Bass v. Rohr

WILNER, Judge. In 1962, the General Assembly enacted the State Home Improvement Law. As presently codified in Md.Code Ann. art. 56, §§ 245-269A, the law provides for the licensing of home improvement contractors, requires each licensee to post a bond for the benefit of its customers, prohibits licensees from engaging in certain conduct, and provides both civil and criminal penalties for violations of the law. Administration and enforcement of the law is committed to the Maryland Home-Improvement Commission, a body created by the statute, whose members are appointed by the Governor.

The law is a regulatory one for the protection of the public. Harry Berenter, Inc. v. Berman, 258 Md. 290, 294 , 265 A.2d 759 (1970). The issue now before us is whether a person who files a complaint with the Commission against a home improvement contractor subject to its jurisdiction may be held liable for defamation by reason of what the complainant says in the complaint and in the course of the proceeding conducted pursuant to it. The Circuit Court for Anne Arundel County, by directing verdicts in favor of the appellee homeowner, concluded that she — the complainant before the Commission — was protected by an absolute privilege and thus could not be held liable.

We agree that appellee is protected by an absolute privilege, but a different one than that applied by the circuit court. I. Background In May, 1981, appellee Raquel Rohr engaged appellant Brodia Bass, Jr., a licensed home improvement contractor, to do some substantial renovation work to her home. The initial written contract was signed May 4, 1981; a modification of it, providing for certain additional work, was signed ⁶¹² June 16,1981. Eventually, a number of disputes arose with respect to both the scope and progress of the work and the amounts due by Ms. Rohr during the construction, all of which culminated in (1) a confrontation between Ms. Rohr and Mr. Bass at the latter’s home on.

July 5, 1981; (2) Mr. Bass declaring a default and leaving the job as of that date; and (3) Ms. Rohr making a complaint to the Home Improvement Commission. On July 10, 1981, pursuant to what must have been an informal or telephonic complaint by Ms. Rohr, a Commission investigator, John Abruzzo, spoke with Ms. Rohr and inspected the work. He found “that a foundation had been poured, a shell constructed, and a roof with shingles. There were no windows or doors, and the interior and exterior were not completed.” Mr. Abruzzo eventually made a written report of this inspection and of subsequent conversations with Mr. Bass, but that report was not submitted to the Commission until at least September 24, 1981. 1 In the meanwhile, on July 27,1981, Ms. Rohr filed a formal written complaint with the Commission.

By checking boxes in the “Type of Complaint” section of the complaint form provided by the Commission, Ms. Rohr charged Mr. Bass with failing to complete the contract and with misrepresentation, both of which are “prohibited acts” under § 261(a) of art. 56. In particular she alleged that, pursuant to an oral modification to the written agreements, she paid Mr. Bass $1,000 to purchase and erect cedar siding and that he failed even to order the siding. She sought to recover $1,500 against the bond posted by Mr. Bass. On August 3, 1981, Mr. Bass responded to the complaint.

In a long letter to the Commission, he denied any wrongdoing and claimed that Ms. Rohr had “misrepresented the true facts.” He denied the oral agreement alleged by Ms. Rohr, asserted that all work had been properly done, and averred ⁶¹³ that he left the job because Ms. Rohr refused to make payments due under the contract. On September 30, Mr. Bass wrote again to the Commission, noting that the open claim was hurting his business and asking that it be resolved. In accordance with Commission practice and procedure, the complaint was referred to a staff employee, Ms. Sandra Harrell, to see if it could be amicably adjusted. To that end, Ms. Harrell conducted an informal conference with the parties on October 20, 1981, which proved unproductive.

There is no transcript of what occurred at the conference, and we are therefore not privy to precisely what was said. It appears, however, from Mr. Bass’s response of August 3, from Mr. Abruzzo’s report, and from some handwritten notes of Ms. Harrell that one of the critical issues in the dispute was whether, at the time Mr. Bass formally abandoned the work on July 5, 1981, money was due to him on the “second draw.” The contract of May 4, 1981, provided for payment of “$2,547.33 second draw when shell is up,” and the parties were in disagreement as to whether the “shell” was up at that time. At some point during the proceeding, Ms. Rohr submitted to the Commission a letter dated October 15, 1981, and purportedly signed by Ronald G. Beland, of B & G Contractors, who had been hired by Ms. Rohr to complete the work started by Mr. Bass. This letter had little to do with the question of whether the “shell” was up, but dealt instead with the quality of the work done by Mr. Bass.

