Williams v. EWrit Filings ( 2022 )

Leslie Williams v. eWrit Filings, LLC, No. 206, September Term 2021. Opinion by
Beachley, J.
MARYLAND DEBT COLLECTION LICENSURE REQUIREMENTS—DEBT
COLLECTION ACTIVITY—FAILURE TO PAY RENT ACTIONS CONSTITUTE
DEBT COLLECTION ACTIONS
In October 2017, Leslie Williams executed a lease to rent an apartment. When she
failed to fully pay her rent on time, the property manager hired eWrit to file Failure to Pay
Rent (“FTPR”) actions against her. eWrit ultimately filed nine FTPR actions against Ms.
Williams, but did not possess a collection agency license when it filed the first four FTPR
actions.
Thereafter, Ms. Williams filed a complaint in the Circuit Court for Anne Arundel
County seeking class certification for a class action lawsuit, and alleging that eWrit
violated the Maryland Collection Agency Licensing Act (“MCALA”), the Maryland
Consumer Debt Collection Act (“MCDCA”), and the Maryland Consumer Protection Act
(“MCPA”). Her claims concerned the fact that eWrit filed four FTPR actions against her
without holding the requisite license to perform debt collection activity as required by the
MCALA. Inherent in her argument is the notion that filing FTPR actions constitutes debt
collection activity.
The circuit court initially denied eWrit’s motion to dismiss the complaint, but on a
motion for reconsideration, eWrit successfully persuaded the court that the filing of FTPR
actions does not constitute debt collection activity and therefore no debt collection license
was required. Accordingly, the circuit court granted eWrit’s motion to dismiss.
Held: Judgment reversed and remanded. Under a plain reading of the MCALA, an
FTPR action constitutes debt collection activity. Here, the FTPR complaints requested
“possession of the property and a judgment for the amount determined to be due.” The
FTPR actions therefore constituted a “consumer claim” as defined in the MCALA because
they represent a claim for “money owed” arising from a transaction for personal property
(the leasehold interest).
A review of the legislative history of the MCALA vindicates this plain reading.
Two weeks after issuance of a 1980 Attorney General Opinion which asserted that all
entities collecting rent for others are debt collectors, the General Assembly introduced a
bill to clarify what entities constitute collection agencies. Ultimately, the bill only
exempted real estate brokers from the definition of a collection agency in the context of
rent collection. Accordingly, the General Assembly has never manifested an intent to
exclude other rent collectors such as eWrit from the definition of a debt collection agency.
Finally, the enactment of Courts and Judicial Proceedings Article (“CJP”) § 5-1201
et seq. do not impact the licensure requirements of parties who file FTPR actions on behalf
of others. To be sure, those statutes impose safeguards and procedural hurdles against debt
collectors seeking to file claims in Maryland. Nevertheless, the statutes were never
intended to modify the MCALA’s licensure requirements.
Circuit Court for Anne Arundel County
Case No. C-02-CV-20-001655
REPORTED
IN THE COURT OF SPECIAL APPEALS
OF MARYLAND
No. 206
September Term, 2021
LESLIE WILLIAMS
v.
EWRIT FILINGS, LLC
Reed,
Beachley,
Zarnoch, Robert A.
(Senior Judge, Specially Assigned),
JJ.
Opinion by Beachley, J.
Filed: January 26, 2022
*Ripken, J., did not participate in the Court’s
decision to designate this opinion for publication
pursuant to Maryland Rule 8-605.1.
Pursuant to Maryland Uniform Electronic Legal
Materials Act
(§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2022-01-26 11:53-05:00
Suzanne C. Johnson, Clerk
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.
FACTS AND PROCEEDINGS1
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
1
Because Ms. Williams appeals the circuit court’s grant of eWrit’s motion to
dismiss, we are required to “presume the truth of all well-pleaded facts in the complaint,
along with any reasonable inferences derived therefrom.” Higginbotham v. Pub. Serv.
Comm’n of Md., 171 Md. App. 254, 264 (2006) (quoting Britton v. Meier, 148 Md. App.
419, 425 (2002)). Accordingly, our factual recitation presumes the truth of the facts alleged
in Ms. Williams’s complaint.
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 (1992, 2015 Repl. Vol., 2021 Supp.), § 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,
2
We recognize that Md. Code (1974, 2015 Repl. Vol., 2021 Supp.), § 8-401 of the
Real Property Article has been amended numerous times, and that the version as written in
2014 would have been in effect when eWrit filed the FTPR actions at issue here.
