Consumer Protection Div. v. George

• Decision Date: 09 November 2004
• Docket Number: No. 12,12
• Citation: 383 Md. 505,860 A.2d 896
• Parties: CONSUMER PROTECTION DIVISION v. Paris G. GEORGE.
• Court: Maryland Court of Appeals

860 A.2d 896

383 Md. 505

CONSUMER PROTECTION DIVISION v. Paris G. GEORGE.

No. 12, September Term, 2004.

Court of Appeals of Maryland.

November 9, 2004.

William D. Gruhn, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen. of Maryland, and Philip D. Ziperman, Asst. Atty. Gen., on brief), Baltimore, for Appellant.

No argument on behalf of Appellee.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ GREENE, Judge.

The issue before the Court is whether the language, "to take affirmative action," found in the Consumer Protection Act, Md. Code (1975, 2000 Repl. Vol), § 13-101 et seq. of the Commercial Law Article ("Act"), permits the Consumer Protection Division to order a person adjudicated in violation of the Act to post a surety bond before engaging in further business transactions and to disclose certain financial information.¹ Our narrow holding is that § 13-403(b)(1) does not authorize the Division "to take affirmative action" either to require a violator of the Act to post a bond or to disclose financial information to aid the Division's enforcement of a cease and desist order. Thus, we affirm the judgment of the Circuit Court for Baltimore County.

The Facts

Paris George, ("George"),² is the sole proprietor of a company that sells durable medical equipment and other supplies. He operates out of his home under various trade names, including Allied Home Healthcare, Allied Healthcare, Allied Medical Equipment Co., Maryland Home Healthcare Services, Access Professionals, and Access Medical Equipment Co. He advertises in the yellow pages the sale and rental of durable medical equipment, i.e., wheelchairs, scooters, and stairlifts, as well as sickroom equipment, i.e., hospital beds, bed rails, and bathing equipment. His customers are seriously ill or disabled people or their families. The average consumer paid George more than $800.00 for equipment while others paid as much as $6,000.00.

In a hearing before Administrative Law Judge Beverly Sherman Nash ("ALJ"), the ALJ found that George violated the Consumer Protection Act, Md. Code (1975, 2000 Repl. Vol), § 13-101 et seq. of the Commercial Law II Article, the Door-to-Door Sales Act, Md. Code (1975, 2000 Repl. Vol), § 14-301 et seq. of the Commercial Law II Article, and the Merchandise Delivery Law, (1975, 2000 Repl. Vol.), § 14-1801 et seq. of the Commercial Law II Article. Specifically, the ALJ found that George engaged in repeated violations of the Acts by, among other things, failing to deliver the purchased items,³ claiming to be an authorized dealer of a certain manufacturer when he was not,⁴ failing to refund money after not delivering the product or after delivering nonconforming goods,⁵ and charging sales tax on nontaxable items.⁶ He also failed to properly notify customers of their rights to cancel orders and to provide written estimated delivery dates as required by law. When customers called to inquire about their ordered products, their calls often went unreturned. When customers did reach a live person at Allied, the person often identified himself as "Pat," an alias used by George, who informed them that George was unavailable or that he, Pat, would check on their items and call them back, which he would fail to do.

Based on the above violations, the Division issued a Final Order against George on June 24, 2002. George appealed to the Circuit Court for Baltimore County, the Honorable John F. Fader II, presiding. The circuit court affirmed the order in the following respects:

1. Ordering George to cease and desist from violating Maryland law;

2. Requiring George to make modifications to the contracts used by him so as to comply with Maryland law and to give fair notice to customers;

3. To provide refunds and restitution;

4. To require George to list his prior customers and the specifics of transactions with them, so as to identify and locate individuals who may be entitled to a refund from him, and to establish a claims process for those who are entitled to a refund;

5. To pay restitution in the amount of $32,510.92;

6. To establish a restitution account to be maintained by the Division for future claims against George; and

7. Imposing a civil penalty against George in the amount of $75,000 for violations of the consumer protection laws, and requiring that he pay the costs of the administrative proceedings in the amount of $4,357.

The circuit court reversed the order of the Division with regard to the following two provisions:

1. Requiring George to post a surety bond in the amount of $30,000 for the protection of future customers; and

2. Requiring George to list his assets, sources of income, and a list of all transfers of assets or payments in an amount greater than $1,000 to anyone in the previous two years.

