Jewell v. Md. Real Estate Comm'n, 2603

Decision Date02 April 2021
Docket NumberNo. 2603,2603
PartiesJERRY JEWELL v. MARYLAND REAL ESTATE COMMISSION
CourtCourt of Special Appeals of Maryland

Circuit Court for Montgomery County

Case No. 465771V

UNREPORTED

Graeff, Arthur, Shaw Geter, JJ.

Opinion by Graeff, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

In August 2017, Christopher and Nkese Miller (the "Millers") filed a Complaint and Guaranty Fund Claim with the Maryland Real Estate Commission (the "Commission"), appellee, against appellant, Jerry Jewell, the listing agent for their recently purchased home. The Millers alleged that the listing stated that the house was "newly renovated," but the house was "falling apart," and Mr. Jewell did not fix items on "the inspection list." The Commission issued an order for a hearing before the Office of Administrative Hearings ("OAH"), stating that the Millers had the burden to show that any loss was sustained as a result of, among other things, fraud or misrepresentation by Mr. Jewell. After the hearing, an Administrative Law Judge ("ALJ") submitted a proposed order recommending a compensation award of $27,636 to the Millers. The Commission agreed, and the circuit court subsequently affirmed.

On appeal, appellant presents the following question for this Court's review, which we have rephrased slightly, as follows:

Did the circuit court err in upholding the ruling of the Commission finding Mr. Jewell liable for actual loss sustained by the Millers as a result of an act or omission that constitutes fraud or misrepresentation in the provision of real estate sales services?

For the reasons set forth below, we shall reverse the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND
I.Factual History

In 2017, Mr. Jewell, a licensed real estate agent working for RealtyForce, Inc., listed for sale a "newly renovated" property in Capitol Heights, Maryland (the "Property"). The Millers, represented by another real estate agent, made an offer to purchase the Property and began the process of securing financing and closing on the home.

At the time of the listing, the Property was owned by RedShift, LLC, a real estate company that purchases homes for the purpose of renovating and reselling them. Mr. Jewell held a minority interest in RedShift, LLC, and in addition to his role as the listing agent, he also had a partial equity interest in the Property. Mr. Jewell introduced himself to the Millers as the owner, seller, and listing agent of the Property.

The Millers received a Federal Housing Administration ("FHA") loan, which required an inspection and an appraisal. Mrs. Miller stated that she was unclear how the house passed the FHA inspection given the outstanding issues, but she knew that it did because they could not have received the loan otherwise. The Millers never received the signed FHA inspection report.1 They ultimately received a loan following the appraisal. The Millers also retained a third-party inspection company to conduct an independent inspection of the home.

The third-party inspection report, which was admitted into evidence, listed numerous items to replace or repair. An addendum to the contract was drafted, and it contained a list of items to be repaired by the seller, as follows:

1.0 Roof shingles on the rear, left side, on drop edge thats [sic] broken, left and right rear dormer, all need to be repaired or replaced with a licensed contractor.
1.1 Repair or replace raising flashing around the chimney and rear roof with a licensed contractor.
1.2 [R]eplace missing chimney cap on roof with a licensed contractor.
1.4 [R]epair downspouts, the missing one and the rear right side of the house, and missing one in the rear with a licensed contractor.
2.0 Wall cladding flashing and trim; Seal wall hole around suction line and seal located at the rear of the house with a licensed contractor.
2.3 [S]ecure hand railing at rear of house. Extend concrete patio to help with water run off in rear of the house with licensed contractor[.]
3.5 [R]epair cabinet top hinge left of range in kitchen. [S]ecure bottom screws in cabinet above range.
3.8 [M]issing cover switch missing on outlet right side of the sink in kitchen. [O]ut1et left of sink needs to be GFCI if 6 feet or less from sink. Electric outlet cover plate is missing. [L]eft range of kitchen.
3.9 [S]ecure dishwasher, connect power, and drain hose, in kitchen with lic. contractor[.]
3.14 [R]eplace missing microwave with licensed contractor[.]
3.16 [I]nstall refrigerator water line with a licensed contractor[.]
4.6 [B]ring ceiling light in living room to working order with a licensed contractor.
4.1D [W]ater stain in top floor bedroom. [R]epair and fix problem from stain and repair damage with a licensed contractor.