Nevertheless, the subsequent amendments to RP § 8-401 have no bearing on the outcome
of our decision.
3
Although we have cited to the 2021 Supplement of BR § 7-301, we note that this
statute has not been amended since 2017.
4
At the hearing on the motion for reconsideration, eWrit’s counsel asserted that it
did not acquire a license because it believed one was needed to comply with the MCALA.
Rather, eWrit’s counsel explained that eWrit obtained its license “in order to cut off
potential exposure” from lawsuits such as the instant case.
2
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 (1975, 2013
Repl. Vol., 2021 Supp.), § 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
5
We note that CL § 14-202 was amended in 2018 to add two additional prohibited
acts, including “engag[ing] in unlicensed debt collection activity in violation of the
[MCALA.]” As will be made clear in our discussion, the amendment has no impact on the
outcome of this case.
3
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.
STANDARD OF REVIEW
“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 (2018)
(quoting Davis v. Frostburg Facility Operations, LLC, 457 Md. 275, 284 (2018)).
6
The Class Action Complaint also requested class certification pursuant to
Maryland Rule 2-231. A court, however, is not required to determine class certification
prior to granting a motion to dismiss. Murray v. Midland Funding, LLC, 233 Md. App.
254, 264 n.7 (2017). Although the circuit court ultimately granted eWrit’s motion to
dismiss, it never resolved the class certification issue.
4
DISCUSSION
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
(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 (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.
5
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. 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 (2019) (holding that an unlicensed debt collector who attempts to collect a debt
violates CL § 14-202(8) by attempting to enforce a right with knowledge that the right does
not exist).
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 (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 (2013),
abrogated on other grounds by LVNV Funding LLC v. Finch, 463 Md. 586, 607. A
6
violation of the MCALA constitutes a violation of the MCDCA, LVNV Funding LLC, 463
Md. at 612, and a violation of the MCDCA constitutes a per se violation of the MCPA,
Chavis v. Blibaum & Assocs., P.A., __ Md. __, No. 30, Sept. Term 2020, Slip Op. at 14-15
(Md. Aug. 27, 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:
(d) “Collection agency” means a person who engages directly or indirectly
in the business of:
(1) (i) collecting for, or soliciting from another, a consumer claim;
or
(ii) collecting a consumer claim the person owns, if the claim
was in default when the person acquired it;
(2) collecting a consumer claim the person owns, using a name or
other artifice that indicates that another party is attempting to collect
the consumer claim;
(3) giving, selling, attempting to give or sell to another, or using, for
collection of a consumer claim, a series or system of forms or letters
that indicates directly or indirectly that a person other than the owner
is asserting the consumer claim; or
(4) employing the services of an individual or business to solicit or
sell a collection system to be used for collection of a consumer claim.
BR § 7-101(d). The MCALA defines a “consumer claim” as a claim that “(1) is for money
owed or said to be owed by a resident of the State; and (2) arises from a transaction in
which, for a family, household, or personal purpose, the resident sought or got credit,
money, personal property, real property, or services.” BR § 7-101(f). We further note that
7
the MCALA requires a license for any person who “does business as a collection agency
in the State.” BR § 7-301(a). Simply put, an entity that seeks to collect a consumer claim
for another party performs debt collection activity, and requires a license.
The MCALA also contains a list of entities that are exempt from the Act. Among
the exempted entities are banks and related financial institutions. See BR § 7-102(b).
Relevant here, the licensing requirements in the MCALA do not apply to “a licensed real
estate broker, or an individual acting on behalf of the real estate broker, in the collection of
rent or allied charges for property[.]” BR § 7-102(b)(5). We shall discuss BR § 7-102(b)(5)
in more detail infra.
Our analysis shall be guided by familiar precepts of statutory interpretation. “When
conducting a statutory construction analysis, we begin ‘with the plain language of the
statute, and ordinary, popular understanding of the English language dictates interpretation
of its terminology.’” Blackstone, 461 Md. at 113 (quoting Schreyer v. Chaplain, 416 Md.
94, 101 (2010)). “Even in instances ‘when the language is unambiguous, it is useful to
review legislative history of the statute to confirm that interpretation and to eliminate
another version of legislative intent alleged to be latent in the language.’” Id. (quoting
State v. Roshchin, 446 Md. 128, 140 (2016)).
