256 A.3d 271
Md. Ct. Spec. App.2021Background
- Bolling took a closed-end loan governed by Maryland’s Credit Grantor Closed End Credit Provisions (CLEC); her vehicle was repossessed and she made payments but did not allege she paid more than the principal.
- She sued Bay Country alleging CLEC violations: refusal to provide an account statement under CL § 12-1025 and demands for amounts not collectible after repossession; she sought penalties under CL § 12-1018.
- Bay Country moved to dismiss, arguing CLEC relief is limited to amounts paid in excess of principal (relying on Fourth Circuit federal decisions); the circuit court accepted that view and dismissed Count I for failure to state a claim.
- On appeal the Court of Special Appeals held that a CLEC cause of action may accrue upon a statutory violation even if the borrower has not paid more than principal, but a plaintiff must allege compensable actual damages or seek appropriate declaratory or injunctive relief; the statute also preserves the lender’s limited right to cure.
- Because Bolling’s amended complaint alleged a CLEC violation but pleaded neither actual damages nor declaratory/injunctive relief (and did not allege overpayment), the appellate court affirmed dismissal of Count I.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a borrower can maintain a CLEC claim before the lender collects more than the principal | Bolling: CLEC penalties/relief accrue immediately upon a statutory violation; no need to await payment beyond principal | Bay Country: CLEC only furnishes relief where borrower paid in excess of principal; otherwise no compensable damages | Court: A CLEC claim may be brought before payment beyond principal, but plaintiff must allege actual damages or request declaratory/injunctive relief; dismissal affirmed because Bolling alleged neither |
Key Cases Cited
- Patton v. Wells Fargo Fin. Md., Inc., 437 Md. 83 (2014) (CLEC’s remedial purpose; suit need not await loan satisfaction)
- Len Stoler, Inc. v. Wisner, 223 Md. App. 218 (2015) (discusses standing to seek CLEC remedies upon violation)
- Crowder v. Master Fin., Inc., 176 Md. App. 631 (2007) (SMLL/CLEC analogies; declaratory relief allowed to determine principal balance)
- Duckworth v. Bernstein, 55 Md. App. 710 (1983) (under SMLL, court must declare rights re principal and refunds even if borrower has not paid more than principal)
- Biggus v. Ford Motor Credit Co., 328 Md. 188 (1992) (legislative context of CLEC as part of credit deregulation)
- Gardner v. GMAC, Inc., 796 F.3d 390 (4th Cir. 2015) (federal interpretation limiting CLEC relief to payments exceeding principal)
- Bediako v. American Honda Finance Corp., [citation="537 F. App'x 183"] (4th Cir. 2013) (earlier federal decision treating CLEC damages as limited to overpayments)