Automobile Trade Ass'n of Maryland v. Harold Folk Enterprises, Inc.

• Decision Date: 01 September 1983
• Docket Number: No. 97,97
• Citation: 301 Md. 642,484 A.2d 612
• Parties: AUTOMOBILE TRADE ASSOCIATION OF MARYLAND et al. v. HAROLD FOLK ENTERPRISES, INC. t/a United Buying Services. ,
• Court: Maryland Court of Appeals

Page 642

301 Md. 642

484 A.2d 612

AUTOMOBILE TRADE ASSOCIATION OF MARYLAND et al. v. HAROLD FOLK ENTERPRISES, INC. t/a United Buying Services.

No. 97, Sept. Term, 1983.

Court of Appeals of Maryland.

Dec. 7, 1984.

Stephen C. Winter, Towson (Eugene W. Cunningham, Jr. and White, Mindel, Clarke & Hill, on brief, Towson), for appellants, Automobile Trade Ass'n of Maryland, Inc., Gladding Chevrolet, Inc. and Tate Chrysler Plymouth Inc.

Avery Aisenstark, Asst. Atty. Gen., Stephen H. Sachs, Atty. Gen., Kathleen Howard Meredith, Asst. Atty. Gen., and Lynette M. Phillips, State Atty., for appellant, State of Maryland.

Ronald H. Jarashow, Annapolis (Franch, Earnest & Cowdrey, P.A., Annapolis, on brief), for appellee.

Argued before MURPHY, C.J., COLE, DAVIDSON ^*, RODOWSKY and COUCH, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals (retired), specially assigned and JAMES C. MORTON, Jr., Associate Judge of the Court of Special Appeals (retired) specially assigned.

COLE, Judge.

The central issue we must decide in this case is whether referral agents of United Buying Service (UBS), an automobile referral sales business, must satisfy the licensure requirements for vehicle salesmen under Md.Code (1984 Repl.Vol.) §§ 15-401 to -412 of the Transportation Article.

We recount those facts necessary to place this issue in proper perspective. UBS is an automobile referral sales business with operations in Virginia, New York, Colorado, the District of Columbia, and, since 1967, Maryland. UBS arranges sales of new vehicles to individuals belonging to member-groups, such as companies, labor organizations, and other similar entities. These individuals contact a UBS referral agent after locating a desired vehicle in the UBS price book, which lists various makes and models of new vehicles at a price that is discounted from the dealer's normal list price. The individual provides the UBS referral agent with information concerning the desired automobile, such as the make, model, and options. In return, the UBS referral agent sends the customer a "purchase certificate" for that vehicle. The referral agent instructs the customer to take the certificate to a dealer who has agreed to accept UBS referrals under a verbal agreement between UBS and the dealership. Under this agreement, the dealer must sell that vehicle to the customer at the UBS price. As consideration for UBS referrals, the dealer pays UBS $30.00 per sale.

Approximately ninety percent of UBS's business is derived from automobile referrals, with the remaining ten percent derived from furniture referrals. The Chevy Chase--based organization employs about twenty five individuals, most of whom are UBS referral agents. UBS referral agents are responsible for dealing with prospective customers, often over the telephone, concerning vehicles listed in the UBS price book. UBS hires and trains these referral agents, and pays their salaries, workmen's compensation insurance, medical benefits, and other expenses. All UBS referral agents transact business from the Chevy Chase office.

On the basis of a 1982 opinion by the Attorney General, the Motor Vehicle Administration (MVA) informed UBS that it would not renew the licenses of its referral agents, which were due to expire on April 30, 1983. In response, UBS filed a declaratory judgment action in the Circuit Court for Anne Arundel County seeking injunctive and mandamus relief against the MVA. The Automobile Trade Association of Maryland (ATA), an association of new automobile dealers, intervened in this suit. The trial court found that UBS referral agents were required to be licensed because they were "vehicle salesmen," and that these referral agents met the licensure requirements because they were "employed by" licensed dealers. Accordingly, on April 28, 1983, the trial court ordered that the MVA renew the licenses of the UBS referral agents. The MVA appealed to the Court of Special Appeals but we granted certiorari before judgment was entered by that Court.

I

Before we can reach the merits of this case it is necessary for us first to analyze a procedural issue raised by the appellants. In its opinion and order, the trial court made several findings to which the appellee did not file a cross-appeal. Appellants argue that the appellee's failure to file a cross-appeal bars appellate review of the trial court's finding that UBS referral agents are "vehicle salesmen" within the meaning of § 15-101(e) of the Transportation Article and are thus required to be licensed under Maryland law.

