Brzowski v. Maryland Home Imp. Com'n

• Decision Date: 01 September 1996
• Docket Number: No. 610,610
• Citation: 114 Md.App. 615,691 A.2d 699
• Parties: Kenneth J. BRZOWSKI t/a Building by Design, Ltd. v. MARYLAND HOME IMPROVEMENT COMMISSION ,
• Court: Court of Special Appeals of Maryland

Page 615

114 Md.App. 615

691 A.2d 699

Kenneth J. BRZOWSKI t/a Building by Design, Ltd. v. MARYLAND HOME IMPROVEMENT COMMISSION

No. 610, Sept. Term, 1996.

Court of Special Appeals of Maryland.

Feb. 27, 1997.

Reconsideration Denied April 29, 1997.

Charles V. Kirchman (Kirchman and Kirchman, on the brief), Wheaton, for appellant

Joel Jacobson, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General, on the brief), Baltimore, for appellee.

Argued before WENNER, HARRELL and EYLER, JJ.

HARRELL, Judge.

Kenneth J. Brzowski, t/a Building By Design, Ltd., appeals from a decision of the Circuit Court for Montgomery County affirming a Final Order of the Maryland Home Improvement Commission (the Commission) which authorized payment from the Home Improvement Guaranty Fund (the Fund) on a claim filed by a homeowner, Raymond E. Odemns, who had contracted with appellant for home repair work. The homeowner claimed the work performed by appellant was of poor quality, and the dispute was submitted to arbitration. The arbitrator awarded Mr. Odemns $7,028.00. The award was submitted then to the Commission. Appellant objected to the Commission

authorizing payment from the Fund, because the arbitrator's award did not comply with the conditions set forth in the Home Improvement Act (the Act), Md.Code Ann., Bus. Reg. § 8-401 et seq., which must be satisfied before payment from the Fund could be authorized. Nonetheless, the Commission approved the award for payment. After concluding that the Act was remedial in nature, the circuit court affirmed the Order of the Commission. For the reasons stated below, we shall affirm.

ISSUES

Appellant presents the following issues, reordered and rephrased below:

1. Whether the form of an arbitration award must strictly comply with the provisions of Md.Code Ann., Bus. Reg. § 8-409(a)(2) before the Maryland Home Improvement Commission may pay a claim from the Home Improvement Fund.

2. Whether an arbitrator has the power to modify or correct an award if neither party to the award has petitioned the arbitrator for a modification or correction within twenty days after delivery of the award as prescribed by Md.Code Ann., Cts. & Jud. Proc. § 3-222.

FACTS

Mr. Brzowski is the owner and operator of a business known as Building by Design, Ltd. and is a licensed contractor under the Maryland Home Improvement Act, Md.Code Ann., Bus. Reg. § 8-101 et seq. Sometime before September 1992, the Department of Housing and Community Development of Prince George's County (the Department) solicited bids for specified work to be performed at the home of Raymond Odemns, located in District Heights, Maryland. Building by Design won the contract with a bid of $9,235.00. Mr. Odemns and Building by Design entered into a contract on 3 September 1992. Under the terms of the contract, Mr. Odemns and Mr. Brzowski agreed, inter alia, to submit all disputed claims to arbitration in accordance with the Construction Industry Work commenced on the project and Mr. Odemns authorized the Department to make most of the progress payments to Building by Design. At some point, however, Mr. Odemns became dissatisfied with the quality of appellant's workmanship. Consequently, he complained to the Department and refused to approve the final payment of $900.00 due under the contract. In response to Mr. Odemns' complaint, the Department dispatched a representative to inspect appellant's work. The Department official recommended that the matter be resolved by Mr. Odemns retaining the $900.00 to cure the alleged defects. Mr. Brzowski agreed to this proposal. In addition to retaining the $900.00, however, Mr. Odemns filed a written demand for arbitration with AAA dated 20 May 1994.

Arbitration Rules of the American Arbitration Association (AAA).

A hearing was conducted by Arbitrator John D. Bond, Esquire, on 9 December 1994. ¹ On 12 December, the arbitrator awarded Mr. Odemns $7,028.00. Based upon this award, Mr. Odemns submitted a claim to the Commission for compensation from the Fund. On 20 March 1995, the Commission notified appellant that it intended to authorize payment to Mr. Odemns from the Fund based on the award, subject to appellant's right to appeal the award. Appellant timely objected to the Commission's proposal to authorize payment from the Fund, contending that the award did not comply with the provisions of Md.Code Ann., Bus. Reg. § 8-409(a)(2)(i). Those provisions require that an arbitration award contain a statement by the arbitrator that he "expressly found on the merits that the claimant is entitled to recover under § 8-405(a) of this subtitle." ²"My award in favor of Mr. Odemns was based upon my determination that the work performed for him by Building by Design (Kenneth J. Brzowski) was performed in a grossly defective manner. The amount of the award reflects my determination of the amount required to properly correct the deficiencies in the work and make Mr. Odemns whole."