I. eWRIT’S FTPR ACTIONS CONSTITUTE DEBT COLLECTION ACTIVITY
We begin with the MCALA’s plain language. The MCALA defines a “collection
agency” as “a person who engages directly or indirectly in the business of: (1)(i) collecting
for, or soliciting from another, a consumer claim.” BR § 7-101(d)(1)(i). “Consumer claim”
is defined to mean “a claim that: (1) is for money owed or said to be owed by a resident of
8
the State; and (2) arises from a transaction in which, for a family, household, or personal
purpose, the resident sought or got credit, money, personal property, real property, or
services.” BR § 7-101(f).
To determine whether an FTPR action constitutes a “consumer claim” under the
MCALA, we look to RP § 8-401, the statutory authority for FTPR actions. RP § 8-
401(b)(2)(iv) provides, in relevant part, that a landlord may file in the District Court a
complaint “Requesting to repossess the premises and, if requested by the landlord, a
judgment for the amount of rent due, costs, and any late fees, less the amount of any utility
bills, fees, or security deposits paid by a tenant under § 7-309 of the Public Utilities
Article[.]” Thus, the statute expressly provides that a landlord may seek both repossession
of the premises and a monetary judgment. Here, when eWrit filed its FTPR complaints
against Ms. Williams, it used District Court Form DC-CV-827, the standard District Court
form for FTPR complaints authorized by RP § 8-401.8 In each FTPR complaint filed
against Ms. Williams, eWrit asserted that “The Tenant rents from the Landlord who asks
for possession of the property and a judgment for the amount determined to be due.” See
Paragraph 4 of DC-CV-82. In the following paragraphs of each FTPR complaint, eWrit
alleged that Ms. Williams “is responsible to pay” $1,145 per month in rent, and then sets
7
District Court Form DC-CV-82 was revised in October 2021. See
https://www.courts.state.md.us/sites/default/files/import/district/forms/civil/dccv082np.p
df (last accessed December 9, 2021). The subsequent changes to the form have no bearing
on our analysis.
8
At the request of the Court, Ms. Williams filed a “Supplement to Record Extract”
which included eWrit’s District Court form complaints against her.
9
forth the precise amount of rent and late charges claimed. See Paragraphs 5 and 6 of DC-
CV-82. We have no difficulty concluding that eWrit’s complaints, on their face, sought to
collect “consumer claims” as defined in the MCALA. Each FTPR complaint represents
“a claim that: (1) is for money owed or said to be owed by a resident of the State; and (2)
arises from a transaction in which, for a family, household, or personal purpose, the
resident sought or got credit, money, personal property, real property, or services.”9 BR §
7-101(f).
eWrit attempts to extricate itself from the grasp of the MCALA’s licensing
requirements by arguing that, because it never personally served Ms. Williams and thus
did not obtain personal jurisdiction over her, the District Court could not have entered a
monetary judgment against her.10 We are wholly unpersuaded by eWrit’s argument—the
complaints filed against Ms. Williams unequivocally sought “possession of the property
and a judgment for the amount determined to be due.” (Emphasis added). That eWrit
effectively withdrew its request for a monetary judgment when it appeared before a District
Court judge does not vitiate its “claim” for “money owed” by a Maryland resident where
the resident received “personal property” (a leasehold interest) for a “family, household, or
personal purpose.” BR § 7-101(f). Furthermore, in Ms. Williams’s complaint, she
9
It has been long-established in Maryland that a leasehold interest constitutes an
interest in personal property. See Neuman v. Travelers Indem. Co., 271 Md. 636, 641
(1974); Heritage Realty, Inc. v. City of Balt., 252 Md. 1, 4 (1969); Kolker v. Biggs, 203
Md. 137, 141 (1953); Holzman v. Wager, 114 Md. 322, 328 (1911).
10
RP § 8-401(e)(2)(iv) only allows a party to seek a judgment for rent and late fees
if the residential tenant was personally served with a summons.
10
specifically alleged that eWrit sought and obtained money judgments against her. 11 In
short, eWrit, by filing the FTPR complaints in this case, falls squarely within the plain
language of the MCALA’s definition of a collection agency and, accordingly, eWrit was
required to be licensed. See BR § 7-301(a).
