Chavis v. Blibaum & Assocs., P.A.

• Decision Date: 27 August 2021
• Docket Number: No. 30, Sept. Term, 2020,30, Sept. Term, 2020
• Citation: 264 A.3d 1254,476 Md. 534
• Parties: Larry S. CHAVIS, et al. v. BLIBAUM & ASSOCIATES, P.A. Bryione K. Moore, et al. v. Peak Management LLC
• Court: Court of Special Appeals of Maryland

476 Md. 534

264 A.3d 1254

Larry S. CHAVIS, et al.

v.BLIBAUM & ASSOCIATES, P.A.

Bryione K. Moore, et al.

v.Peak Management LLC

No. 30, Sept. Term, 2020

Court of Appeals of Maryland.

August 27, 2021

Reconsideration Denied September 28, 2021

Argued by E. David Hoskins (The Law Offices of E. David Hoskins, LLC, Baltimore, MD), on brief, for Petitioners.

Argued by James E. Dickerman (Eccleston and Wolf, P.C., Hanover, MD) on brief, for Respondents.

Amici Curiae Civil Justice, Housing Initiative Partnership, Cash Campaign of Maryland, and Maryland Consumer Rights Coalition: Ingmar Goldson, Esq., The Goldson Law Office LLC, 8737 Colesville Road, Suite 308, Silver Spring, MD 20910, Leslie K. Dickinson, Esq., Dickinson Law Firm, LLC, PO Box 238, Mount Airy, MD 21771.

Amicus Curiae Maryland Legal Aid: Louise M. Carwell, Esq., Nicole Portnov, Esq., Daniel L. Rosenberg, Esq., Maryland Legal Aid, 500 East Lexington Street, Baltimore, MD 21202.

Amicus Curiae the Maryland State Bar Association: Steven M. Klepper, Esq., Kramon & Graham, P.A., One South Street, Suite 2600, Baltimore, MD 21202-3201, J. Bradford McCullough, Esq., Lerch, Early & Brewer, Chtd., 7600 Wisconsin Avenue, Suite 700, Bethesda, MD 20814.

Argued before: Barbera, C.J.; McDonald, Watts, Hotten, Getty, Booth and Biran, JJ.

Biran, J.

In Ben-Davies v. Blibaum & Assocs., P.A. , 457 Md. 228, 177 A.3d 681 (2018), this Court answered a certified question from the United States District Court for the District of Maryland regarding the correct legal rate of post-judgment interest where a landlord has obtained a judgment against a residential tenant for breach of contract. We held in Ben-Davies 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 unpaid rent and other expenses, a post-judgment interest rate of 6% applies[.]" Id. at 275, 177 A.3d 681.

Petitioners Bryione Moore, Albert Grantham, Patricia Grantham, Sharone Crowell, Larry S. Chavis, Laronda Green, and Cassandra Reid rented residential properties managed by Respondent Peak Management LLC ("Peak") or another entity. After Petitioners defaulted on their leases, Peak or another entity engaged Respondent Blibaum & Associates, P.A. ("Blibaum"), a law firm, to file suit against Petitioners in the District Court of Maryland for breach of contract. Blibaum obtained judgments against Petitioners that included amounts of unpaid rent, and subsequently attempted to collect on the judgments by garnishing Petitioners’ wages. In the requests for writs of garnishment, Blibaum included post-judgment interest at a rate of 10% as well as post-judgment court costs (the filing fees for the writs of garnishment). This collection activity occurred before we issued our opinion in Ben-Davies .

Several of the Petitioners filed a putative class action lawsuit in the Circuit Court for Baltimore City against Peak in which they claimed, among other things, that Peak violated the Maryland Consumer Debt Collection Act (the "MCDCA"), Md. Code Ann., Commercial Law Article ("CL"), Title 14, Subtitle 2, and the Maryland Consumer Protection Act (the "MCPA"), CL, Title 13, by obtaining writs of garnishment that charged post-judgment interest at a rate of 10%, rather than 6%, and by including post-judgment court costs (i.e. , filing fees for the requests for writs of garnishment) in the amounts sought to be garnished. Several of the Petitioners filed a similar lawsuit against Blibaum in the Circuit Court for Baltimore County.

In the Baltimore City case, Peak moved to dismiss the MCDCA and MCPA claims, and the circuit court granted that motion. After that ruling, Petitioners moved for class certification with respect to the sole claim remaining at that time, which was for unjust enrichment. The circuit court denied the motion for class certification after holding a hearing. Petitioners then filed a second motion for class certification and requested a hearing. The circuit court denied the second motion for class certification without a hearing. The circuit court subsequently ruled on the parties’ cross-motions for summary judgment, resolving the unjust enrichment claims as to the named plaintiffs. Meanwhile, in the Baltimore County case, Blibaum filed a motion to dismiss all claims, which the circuit court granted.

