Jason v. Nat'l Loan Recoveries, LLC.

• Decision Date: 01 April 2016
• Docket Number: No. 284, Sept. Term, 2014.,284, Sept. Term, 2014.
• Citation: 227 Md.App. 516,134 A.3d 421
• Parties: Rashad Ahmad JASON v. NATIONAL LOAN RECOVERIES, LLC.
• Court: Court of Special Appeals of Maryland

227 Md.App. 516

134 A.3d 421

Rashad Ahmad JASON

v.NATIONAL LOAN RECOVERIES, LLC.

No. 284, Sept. Term, 2014.

Court of Special Appeals of Maryland.

April 1, 2016.

Scott C. Borison (Legg Law Firm, LLC, San Mateo, CA and Phillip R. Robinson, Consumer Law Center, LLC, Silver Spring, MD), on the brief, for Appellant.

Brian L. Moffet (Zachary S. Schultz, Gordon, Feinblatt, LLC, on the brief), Baltimore, MD, for Appellee.

Panel: MEREDITH, GRAEFF, and FRIEDMAN, JJ.

ON MOTION FOR RECONSIDERATION

MEREDITH, J.

This appeal flows from a suit for damages and declaratory relief filed in the Circuit Court for Baltimore City by Rashad Ahmad Jason ("Jason"), appellant, against National Loan Recoveries, LLC ("National Loan"), appellee.¹ Appellee moved to dismiss the complaint as time barred, and the circuit court granted that motion. Jason appealed.

QUESTIONS PRESENTED

The "Questions Presented" in Jason's brief were framed as follows:

1. Did the Circuit Court err in holding that the Plaintiff's claims for declaratory relief were untimely when they sought a declaration that outstanding judgments obtained by Defendant were void?

2. Did the Circuit Court err in granting a Motion to Dismiss the Plaintiff's declaratory judgment claims without entering a declaratory judgment?

3. Did the Circuit Court err in applying the three year limitation to Plaintiff's claims for unjust enrichment relating to judgments obtained by the Defendant?

4. Did the Circuit Court err in determining that the Plaintiff's claims under the [Maryland Consumer Debt Collection Act] were time barred?

We answer "yes" to question 1, which obviates the need for us to address question 2. In response to question 3, we conclude that a claim of unjust enrichment is subject to the three-year statute of limitations, but, because the record was not clear as to the date of National Loan's alleged enrichment, the circuit court erred in granting the motion to dismiss on that count. We answer "no" to question 4. We will affirm in part and reverse in part, and we will remand the case for further proceedings.

PROCEDURAL AND FACTUAL BACKGROUND

In late 2008, National Loan, a "debt buyer," purchased Jason's credit card debt, as to which Jason was then in default. On January 29, 2009, National Loan filed a lawsuit against Jason in the District Court of Maryland for Baltimore City to collect that debt. At the time it filed suit against Jason, National Loan did not have a license to act as a debt collection agency in Maryland, and did not obtain a license in Maryland until September 10, 2010. The standing of National Loan to pursue collection of Jason's debt was apparently never challenged in the District Court. On March 31, 2009, the District Court entered a judgment in favor of National Loan in the amount of $1,323.39 plus $60.00 in costs and $1,051.65 for pre-judgment interest, based upon an affidavit filed by National Loan. Notice of the judgment was mailed to Jason on March 31, 2009.

On April 16, 2009, the District Court issued a writ of garnishment that was served upon Jason's bank. Jason moved to dismiss the garnishment on April 30, 2009, but assets sufficient to satisfy the judgment were paid through garnishment on a date that does not appear in the record. On December 13, 2011, the District Court clerk made a docket entry confirming that the judgment against Jason had been satisfied.

On July 30, 2013, Jason filed a complaint captioned "CLASS ACTION COMPLAINT" in the Circuit Court for Baltimore City, seeking relief for actions taken by National Loan in Maryland prior to the date it became licensed as a debt collection agency on September 10, 2010. Although Jason was the sole plaintiff identified by name in the complaint, he claimed that he was filing the suit "On his Behalf and on Behalf of a Class of Persons Similarly Situated." He alleged in the complaint that, if the court certified the case to proceed as a class action pursuant to Maryland Rule 2–231, the proposed class would include "those persons sued by National Loan in Maryland state courts from October 30, 2007 through September 9, 2010 for whom National Loan obtained a judgment for an alleged debt, interest or costs, including attorney's fees in its favor in an attempt to collect a consumer debt." The circuit court never acted on Jason's request to certify his case to proceed as a class action.²

The complaint included five counts. In Count I, the complaint asserted that National Loan "is not entitled to any interest from the Plaintiff Class Members on the purported debts since it was acting unlawfully as an unlicensed collection agency." The relief requested in this count included a declaration that National Loan was not entitled to interest on any judgment "obtained illegally," and an injunction ordering National Loan "to disgorge all interest amounts collected from Plaintiff Class Members" based upon judgments that had been obtained while National Loan had acted as a collection agency without a Maryland license. Count II was similar to Count I, but sought relief relative to any costs and attorney's fees National Loan had obtained as a result of judgments entered against Plaintiff Class Members during the time National Loan had acted as a collection agency without a Maryland license.

