Andrews & Lawrence Prof'l Servs., LLC v. Mills
| Decision Date | 28 January 2020 |
| Docket Number | No. 5, Sept. Term, 2019,5, Sept. Term, 2019 |
| Citation | 223 A.3d 947,467 Md. 126 |
| Parties | ANDREWS & LAWRENCE PROFESSIONAL SERVICES, LLC and Galyn Manor Homeowners Association, Inc. v. David O. MILLS, et ux. |
| Court | Court of Special Appeals of Maryland |
Argued by Timothy Guy Smith (Law Offices of Timothy Guy Smith, Glenwood, MD; Torin K. Andrews, Andrews & Lawrence Professional Services, LLC, Ijamsville, MD) and Megan T. Mantzavinos (Marks, O'Neill, O'Brien, Doherty & Kelly, P.C., Towson, MD), on brief, for Petitioners.
Argued by Ejaz H. Baluch, Jr. (Dena Elizabeth Robinson, Public Justice Center, Baltimore, MD; Leslie K. Dickinson, Dickinson Law Firm, LLC, Mount Airy, MD), on brief, for Respondents.
Phillip R. Robinson, Esquire, Consumer Law Center, LLC, 8737 Colesville Road, Suite 308, Silver Spring, MD 20910, for Amicus Curiae Housing Initiative Partnership, Inc. in Support of Respondents.
Alexa E. Bertinelli, Esquire, Civil Justice, Inc., 520 W. Fayette Street, Suite 410, Baltimore, MD 21201, for Amicus Curiae Civil Justice, Inc. in Support of Respondents.
Joshua N. Auerbach, Esquire, Asst. Atty. Gen., Office of the Attorney General, 200 Saint Paul Place, 20th Floor, Baltimore, MD 21202, William D. Gruhn, Esquire, Chief, Consumer Protection Division, Office of the Attorney General, 200 Saint Paul Place, 16th Floor, Baltimore, MD 21202, for Amicus Curiae Attorney General of Maryland Support of Respondents.
Argued before: Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, Sally D. Adkins (Senior Judge, Specially Assigned), JJ.
The General Assembly enacted the Consumer Protection Act ("CPA"), Commercial Law Article ("CL") § 13-101, et seq. , and the Maryland Consumer Debt Collection Act ("MCDCA"), CL § 14-201, to protect consumers from unfair or deceptive trade practices, including the collection of consumer debts. Under state law, debt collection activities are often undertaken by law firms, as well as non-lawyer debt collection agencies that are licensed by the State Collection Licensing Board to do business as a collection agency pursuant to the Maryland Collection Agency Licensing Act ("MCALA"), Business Regulations Article ("BR"), § 7-101.
The overarching purpose and intent of these remedial consumer protection and licensing statutes is to protect the public from unfair or deceptive trade practices by creditors engaged in debt collection activities. The CPA is a statutory enforcement umbrella under which a violation of MCDCA or MCALA is also a per se violation of the CPA. CL §§ 13-301(14)(iii) ; (xxix).
Under the CPA, the General Assembly has created a statutory exemption from its application for certain professionals when undertaking "professional services". CL § 13-104(1). Here, we are concerned with the exemption as it applies to professional services provided by a lawyer. In this case, we must determine the scope of the professional services exemption under the CPA when a lawyer or law firm is engaged in debt collection activities on behalf of a client. If the lawyer's debt collection activity is exempt under the CPA, we must also determine whether the professional services exemption also applies to vicarious liability claims brought by a third party against the client arising out of the lawyer's conduct.
This case arises out of a private cause of action brought by David and Tammy Mills against their homeowners association, Galyn Manor Homeowners Association, Inc., ("Galyn Manor") alleging in part, violations of the CPA and MCDCA in connection with Galyn Manor's attempt to collect delinquent homeowners association ("HOA") assessments, fines, penalties and attorney's fees over the course of nine years. Galyn Manor retained the law firm of Andrews & Lawrence Professional Services, LLC ("Andrews") to undertake debt collection activities for delinquent HOA assessment accounts.
Andrews, on behalf of Galyn Manor, employed a variety of means to collect the debts allegedly owed by the Millses, including obtaining two judgments, four liens, an injunction, and garnishment of the Millses' bank account. The Millses alleged that although they made payments, and attempted settle their account, Andrews's collection practices left them in a never-ending debt spiral.
In 2016, the Millses filed suit against Galyn Manor challenging its debt collection practices under the CPA and MCDCA. Galyn Manor filed a third-party complaint against Andrews for indemnification.