On appeal, the Court of Special Appeals consolidated the two cases for decision and held that both circuit courts properly dismissed the MCDCA and MCPA claims. With respect to the case against Peak, the court also affirmed the denial of the second motion for class certification. Petitioners sought further review in this Court.

Respondents argue that the judgment of the Court of Special Appeals with respect to the MCDCA and MCPA claims should be affirmed because Petitioners impermissibly seek to hold them liable for collecting certain amounts from Petitioners, rather than challenging the methods Respondents used to collect those debts. In addition, Respondents contend that, prior to this Court deciding Ben-Davies , it was impossible for a debt collector to have the requisite knowledge under the MCDCA that the collector lacked the right to charge post-judgment interest at a rate of 10%. Respondents also argue that they were permitted to include the post-judgment court costs to obtain the writs of garnishment in the total amounts subject to garnishment.

For the reasons stated below, we conclude that the circuit courts incorrectly dismissed the MCDCA and MCPA claims to the extent Petitioners alleged violations of those statutes based on Respondents’ collection of post-judgment interest at a rate of 10%. However, we agree with the Court of Special Appeals that Respondents did not violate the MCDCA (or the MCPA) by including the costs of the filing fees to obtain the writs of garnishment in the amounts to be garnished.¹

IBackground²

A. Bryione K. Moore, et al. v. Peak Management LLC

1. Pertinent Allegations

Peak is a Maryland limited liability company that manages real estate properties and self-storage facilities throughout the greater Baltimore area. Peak retained Blibaum to collect debts owed by Petitioners and to pursue legal remedies to aid in debt collection.

Petitioners Moore, Albert Grantham, Patricia Grantham, Crowell, and Chavis signed residential leases with Peak. Each of these Petitioners subsequently defaulted on their lease with Peak. Blibaum filed a complaint in the District Court of Maryland against each Petitioner for breach of contract, seeking damages for the default and breach of lease, and obtained a judgment. When entering the judgment in each case, the District Court of Maryland ordered post-judgment interest "at the legal rate." The judgment did not set forth a specific rate of post-judgment interest. When Petitioners failed to satisfy the judgments entered against them, Blibaum requested and obtained writs of garnishment to collect the judgments. When requesting the writs of garnishment, Blibaum stated on the District Court's "Request for Writ of Garnishment" form that it applied post-judgment interest at a rate of 10% to the money judgments it had obtained on behalf of Peak. Applying post-judgment interest at a rate of 10% was the standard practice of Blibaum as Peak's agent. It was also standard practice for Blibaum, on behalf of Peak, to include post-judgment costs (i.e. , the filing fees to obtain the writs of garnishment) in the requests for writs of garnishment.

2. Related Federal Case

Prior to filing her complaint against Peak in the Circuit Court for Baltimore City, Moore sued Blibaum in the United States District Court for the District of Maryland, alleging violations of the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. , the MCDCA, and the MCPA, through Blibaum's work as Peak's collection agent. Bryione K. Moore v. Blibaum & Assocs., P.A., Civ. No. 1:16-cv-3546-JFM, 2017 WL 462508 (D. Md. Feb. 2, 2017) (Memorandum). The federal district court dismissed the complaint on February 2, 2017, following which Moore appealed to the United States Court of Appeals for the Fourth Circuit. On July 19, 2017, the Fourth Circuit reversed and remanded.

Moore v. Blibaum & Assocs., P.A. , 693 F. App'x 205 (4th Cir. 2017). On remand, the district court certified a question to this Court concerning the proper rate of post-judgment interest on a judgment obtained against a tenant for breach of contract. As stated above, we answered the certified question in Ben-Davies , holding that the legal rate of post-judgment interest on a judgment for unpaid rent obtained in a breach of contract action is 6%. Ben-Davies , 457 Md. at 275, 177 A.3d 681.

3. The Class Action Lawsuit Against Peak in the Circuit Court for Baltimore City

a. Motions to Dismiss

On January 4, 2017, Moore filed a putative class action lawsuit against Peak in the Circuit Court for Baltimore City. The Granthams, Crowell, and Chavis were added as named plaintiffs in subsequent amended complaints. Petitioners sought a declaratory judgment (Count I), and also brought claims under the MCDCA, CL § 14-202(8)³ (Count II), and the MCPA, CL §§ 13-303(5)⁴ and 13-301(14)(iii)⁵ (Count III), and for common law unjust enrichment (Count IV). Petitioners alleged that Peak knowingly or recklessly charged and collected post-judgment interest at a rate of 10% instead of at the maximum legal rate of 6% under Maryland Code, Courts and Judicial Proceedings (CJ) § 11-107(b) (2013 Repl. Vol.).⁶ Petitioners also claimed that, through the writs of garnishment, Peak collected or attempted to collect costs in excess of the amount of costs actually awarded in the judgment.

Peak moved to dismiss the operative complaint on March 31, 2017. On April 19, 2017, the circuit court granted Peak's motion to dismiss the MCDCA and MCPA claims (Counts II and III), but denied the motion as to the request for declaratory judgment (Count I) and the...