Count III sought a declaration that National Loan "did not have legal standing to obtain any judgment in Maryland Courts against [Jason] and Plaintiff Class Members," as well as a declaration that the judgments it did obtain prior to being licensed were "void and unenforceable." In addition to the request for declaratory relief, Count III included a request for injunctive relief requiring National Loan to "disgorge all judgment amounts" it had collected as a result of acting as an unlicensed collection agency.

Count IV alleged that National Loan had been unjustly enriched by the "acceptance and retention" of any sums it had received as a result of its actions to enforce void judgments. This count included a claim for a money judgment and attorney's fees.

Count V asserted that the actions National Loan had taken to collect debts in Maryland before being licensed to do so constituted violations of Maryland Code (1975, 2005 Repl.Vol.), Commercial Law Article ("Comm.Law"), § 14–201 et seq. (also known as the Maryland Consumer Debt Collection Act), and Comm. Law § 13–101 et seq. (the Maryland Consumer Protection Act). Under the Consumer Protection Act, Comm. Law § 13–301(14)(iii), "[u]nfair or deceptive trade practices include any ... [v]iolation of a provision of ... the Maryland Consumer Debt Collection Act." Count V requested a money judgment for the violations of the Maryland Consumer Debt Collection Act, and attorney's fees and litigation expenses pursuant to Comm. Law § 13–408.

National Loan moved to dismiss the suit for failure to state a claim, arguing that Jason's complaint was filed after the three-year statute of limitations had expired. Suit was filed on July 30, 2013, and National Loan argued that all of the events that Jason complained of occurred more than three years before his complaint was filed. National Loan urged the court to find that Jason's claims were therefore barred by the statute of limitations generally applicable to civil actions in Maryland. See Maryland Code (1973, 2013 Repl.Vol.), Courts and Judicial Proceedings Article ("CJP"), § 5–101.³

Following a hearing, the circuit court concluded that Jason's claims all arose from conduct that occurred more than three years prior to the time he filed suit, and the court granted National Loan's motion to dismiss based upon the statute of limitations. Jason filed this timely appeal.

DISCUSSION

I. Claims for declaratory relief.

Appellant's first two questions relate to the claims for declaratory relief. In Counts I, II, and III, Jason asserted that the judgment entered against him on March 31, 2009, was void because National Loan was not licensed as a debt collector in Maryland as of the date of the judgment. In Finch v. LVNV Funding, LLC, [hereinafter "Finch "], 212 Md.App. 748, 758, 71 A.3d 193, cert. denied, 435 Md. 266, 77 A.3d 1084 (2013), we observed that "Maryland law requires a debt collector to obtain a license." We further noted that "[a] Consumer Debt Purchaser that collects consumer claims through civil litigation is a ‘collection agency’ under Maryland law and required to be licensed as such." 212 Md.App. at 758, 71 A.3d 193 (quoting Md. State Collection Agency Licensing Bd. Advisory Notice 05–10, May 5, 2010). We held that "a judgment entered in favor of an unlicensed debt collector constitutes a void judgment as a matter of law." 212 Md.App. at 764, 71 A.3d 193. We explained: "Much like a complaint filed by a non-lawyer, ‘a complaint filed by an unregistered collection agency is [ ] a nullity, and any judgment entered on such a complaint is void.’ " 212 Md.App. at 761, 71 A.3d 193 (quoting LVNV Funding, LLC v. Trice, 352 Ill.Dec. 6, 952 N.E.2d 1232, 1236 (Ill.App.2011) ).

National Loan does not dispute that it was unlicensed in Maryland at the time it filed suit and obtained its judgment against Jason (although it argued in the circuit court that it did not need to be licensed at the time it pursued the collection suit against Jason because it was acting on its own behalf). Considering the allegations in the complaint in the light most favorable to the plaintiff, we shall assume for purposes of this appeal (without deciding) that National Loan's judgment against Jason was a void judgment under our holding in Finch.

Pointing to language in Finch and cases cited therein, Jason asserts that a void judgment may be attacked through collateral proceedings "at any time." 212 Md.App. at 765, 768, and 769, 71 A.3d 193. Based on such statements in Finch and other cases, Jason contends that there is no statute of limitations that limited the period of time during which he could assert that the judgment National Loan obtained against him is void.

National Loan does not dispute that void...