Bayly Crossing, LLC v. Consumer Protection Division
417 Md. 128
Md.2010Background
- Passyns acquired Bayly Crossing, LLC in 2002 with each owner holding one-third; Bayly's assets were 30 undeveloped residential lots in Bayly Crossing, Dorchester County.
- Bayly contracted with buyers to build homes, but Bayly was not a Maryland-registered home builder; contracts provided Bayly would subcontract with T.B. Passyn & Sons, Inc., a registered builder.
- Contracts and an addendum labeled Bayly as builder, advising that T.B. Passyn & Sons would be the builder and that buyers received a One-Year Limited Warranty with a general release to Bayly and the Passyns.
- Between 2002 and 2004, seven homes were constructed on Bayly’s lots; Bayly sold the remaining 23 undeveloped lots in 2004.
- In 2005, the Consumer Protection Division filed charges alleging HBRA and CPA violations; ALJ initially found Bayly exempt; the Division appealed and the Agency later held Bayly must register as a home builder.
- Final Agency order in 2007 imposed penalties; Bayly and Passyns sought judicial review; the Court of Special Appeals affirmed, dismissing Bayly for lack of standing; certiorari granted by this Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HBRA registration applicability | Bayly should be exempt as a 'real estate developer' who does not construct homes. | Bayly undertook to construct homes and thus must register as a home builder. | HBRA registration requirement not met by Bayly; division's reliance on a presumption of construction was unsupported. |
| CPA general releases and consequential damages | General releases target post-performance claims and do not waive consequential damages in CPA § 13-301(13). | General releases precluded a broad range of claims, including consequential damages, violating the CPA. | General releases precluding consequential damages violate CPA § 13-301(13); releases were sufficiently broad to be violative. |
| Bayly's standing to participate | Bayly, though defunct, can participate through Passyns as petitioners. | Bayly lacked standing due to charter forfeiture; LLCs lose standing upon forfeiture. | Passyns have standing; Bayly’s standing issue is not necessary to resolve for the presented questions. |
Key Cases Cited
- Vann v. Charles County, 382 Md. 286 (2004) (mixed questions and deferential review in agency decisions)
- Schwartz v. Maryland Dep't of Natural Resources, 385 Md. 534 (2005) (statutory interpretation with deference to agency expertise when ambiguous)
- Baltimore Gas & Electric Co. v. Public Serv. Comm'n, 305 Md. 145 (1986) (deference factors in agency interpretations of statutes)
- Triangle Gen. Contrs., Inc. v. Md., 366 Md. 407 (2001) (deference and mixed questions in agency adjudications)
- Ramsay, Scarlett & Co. v. Comptroller, 302 Md. 825 (1985) (deferential review of agency fact-finding and statutory application)
- Cochran v. Norkunas, 398 Md. 1 (2007) (contract interpretation within agency review; entire agreement context)
- Price v. Upper Chesapeake Health Ventures, 192 Md.App. 695 (2010) (standing and procedural posture in appellate review)