253 A.3d 1142
Md. Ct. Spec. App.2021Background
- Sullivan purchased a newly built home in Prince George’s County; the Purchase Agreement and a Declaration imposed a deferred private water and sewer assessment.
- Assessment terms: $900 per year for 23 years at 8% interest; the amortized total disclosed as “amount remaining on the assessment, including interest” was $20,700.
- The Declaration allowed an owner to prepay the outstanding assessment at "present day values" (i.e., a discounted present-value payoff).
- The Purchase Agreement’s disclosures listed both (a) the amount remaining including interest and (b) the “estimated payoff amount” as $20,700.
- Sullivan sued, alleging the “estimated payoff amount” disclosure was inaccurate because the present-value prepay amount would be substantially less; the circuit court dismissed for failure to state a claim.
- The Court of Special Appeals reversed, holding the statute requires a good-faith, fairly accurate estimate of the payoff that would be due at settlement (so sellers may not simply repeat the gross amortized amount).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 14-117(a)(3)(i)(7) allows the seller to disclose the same figure for the “estimated payoff amount” and the “amount remaining on the assessment, including interest” | Sullivan: "Estimated payoff" must reflect a present-value (good-faith) estimate and therefore cannot equal the total amortized amount including future interest | Caruso: “Estimate” permits approximation; statute does not require a present-value calculation, so repeating the gross amount is permissible | Held: "Estimated payoff amount" must be a good-faith, fairly accurate estimate of the payoff due at settlement (not simply the total amortized amount); listing identical figures can defeat the disclosure’s purpose |
| Whether the amended complaint sufficiently stated a claim and the circuit court erred in dismissing | Sullivan: Allegations sufficiently plead that Caruso failed to provide an accurate estimated payoff under § 14-117(a)(3)(i) | Caruso: Disclosures were made and the statute imposes no particular calculation method; dismissal appropriate | Held: Amended complaint adequate to state a claim; dismissal was error and case remanded for further proceedings |
Key Cases Cited
- Lamson v. Montgomery County, 460 Md. 349 (2018) (review of grant of motion to dismiss for failure to state a claim is de novo)
- Daughtry v. Nadel, 248 Md. App. 594 (2020) (statutory construction starts with plain language and views statute as whole)
- Blackstone v. Sharma, 461 Md. 87 (2018) (use ordinary meaning and context in interpreting statutes)
- RRC Ne., LLC v. BAA Md., Inc., 413 Md. 638 (2010) (pleadings are limited to the four corners of the complaint and incorporated exhibits)
- Harrison v. John F. Pilli & Sons, Inc., 321 Md. 336 (1990) (remedial statutes are construed liberally to effectuate their purpose)