The Maryland Rules do not contain extensive requirements for cross-appeals. For review by this Court, Maryland Rule 812 b provides in general that any other party may file a petition for writ of certiorari within ten days of the filing of the first timely petition for writ of certiorari or within the time specified in Maryland Rule 812 a. Similarly, for appeals to the Court of Special Appeals, Maryland Rule 1012 f generally requires any other party to file an order for appeal within ten days from the date on which the first order for appeal was filed. Despite the lack of detailed guidance in the rules, we have discussed on numerous occasions when a cross-appeal properly lies. E.g., Joseph H. Munson Co. v. Secretary of State, 294 Md. 160, 448 A.2d 935 (1982), aff'd, --- U.S. ----, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984); Offutt v. Montgomery County Bd. of Educ., 285 Md. 557, 404 A.2d 281 (1979).

As a general matter, a party to a trial court proceeding must file a valid, timely order of appeal to seek direct appellate review and reversal of the trial court's judgment. See Joseph H. Munson Co. v. Secretary of State, supra, 294 Md. at 168, 448 A.2d at 939-40. In Munson, we held that an appellee could not assert on appeal that the appellant lacked standing to challenge the constitutionality of a statute because the appellee failed to file a cross-appeal from a declaratory judgment that upheld the validity of that statute. Id. at 168, 448 A.2d at 940. In writing for the Munson Court, Judge Eldridge reasoned that the lack of standing could not be raised for the first time by the appellee on appeal because lack of standing would not serve as an alternate ground for affirming the trial court's decision on the merits. Conversely, where a party has an issue resolved adversely in the trial court, but receives a wholly favorable judgment on another ground, that party may, as an appellee and without taking a cross-appeal, argue as a ground for affirmance the matter that was resolved against it at trial. Offutt v. Montgomery County Bd. of Educ., supra, 285 Md. at 564 n. 4, 404 A.2d at 285 n. 4; State Comm'n on Human Relations v. Amecom Div., 278 Md. 120, 123 n. 2, 360 A.2d 1, 3 n. 2 (1976). In Offutt, the appellee school board received a judgment wholly in its favor, although the trial court ruled that it had bargained in bad faith. The school board filed a cross-appeal. Under these circumstances, we determined that the cross-appeal was inappropriate because a finding of good faith would have been an alternate ground to support the trial court's ruling. In Amecom Div., we noted that the appellee was not required to file a cross appeal to assign any error of the trial court in support of the final decree when the appellee seeks only affirmance of that final decree.

In light of these principles, it is apparent to us that the appellee in the case sub judice was not required to file a cross-appeal to argue in this Court that its referral agents are not "vehicle salesmen" under § 15-101(e) of the Transportation Article. The appellee received a judgment wholly in its favor at trial insofar as that court denied the relief sought by appellants. Without taking a cross-appeal, appellee may argue as a ground for affirmance the matter that was resolved against it at trial. Thus, appellee can argue that we should affirm the trial court's final order on an alternate ground, i.e., that the UBS referral agents do not come within the definition of vehicle salesmen and therefore do not have to be licensed. Although this issue was resolved against appellee at trial, it nevertheless provides an alternate ground for affirmance. We therefore hold that the appellant's contention that appellee is barred from raising the contested issues because no cross-appeal was taken is without merit.

II

UBS and Maryland's vehicle salesmen licensing laws have often been at odds since UBS initiated its Maryland operation in 1967. Barely one year after UBS's foray into Maryland, the MVA issued a bulletin to all automobile dealers on May 21, 1968, indicating that they should not enter into selling arrangements with any person not licensed or bonded in accordance with Maryland law. At the MVA's request, the Attorney General of Maryland issued an opinion on the matter. The Attorney General opined that consumer buying services were "salesmen" under former Md.Code 1957, 1967 Repl.Vol.), Art. 66 1/2, § 2(49a) (current version at Md.Code (1984 Repl.Vol.), § 15-101(e) of the Transportation Article) and that dealers could not participate in an automobile sales transaction with an unlicensed buying service without violating the applicable licensing laws. 53 Op. Att'y Gen. 402 (1968). On November 20, 1968, MVA directed UBS to cease and desist its operations. After discussions between UBS and the MVA, UBS modified its purchase certificate by having it state that UBS was the agent of the purchaser, not the dealer. Based on this modification, the MVA approved the UBS operation on January 2, 1969.

In 1970, the General Assembly undertook an extensive revision of Maryland's motor vehicle laws. This revision expanded the definition of "vehicle salesmen" to include an individual who "induces or attempts to induce any person to buy or exchange" a vehicle and who "receives or expects to receive" any "value from either the seller or purchaser" of a vehicle. Chapter 534 of the 1970 Laws of...