We find further support for our interpretation that eWrit’s FTPR actions constitute
debt collection activity pursuant to the MCALA by examining the MCALA’s specifically
delineated exemptions for licensure. Notably, the MCALA provides a list of entities to
which its licensure requirements do not apply, and entities such as eWrit that are engaged
in the business of recovering unpaid rents for landlords are not among them. See BR § 7-
102(b).12
The MCALA does, however, exempt a specific type of entity seeking to recover the
collection of rent for another: licensed real estate brokers or their agents. BR § 7-102(b)(5)
states that the MCALA’s licensing requirements do not apply to “a licensed real estate
11
In her complaint, Ms. Williams claimed that eWrit obtained “judgments” against
her, that “for each FTPR, the District Court entered judgment in the amount that eWrit had
originally sought[,]” and that eWrit performed debt collection activity by “filing lawsuits
and obtaining judgments[.]” Thus, Ms. Williams’s complaint specifically alleged that
eWrit sought monetary judgments against her. We must presume the truth of these well-
pleaded facts. Higginbotham, 171 Md. App. at 264 (quoting Britton v. Meier, 148 Md.
App. at 425).
12
Pursuant to BR § 7-102(b), the MCALA does not apply to: banks; federal or State
credit unions; mortgage lenders; “a person acting under an order of a court of competent
jurisdiction”; “a licensed real estate broker, or an individual acting on behalf of the real
estate broker, in the collection of rent or allied charges for property”; savings and loan
associations; “a title company as to its escrow business”; trust companies; lawyers
collecting debts for clients in certain circumstances; and a person collecting debts for
another in certain circumstances not applicable here.
11
broker, or an individual acting on behalf of the real estate broker, in the collection of rent
or allied charges for property[.]” We find this exemption to be particularly illuminating.
By only exempting real estate brokers and their agents from licensure requirements in the
context of collecting rent for others, the MCALA implicitly asserts that all other
individuals or entities that seek to collect rent for others are in fact performing debt
collection activity. We therefore conclude that the plain language of the MCALA makes
clear that eWrit’s FTPR actions constitute debt collection activity.13
Although we hold that the plain language of the MCALA is not ambiguous, as we
noted above, it is often useful to review the legislative history of a statute to confirm our
statutory interpretation. Blackstone, 461 Md. at 113. Our review of the legislative history
of the MCALA vindicates our plain reading, and confirms that entities such as eWrit that
file FTPR actions on behalf of others are performing debt collection activity. We explain.
13
In its brief, eWrit argues that Blackstone supports the notion that it is not a
collection agency. Our careful review of Blackstone, however, persuades us that it is
distinguishable from the instant case. Blackstone involved whether a foreign statutory trust
constitutes a debt collection agency in light of a 2007 amendment to the MCALA. 461
Md. at 93, 115. Relevant there, the Blackstone Court focused on the role of foreign
statutory trusts in the context of the mortgage industry, and noted that the MCALA does
not apply to many actors in that industry. Id. at 115-16. Ultimately, the Court concluded
that the MCALA (and particularly the 2007 amendment) was not intended to license
mortgage industry actors, and that statutory enactments to foreclosure law subsequent to
the 2007 amendment to the MCALA vindicated this interpretation. Id. at 146-47. Indeed,
the Court stated: “Our holding today in no way undermines the consumer protections found
in any of these statutes, including MCALA. Instead, this Court clarifies that foreign
statutory trusts, acting as special purpose vehicles in the mortgage industry, were outside
of the purview of the collection agency industry that the General Assembly intended to
license when it enacted MCALA and passed the 2007 departmental bill.” Id. at 95 n.3.
The instant case has no connection to the mortgage industry or foreign statutory trusts.
Accordingly, Blackstone is inapposite.
12
On January 28, 1980, the Maryland Attorney General’s Office issued an opinion at
the request of the Maryland Collection Agency Licensing Board in which the Attorney
General asserted that all entities that collect rent for others perform debt collection activity:
all rent collectors must be licensed as collection agencies if: (1) they are
engaged in the business of collecting or attempting to collect for others rents
owed or claimed to be owed to those others by Maryland residents for
leasehold interests acquired for personal, family, or household purposes[;]
and (2) they do not fall within one of the specific exclusions contained in the
law.
65 Md. Op. Att’y Gen. 316 (1980). We note the breadth of the Attorney General’s
position—any party collecting rent for another is a debt collection agency.
