Ben-Davies v. Blibaum & Assocs., P.A.

• Decision Date: 19 January 2018
• Docket Number: Misc. No. 4, Sept. Term, 2017
• Citation: 177 A.3d 681,457 Md. 228
• Parties: Amber BEN–DAVIES v. BLIBAUM & ASSOCIATES, P.A.; Bryione K. Moore v. Blibaum & Associates, P.A.
• Court: Court of Special Appeals of Maryland

457 Md. 228

177 A.3d 681

Amber BEN–DAVIES

v.BLIBAUM & ASSOCIATES, P.A.;

Bryione K. Moore

v.Blibaum & Associates, P.A.

Misc. No. 4, Sept. Term, 2017

Court of Appeals of Maryland.

January 19, 2018

ARGUED BY Steven B. Isbister (E. David Hoskins, The Law Offices of E. David Hoskins, LLC, Baltimore, MD), on brief, FOR APPELLANTS

Amicus Curiae for Civil Justice, Inc., Maryland Volunteer Lawyers Service, and Public Justice Center: Benjamin H. Carney, Esquire, Gordon, Wolf & Carney, Chtd., 100 W. Pennsylvania Ave, Suite 100, Towson, MD 21204, Joseph Mack, Esquire, Civil Justice, Inc., 520 W. Fayette Street, Suite 410, Baltimore, MD 21201

ARGUED BY James E. Dickerman (Laura E. Gagné, Eccleston and Wolf, P.C., Hanover, MD; Nina Basu, Blibaum & Associates, P.A., Towson, MD), on brief, FOR APPELLEES

Amicus Curiae for Maryland Multi-housing Association, Inc.: Ronald S. Canter, Esquire, Law Offices of Ronald S. Canter, LLC, 200A Monroe Street, Suite 104, Rockville, MD 20850–4424

Barbera, C.J., Greene, Adkins, McDonald, Watts, Hotten, Getty, JJ.

Watts, J.

After a trial court enters judgment in a plaintiff's favor against a defendant, the plaintiff is entitled to post-judgment interest until the defendant satisfies the judgment. See Med. Mut. Liab. Ins. Soc'y of Md. v. Davis, 389 Md. 95, 109, 883 A.2d 158, 166 (2005) ("Post-judgment interest begins to run on a money judgment from the date of the entry of that judgment.... Post-judgment interest continues to accrue until the judgment is satisfied by payment." (Citations omitted)). The purpose of post-judgment interest is "to compensate the successful [plaintiff] for the [ ] loss of the use of the monies [that are] represented by a judgment in [the plaintiff's] favor, and the loss of income thereon, between the time of entry of the judgment ... and the satisfaction of the judgment by payment."

Id. at 109, 883 A.2d at 166 (citations and internal quotation marks omitted).

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. Generally, 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 of residential premises[.]"

This opinion consolidates two cases that require us to determine which of these two post-judgment interest rates applies where: a landlord sues a tenant for breach of contract based on a residential lease; the trial court enters judgment in the landlord's favor against the tenant; the judgment includes unpaid rent and other expenses; and the judgment does not delineate what portion thereof was comprised of unpaid rent, as opposed to the other expenses—such as late fees or the cost of repairs to the premises.

In separate matters, Amber Ben–Davies and Bryione K. Moore (together, "Appellants") failed to pay rent. After Appellants vacated their apartments, their respective landlords initiated separate actions for breach of contract. The District Court of Maryland, sitting in Baltimore County ("the District Court"), entered judgments in the landlords' favor against Appellants. The judgments did not delineate the portions thereof that were comprised of unpaid rent, as opposed to other expenses. Ben–Davies's landlord had sought the cost of replacing carpet in her apartment, and Moore's landlord had sought the costs of utilities, changing the apartment's lock, trash disposal, cleaning stained carpet, advertising, and various fees.

Samuel Blibaum ("Samuel") and Gary S. Blibaum ("Gary") of Blibaum & Associates, P.A. ("Appellee"), a licensed debt collector, represented the landlords in the actions for breach of contract. After the District Court entered the judgments, Appellee engaged in collections activity on the landlords' behalf.

On Appellee's behalf, Gary sent Ben–Davies a letter in which he stated that she owed her landlord a certain amount. Appellee obtained a writ of garnishment of Moore's wages, and sent her a Judgment Creditor's Monthly Report. In both the letter that was sent to Ben–Davies, and the Judgment Creditor's Monthly Report that was sent to Moore, Appellee indicated that the applicable post-judgment interest rate was 10%. In other words, Appellee sought to apply the post-judgment interest rate of 10% under CJ § 11–107(a), which applies to all judgments unless provided otherwise.