On 21 April 1995, the Executive Director of the Commission wrote a letter to Mr. Odemns, with copies to appellant and his attorney, in which she suggested that he obtain a statement from the arbitrator explaining the basis of his award. By letter to the Commission dated 27 April, appellant objected to this procedure. In response to Mr. Odemns's request for an explanatory statement concerning the Award, the arbitrator sent a letter to AAA on 10 May that stated in part:

Based on the arbitrator's letter of 10 May, the Commission issued its Final Order dated 22 June 1995 awarding Mr. Odemns $7,028.00, to be paid from the Fund.

In January 1996, appellant filed a Petition for Judicial Review with the Circuit Court for Montgomery County. On 4 March 1995, the court, after conducting a hearing, denied appellant's petition. The court concluded that the Home Improvement Act was remedial in nature and, therefore, should be broadly construed. Hence, although the award did not satisfy the precise requirements of section 8-409(a)(2)(i), the court affirmed the Commission's Final Order. This appeal ensued.

ANALYSIS

I.

Judicial review of a final decision of the Maryland Home Improvement Commission may be obtained by appeal to the circuit court. Md.Code Ann., Bus. Reg. § 8-314; State Gov't §§ 10-222, 10-223; see generally Mayor and Aldermen of Annapolis v. Annapolis Waterfront Co., 284 Md. 383, 393-99 396 A.2d 1080 (1979). The extent of judicial review of an administrative agency ³ decision is set forth in the Maryland Administrative Procedure Act. Md.Code Ann., State Gov't. § 10-101 et seq. Although judicial review of an administrative decision is ordinarily limited in scope, Esslinger v. Baltimore City, 95 Md.App. 607, 623, 622 A.2d 774, 782, cert. denied, 331 Md. 479, 628 A.2d 1066 (1993); Secretary of Health & Mental Hygiene v. Crowder, 43 Md.App. 276, 280, 405 A.2d 279, 281 (1979), a court can and should review whether an agency has acted within its statutory powers or has otherwise made an error of law. Md.Code Ann., State Gov't § 10-222(h)(3)(ii), (iv); Board of Educ. v. Paynter, 303 Md. 22, 35, 491 A.2d 1186, 1192-93 (1985). See Montgomery County v. Buckman, 333 Md. 516, 519 n. 1, 636 A.2d 448, 450 n. 1 (1994); Erb v. Maryland Dept. of the Env't, 110 Md.App. 246, 255-56, 676 A.2d 1017, 1022 (1996); General Motors Corp. v. Bark, 79 Md.App. 68, 71-72, 555 A.2d 542, 543-44 (1989).

In the case sub judice, after conducting a hearing encompassing a scant twelve pages of transcript, the circuit court summarily concluded that "it is clear from the face of the award ... that [it] satisfies the statute [Md.Code Ann., Bus. Reg. § 8-409]." We presume that the circuit court was referring to the arbitrator's award, as it was originally presented to the Commission, which merely stated:

BUILDING BY DESIGN, KENNETH J. BRZOWSKI (Respondent) shall pay to RAYMOND E. & LINDA F. ODEMNS (claimant) the amount of SEVEN THOUSAND AND TWENTY-EIGHT DOLLARS ($7,028.00) within thirty (30) days of the date of this Award.

The first point appellant seeks to establish is that the award as originally presented to the Commission could not support payment from the Fund because the award did not conform to the specific requirements of Md.Code Ann., Bus. Reg. §§ 8-409(a) and 8-405(a). According to appellant's construction of the statute, the Commission may not authorize payment from the Fund until it has received a certified award from an arbitrator expressly stating that, based upon a determination rendered on the merits, the claimant is entitled to recover under the provisions of section 8-405(a). Section 8-405(a) provides that a claimant may only recover for an "actual loss," which is defined in section 8-401. Appellant, therefore, concludes that by ordering payment from the Fund in contravention of the requirements of section 8-409(a), the Commission exceeded the scope of its statutory authority. ⁴

The Commission, on the other hand, asks this Court to apply a liberal construction to the Act in light of its remedial purpose. Further, the Commission suggests that the Act, when viewed in its entirety, evidences the legislature's intent to ensure that homeowners who have prevailed against a contractor in arbitration proceedings are afforded access to the additional remedy provided by the Fund. The Commission further contends that deference should be accorded to its previous liberal constructions of the statute in which it has sought to achieve the remedial purposes sought by the legislature's enactment of the Statute. The Commission, however, fails to enumerate any particular instances when the Commission actually applied a liberal construction to its statute. Finally, the Commission argues that appellant's construction of the statute flies in the face of the legislature's intent, because Md.Code Ann., Bus. Reg. § 8-408(b)(3)(i) mandates that the Commission shall approve a final judgment or arbitration award decided in favor of a claimant. All questions relating to the...