Approximately two weeks after issuance of the Attorney General’s Opinion, the
Maryland Senate introduced 1980 Senate Bill 842, which sought to clarify what entities
constitute collection agencies. Ultimately, the Bill created an exemption in the context of
rent collection, stating that a debt collection agency does not include “any person licensed
under the laws of this state as a real estate broker, associate broker, real estate salesman, or
an employee of a real estate broker, with respect to the collection of rent and allied charges
for property on behalf of the employing broker.”14
14
1980 Senate Bill 842 also proposed adding as an exemption “any landlord or the
managing agent or employee of the landlord with respect to the collection of rent and allied
charges for residential housing.” Although we could find no explanation for this
language’s exclusion from the bill in our legislative history research, we presume it would
have been unnecessary to exclude landlords when the Attorney General’s opinion made
clear that landlords collecting their own rent are not debt collectors, but that all third-party
rent collectors who collect rent owed to others are debt collectors. 65 Md. Op. Att’y Gen.
at 317-18.
13
We find it notable that the Maryland Senate seemingly responded to the Attorney
General’s opinion when it proposed a bill two weeks after the opinion’s issuance to clarify
that real estate brokers and their agents that collect rents would not constitute debt
collection agencies. It seems logical to infer that the Senate was aware of the Attorney
General’s position. See Donlon v. Montgomery Cnty. Pub. Schs., 460 Md. 62, 95 (2018)
(“We presume the Legislature is aware of the Attorney General’s statutory interpretation
and, in the absence of enacting a change to the statutory language subsequent to the
issuance of such an opinion, to acquiesce in the Attorney General’s construction.” (citing
Read Drug & Chem. Co. v. Claypool, 165 Md. 250, 257-58 (1933))). In light of the
Attorney General’s broad interpretation that rent collectors must be licensed as collection
agencies, the General Assembly carved out a single exemption for real estate brokers and
their agents who engage in the collection of rent. By failing to exempt any other rent
collection entities in the bill, the General Assembly inferentially manifested its intent that
all other rent collectors engage in debt collection activity.15
15
The Court of Appeals has referred to this form of statutory construction as the
maxim “expressio unius est exclusio alterius” or “to express or include one thing implies
the exclusion of the other, or of the alternative.” Md. Ins. Comm’r v. Cent. Acceptance
Corp., 424 Md. 1, 32 (2011) (quoting Breslin v. Powell, 421 Md. 266, 286 (2011)). We
acknowledge the Court’s caution “against the too easy use of this statutory construction
tool to override the clear intent of the Legislature[.]” Id. We note, however, that this
construction comports with our interpretation of the plain language of the statute. The
General Assembly created a single exemption (for real estate brokers); therefore all other
parties that collect rents due to others are debt collectors.
14
Here, the landlord’s managing agent, Morgan Properties, apparently hired eWrit to
file FTPR actions against Ms. Williams. As such, eWrit was engaged in the business of
collecting rents owed to others (landlords) arising out of personal or household leases
executed by Maryland resident tenants. Accordingly, the legislative history materials
confirm our plain reading of the MCALA—that eWrit is a “collection agency,” and was
therefore required to be licensed.
II. THE COURTS AND JUDICIAL PROCEEDINGS ARTICLE HAS NO IMPACT ON
LICENSING REQUIREMENTS
Despite the plain language of the MCALA and its legislative history, eWrit argues
that Md. Code (1973, 2020 Repl. Vol.), § 5-1201 et seq. of the Courts and Judicial
Proceedings Article (“CJP”) clarify that filing FTPR actions on behalf of others does not
constitute debt collection activity. As we shall explain, we construe CJP § 5-1201 et seq.
as making no substantive changes to Maryland’s debt collection licensure requirements.
In 2016, the General Assembly enacted CJP § 5-1201 et seq.16 These statutes were
enacted to govern the procedures by which a debt collector may file a claim against a
consumer. CJP § 5-1202(a), for example, affirmatively imposes a burden on a creditor or
debt collector that it “may not initiate a consumer debt collection action after the expiration
of the statute of limitations.” Additionally, CJP § 5-1203 imposes substantial evidentiary
16
Aside from an amendment to CJP § 5-1202 in 2018 not relevant here, CJP § 5-
1201 et seq. have remained unchanged since 2016.