After the circuit court entered judgment as a matter of law against the Millses on their CPA and MCDCA claims, the Millses appealed. The Court of Special Appeals reversed the circuit court on these counts. We granted a writ of certiorari to determine whether a client can be vicariously liable under the CPA for deceptive trade practices undertaken by its attorney when the attorney is engaged in debt collection activities on its behalf. To answer this question, it is also necessary to determine whether, consistent with our holding in Scull v. Groover, Christie & Merritt, PC , 435 Md. 112, 76 A.3d 1186 (2013), all activities or services undertaken by a lawyer or a law firm when collecting consumer debts fall within the professional services exemption under CL § 13-104(1).
For the reasons set forth herein, we hold that when a lawyer is engaged in debt collection activities, not all of the lawyer's services fall within the "professional services" exemption of the CPA. Specifically, we hold that where the lawyer is engaged in debt collection activities that could be performed by any licensed debt collection agency not affiliated with a lawyer or a law firm, or where the lawyer's conduct would be prohibited by the Maryland Consumer Debt Collection Act, such conduct or services are not "professional services" for which the CPA exemption applies. We further hold that where the professional services exemption does, in fact, apply to the lawyers' "professional services," the statutory exemption does not flow to the client. Accordingly, we affirm the judgment of the Court of Special Appeals.
In 2004, Mr. and Mrs. Mills purchased a home in the Galyn Manor subdivision, in Frederick County. Galyn Manor is a residential community that is subject to the Maryland Homeowners Association Act, which is codified at Maryland Code, Real Property Article ("RP") § 11B-101, et seq. Under the Maryland Homeowners Association Act, lots within the community are subject to a declaration, which is enforceable by the governing body of the association, as well as other governing documents such as its bylaws, and rules and regulations promulgated and adopted in accordance with the declaration and other governing documents.
Like many homeowners associations, the Galyn Manor declaration and bylaws require members to comply with certain rules and restrictions, and to pay annual assessments, which are due in quarterly installments. To collect delinquent HOA assessments, the Maryland Homeowners Association Act and the Galyn Manor declaration give the HOA the right to impose a lien on a lot for the unpaid assessment under the Maryland Contract Lien Act ("MCLA"). RP § 11B-117(b). The HOA, through its Board of Directors, may also initiate collection proceedings and obtain a judgment against a homeowner for delinquent assessments. Under the declaration, delinquent assessments accrue interest and late fees, and the HOA may also recover its attorney's fees and costs when undertaking collection efforts to collect unpaid assessments.
The Galyn Manor governing documents also authorize the HOA to fine members who violate certain sections of the declaration and bylaws. Specifically, under the declaration, the Board has the authority to adopt and publish rules and regulations and to establish monetary fines for certain infractions. Prior to the imposition of a fine, the Board is required to send written notice to the owner specifying the nature of the infraction and to provide the owner with an opportunity for a hearing before the Board regarding the infraction and any penalty to be imposed.
In February 2007, Galyn Manor's former management company, Chambers Management, Inc. ("Chambers"), discovered that the Millses regularly parked a work truck in their driveway. Chambers notified the Millses that this conduct constituted a violation of the declaration. The Millses were given 30 days to correct the violation. Chambers then proceeded to send letters to the Millses advising them that Galyn Manor was imposing a fine against them in the amount of $50 for each day that the commercial vehicle was parked on their property. By the end of 2007, the fines for the alleged violations associated with the unlawful parking of the commercial vehicle accumulated to $645. In October 2007, Chambers sent another letter to the Millses, informing them of the amount they owed. The letter stated that it was a "final notice," that the Millses had until November 26 to pay, and that the letter served as "an attempt to collect a debt[.]"
In January 2008, Galyn Manor retained Andrews to provide legal services and to collect overdue assessments on behalf of the Association. Andrews is licensed as a debt collection agency with the Maryland Collection Agency Licensing Board,1 and the Millses' account was turned over to Andrews for debt collection.
Between January 2008 and May 2015, Andrews attempted to collect dozens of fines, fees, costs, and assessments against the Millses. Andrews's collection activity included sending letters to the Millses, all of which are unsigned and identify, as their sender, "Andrews Law Group, LLC" or "Andrews & Lawrence Law Group, LLC," rather than any specific individual. Andrews enclosed with most of these letters a document titled "Andrews & Lawrence Law Group, LLC Statement of Account," reflecting that the firm itself maintained the operative account of the Millses' asserted debt. Beginning in June 2012, the unnamed sender of these...
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