D & Y, Inc. v. Winston
| Decision Date | 01 September 1987 |
| Docket Number | No. 742,742 |
| Parties | D & Y, INC. v. Clyde R. WINSTON , |
| Court | Court of Special Appeals of Maryland |
Jay Fred Cohen, Baltimore, for appellee.
Argued before MOYLAN, BISHOP, and ROBERT M. BELL, JJ.
D & Y, Inc. (D & Y), appeals from an Order of the Circuit Court for Baltimore City by which summary judgment was granted in favor of appellee, Clyde R. Winston (Winston). D & Y asks one question: did the court err in granting the motion? We hold that it did not. For purposes of this appeal the parties agreed on the following:
AGREED STATEMENT OF FACTS
Pursuant to Maryland Rule 1028(g), the parties agreed to the following facts.
The parties entered into and executed a land installment contract on August 31, 1984. The contract was recorded in the Land Records of Baltimore City on September 18, 1984. 1
Appellee paid appellant $400.00 as a down payment and thereafter paid $9,131.04 in monthly payments for a total of $9,531.04.
Pursuant to appellee's claim that he was entitled to a refund of all payments, without setoff for rent, the following Order was entered in the Circuit Court for Baltimore City.
The Defendant, D & Y, Inc., filed a Motion for Summary Judgment which Motion was answered by the Plaintiff, Clyde R. Winston, who with his answer filed a Motion for Summary Judgment. Said Motions were based on the undisputed facts that the Land Installment Contract between D & Y. Inc. and Clyde R. Winston was signed by the parties on August 31, 1984 and was recorded among the Land Records of Baltimore City on September 18, 1984 more than fifteen (15) days after its execution.
A hearing was held on February 27, 1987 on both Motions, and it is hereby,
ORDERED, by the Circuit Court for Baltimore City, this 18th day of March, 1987, that:
1. The Defendant, D & Y, Inc.'s Motion for Summary Judgment is denied;
2. That the Plaintiff, Clyde R. Winston's Motion for Summary Judgment is granted;
3. That in accordance with the Annotated Code of Maryland, Real Property Article 10-102(f) the Land Installment Contract made between D & Y, Inc. and Clyde R. Winston is cancelled and the Plaintiff is to receive immediate refund of all payments and deposits made on account or in contemplation of the contract;
4. That the amount of the refund to be made to the Plaintiff, Clyde R. Winston, is:
A. Down Payment $ 400.00
B. Monthly payments made 9,131.04
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Total payments made to Defendant $9,531.04
C. Plus all payments and interest now being held by the Court pursuant to the Stipulation entered into by the parties;
5. That the Defendant, D & Y, Inc. is not entitled to any setoffs for rent or any other reason as Real Property Article 10-102(f) does not allow any setoffs;
6. That judgment be and is hereby entered in favor of Plaintiff, Clyde R. Winston, against Defendant, D & Y, Inc., for $9,531.04;
7. That the Clerk of the Court be and he is hereby directed to deliver to the Plaintiff, Clyde R. Winston, and/or his counsel of record all payments and interest thereon now being held by the Court pursuant to the Stipulation entered into by the parties;
8. In the event that the parties do not agree that the amount that has been paid to the Defendant by the Plaintiff is $9,531.04, then this case shall be sent to a Master to determine the amount due to the Plaintiff by the Defendant. If the Master determines that the sum due the Plaintiff by the Defendant is $9,531.04, then the costs of the Master shall be borne solely by the Defendant. If the Master determines a sum that is less than $9,531.04, then the Master's cost shall be divided equally between the parties.
To the Agreed Statement of Facts we add the following. The contract involved a single family row house located at 3520 Reisterstown Road in Baltimore City. The total purchase price was $32,900.00. Possession of the property was given to Winston at the time of the execution of the contract. The balance of the amount due on the property was to be paid in monthly installments beginning on October 1, 1984, and in accordance with the terms of the contract. The date on which D & Y recorded the contract among the Land Records of Baltimore City, September 18, 1984, was 18 days after the contract was signed by the parties.