15
hurdles on any party seeking a judgment in a debt collection action.17 To obtain a
judgment, the statute requires the party to introduce into evidence numerous documents
which prove: the existence of the debt, the debt’s terms and conditions, the debt
buyer/collector’s ownership of the debt, the identification and nature of the debt, and
several other forms of identification meant to protect consumers from unverified or expired
debt collection claims. The limitations and evidentiary provisions in the statute are clearly
intended to provide additional protections for Maryland consumers.
Despite the fact that CJP § 5-1201 et seq. were enacted to protect Maryland
consumers, eWrit seizes on the definitional language of CJP § 5-1201 to argue that the
statute manifests the General Assembly’s intent that the filing of FTPR actions pursuant to
RP § 8-401 does not constitute debt collection activity, and therefore entities such as eWrit
who file FTPR actions on behalf of others are not subject to the licensure requirements of
the MCALA. We disagree with the significance eWrit places upon CJP § 5-1201 et seq.
within the scheme of Maryland statutes designed to protect consumers from the abusive
practices of debt collection agencies.
Relevant to eWrit’s argument, CJP § 5-1201, which provides the definitions for the
terms contained in the subtitle, defines a “consumer debt collection action” as follows:
(f)(1) “Consumer debt collection action” means any judicial action or
arbitration proceeding in which a claim is asserted to collect a
consumer debt.
17
The evidentiary requirements set forth in CJP § 5-1203 do not apply in “judgment
on affidavit” cases.
16
(2) “Consumer debt collection action” does not include an action
brought under § 8-401 of the Real Property Article by a landlord or
an attorney, a property manager, or an agent on behalf of a landlord.
(Emphasis added). Additionally, CJP § 5-1201(i)(2)(vii) provides that a
“Debt buyer” does not include: . . . (vii) An attorney, a licensed debt
collection agency, a property manager, or any other person that collects or
attempts to collect consumer debt in an action under § 8-401 of the Real
Property Article on behalf of an original creditor that is a residential rental
property owner.
(Emphasis added).
eWrit places great emphasis on the fact that RP § 8-401 actions do not constitute
consumer debt collection actions under CJP § 5-1201(f)(2), but we are not persuaded that
CJP § 5-1201 alters the MCALA’s licensure requirements. First, the plain language of CJP
§ 5-1201(a) makes clear that the definitions are limited in scope; the statute begins “(a) In
this subtitle the following words have the meanings indicated.” (Emphasis added). Thus,
the statute itself confines the extent to which its definitions apply—only to the subtitle itself
and not to the other statutes such as the MCALA. Also noteworthy is the fact that CJP §
5-1204 states, “This subtitle may not be construed to alter any licensing requirement under
federal or Maryland law applicable to debt buyers or collectors.” This language speaks for
itself—the subtitle should not be viewed as changing licensing requirements, including
those found in the MCALA. The plain language of CJP § 5-1201 et seq. therefore
demonstrates the General Assembly’s intent that the subtitle was not intended to modify
Maryland licensure requirements.
17
The legislative history of CJP § 5-1201 et seq. further bolsters our view that this
legislation was not meant to address licensure requirements. According to the Floor
Report, 2016 Senate Bill 771—which would ultimately be codified as CJP § 5-1201 et seq.
and was sponsored by the Attorney General’s Office—was designed to “establish[]
procedural requirements for consumer debt collection actions.” Senate Judicial
Proceedings Committee, Floor Report, Senate Bill 771 (2016) (emphasis added). Although
the Floor Report goes on to state that the filing of an FTPR action is “not considered a
consumer debt collection action under the bill[,]” the thrust of the bill was clearly to
provide additional protections for Maryland consumers. Id. The Floor Report explains
that the bill “prohibits a creditor or a collector from initiating a consumer debt collection
action after the expiration of the statute of limitations applicable to the consumer debt
collection action[,]” and that a debt buyer or collector may not initiate a consumer debt
collection action unless that party possesses all of the documents required by CJP § 5-
1203(b)(3) to obtain a judgment, including proof of the existence of the debt, proof of the
terms and conditions of the debt, and proof of ownership of the debt. The Floor Report
therefore suggests that the bill was simply designed to introduce procedural protections for
Maryland consumers who are sued by debt collectors.
The Fiscal and Policy Note for Senate Bill 771 vindicates this interpretation. It
states that, “This bill establishes several procedural requirements for ‘consumer debt
collection actions.’ The bill’s provisions may not be construed to alter any licensing
requirement under federal or Maryland law applicable to debt buyers or collectors.”