* * *

4.4D Repair entry door at lower level bedroom. repair latch at entry door bathroom lower level #1. Repair lower level entry door in lower bedroom #2 with a licensed contractor.
4.5D [R]epair window broken glass in basement window with a licensed contractor.
4.6D repair ceiling light lower bedroom #1, repair ceiling light in bedroom #2 with a licensed electrician.
4.3E [H]and railing missing on second level stairways with a licensed contractor[.]
4. 6E Electrical switch cover is missing in first level hallway.
4. 3F Extend handrailing to the []top of the stairway at lower level with a contractor licensed[.]
4.5F Window does not close to the right of the fireplace (lower level)
4.6F [Four] electrical outlet cover plates are missing in utility area in lower level, electrical switch missing in lower level. electrical missing switch left of rear entry at lower level with a licensed electrician.
5.2A Window lock handle is broken at second level bath. repair or replace.
5.4A Shower head missing in second level hall bath.
5.5A Electrical GFCI outlet cover plate is missing in second level hall bath.
5.4B Tub spout and diverter needs to be caulked at buddy bath. [S]ecure tub diverter handle, replace shower head.
5.5B Cei[l]ing like [sic] is missing and wire splice is exposed and not in box in buddy bath. Repair o[r] replace.
5.5C GFCI is needed in outlet in first bathroom.
5.6C No ventilation in first level bathroom with using license contractor
5.4D Sink leaks at lower level bath[.]
5.5D GFCI outlet is needed in lower level bathroom[.]
7.2 [W]ater heater romex connector is not secure in lower level. [R]epair or replace T&P valve-on water heater needs a 3/4 threaded pipe to extend within 6 inches from floor missing at lower level. NO PVC[.]

* * *

8.1 Electric panel earth ground is missing at lower level[.]
8.3 [E]lectrical wire is exposed and not in box with a cover plate in the kitchen.
8.7 [S]moke detector does not work at lower level.
9.3 Second level hallway, second level bedroom wall register cover is missing, floor register cover is broken in first level bedroom, missing ceiling register cover missing at lower level. HVAC filter missing, and filter door is missing at lower level. H[VAC] return duct has a hole and should be sealed, repair or replace.
9.5 Chimney needs to be cleaned and brought up to working order.
9.8 Heat pump air compressor power wires in the green fields are not in the connector at rear of house. Bring compressor up to working order.
A. Back yard is in need of grading to allow proper water run off and even flow throughout the back yard.
B. Concrete driveway to be installed on property.
C. Fence is to be installed in back yard portion of the property as agreed previously with diagram. (Not in front yard)

The copy of the addendum introduced into evidence did not include a response from the seller, and it was unsigned.

The Millers testified that Mr. Jewell told them that he would complete all of the repairs listed in the addendum prior to closing. Mrs. Miller testified that Mr. Jewell told them over the phone that he would fix all the items on the list, including the roof. Mr. Miller stated that Mr. Jewell said that he would sign the document and send it to the Millers' agent, but they never received a signed copy.

Prior to closing, the Millers conducted a walk-through of the Property with their real estate agent. They checked whether the repairs listed on the inspection report and addendum had been completed, but some of the key items were not visible or accessible at that time. Their agent did not raise any concerns about moving to closing after the walk-through.

On June 26, 2017, the Millers closed on the Property. Immediately after moving in, they discovered that many of the promised repairs had not been done, and there were numerous outstanding issues with the house. On July 3, 2017, Mr. Miller sent an e-mail to their realtor stating that the sump pump, dishwasher, HVAC, duct system, and certain light switches did not work.

The Millers subsequently identified additional problems, including kitchen tiling that cracked, plumbing issues and clogged sewer lines, an improperly sealed toilet that leaked and caused water damage to the ceiling below, numerous electrical problems and unsecured lighting fixtures, broken windows and doors, loose railings, a leaky roof, and an improperly installed built-in microwave that fell and revealed exposed wiring. There also was severe flooding in the basement, including one time that the basement flooded with human waste.

The Millers were told that most of these problems were not covered by their home warranty. The warranty did, however, cover the costs to fix the HVAC and the dishwasher and to clear the basement water line. They paid a $100 deductible on July 12, 2017, to fix the HVAC and the dishwasher, and another $100 on August 3, 2017, to clear out the "main line" from the basement. On July 6, 2018, the Millers signed a contract with Long Roofing to replace the roof for $27,936.2

II.Proceedings Leading to Appeal
A.Complaint

On August 13, 2017, the...

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