In the United States District Court for the District of Maryland ("the U.S. District Court"), Appellants filed separate complaints against Appellee. In the complaints, Appellants contended that, contrary to Appellee's position, the applicable post-judgment interest rate was 6%, not 10%. In other words, Appellants argued that CJ § 11–107(b) applied because the judgments against them constituted "money judgment[s] for rent of residential premises [.]" Appellants asserted that, by seeking to apply a post-judgment interest rate of 10%, Appellee violated the federal Fair Debt Collection Practices Act, the Maryland Consumer Debt Collection Act, and the Maryland Consumer Protection Act.

Ultimately, in each case, the parties filed a "Joint Motion to Certify a Question of Law to the Maryland Court of Appeals," requesting that the U.S. District Court certify the following question of law to this Court:¹

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?

In the joint motions to certify, the parties noted that this was an issue of first impression. The U.S. District Court granted the joint motions to certify.

Before this Court, as in the U.S. District Court, Appellants contend that the applicable post-judgment interest rate is 6% pursuant to CJ § 11–107(b). Appellee responds that the applicable post-judgment interest rate is 10% pursuant to CJ § 11–107(a).

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 damages for unpaid rent and other expenses, a post-judgment interest rate of 6% applies pursuant to CJ § 11–107(b). CJ § 11–107(b) unequivocally states that it applies to "a money judgment for rent of residential premises[.]" As such, CJ § 11–107(b)'s plain language establishes that it applies where, as here, a judgment is comprised of unpaid rent and other expenses that are due as a result of a residential lease. Nothing in CJ § 11–107(b) renders it exclusively applicable to money judgments that are entirely comprised of unpaid rent. Stated otherwise, nothing in CJ § 11–107(b) indicates that, for a post-judgment interest rate of 6% to apply, a judgment must consist solely of unpaid rent, and may not include expenses that are associated with the rent of residential premises. Additionally, nothing in CJ § 11–107(b) indicates that it does not apply to actions for breach of contract between landlords and tenants. In addition to the plain language of CJ § 11–107(b), our holding is supported by CJ § 11–107(b)'s obvious purpose, which is to protect tenants by not subjecting them to a 10% post-judgment interest rate on money judgments for rent of residential premises.

BACKGROUND²

Amber Ben–Davies v. Blibaum & Assocs., P.A.

On August 2, 2005, Ben–Davies signed a lease for an apartment at Stratford Apartments at 1210 East Northern Parkway in Baltimore City. The lease named Hendersen–Webb, Inc. ("Hendersen–Webb") as the agent for the apartment building's owner. The period of the lease was from September 12, 2005 through September 30, 2006. The lease would automatically be renewed unless Ben–Davies or Hendersen–Webb provided notice, at least three months in advance, of an intent not to renew the lease. The rent was initially $635.00 a month. Ben–Davies paid a security deposit of $635.00.

Eventually, Ben–Davies vacated the apartment.³ In a letter dated January 11, 2007, Hendersen–Webb's Supervisor of Collections advised Ben–Davies that she owed $2,728.09. Specifically, according to the Supervisor of Collections, Ben–Davies owed: an overdue balance⁴ of $893.62 as of October 9, 2006;⁵ $615.55 for the remainder of rent in October 2006; $658.00 for rent in November 2006; $445.83 for rent from December 1, 2006 through December 21, 2006, the day before Henderson–Webb leased the apartment to a new tenant; and $115.09 for replacing carpet in the apartment. Ben–Davies did not make any payments toward the $2,728.09 that Hendersen–Webb alleged was due.

On May 7, 2007, in the District Court, Hendersen–Webb sued Ben–Davies, initiating Henderson–Webb, Inc. v. Amber Ben–Davies, No. 080400171172007 (Dist. Ct. Md.). The complaint named Samuel as Hendersen–Webb's counsel. Hendersen–Webb used the District Court's form for complaints in civil cases. The form included the following language: "Clerk: Please docket this case as an action of ? contract ? tort ? replevin ? detinue[.]" All of these checkboxes are blank; however, the checkbox that is next to the word "contract" has two typed "Xs" near it.⁶ Under the heading "APPLICATION AND AFFIDAVIT IN SUPPORT OF JUDGMENT[,]" the complaint stated, in pertinent part: "Attached hereto are [ ] documents [that] contain sufficient detail as to liability and damage to apprise [Ben–Davies] clearly of the claim against" her.⁷ In the complaint, Hendersen–Webb alleged that Ben–Davies "ow[ed] rent and [ ] caused additional expenses[,] which total $3[,]372.62." Hendersen–Webb sought $2,728.09 in damages, which represented the $3,372.62 in...