop. § 14-203.11 It only asks for (1) the unit address, (2) the name of the unit owner, (3)
10
Even if it was necessary to examine Archie’s discussion of the MCLA on the
merits, we do not find the district court’s reasoning persuasive here. As we have previously
noted, the district court did not directly address the MCLA in its analysis, rather framing
its brief discussion of the statute in the context of the Federal Debt Collection Practices Act
(“FDCPA”). According to the district court, the defendant’s continuing lien did not violate
the FDCPA because it “was not proscribed by the MCLA.” Archie, 2018 WL 3475429, at
*6. We offer no opinion as to whether the continuing lien in Archie may have violated the
FDCPA, but as we have explained in the context of the mechanic’s lien statute, “there can
be no lien for anything which does not fall within the statutory provision[]” and “[t]his
Court has no power to extend the mechanic’s lien law to cases beyond its obvious design
and plain requirements.” 5500 Costal Highway, 305 Md. at 536, 505 A.2d at 535. A
condominium association may not secure future debts through a lien merely because the
MCLA is silent on the issue.
11
The “Statement of Lien” included in the statute provides, in its entirety:
(continued…)
18
the signature of the creditor, and (4) the amount of debt owed at the time of recording.
After recording the short document within the land records, the condominium association
has established a valid lien.
Admittedly, a continuing lien would make the process for securing delinquent
payments more expedient for condominium associations. In this case, Appellant would
have been able to secure, by operation of statute, delinquent assessments that had accrued
since the last recorded lien. The countervailing interest of expediency does not withstand
practical experience or judicial scrutiny. Appellant’s own actions reveal that routinely
recording liens is not too burdensome. Appellant has already recorded nine different liens
against Walker. Our case law has also recognized the preference of the General Assembly
for protecting a unit owner’s constitutional rights over expedience. Id. at 335-36, 167 A.3d
at 619; Golden Sands, 313 Md. at 493, 545 A.2d at 1337 (“no lien attaches until after the
unit owner has an opportunity to be heard. . . . The court may not order a lien imposed
unless it finds that probable cause exists to establish a lien[.]”) (internal citation omitted).
(…continued)
This is to certify that the property described as _______________ is subject
to a lien under Title 14, Subtitle 2 of the Real Property Article, Maryland
Annotated Code, in the amount of $______. The property is owned by
____________________.
I hereby affirm under the penalty of perjury that notice was given under §
14-203(a) of the Real Property Article, and that the information contained in
the foregoing statement of lien is true and correct to the best of my
knowledge, information, and belief.
_________________________
(name of party claiming lien)
Real Prop. § 14-203(j)(1).
19
The plain language of Real Prop. § 14-202 limits sums that can be secured by the
lien to unpaid damages, costs, and fees due under contract. A continuing lien would sweep
future damages, costs and fees that have yet, and may never materialize into the lien’s
scope. Such an outcome is not supported by the plain text of the statute.
C. Legislative History
The prohibition of continuing liens by the MCLA garners further support from the
statute’s legislative history. “Enacted in 1985, the MCLA was established as a direct result,
and in response to, the 1985 Court of Special Appeals unreported opinion in Surfside 84
Condominium Council of Unit Owners v. Mullen, No. 495, Sept. Term 1984 (Md. Ct. Spec.
App. Jan. 28, 1985).[12] The purpose of the MCLA was to ‘establish procedural rules that
comported with due process for establishing, enforcing, or denying a lien based on a
contract.’” In re Stein Props., Inc., 598 B.R. 213, 218 (Bankr. D. Md. 2019) (quoting Select
Portfolio, 455 Md. at 332, 167 A.3d at 617). The MCLA’s predecessor had allowed the
statement of the lien to be recorded within two years after the assessment came due. Select
Portfolio, 455 Md. at 332, 167 A.3d at 616 (citing Real Prop. § 11-110(d)). The General
Assembly amended the MCLA to prevent a lien’s recordation until the unit owner received
both prior notice and an opportunity to be heard. Id. at 336, 167 A.3d at 619 (“Under the
[MCLA], . . . no lien attaches until after the [property] owner has had an opportunity to be
heard. It would be completely at odds with that purpose to provide for the creation of a
12
Even though the Surfside 84 decision was unreported, the General Assembly
moved quickly to address the procedural due process deficiencies identified by the Court
of Special Appeals. Select Portfolio, 455 Md. at 332, 167 A.3d at 617 (citing Report of
Senate Judicial Proceedings Committee concerning Senate Bill 625 (March 20, 1985)).
20
lien by virtue of a contract alone and exempt it from the procedures the statute created.”)
(internal citation omitted).
