Vulcan Waterproofers, Inc. v. Maryland Home Imp. Commission
Decision Date | 09 April 1969 |
Docket Number | No. 326,326 |
Citation | 253 Md. 204,252 A.2d 62 |
Parties | VULCAN WATERPROOFERS, INC. v. MARYLAND HOME IMPROVEMENT COMMISSION. |
Court | Maryland Court of Appeals |
Arnold Fleischmann and Allan H. Fisher, Jr., Baltimore (Fisher & Fleischmann, Baltimore, on the brief), for appellant.
Henry R. Lord, Asst. Atty. Gen. (Francis B. Burch, Atty. Gen., and George W. Liebmann, Asst. Atty. Gen., Baltimore, on the brief), for appellee.
Before HAMMOND, C. J., and MARBURY, BARNES, SINGLEY and SMITH, JJ.
Appellant (Vulcan) is a home improvement contractor within the meaning of Code (1968 Repl.Vol.) Art. 56, §§ 245 to 269, inclusive. Vulcan here appeals the action of the Circuit Court of Baltimore City in granting Maryland Home Improvement Commission (established under the aforegoing sections of the Code) the right to inspect Vulcan's records. We shall remand for further proceedings.
The Maryland Home Improvement Commission (Commission) was established by Chapter 133 of the Acts of 1962. Section 257(g) of Art. 56 Chapter 827 of the Acts of 1963 provides:
'Requiring supplementary or additional information.-The Commission may, at any time, require reasonable information of an applicant or licensee, and may require the production of books of accounts, financial statements, or other records which relate to the home-improvement activity, or qualification, or compliance with this subtitle, whether such information or records are supplementary or additional to the contents of license applications or otherwise.'
On October 24, 1966, the Commission addressed the following letter to vulcan:
'Pursuant to the authority granted the Maryland Home Improvement Commission by section 257(g) of Article 56 of the Annotated Code of Maryland (Home Improvement Law) the Maryland Home Improvement Commission directs that you provide an investigator from this Commission with the names and addresses of homeowners for whom you have had to provide service due to the fact that your Vulcan Waterproofers' method did not work, after the first application.
'The Commission is desirous of having the names and addresses of these homeowners for whom service had to be performed during the period from July 1, 1966 to the present.
'This information should be provided the investigator upon presentation of this letter to you.'
Counsel for Vulcan replied in pertinent part as follows:
'Due to the fact that this could cause substantial inconvenience to my client and possibly jeopardize its standing in the community as a reputable waterproofing concern I have advised my client that this information not be made available to you without the opportunity of a full hearing by your Board.
'I do not think that this is unreasonable on our part and request that if you have any questions concerning the same that you contact me.'
The reply of counsel brought about a registered letter from the Commission under date of November 4 directing that Vulcan supply to the Commission the records of all waterproofing work performed by Vulcan for home owners within the State of Maryland in the period July 1, 1966, to November 4, 1966, including the names and addresses of the home owners. Vulcan was advised that if it did not comply with the directive by noon on November 9 the Commission would 'have no alternative but to institute action against (its) license for violation of Section 261(a)(14) of Art. 56 of the Annotated Code of Maryland.' Section 261(a)(14) lists as a prohibited act 'willful failure to comply with any order, demand or requirement lawfully made by the Commission under and within the authority of this subtitle.' Section 261(b) by referring to Section 259 provides for suspension or revocation of license for violation of any of the prohibitions of Section 261.
Section 260(d) of Art. 56 provides in pertinent part:
Without waiting for action by the Commission under Section 260(d), Vulcan filed its bill of complaint on November 9, 1966, in the Circuit Court of Baltimore City. After various preliminary recitations it stated:
Vulcan prayed that the court temporarily and permanently enjoin the Commission, 'from acting upon, and forcing (sic) or carrying out the order contained in its letter dated November 4, 1966' and that it, 'Determine that said order is arbitrary, malicious, unreasonable and without any legality.'
A demurrer filed by the Commission was overruled. An answer was then filed and the matter came on for hearing on June 15, 1967. Melvin Waxman, president of Vulcan, testified as did John C. Coolahan, the former executive director of the Commission, who was called as a witness by Vulcan. The hearing was recessed for lunch and never resumed, apparently because the parties decided to attempt to work out a settlement. On December 8, 1967, the Assistant Attorney General advised counsel for Vulcan that the matter could not be further delayed and that unless he received a copy of a proposed order by December 11 and unless they could conclude an agreement by the afternoon of December 12, he would be obliged to ask the court to re-schedule the matter for trial. On December 15 he wrote to the chancellor requesting that the case be re-scheduled and the trial continued. There was no further hearing.
On August 19, 1968, the chancellor passed an order holding the order previously issued by the Commission to be a lawful order and directing the procedures under which the desired inspections might take place. On August 28 Vulcan submitted a motion to rescind or suspend the order followed by a motion on September 18 to vacate the order of August 19. The chancellor on September 18 modified the August 19 order by providing:
'All files examined by the Commission representatives, all notes taken by Commission representatives, and all items removed from said files by (Vulcan) or as to which a claim of trade secret has been or is asserted shall be submitted by (Vulcan) to this court under seal by September 27, 1968.'
Pursuant to motion for a statement for the grounds of his order made under Maryland Rule 18 c, the chancellor said
* * *
'The Court is of the opinion that the authority for its decision is to be found in Article 56, Section 257(g), Annotated Code of Maryland, 1957 Edition * * *.
The questions here presented to us are: (1) whether the Commission's order was a proper one, (2) whether it is necessary for there to be probable cause before the Commission proceeds with an investigation, (3) whether the Circuit Court of Baltimore City might pass an order granting the Commission the right to inspect Vulcan's records when the Commission had not requested such an order and Code (1968 Repl.Vol.) Art. 56, § 260(d) vests the Baltimore City Court with the jurisdiction to enforce orders of the Commission and the duty of compelling obedience to the requirements of such orders, and (4) whether the action of the chancellor was improper in that the hearing was not concluded.
In United States v. Morton Salt Company, 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950) the Supreme Court of the United States speaking through Mr. Justice Jackson said:
'This case illustrates the difference between the judicial function and the function the (Federal Trade) Commission is attempting to perform. * * *
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