Chavis v. Blibaum & Assoc. Moore v. Peak Mgmt.
264 A.3d 1254
Md.2021Background
- Tenants (Petitioners) defaulted on residential leases; law firm Blibaum obtained District Court judgments that ordered post-judgment interest at the “legal rate.”
- Before this Court’s Ben‑Davies decision, Blibaum (for landlord Peak) sought garnishments listing post-judgment interest at 10% (not 6%) and included the writ filing fees in amounts to be garnished.
- After Ben‑Davies (holding 6% applies to judgments for residential rent), Petitioners sued under the Maryland Consumer Debt Collection Act (MCDCA § 14‑202(8)) and the Maryland Consumer Protection Act (MCPA), alleging unlawful collection of unauthorized interest and costs.
- Circuit courts dismissed the MCDCA/MCPA claims; the Court of Special Appeals affirmed. The Court of Appeals granted certiorari and reversed as to the 10% interest claims but affirmed dismissal as to inclusion of filing fees.
- The Court held (1) a collector may violate § 14‑202(8) by seeking sums it knows it has no right to collect (e.g., excess interest); (2) the mens rea requires actual knowledge or reckless disregard that the asserted right does not exist; and (3) on remand plaintiffs may file a new class‑certification motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether collecting post‑judgment interest at 10% (vs. legal 6%) can state a claim under MCDCA § 14‑202(8) | Blibaum/Peak charged an unauthorized 10% rate; §14‑202(8) forbids claiming a right the collector knows does not exist | MCDCA targets improper collection methods, not disputes over amount; plaintiffs are really challenging the debt amount | Court: Viable MCDCA/MCPA claim; §14‑202(8) covers attempts to collect sums a collector knows it lacks the right to collect (reverse dismissal) |
| Whether including writ filing fees in garnishment amounts violated § 14‑202(8) | Filing fees were not ‘‘costs actually assessed in the cause’’ under CL §15‑605(c), so inclusion was unauthorized | Filing fees are allowable court costs; District Court garnishment form and rules permit listing “total costs, including this writ” | Court: No MCDCA violation; respondents had the right to include writ filing fees; those allegations must be stricken |
| What mental state ("knowledge") § 14‑202(8) requires | Petitioners: collectors are presumptively aware of applicable law; knowledge of illegality can be inferred | Respondents: law was unsettled pre‑Ben‑Davies; cannot as a matter of law have known the right didn’t exist | Court: Plaintiff must prove actual knowledge or reckless disregard as to falsity; non‑reckless mistake of law is not per se actionable; recklessness is factual |
| Class certification after dismissal and subsequent reversal | Plaintiffs sought class certification; earlier denial followed dismissal of MCDCA claims | Defendants defended denial and procedures | Court: Remand so plaintiffs may file a new (treated as initial) motion for class certification; hearing must be granted if requested |
Key Cases Cited
- Ben‑Davies v. Blibaum & Assocs., P.A., 457 Md. 228 (Md. 2018) (post‑judgment interest on residential rent judgments is 6%)
- Andrews & Lawrence Prof’l Servs., LLC v. Mills, 467 Md. 126 (Md. 2020) (MCDCA/MCPA are remedial consumer‑protection statutes; no attorney exemption)
- Allstate Lien & Recovery Corp. v. Stansbury, 219 Md. App. 575 (Md. Ct. Spec. App. 2014) (collection of an unauthorized processing fee can support §14‑202 claim)
- Mills v. Galyn Manor Homeowner’s Ass’n, 239 Md. App. 663 (Md. Ct. Spec. App. 2018) (similar to Allstate: unauthorized charges can implicate §14‑202(8))
- Spencer v. Hendersen‑Webb, Inc., 81 F. Supp. 2d 582 (D. Md. 1999) (interpreting §14‑202(8) to require actual knowledge or reckless disregard; non‑strict liability)
- Barr v. Flagstar Bank, FSB, 303 F. Supp. 3d 400 (D. Md. 2018) (an MCDCA claim may exist where collector seeks amounts exceeding what is owed due to unauthorized charges)
- Fontell v. Hassett, 870 F. Supp. 2d 395 (D. Md. 2012) (district court view distinguishing methods v. amounts under §14‑202(8), which this Court declined to adopt)