Fiscal and Policy Note, Senate Bill 771 (2016) (emphasis added). Thus, the purpose of the
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bill was to implement new procedures for non-FTPR debt collection actions, not to address
Maryland licensure requirements. Furthermore, a March 3, 2016 letter from the Attorney
General states that the bill was designed to “extend[] protections to Maryland consumers
facing collection actions for debts they may not owe.” The March 3, 2016 letter states,
SB 771 would prevent collection activities from taking place after the
statute of limitations on[ce] the debt has expired. And it would also ensure
that any payments made by consumers after the expiration deadline do not
reset the clock on collection activity.
Importantly, SB 771 codifies court rules that require full and
appropriate documentation be placed into evidence in court before a
judgment against a consumer can be issued. These documents must include:
a certified copy of proof of the debt; a document signed by the debtor
showing the evidence of the debt; a listing of all prior owners of the debt;
records of the last payment on the debt and proof that the debtor is the actual
verified recipient of the credit.
This documentation will prevent improper judgments against
consumers.
This letter indicates that the Attorney General’s Office intended to create procedural
protections for Maryland consumers in debt collection actions. That entities filing FTPR
actions were specifically exempted from these new procedural requirements should not be
construed as meaning that CJP § 5-1201 exempts such entities from the licensure
requirements in the MCALA. Rather, we construe the exclusionary language in CJP § 5-
1201 as simply exempting rent collectors who file FTPR actions from the new procedural
requirements codified in CJP § 5-1201 et seq. In other words, entities filing FTPR actions
on behalf of others are not constrained by the statute of limitations provision in CJP § 5-
1202, nor are they required to introduce into evidence the numerous documents necessary
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to secure a debt collection judgment pursuant to CJP § 5-1203.18 But these entities must
still be licensed as debt collectors because CJP § 5-1204 expressly provides that nothing in
the subtitle should be construed as modifying Maryland’s licensure requirements.
This interpretation is consistent with the thrust of the Attorney General’s actions
dating back to 1980. In 1980, the Attorney General specifically determined that entities
such as eWrit that file actions for others based on delinquent rent are performing debt
collection activity and must be licensed. Indeed, it would seem contradictory for the
Attorney General’s Office to propose a bill in 2016 that was specifically designed to
provide additional protections for consumers, but would effectively vitiate its longstanding
interpretation that entities such as eWrit that collect rent for others are required to be
licensed. Accordingly, we reject eWrit’s argument that CJP § 5-1201 et seq. exempt eWrit
from the MCALA’s licensure requirements.
CONCLUSION
All of the counts in Ms. Williams’s complaint rely on the notion that eWrit
18
Although not expressly stated in the legislative history, there is good reason to
exempt FTPR actions from the procedural requirements of CJP §§ 5-1202 and 5-1203.
First, FTPR actions are designed to allow landlords to obtain prompt relief when a tenant
fails to pay rent and, as such, it is unlikely that the statute of limitations would be
implicated. Second, as the most frequently filed action in the District Court of Maryland,
the General Assembly may have viewed the strict evidentiary requirements of CJP § 5-
1203 as unduly burdensome, thereby slowing down a process that is intended to be
expedited. See Maryland Judiciary Statistical Abstract 2019, https://mdcourts.gov/sites
/default /files /import/publications /annualreport/reports/2019/fy2019statisticalabstract.pdf
(669,778 landlord-tenant actions filed, or 40.8% of all District Court cases filed); Maryland
Judiciary Statistical Abstract 2018, https://mdcourts.gov/sites/default/files/import
/publications/annualreport/reports/2018/fy2018statisticalabstract.pdf (653,505 landlord-
tenant actions filed, or 39.2% of all District Court cases filed).
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conducted debt collection activity by filing FTPR actions under RP § 8-401 without the
requisite debt collection license required by the MCALA. Because we conclude that
eWrit’s actions did indeed constitute debt collection activity, eWrit was required to possess
a debt collection license, and the circuit court erred in dismissing the complaint.
Accordingly, we reverse.
JUDGMENT OF THE CIRCUIT COURT FOR
ANNE ARUNDEL COUNTY REVERSED.
CASE REMANDED TO THAT COURT FOR
FURTHER PROCEEDINGS. COSTS TO BE
PAID BY APPELLEE.
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