A continuing lien appears similarly at odds with the legislative purpose of the
MCLA because it deprives debtors of the opportunity to challenge the accrual of a finite
amount of debt in a proceeding before the condominium association records the lien. In
Select Portfolio, this Court dismissed the creditor’s reading of the MCLA that it permitted
“creation of a lien simply by virtue of the existence of a contract[,]” in part, because
“[n]othing in the legislative history of the statute supports such a reading.” Id. at 335, 336,
167 A.3d at 619 (emphasis added and footnote omitted). Similar to Select Portfolio,
nothing in the legislative history of the MCLA demonstrates the intent of the General
Assembly to permit continuing liens. The General Assembly amended the MCLA to better
protect the due process rights of the debtor. Whether a continuing lien may also satisfy the
minimum due process concerns expressed by the legislature in 1985 is irrelevant. The
legislative history demonstrates that the General Assembly did not contemplate or evaluate
continuing liens in amending the MCLA. When a continuing lien “is not only inconsistent
with the structure and language of the [MCLA], but it is also at odds with the legislative
history[,]” it is not permitted. Id. at 335, 167 A.3d at 619.
The desire of the General Assembly to model the MCLA on the mechanic’s lien
statute further demonstrates the MCLA’s prohibition of continuing liens. Id. at 332, 167
A.3d at 617; see also Golden Sands, 313 Md. at 491 n.5, 545 A.2d at 1336 n.5 (“Although
the 1985 enactment . . . is not a clone of the 1976 Mechanic’s Lien Law, there is enough
similarity to suggest cousinship even if not parentage.”). Like a condominium association
21
lien, a mechanic’s lien is created by and limited to its statutory terms. Southern Mgmt.
Corp. v. Kevin Willes Const. Co., Inc., 382 Md. 524, 543, 856 A.2d 626, 637 (2004). The
mechanic’s lien statute requires prior notice before the lien’s recordation, which should
specify the kind of work or materials furnished, the expected date of completion and the
amount or sum due.13 Welch v. Humphrey, 200 Md. 410, 414, 90 A.2d 686, 687 (1952)
(“It has always been held in Maryland that if notice is given to the owner of the property
before the lien claim is filed, it should definitely state the intention of the claimant to claim
the lien, and also fully and specifically state the particulars of the claim . . . and the amount
of the claim.”) (emphasis added). This Court has construed the mechanic’s lien statute to
prohibit a mechanic’s lien from attaching to future indebtedness. Dickerson Lumber Co.
v. Herson, 230 Md. 487, 493, 187 A.2d 689, 692 (1963). It follows that the MCLA would
similarly require advanced notice to challenge the proposed amount or sum due before
recordation of the lien.
The conscious omission of continuing liens in the MCLA by the General Assembly
becomes more apparent when juxtaposed against other titles within the Maryland Code.
The General Assembly has authorized liens that are “continuing” in different kinds of
commercial transactions. See, e.g., Md. Code Ann., Commercial Law (“Com. Law”) § 15-
602(a) (“When an attachment is levied against the wages of a judgment debtor, it shall
13
Similar to the boilerplate “Statement of Lien” provided in Real Prop. § 14-203,
see supra note 11, the mechanic’s lien statute also provides a boilerplate “Intention to
Claim a Lien” form that states in pertinent part: “The total amount earned under the
subcontractor’s undertaking to the date hereof is $___ of which $___ is due and unpaid as
of the date hereof.” Real Prop. § 9-104. This form indicates that the lien covers only a
fixed, ascertainable amount due before the lien is created.
22
constitute a lien on all attachable wages that are payable at the time attachment is served
or which become payable until the judgment, interest, and costs, as specified in the
attachment, are satisfied.”) (emphasis added). Unlike with the MCLA, the plain text of
Com. Law § 15-602(a) explains that the lien covers payments both at the time of attachment
and in the future. If the General Assembly had intended for the MCLA to permit continuing
liens, as an expedient mechanism for securing future condominium association costs and
fees, it could have said so in the statute.14
D. Other Authority
We find further support in our interpretation of the MCLA by turning to how other
jurisdictions have treated the issue of continuing liens. While appellate courts across the
country have reached different conclusions as to the validity of continuing liens, each case
confirms that the outcome depends on the particular text, legislative purpose and history,
and case law of the respective jurisdiction. A United States Bankruptcy Appellate Panel
of the Ninth Circuit exemplified this kind of jurisdiction-specific analysis of continuing
liens in In re Basave De Guillen, 604 B.R. 826 (B.A.P. 9th Cir. 2019). In De Guillen, a
condominium association attempted to secure a continuing lien under a California state
14
Other states have expressly permitted “continuing liens” in their statutory
language as well. See N.D. Cent. Code Ann. § 32-09.1-21 (West 2020) (Continuing lien
on wages); Wash. Rev. Code Ann. § 6.27.330 (2020) (Continuing lien on earnings—
Authorized); S.D. Codified Laws § 9-43-100 (2020) (“Any special assessment lawfully
levied upon real property assessed pursuant to this chapter is a continuing lien on the
property as against all persons except the United States and this state. The lien continues
for fifteen years from the due date of the last installment.”).
