Simmons v. Maryland Management Company
| Decision Date | 04 February 2022 |
| Docket Number | 1680, Sept. Term, 2019 |
| Citation | 253 Md.App. 655,269 A.3d 369 |
| Parties | Brittany SIMMONS, et al. v. The MARYLAND MANAGEMENT COMPANY, et al. |
| Court | Court of Special Appeals of Maryland |
Argued by Scott C. Borison (Borison Firm, LLC, Baltimore, MD, Peter A. Holland, Emanwel J. Turnbull, The Holland Law Firm, PC, Annapolis, MD, Phillip P. Robinson, Silver Spring, MD), all on the brief, for Appellant.
Argued by M. Olivia Haarz (Alvin I. Frederick, Eccleston & Wolf, PC, Hanover, MD) Brian L. Moffet (Michael B. Brown, Miles & Stockbridge PC, Baltimore, MD., Anthony P. Ashton, Baxter, Baker, Sidle, Conn & Jones PA, Baltimore, MD), all on the brief, for Appellee.
Graeff, Berger, Deborah S. Eyler (Senior Judge, Specially Assigned), JJ.*
In this appeal, the appellants ("Tenants"1 ) are six people who at one time rented Maryland residential properties either owned or managed by certain of the appellees ("Landlords"2 ). The other appellees are lawyers, law firms, and the collection agency employer of one of the lawyers ("Lawyers"3 ), who sued each Tenant for back rent in the District Court of Maryland. Those lawsuits, filed in several Maryland counties, all were brought more than three years after the Tenants breached their leases. Although the limitations period for an action for back rent on a residential lease is three years, the leases governing the tenancies included a clause entitled "Statute of Limitations" that purported to apply a twelve-year limitations period to causes of action arising from them ("Statute of Limitations Clauses").
In the Circuit Court for Baltimore City, the Tenants filed a putative class action against the Landlords and the Lawyers. Various combinations of Tenants alleged that the Statute of Limitations Clauses were invalid and unenforceable and that the actions for back rent were time-barred. They further alleged that by including the Statute of Limitations Clauses in the leases and acting to enforce them, the Landlords violated Maryland Code § 8-208 of the Real Property Article ("RP"); and that by filing actions to recover time-barred debt and attempting to enforce or actually enforcing judgments they obtained, the Landlords and the Lawyers violated Maryland Code , § 5-1202(a) of the Courts and Judicial Proceedings Article ("CJP") and Maryland Code , § 14-202(8) of the Commercial Law Article ("CL"), the latter being a part of the Maryland Consumer Debt Collection Act ("MCDCA").4 On the same basis, the Tenants alleged that the Landlords violated CL §§ 13-301(14)(iii) and 13-303(5), parts of the Maryland Consumer Protection Act ("MCPA").5 The Tenants sought damages for the statutory violations. In addition, various combinations of Tenants sought declaratory and injunctive relief. Finally, the Tenants sought attorneys’ fees.
The circuit court granted motions to dismiss all claims for failure to state a claim for which relief can be granted. This appeal followed. We shall vacate the judgments and remand for further proceedings not inconsistent with this opinion.
To place the claims, the circuit court's rulings, and the parties’ contentions in context, we first shall describe the legal backdrop against which this case has played out.
"The MCDCA regulates the conduct of anyone who collects – or attempts to collect – a debt arising from a consumer transaction." Nationstar Mortgage, LLC v. Kemp , 476 Md. 149, 161, 258 A.3d 296 (2021). Under CL § 14-202(8), in "collecting or attempting to collect an alleged debt[,]" debt collectors "may not ... [c]laim, attempt, or threaten to enforce a right with knowledge that the right does not exist." The "with knowledge" element of this subsection of the MCDCA "require[s] proof that a debt collector claimed, attempted, or threatened to enforce the non-existent right ‘with actual knowledge or with reckless disregard as to the falsity of the existence of the right.’ " Chavis v. Blibaum & Assocs., P.A ., 476 Md. 534, ––––, 264 A.3d 1254 (2021) (quoting Fontell v. Hassett , 870 F. Supp. 2d 395, 407 (D. Md. 2012) (internal quotation marks and citations in Fontell omitted)). Under CL § 14-203, "[a] collector who violates any provision of [the MCDCA] is liable for any damages proximately caused by the violation, including damages for emotional distress or mental anguish suffered with or without accompanying physical injury."
