Chavis v. Blibaum Assocs., P.A.

246 Md.App. 517

230 A.3d 188

Larry S. CHAVIS, et al.

v.BLIBAUM ASSOCIATES, P.A.

Bryione K. Moore, et al.

v.Peak Management LLC

No. 334, 528, Sept. Term, 2019

Court of Special Appeals of Maryland.

July 2, 2020

Argued by: E. David Hoskins (Law Office of E. David Hoskins, LLC, on the brief), Baltimore, MD.

Argued by: James E. Dickerman (Bradford F. Kirby, Eccleston and Wolfe, PC, on the brief), Hanover, MD

Berger, Arthur, Gould, JJ.

Berger, J.

This appeal arises out of two consolidated cases from the Circuit Court for Baltimore City and the Circuit Court for Baltimore County involving the collection activities of two judgment creditors. Appellants are residential tenants who defaulted on their leases with their landlord, Appellee, Peak Management LLC ("Peak"). Peak hired Blibaum & Associates ("Blibaum"), Appellee, which sought to collect on the judgments entered against the tenants.¹ Appellants challenged the debt collection activities of Peak and Blibaum in separate actions in Baltimore City and Baltimore County. Appellants sought damages for violations of the Maryland Consumer Debt Collection Act ("MCDCA"), the Maryland Consumer Protection Act ("MCPA"), as well as declaratory and injunctive relief.

On appeal, Appellants present the following issues for review, which we rephrase in accordance with the consolidation of the two cases:

I. Whether the circuit court erred when it dismissed Appellants' claims under the Maryland Consumer Debt Collection Act.

II. Whether the circuit court erred when it dismissed Appellants' claims under the Maryland Consumer Protection Act.

III. Whether the 2018 Amendments to the Maryland Consumer Debt Collection Act apply retroactively.

IV. Whether the circuit court erred when it denied Appellants' Second Motion for Class Certification.

V. Whether the circuit court erred when it denied Appellants' request for attorney's fees pursuant to the Maryland Consumer Protection Act.

For the reasons explained herein, we hold that neither the Circuit Court for Baltimore City nor the Circuit Court for Baltimore County erred in dismissing Appellants' MCDCA or MCPA claims. Additionally, the Circuit Court for Baltimore City did not err in finding that the 2018 Amendments to the MCDCA did not apply retroactively. In light of our holding that Appellees did not violate the MCDCA or the MCPA, we need not address whether the Circuit Court for Baltimore County erred in denying Appellants' request for attorney's fees.

FACTS AND PROCEEDINGS

Although we have consolidated both appeals into one opinion, we shall outline the procedural history of both cases separately. Tenants Bryione Moore, Albert Grantham, Patricia Grantham, Sharone Crowell, and Larry S. Chavis defaulted on their residential leases with Peak. Peak hired Blibaum to obtain judgments against the tenants for damages caused by the breaches of their leases. Blibaum obtained judgments against the tenants, which they failed to satisfy. Blibaum, therefore, initiated collection activities against the tenants, which included filing and obtaining writs of garnishments. Blibaum sought to collect the fee that it incurred for filing the writs of garnishment, as well as post-judgment interest in the amount of 10%. Chavis and Grantham satisfied the judgments obtained against them in full. Moore and Crowell did not satisfy the judgments entered against them.

The tenants filed a lawsuit against Peak Management in the Circuit Court for Baltimore City, seeking damages for the debt collection activities by Peak. In their First Amended Class Action Complaint, which was filed on March 24, 2017, the tenants sought declaratory and injunctive relief, damages for violations of the MCDCA, Md. Code (1975, 2013 Repl. Vol.), § 14-202(8), of the Commercial Law Article ("CL"), damages and attorney's fees for violations of the Maryland Consumer Protection Act ("MCPA"), CL § 13-301 et. seq., as well as restitution in the amount of the overpayments made to Peak. The tenants' primary contention was that Blibaum's utilization of a 10% post-judgment interest rate was contrary to Maryland law, which authorizes a post-judgment interest rate of 6% for the collection of rent of residential premises.

On April 19, 2017, the Honorable Barry Williams dismissed both the MCDCA and the MCPA counts against Peak. Thereafter, the tenants filed a Fourth Amended Complaint on May 1, 2018, which added claims for permanent injunctive relief, a new MCPA claim based on CL § 13-303(1) and a claim, pursuant to CL § 15-605, that Peak was not entitled to collect a fee in order to file a writ of garnishment. Following a motion to dismiss filed by Peak, the new claims under the MCPA and CL § 15-605 were dismissed by the Honorable Michael DiPietro. Judge DiPietro additionally denied the tenants' request for the entry of a declaratory judgment, permanent injunction, and an order for restitution.