23
statute15 with requirements substantially similar to the MCLA. Id. at 830. The court held
that the statute authorizing a lien on unit owner assessments “does not provide for a
continuing lien, and case law is scant regarding whether the Act may be fairly interpreted
as so providing.” Id. at 833. “To hold otherwise would offend the comprehensive notice
scheme and homeowners’ rights to contest delinquent assessments as established in the
[statute].” Id. at 834.
The De Guillen court’s analysis appears particularly persuasive in this case because
the text and legislative history of Cal. Civ. Code § 5675 parallels the text and legislative
history of Real Prop. § 14-204. Both statutes permit liens on uncollected assessments, late
charges and fees, but omit reference to continuing liens. The legislative history underlying
each statute reflects that both were intended to protect the due process rights of unit owners
and limit what condominium associations can secure in a recorded lien. The De Guillen
court similarly found no California case law that authorized continuing liens. In sum, the
15
Cal. Civ. Code § 5675 provides in pertinent part:
(a) The amount of the assessment, plus any costs of collection, late charges,
and interest assessed in accordance with subdivision (b) of Section 5650,
shall be a lien on the owner’s separate interest in the common interest
development from and after the time the association causes to be recorded
with the county recorder of the county in which the separate interest is
located, a notice of delinquent assessment, which shall state the amount of
the assessment and other sums imposed in accordance with subdivision (b)
of Section 5650, a legal description of the owner’s separate interest in the
common interest development against which the assessment and other sums
are levied, and the name of the record owner of the separate interest in the
common interest development against which the lien is imposed.
(Emphasis added).
24
court declined to read continuing liens into the statute when its plain text, legislative history
and purpose, and relevant case law provided no basis to do so.
The jurisdiction-specific approach to analyzing the validity of condominium
association liens also explains why the cases cited by Appellant are not persuasive. Some
state legislatures intended to permit continuing liens,16 while others, like Maryland, did
not. Appellant cites to a line of cases in New York that most recently culminated in a state
intermediate appellate court’s ruling that permitted continuing liens. The New York
appellate court reached an opposite conclusion than this Court because of notable
differences in the respective statutory texts, legislative histories, and case law. Trencher,
128 A.D.3d at 453, 9 N.Y.S.3d at 214 (citing a line of cases dating back to 1978 that
expressly approved of continuing liens in New York). Unlike the MCLA, which limits
damages to those due under contract and directly relating to filing, the New York statute
used broader language that supported a recognition of continuing liens:
The board of managers, on behalf of the unit owners, shall have a lien on
each unit for the unpaid common charges thereof, together with interest
thereon. . . . Any grantor or grantee of a unit shall be entitled to a statement
from the manager or board of managers, setting forth the amount of the
unpaid common charges accrued against the unit, and neither such grantor
16
Missouri’s intermediate appellate court, for example, interpreted its equivalent
condominium association statute to permit continuing liens. Carroll v. Oak Hall Assocs.,
L.P., 898 S.W.2d 603, 607 (Mo. Ct. App. 1995) (“The Association’s lien, then, arose when
the common expense assessments became due and were unpaid. The first of the delinquent
assessments was due January 1, 1988, and each month’s assessment since that date has
remained unpaid and constitutes a lien on the respective units.”) (emphasis added). Other
jurisdictions, such as Connecticut, permit continuing liens subject to parameters specified
in the statute. Lakeridge Ass’n, Inc. v. Lynch, 51 Conn. L. Rptr. 530, 2011 WL 1087513,
at *2 (Conn. Super. Ct. Feb. 23, 2011) (noting Connecticut’s statute limits a condominium
association’s priority lien to six months of common charges plus fees and costs).
25
nor grantee shall be liable for . . . any unpaid common charges against such
unit accrued prior to such conveyance[.]
N.Y. Real Prop. Law § 339-z (McKinney 2004) (emphasis added).
The New York legislature also articulated a different legislative purpose than the
Maryland General Assembly when enacting the MCLA. In the New York legislature, the
“overriding concern” was “that of ensuring the continued viability of the entire
condominium project and protecting those who have invested substantial sums of their life
savings from unit owners who have failed to pay their common charges.” Washington Fed.
Sav. & Loan Ass’n v. Schneider, 95 Misc. 2d 924, 929 (N.Y. Sup. Ct. 1978). The Maryland
General Assembly presumably had this goal in mind too, but it was not the “overriding
concern.” Maryland’s General Assembly weighed the rights of the condominium against
a debtor’s constitutional due process rights and achieved a different balance of interests
than the New York legislature by requiring that Maryland debtors have an opportunity to
challenge fixed sums in a lien before it is recorded.
CONCLUSION
The plain text, legislative history, and case law relevant to the MCLA collectively
demonstrate the intent of the General Assembly to prohibit continuing liens. We
accordingly answer the certified question in the negative: Real Prop. §§ 14-201–206 does
not secure unpaid damages, costs of collection, late charges, and attorney’s fees that accrue
subsequent to the recordation of the lien.
CERTIFIED QUESTION OF LAW
ANSWERED AS SET FORTH
ABOVE. COSTS TO BE EQUALLY
DIVIDED BY THE PARTIES.
26