Bolling v. Bay Country Consumer Fin., Inc., 699, Sept. Term, 2019

CourtCourt of Special Appeals of Maryland
Citation256 A.3d 271,251 Md.App. 575
Docket NumberNo. 699, Sept. Term, 2019,699, Sept. Term, 2019
Parties Nina BOLLING v. BAY COUNTRY CONSUMER FINANCE, INC.
Decision Date01 July 2021

251 Md.App. 575
256 A.3d 271

Nina BOLLING
v.
BAY COUNTRY CONSUMER FINANCE, INC.

No. 699, Sept. Term, 2019

Court of Special Appeals of Maryland.

July 1, 2021
Reconsideration Denied September 2, 2021


Argued by: Cory L. Zajdel (Jeffrey C. Toppe, David M. Trojanowski, Z Law, LLC, Timonium, MD), on the brief, for Appellant.

Argued by: Zachary S. Gilreath (Steven R. Freeman, Lee B. Rauch, Freeman Rauch, LLC, Towson, MD), on the brief, for Appellee.

Panel: Meredith,* Leahy, Shaw Geter, JJ.

Leahy, J.

256 A.3d 274

In this appeal, although we affirm the circuit court's dismissal of the underlying case, we clarify that a consumer borrower may maintain a cause of action against a credit grantor under the Credit Grantor Closed End Credit Provisions ("CLEC"), Maryland Code (1975, 2013 Repl. Vol., 2019 Supp.), Commercial Law Article ("CL"), §§ 12-1001 - 12-1029, before the credit grantor has collected more than the principal amount of the loan.

Appellant Nina Bolling appeals from an order of the Circuit Court for Baltimore City granting the motion to dismiss Count I of the complaint that she filed against appellee Bay Country Consumer Finance, Inc. ("Bay Country"). The court dismissed Ms. Bolling's CLEC claim on the ground that she was not entitled to relief as a matter of law because the complaint failed to state a "claim for any amounts in excess of the principal amount" of the loan. We hold that a borrower may bring a claim under CLEC against a credit grantor before the credit grantor has collected more than the principal amount on the loan. To properly state a cause of action for a violation of CLEC, however, a plaintiff must allege actual damages emanating from a violation of the statute or request appropriate declaratory or injunctive relief. Ms. Bolling alleged a violation of CLEC, but she sought neither declaratory nor injunctive relief. She also failed to articulate how she suffered any actual damages, nor did she claim that she paid Bay Country any amount in excess of the principal under CL § 12-1018(a)(2). Accordingly, we affirm the judgment of the circuit court dismissing Count I of Ms. Bolling's complaint for failure to state a claim.

BACKGROUND1

On or about December 4, 2014, Ms. Bolling entered into a loan agreement ("Agreement") with Bay Country, which elected CLEC as the governing law.

Complaint

On June 13, 2018, Ms. Bolling filed a complaint against Bay Country. Under the heading "Factual Allegations," Ms. Bolling included the following paragraphs which we present verbatim:

7. On or about December 4, 2014, [Ms.] Bolling entered into a credit contract with [Bay Country].

8. The credit contract between [Ms.] Bolling and [Bay Country] elected Maryland's Credit Grantor Closed
256 A.3d 275
End Credit Provisions ... ("CLEC") as the governing law.

9. [Ms.] Bolling obtained financing primarily for personal, family and household purposes.

10. [Bay Country] took a security interest in [Ms.] Bolling's tangible personal property in the credit contract.

11. Throughout the life of the credit contract, [Ms.] Bolling made numerous payments to [Bay Country].

12. Throughout the life of the credit contract, [Bay Country] applied [Ms.] Bolling's payments toward interest, costs, fees and principal.

13. On or around January 12, 2017, [Bay Country] repossessed [Ms.] Bolling's tangible personal property in Baltimore City, Maryland.

14. On March 1, 2018, [Ms.] Bolling requested from [Bay Country] all records memorializing [Ms.] Bolling's account history including all debits and credits to her account and any monthly statements sent to [Ms.] Bolling and all other documents which refer to payments due or received.

15. [Bay Country] has specifically refused to provide [Ms.] Bolling with the written statement requested.

Ms. Bolling's initial complaint contained one cause of action: Bay Country "specifically refused to provide Ms. Bolling with the requested written statement" in violation of CL § 12-1025. Ms. Bolling alleged that "[Bay Country]’s refusal to provide the written statement with knowledge of the requested written statement subjects [Bay Country] to treble damages." The complaint requested that the circuit court "enter an order that [Bay Country] pay to [Ms. Bolling] the statutory penalties imposed by [CL] § 12-1018(a)(2) and (b)"; award "pre-judgment and post-judgment interest"; and "award such other relief as the court deems appropriate."