More than two years later, Winston filed a complaint in which he alleged D & Y's failure to comply with the Land Installment Contract Act, §§ 10-101 through 10-110 of the MD. REAL PROP. ARTICLE (1987 Repl.Vol. and 1987 Cum.Supp.) (the Act). Winston claimed that because D & Y had violated § 10-102(f) of the Act by filing the contract more than fifteen days after it was signed and by failing to mail to Winston a recordation receipt 2, he was entitled to cancel the Contract and to a refund of all payments made thereunder. Winston also filed a Motion for Summary Judgment which was granted by the trial court.
D & Y bases its claim that the trial court erred when it granted Winston's Motion for Summary Judgment on two arguments. First, that the three day time period for rescission provided under § 226.23 of the Federal Truth in Lending Act 3, tolls the recordation requirements of § 10-102(f). Second, that the trial court's interpretation of Section 10-102(f) was erroneous. Finally, D & Y asserts that even if the trial court was correct and Winston was entitled to a judgment under the statute, it was entitled to a setoff of the fair rental value of the property covering the period of Winston's occupancy.
Conceding that the contract was filed more than fifteen days after it was signed, D & Y argues that under § 226.23 of the Federal Truth in Lending Act, a consumer has the right to rescind an installment contract within three days of its signing and that that three day period for rescission tolls the running of § 10-102(f). D & Y claims, therefore, that its filing of the contract, on the 18th day after its execution, was timely. We hold that that section is not controlling in the case sub judice. Specifically, § 226.23 does not concern recordation of instruments and it does not therefore conflict with or control the specified provisions of Maryland law at issue here. In addition, transactions such as the installment sales contract at issue here are specifically exempted by § 226.23(f)(1) which provides:
Exempt transactions. The right to rescind does not apply to the following:
(1) A residential mortgage transaction.
A residential mortgage transaction is defined in 12 C.F.R. § 226.2(24) as:
[A] transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment contract, or equivalent consensual security interest is created or retained in the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling. (Emphasis added.)
The installment contract executed by the parties specifically provided:
The Buyer agrees:
6. That he will not use or permit the use of the premises for purposes other than those of a dwelling.
7. That he will not rent the premises in whole or part without first obtaining the written consent of the Seller.
We read this as consistent with the requirement that the mortgage be "in the consumer's principal dwelling".
We now address whether the sanctions of cancellation and reimbursement contained in the statute apply to the facts of this case.
The primary source for determining the legislature's intent is the language of the statute itself which should be construed according to its ordinary and natural import. A statute should not be construed by forced or subtle interpretations designed to extend or limit the scope of its operation. Thus, where statutory language is plain and free from ambiguity and expresses a definite and sensible meaning, no construction or clarification is needed or permitted.
Comptroller v. Fairchild Industries, 303 Md. 280, 284, 439 A.2d 341 (1985) (citations omitted). The pertinent language of § 10-102(f) requires that
[w]ithin 15 days after the contract is signed by both the vendor and the purchaser, the vendor shall cause the contract to be recorded ... and shall mail the recorder's [receipt] to the purchaser.... Failure to do so or to record as required under this section within the time stipulated, gives the purchaser the unconditional right to cancel the contract and receive immediate refund of all payments and deposits made on account of or in contemplation of the contract.
The court granted summary judgment solely on the failure to record the contract within the fifteen days. We limit our review to that issue.
The plain language of the statute provides that the vendor "shall cause" the recordation. Failure to do so as required by the section gives the purchaser the "unconditional" right to cancellation and reimbursement of all monies paid under the contract. "[O]rdinarily the word 'shall', unless the context within which it is used indicates otherwise, is mandatory when used in a statute, and thus denotes an imperative obligation inconsistent with the idea of discretion." Bright v. Unsat. C. & J. Fund Bd., 275 Md. 165, 169, 338 A.2d 248 (1975) and cases therein cited. In Bright, the Court of Appeals considered whether the term "shall", as used in MD.ANN.CODE art. 66 1/2, § 154(a)(4) (1957, 1967 Repl.Vol.), was mandatory or merely directory. The statute under analysis in Bright, art. 66 1/2 Section 154(a)(4), provided in pertinent part:
The person also shall notify the [Unsatisfied Claim and Judgment Fund] Board of any action thereafter instituted for the enforcement of the claim within 15 days after the institution thereof, and the notice shall be accompanied by a copy of the complaint.
In analyzing the statute the Court of Appeals found no reason why the usual and...
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