The tenants filed their first Motion for Class Certification on May 14, 2018. The only remaining count at that time was an action for unjust enrichment. Following a hearing, the Honorable Videtta A. Brown denied the motion on September 10, 2018. In an effort to resolve the concerns expressed by the court when it denied the first motion, the tenants subsequently filed a Second Motion for Class Certification that included the deposition testimony of Gary Blibaum. The circuit court denied the second motion for class certification without a hearing on February 6, 2019. Both Peak and the tenants filed cross-motions for summary judgment, which were considered by the Honorable Julie R. Rubin. The circuit court granted judgment in favor of Peak with respect to Moore and Crowell's unjust enrichment claims. The court further entered judgment in favor of Albert Grantham, Patricia Grantham, and Larry S. Chavis with respect to their claims of restitution. The judgments were entered on May 3, 2019 and this timely appeal was filed on May 7, 2019.

The second of these consolidated cases involves the following undisputed facts. Tenants Larry S. Chavis, Patricia Grantham, Laronda T. Green, and Cassandra J. Reid defaulted on their residential leases with Peak. Blibaum was retained by Peak to file claims against the tenants for breach of contract, seeking damages caused by the breaches. Blibaum obtained judgments against the tenants, on behalf of Peak, which included a 10% pre-judgment interest rate. When the tenants failed to satisfy the judgments entered against them, Blibaum began to garnish their wages. Blibaum utilized a 10% post-judgment interest rate when calculating the amount the tenants owed on the judgments.

On October 22, 2018, the tenants filed a Complaint against Blibaum in the Circuit Court for Baltimore County, similarly alleging violations of the MCDCA and requesting attorney's fees pursuant to the MCPA. Blibaum filed a motion to dismiss the complaint and requested a hearing. While the motion was pending, the tenants filed their First Amended Class Action Complaint on January 4, 2019. Blibaum filed a motion to dismiss the First Amended Class Action Complaint and requested a hearing. Following a hearing on the motion to dismiss, the Honorable Paul J. Hanley granted Blibaum's motion to dismiss the complaint in its entirety in an order dated April 11, 2019.

The core of Appellants' arguments on appeal is based on Appellees charging the incorrect post-judgment rate pursuant to Md. Code (1974, 2013 Repl. Vol.), § 11–107, of the Courts and Judicial Proceedings Article ("CJ"). Three related cases are currently pending in Federal Court and are relevant to this issue on appeal. See Amber Ben-Davies v. Blibaum & Associates P.A. , CCB-16-2783 (D. Md. 2019); Bryione K. More v. Blibaum & Associates, P.A. , CCB-16-3546 (D. Md. 2019); Larry Chavis v. Blibaum & Associates, P.A. , CCB-17-2220 (D. Md. 2019). The U.S. District Court for the District of Maryland certified the following question to the Maryland Court of Appeals regarding the proper post-judgment interest rate:

Is the legal rate of post-judgment interest on a judgment awarded in a breach of contract action where the underlying contract is a residential lease ten percent (10%)[,] as stated in [CJ] § 11–107(a) [,] or is it six percent (6%)[,] as stated in [CJ] § 11–107(b), which states that it is applicable to ‘a money judgment for rent of residential premises,’ where the judgment in the breach of contract action does not specifically delineate what portion, if any, of the judgment was awarded for unpaid rent?

Ben-Davies v. Blibaum & Assocs., P.A. , 457 Md. 228, 232–33, 177 A.3d 681 (2018). The Court of Appeals explained that "under Md. Code Ann., Cts. & Jud. Proc. (1974, 2013 Repl. Vol.) ("CJ") § 11–107, different post-judgment interest rates apply to different types of judgments." Id. at 231, 177 A.3d 681. Moreover, "[g]enerally, under CJ § 11–107(a), except as provided otherwise, a post-judgment interest rate of 10% applies to all judgments. Meanwhile, under CJ § 11–107(b), a post-judgment interest rate of 6% applies to ‘money judgment[s] for rent of residential premises[.]’ " Id . Blibaum and Peak argued that "the plain language of CJ § 11–107(b) demonstrates that it does not apply to judgments in actions for breach of contract, even if the damages include rental payments under a lease." Id. at 244, 177 A.3d 681. The Court of Appeals agreed with the Tenants' reading of CJ § 11-107(b) and held the following:

Here, we conclude that, where a landlord sues a tenant for breach of contract based on a residential lease, and the trial court enters judgment in the landlord's favor against the tenant and the judgment includes amounts for unpaid rent and other expenses, a post-judgment interest rate of 6% applies to the judgment pursuant to CJ § 11–107(b).

Id. at 265, 177 A.3d 681.

We shall add additional facts as they become relevant to the issues on appeal.

I. MCDCA Claims.

Appellants allege that Blibaum and Peak violated the MCDCA, CL § 14-202(8), for their collection of two "unauthorized charges." Fir...