In reversing the order regarding the bond, the circuit court noted that:

[w]hile the court is aware of the general remedial purpose of the statutes to protect consumers, it is not convinced that the general right to "fence in" a person found to have violated the law includes the right to order the posting of a bond.... Where the Maryland Legislature has meant there to be a requirement for the posting of a bond, they have so provided as part of other statutory schemes.

With regard to the second issue, the disclosure of George's assets and transfers, the circuit court noted "[t]he statute does not give that authority; the Division can point to no specific case law interpreting any part of the State or Federal consumer protection statutes as giving this authority, and no case law interpretation can be strained or bent to say the authority exists."

On March 12, 2004, the court issued an order and monetary judgment against George in the amount of $111,867.92, representing the sum of the civil penalty, restitution order, and costs in the case.

The Division appealed the circuit court's conclusions regarding the surety bond and the financial disclosure provisions. The Division argues that "[t]he [Division's] Order against George furthered the purpose of the Consumer Protection Act, was issued pursuant to the [Division's] statutory authority and was reasonably tailored to address the violations committed by George...." We granted certiorari before consideration of the matter in the Court of Special Appeals. 380 Md. 617, 846 A.2d 401 (2004).

II.

Standard of Review

In Watkins v. Dept. of Public Safety and Correctional Services, 377 Md. 34, 831 A.2d 1079 (2003), Judge Battaglia, writing for this Court, summarized the relevant standard of review:

Because an appellate court reviews the agency decision under the same statutory standards as the circuit court, we reevaluate the decision of the agency, not the lower court. Generally, "judicial review of administrative agency action is narrow." The reviewing court must not "substitute its judgment for the expertise of those persons who constitute the administrative agency." We must respect the expertise of the agency and accord deference to its interpretation of a statute that it administers; however, we "may always determine whether the administrative agency made an error of law." Typically, such a determination requires considering "(1) the legality of the decision and (2) whether there was substantial evidence from the record as a whole to support the decision."

Id. at 45-46, 831 A.2d at 1086 (internal citations omitted).

In interpreting a statute we have said that the "predominant goal, when construing statutes, is to ascertain and implement the legislative intent." Baltimore County v. RTKL, 380 Md. 670, 678, 846 A.2d 433, 437 (2004). In ascertaining the intent of the General Assembly we "look first to the words of the statute," id.; however,

if the true legislative intent cannot readily be determined from the statutory language alone, we look to other indicia of that intent, including the title to the bill, the structure of the statute, the inter-relationship of its various provisions, its legislative history, its general purpose, and the relative rationality and legal effect of various competing constructions.

RTKL, 380 Md. at 678, 846 A.2d at 437-38 (internal citations omitted).

The Consumer Protection Division

The Consumer Protection Division is entrusted with broad powers to enforce and interpret the Consumer Protection Act, Md. Code (1975, 2000 Repl. Vol), § 13-101 et seq. of the Commercial Law II Article. Consumer Protection Division v. Consumer Pub'l Co., 304 Md. 731, 745, 501 A.2d 48, 55 (1985). In adopting the Act, the General Assembly concluded that "it should take strong protective and preventive steps to investigate unlawful consumer practices, to assist the public in obtaining relief from these practices, and to prevent these practices from occurring in Maryland. It is the purpose of this title to accomplish these ends and thereby maintain the health and welfare of the citizens of the State." CL § 13-102(b)(3). The General Assembly further provided that the Act should be "construed and applied liberally to promote its purpose." CL § 13-105.

We summarized the statutory powers of the Division in Consumer Publishing:

The statutory powers of the Division include the power to receive and investigate consumer complaints, initiate its own investigation of any possibly unfair and deceptive trade practices, issue cease and desist orders, adopt rules and regulations which further define unfair or deceptive trade practices or otherwise effectuate the purposes of the Act, and seek a temporary or permanent injunction in a civil enforcement proceeding. §§ 13-204 and 13-403(c)(2). The statute further provides that the Division may "exercise and perform any other function, power and duty appropriate to protect and promote the welfare of consumers." § 13-204(11).

Consumer Publishing, 304 Md. at 745, 501 A.2d at 55.

The cease and desist provision of the statute is found at CL § 13-403(b)(1). It provides:

If, at the conclusion of the hearing, the

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