Bay Country moved to dismiss or, in the alternative, for summary judgment, on the grounds that venue was improper in Baltimore City and that the court lacked subject matter jurisdiction because the "[c]omplaint does not specifically allege damages and does not provide a calculation of damages." Ms. Bolling then filed her "First Amended Complaint" on July 30, 2018. Besides providing additional allegations relating to venue, the amended complaint also averred that "[a]fter the date of the repossession, [Bay Country] demanded money from Ms. Bolling in an amount not collectible under her credit contract." The amended complaint added a cause of action for a violation of the Maryland Consumer Debt Collection Act ("MCDCA"), Maryland Code (1975, 2013 Repl. Vol., 2019 Supp.), Commercial Law Article, §§ 14-201 - 14-204, and, in a footnote in the prayer for relief, stated that Ms. Bolling's claim "totals ... $35,000.00." Otherwise, the amended complaint was substantively identical to the initial complaint. Ms. Bolling did not allege in her amended complaint that Bay Country collected more than the principal loan amount.

Motion to Dismiss

Bay Country filed a motion to dismiss Ms. Bolling's first amended complaint or, in the alternative, for summary judgment, on August 14, 2018. Bay Country asserted that Ms. Bolling's complaint should be dismissed for four reasons:

First, venue is not proper in Baltimore City. Second, [Ms. Bolling] is not entitled to monetary recovery under CLEC as a matter of law. Third, [Ms. Bolling] has failed to allege any fact sufficient to support a claim under the MCDCA. Fourth, this Complaint is duplicative of the same issues raised in a discovery
256 A.3d 276
dispute now pending in the United States District Court for the District of Maryland, Northern Division and, accordingly, [Bay Country] should not be required to defend the same subject matter in two forums simultaneously.

Under the second argument, Bay Country asserted that Ms. Bolling's "characterization of the damages sought as a ‘statutory penalty’ is incorrect. ‘CLEC does not provide for any fixed statutory damages beyond the plaintiff's actual loss.’ " (Quoting Bediako v. Am. Honda Fin. Corp. , 537 F. App'x 183, 186-87 (4th Cir. 2013) ). Relying on Bediako and Gardner v. GMAC, Inc. , 796 F.3d 390 (4th Cir. 2015), Bay Country posited that, because Ms. Bolling failed to allege that she paid amounts in excess of the principal,2 she did not assert a proper claim under CLEC.

Ms. Bolling filed an opposition in which she averred that "CLEC damages are available regardless of whether a credit grantor has collected more than [the] principal amount of the loan." Relying on cases primarily interpreting the Secondary Mortgage Loan Law ("SMLL"), Maryland Code (1975, 2013 Repl. Vol., 2019 Supp.), Commercial Law Article, § 12-413, she contended that the circuit court was "actually bound by an unbroken line of controlling Maryland Appellate Court opinions dating back thirty five (35) years" directly contrary to Bediako. Ms. Bolling asserted that, "[t]he relief that is provided by CLEC § 12-1018 has also already been determined by Maryland Appellate Courts and includes monetary, equitable and declaratory relief[,]" citing Chevy Chase Bank, F.S.B. v. Chaires , 350 Md. 716, 715 A.2d 199 (1998) ; Crowder v. Master Financial, Inc. , 176 Md. App. 631, 933 A.2d 905 (2007) ; Coner v. Morris S. Berman Unlimited, Inc. , 65 Md. App. 514, 501 A.2d 458 (1985) ; and Duckworth v. Bernstein , 55 Md. App. 710, 466 A.2d 517 (1983). Ms. Bolling pointed out that Maryland Appellate cases, notably Duckworth , interpret SMLL to entitle a consumer to "declaratory and injunctive relief immediately upon the creditor's statutory violation," and urged the circuit court to interpret the same language found in CLEC in the same manner. "Unquestionably then, a credit grantor does not have to collect greater than the principal amount of the loan in order for a consumer to state a claim for relief under CLEC."

On September 19, 2019, the circuit court held a hearing on Bay Country's motion to dismiss. First, the court determined that venue is proper in the Circuit Court for Baltimore City. Then, the court heard argument on the CLEC claim. Counsel for Bay Country asserted that Ms. Bolling was not entitled to damages under CLEC as a matter of law because she had not paid more than the principal amount. The court inquired whether Ms. Bolling's claim survived

256 A.3d 277

for "knowing violation[s]" under § 12-1018(b). Counsel responded that "the knowing violation only applies [ ] if the debtor, the plaintiff, has paid more than the principal."

Counsel for Ms. Bolling argued that, regardless of whether a knowing...

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