Aleti v. Metropolitan Baltimore, LLC
279 A.3d 905
Md.2022Background
- Tenants Karunaker and Chandana Aleti rented at 10 Light Street and paid rent and fees during a 302-day period when the building’s Baltimore City rental license lapsed.
- Baltimore City Code Art. 13 § 5-4(a)(2) (amended 2018) bars charging, accepting, retaining, or seeking to collect rent or other compensation unless the landlord was licensed at offer and occupancy.
- The Aletis sued Metropolitan Baltimore, LLC and Gables Residential Services alleging: (Count I) declaratory relief; (Count II) statutory claim for refund of rent/fees under § 5-4(a)(2); (Count III) restitution (money had and received) for rent, fees, and legal fees; (Count IV) breach of contract (lease incorporated local law).
- The circuit court dismissed all counts; the Court of Special Appeals largely affirmed but held the restitution claim could proceed as to legal fees collected in unlawful summary-ejectment actions and vacated dismissal of the declaratory count.
- The Court of Appeals affirmed: no implied private right of action under § 5-4(a)(2) to recover rent/related fees; money-had-and-received cannot recover rent/fees where tenants received the bargained-for benefit, but may proceed for legal fees unlawfully collected in suits filed while landlord was unlicensed; breach claim fails. Count I (declaratory relief) was remanded per the intermediate court’s disposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 5-4(a)(2) creates an implied private right to recover rent/fees paid during unlicensed period | § 5-4(a)(2) forbids collection of rent; tenants may seek restitution/disgorgement | No express private remedy; ordinance aims to promote licensure and public welfare, not give tenants free housing; remedies are public/enforcement-based | No implied private right of action under § 5-4(a)(2) |
| Whether common-law money-had-and-received allows recovery of rent/related fees paid while landlord unlicensed | Money-had-and-received covers unjust enrichment and should allow restitution of rent/fees | Lease fully executed; tenants got what they bargained for; equity doesn't require restitution | Denied as to rent and related fees (no unjust enrichment); allowed to proceed as to legal fees unlawfully collected in actions filed while landlord was unlicensed |
| Whether breach of contract (lease ¶44 incorporates local law) allows recovery of rent/fees | Lease incorporated local laws; charging rent while unlicensed breached lease | No material breach or damages alleged; tenants received full benefit | Dismissed — no viable breach of contract claim to recover rent/fees |
| Declaratory relief: can landlord, after later obtaining license, collect unpaid rent attributable to the unlicensed period? | Tenants sought declaration that leases during unlicensed period are void and landlord cannot collect rent/legal fees from that period | Landlord contends it may seek unpaid rent once licensed; declaratory relief may be moot if other counts fail | Not finally decided by Court of Appeals here; intermediate court vacated dismissal and remanded Count I to circuit court for further proceedings (Court of Appeals remanded consistent with that opinion) |
Key Cases Cited
- CitaraManis v. Hallowell, 328 Md. 142 (1992) (tenant cannot recover rent under MCPA or restitution without proving actual injury from unlicensed condition)
- Galola v. Snyder, 328 Md. 182 (1992) (restitution may be available if unlicensed condition caused actual loss; otherwise tenant who received contracted-for benefit cannot recover)
- McDaniel v. Baranowski, 419 Md. 560 (2011) (landlord must be licensed to initiate summary ejectment; tenant’s MCPA counterclaim requires proof of actual injury)
- Bourgeois v. Live Nation Ent., Inc., 430 Md. 14 (2013) (Maryland recognizes money-had-and-received; equitable restitution may lie in some statutory violations but is limited where contract fully executed or parties are in pari delicto)
- Baker v. Montgomery County, 427 Md. 691 (2012) (framework for implied private right of action; analyze statutory language, legislative intent, and consistency with scheme)
- Scull v. Groover, Christie & Merritt, P.C., 435 Md. 112 (2013) (apply Cort v. Ash factors when statute silent on private remedy)
- Velicky v. Copycat Building, LLC, 476 Md. 435 (2021) (context on municipal licensing schemes and tenant remedies for habitability enforcement)
- Aleti v. Metropolitan Baltimore, LLC, 251 Md. App. 482 (2021) (intermediate appellate decision affirming most dismissals but allowing restitution claim as to legal fees and remanding declaratory count)