Two provisions of the MCPA also apply to consumer debt collection practices. CL § 13-303(5) prohibits a person from "engag[ing] in any unfair, abusive, or deceptive trade practice ... in ... [t]he collection of consumer debts[.]" CL § 13-301(14)(iii) includes in "[u]nfair, abusive, or deceptive trade practices" any "[v]iolation of [the MCDCA]." Thus, a trade practice may violate the MCDCA and be a per se violation of the MCPA, or it may violate the MCPA independently.
Several statutes governing time periods for filing suit are relevant. Generally, civil actions are governed by a three-year statute of limitations. CJP § 5-101. The limitations period for actions that are "specialties" is twelve years, CJP § 5-102, and a "[c]ontract under seal" is a specialty. CJP § 5-102(a)(5). CJP § 5-1202, entitled "Statute of limitations applicable to consumer debt collection action[,]" states at subsection (a):
A creditor or a collector may not initiate a consumer debt collection action after the expiration of the statute of limitations applicable to the consumer debt collection action.
CJP § 5-1202 became effective on October 1, 2016.
Finally, RP § 8-208(d)(2), pertaining to residential leases, is what commonly is referred to as an "anti-waiver" provision. It prohibits a landlord from using "a lease or form of lease containing any provision that ... has the tenant agree to waive or to forego any right or remedy provided by applicable law[.]" Under subsection (g)(1) and (2) of the statute, a landlord may not enforce such a lease provision; and, if a landlord includes such a provision in a residential lease and tenders the lease to the tenant, or if a landlord attempts to enforce the provision or makes known an intent to enforce it, the tenant may recover actual damages caused thereby, including reasonable attorneys’ fees.
In Tipton v. Partner's Management Co., 364 Md. 419, 773 A.2d 488 (2001), Tipton's landlord sued him for back rent seven years after he breached the lease. Tipton raised the three-year statute of limitations in CJP § 5-101 as a defense. The landlord countered that because the word "(SEAL)" appeared next to the signature line, the lease was a "contract under seal," to which the twelve-year limitations period in CJP § 5-102(a)(5) applied. The District Court agreed with the landlord and entered judgment against Tipton.
Eventually, the case reached the Court of Appeals, which reversed. It explained that for centuries all leases executed in Maryland were required to be made under seal, "primarily to create presumptions of consideration and validity." 364 Md. at 431, 773 A.2d 488. During that same time, however, Maryland law had established that the limitations period for actions for back rent is three years. Article 57, § 1 of the Maryland Code (1957, 1972 Repl. Vol.), the immediate predecessor to CJP § 5-101, specified all forms of action subject to the three-year limitations period, including an action " ‘brought to recover rent in arrear, reserved under any form of lease[.]’ " Id . at 437, 773 A.2d 488 (emphasis omitted). And the Court of Appeals had construed Article 57, § 3, the immediate predecessor to CJP § 5-102, which, as noted, sets forth the twelve-year limitations period for specialties, as not applying to leases. Id . at 438, 773 A.2d 488 (citing Henry's Drive-In, Inc. v. Pappas , 264 Md. 422, 430, 287 A.2d 35 (1972) ).
The Court further explained that, upon codification of the Courts and Judicial Proceedings Article in 1973, CJP § 5-101 took its current form as " ‘a blanket three-year limitation covering all civil causes of action for which no other limitation is specifically provided.’ " Id. at 440, 773 A.2d 488 (). By creating CJP § 5-101, the General Assembly clearly intended "to cover the causes of action that it had been the intent of the legislature to cover with Article 57 section 1, just in a more simplistic form." Id . at 441-42, 773 A.2d 488. The following year, the requirement that all leases be made under seal was eliminated in the codification of the Real Property Article. The practice of putting the word "Seal" next to the signature lines on residential leases remained widespread as a vestige of prior times, however. Id . at 433, 773 A.2d 488.
The Tipton Court reasoned that because Maryland law before codification of the Courts and Judicial Proceedings Article applied a three-year limitations period to an action for back rent "under any form of lease" and the General Assembly did not express an intent to change that in creating CJP § 5-101, the three-year limitations period applies to actions for back rent, even for leases made under seal. Accordingly, Tipton's lease was not a specialty, even though "(SEAL)" appeared at the end of the signature line. Moreover, "[t]here was no language in the lease in respect to statutes of limitation[,]" much less any evidence that "the parties specifically agreed to a twelve-year period of limitations[.]" Id . at 423-24, 773 A.2d 488. The parties in Tipton raised the question whether applying the statute of limitations for a specialty to a residential lease would contravene the anti-waiver provision in RP § 8-208(d)(2), but the Court did not address it.
The Tipton Court set forth its "holding" three times. At the beginning of its opinion, the Court said: "We hold that a residential lease...
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