Williams v. Ewrit Filings, LLC
| Decision Date | 26 January 2022 |
| Docket Number | 206, Sept. Term, 2021 |
| Citation | 253 Md.App. 545,268 A.3d 960 |
| Parties | Leslie WILLIAMS v. EWRIT FILINGS, LLC |
| Court | Court of Special Appeals of Maryland |
Argued by: Emanwel J. Turnbull (Peter A. Holland, The Holland Law Firm, PC, Annapolis, MD, Scott C. Borison, Borison Firm LLC, Baltimore, MD) on the brief, for Appellant.
Argued by: Jonathan A. Singer (Michael E. Blumenfeld, Timothy M. Hurley, Nelson, Mullins, Riley & Scarborough, LLP, Baltimore, MD) on the brief, for Appellee.
Panel: Reed, Beachley, Robert A. Zarnoch (Senior Judge, Specially Assigned), JJ.*
From November 2017 through September 2018, appellee eWrit Filings, LLC ("eWrit") filed nine Failure to Pay Rent ("FTPR") actions against appellant Leslie Williams. On August 26, 2020, Ms. Williams, as lead plaintiff, filed a class action complaint against eWrit in the Circuit Court for Anne Arundel County, alleging that eWrit unlawfully acted as a debt collector by filing the FTPR actions without having first obtained a debt collection license as required by Maryland law. eWrit moved to dismiss the complaint, and the circuit court denied eWrit's motion. eWrit then filed a motion for reconsideration, which Ms. Williams opposed. Following a hearing, the court granted eWrit's motion and dismissed the complaint. Ms. Williams timely appealed and presents four questions for our review, which we have consolidated into one:
Was eWrit required to have a debt collection license in order to lawfully file FTPR actions? Based on our interpretation of the relevant statutes, we hold that eWrit was required to have a debt collection license to file FTPR actions and, accordingly, the circuit court erred in dismissing Ms. Williams's complaint.
According to Ms. Williams's complaint, on October 19, 2017, she executed a written lease to rent an apartment in Glen Burnie, Maryland. A company called Morgan Properties managed that property. Because Ms. Williams failed to fully pay her rent on time, Morgan Properties apparently hired eWrit to file FTPR actions against her. eWrit filed these FTPR actions pursuant to Real Property Article ("RP") § 8-401,2 which allows a landlord to initiate eviction proceedings against a tenant who is late on her rent. Specifically, eWrit filed FTPR actions against Ms. Williams for late rental payments on November 7, 2017; December 8, 2017; January 9, 2018; February 8, 2018; May 9, 2018; June 8, 2018; July 10, 2018; August 8, 2018; and September 7, 2018.
The Maryland Collection Agency Licensing Act ("MCALA") requires a debt collection agency to first obtain a license before performing debt collection activity within the State. Md. Code , § 7-301 of the Business Regulation Article ("BR").3 eWrit did not obtain its license, however, until April 3, 2018, meaning that it filed four FTPR actions against Ms. Williams while not licensed as a collection agency.4 Accordingly, Ms. Williams averred that eWrit's FTPR actions filed on November 7, 2017; December 8, 2017; January 9, 2018; and February 8, 2018 were illegal, and that the corresponding judgments eWrit obtained against her were therefore unenforceable.
Pursuant to her interpretation of eWrit's conduct—that filing FTPR actions constitutes debt collection activity—Ms. Williams, as the lead plaintiff in a class action lawsuit, filed a four-count complaint against eWrit. The first count alleged that eWrit violated the Maryland Consumer Debt Collection Act ("MCDCA") by performing debt collection activities without a debt collector license in violation of Md. Code , § 14-202(8) of the Commercial Law Article ("CL").5 That code section prohibits a debt collector from attempting to enforce a right "with knowledge that the right does not exist." The second count alleged that eWrit violated the Maryland Consumer Protection Act ("MCPA") by filing the FTPR actions without a debt collection license, in violation of CL § 13-301(1). That section defines "unfair, abusive, or deceptive" trade practices to include false or misleading statements or representations that have the capacity or tendency to deceive or mislead consumers. The third count requested a declaratory judgment that the judgments eWrit obtained in its FTPR actions were unenforceable.
The fourth count sought attorneys’ fees.6 Thus, all of Ms. Williams's causes of action were predicated upon her belief that eWrit was required to possess a debt collector license to legally file FTPR actions in Maryland.
On October 27, 2020, eWrit moved to dismiss and requested a hearing. In eWrit's memorandum in support of its motion to dismiss, eWrit argued, among other things, that it was not subject to the licensure requirements found in the MCALA because it did not engage in debt collection activity. Ms. Williams filed an opposition, and on November 19, 2020, the circuit court denied eWrit's motion without a hearing.
On December 2, 2020, eWrit filed a motion to reconsider and again requested a hearing. A hearing was held before a different judge than the one who originally denied eWrit's motion to dismiss. At the conclusion of the hearing, the court granted eWrit's motion and dismissed the complaint, and Ms. Williams timely appealed. We shall provide additional facts as necessary.
"Generally, the ‘standard of review of the grant or denial of a motion to dismiss is whether the trial court was legally correct.’ " Blackstone v. Sharma , 461 Md. 87, 110, 191 A.3d 1188 (2018) (quoting Davis v. Frostburg Facility Operations, LLC , 457 Md. 275, 284, 177 A.3d 709 (2018) ).
The threshold issue in this case is whether eWrit, by simply filing FTPR actions on behalf of another, performed debt collection activity and therefore functioned as a debt collection agency for purposes of the MCALA, MCDCA, and MCPA. As we shall explain, the plain language of the MCALA establishes that actions meant to collect consumer debt for others, including FTPR actions, constitute debt collection activity. Moreover, the relevant legislative history confirms our plain language interpretation. Accordingly, eWrit was required to be licensed as a debt collection agency to file the FTPR actions in this case. We therefore reverse the circuit court's grant of eWrit's motion to dismiss Ms. Williams's complaint. Before we begin our analysis, however, it behooves us to first explain the landscape regarding the MCALA, MCDCA, and MCPA.
The General Assembly enacted the MCPA in 1973 in order to "take strong protective and preventative steps to investigate unlawful consumer practices, to assist the public in obtaining relief from these practices and to prevent these practices from occurring in Maryland." Andrews & Lawrence Prof'l Servs., LLC v. Mills , 467 Md. 126, 149-50, 223 A.3d 947 (2020) (quoting CL § 13-102(b)(3) ). The MCPA "prohibits all trade practices that are unfair, abusive or deceptive in, among other things, the collection of consumer debts." Id . at 150, 223 A.3d 947 (citing CL §§ 13-301(14)(iii) ; 13-303(5)). The MCPA provides a private enforcement mechanism pursuant to CL § 13-408(a). Id .
Additionally, Maryland also has a consumer debt collection act—the MCDCA.
The MCDCA regulates any "person collecting or attempting to collect an alleged debt arising out of a consumer transaction." [CL] § 14-201(b) (defining "collector"). The MCDCA prohibits eleven categories of conduct when collecting debts, including placing harassing or abusive calls to a debtor or claiming, attempting, or threatening to enforce a right with knowledge that the right does not exist. CL §§ 14-202(6) ; (8). The MCDCA also provides that a collector may not "[e]ngage in unlicensed debt collection activity in violation of the [MCALA.]" CL § 14-202(10).
Id. at 151, 223 A.3d 947. We note that CL § 14-202 was amended on October 1, 2018, three weeks after eWrit filed its final FTPR action against Ms. Williams. That amendment added CL § 14-202(10), which, as noted, expressly prohibits a debt collector from engaging in unlicensed debt collection activity in violation of the MCALA. Nevertheless, prior to the 2018 amendment, the MCDCA still prohibited unlicensed debt collectors from pursuing debt collection actions in violation of the MCALA. See LVNV Funding LLC v. Finch , 463 Md. 586, 612, 207 A.3d 202 (2019) ().
Finally, the MCALA "requires a collection agency to be licensed by the State Collection Agency Licensing Board unless exempted by the [MCALA]." Mills , 467 Md. at 151-52, 223 A.3d 947 (citing BR §§ 7-101 ; 7-301) (footnote omitted). Because the MCALA does not provide its own mechanisms for public enforcement or a private cause of action, a consumer who is sued by an unlicensed debt collector in violation of the MCALA may bring a claim for damages pursuant to the MCDCA and the MCPA (as Ms. Williams has done here). See Finch v. LVNV Funding, LLC , 212 Md. App. 748, 763 n.10, 71 A.3d 193 (2013), abrogated on other grounds by LVNV Funding LLC v. Finch , 463 Md. 586, 607, 207 A.3d 202. A violation of the MCALA constitutes a violation of the MCDCA, LVNV Funding LLC , 463 Md. at 612, 207 A.3d 202, and a violation of the MCDCA constitutes a per se violation of the MCPA, Chavis v. Blibaum & Assocs., P.A ., 476 Md. 534, 264 A.3d 1254 (2021) (quoting CL § 13-301(14)(iii) ). Thus, if eWrit's filing of FTPR actions constitutes debt collection activity requiring licensure under the MCALA, Ms. Williams would have a viable cause of action for violations of the MCDCA and MCPA.
Against this backdrop, we note that the MCALA defines a "collection agency" as follows:
To continue reading
Request your trial