In the letter, Mr. Beland stated: “There were numerous things that had to be redone because of poor workmanship. Example, roof had to be completely re-installed. The floor had to be supported in another are[a] near door entrance area where much traffic would occur.” Ms. Harrell concluded that, because of the conflicting claims, the matter could not be informally adjusted; thus she referred the complaint for review by the full Commission. ⁶¹⁴ The day after the informal conference, Ms. Harrell received a call from Mr. Beland asking that the aforequoted language in his letter be disregarded. In a letter to the Commission dated October 22, 1981, he formally asked to “retract” that paragraph.

He explained that he did not wish to “question the workmanship [ijnvolved before I got to the job” and noted that “[njaturally when a job isn’t completed and finalized, there are numerous things that have to be done.” Beland said that he had been asked by Ms. Rohr to write a statement in her behalf “as to payments received, and a good working relationship” and regarded himself as simply “in the middle of a bad situation between these two individuals.” On November 5, 1981, the Commission reviewed the Rohr complaint. As announced in a subsequent letter to Ms. Rohr from Ms. Harrell, “After review of all the facts as they relate to your file they [the Commission] were not persuaded to initiate charges against the contractor for violation of the Home Improvement Law. They also declined to define the meaning of ‘shell.’ They were of the opinion this was a civil matter.” Ms. Rohr responded on December 2,1981, that she was not satisfied with the Commission’s decision and requested a formal hearing. The Commission denied that request on January 7, 1982.

On behalf of the Commission, Ms. Harrell advised Ms. Rohr: “After review of all relevant facts the Commission did not find that the contractor had either abandoned or breached his agreement with you. They were not persuaded to charge the contractor for violation of the Home Improvement Law. They confirmed their decision of November 5, 1981 that this was a civil matter.” With this determination, the parties’ roles reversed: Bass became the complainant. On January 25, 1982, he sued Ms. Rohr for defamation.

Ultimately, in an amended declara ⁶¹⁵ tion he alleged four separate acts of libel or slander; namely: (1) Count One: slander committed in the presence of Ms. Rohr’s friend and witness during the confrontation at Mr. Bass’s home on July 5, 1981; (2) Count Two: libel arising from the statements and charges made in the formal complaint to the Commission on July 27, 1981; (3) Count Three: slander arising from defamatory statements made to Mr. Beland at some undefined point; and (4) Count Four: libel arising from the October 15, 1981 letter purporting to be from Mr. Beland which, Bass averred, Rohr actually wrote and forged. The case came to trial on March 22, 1983. At the end of the plaintiff’s case, the court directed verdicts in favor of Ms. Rohr as to Counts Two, Three, and Four. It concluded, on the basis of this Court’s decision in Adams v. Peck, 43 Md.App. 168 , 403 A.2d 840 (1979), aff’d 288 Md. 1 , 415 A.2d 292 (1980), and the decision of the Court of Appeals in Gersh v. Ambrose, 291 Md. 188 , 434 A.2d 547 (1981), that Ms. Rohr was protected by an absolute privilege with respect to statements made in the course of the administrative proceedings before the Commission, including the informal conference conducted by Ms. Harrell.

The motion was denied as to Count One — the incident at Mr. Bass’s home — but the jury ultimately decided that issue in Ms. Rohr’s favor. In this appeal, Mr. Bass attacks the court’s rulings on Counts Two, Three, and Four. He argues that the court erred in “finding that Maryland had adopted the doctrine of absolute privilege for libel and slander in administrative proceedings.” He makes no complaint with respect to Count One.

II

Discussion A. Count Three — The Conversation With Mr. Beland We need not consider the question of privilege with respect to Count Three. We are unable to find in the record ⁶¹⁶ extract any evidence in support of the allegations made in that count, and we must therefore assume that no such evidence was produced. Md.Rule 1028b. Quite apart from any matter of privilege, there is simply no basis in the record for us to conclude that the directed verdict entered on that count was incorrect.

B. Counts Two and Four — Privilege In considering the issue raised by Mr. Bass, it is necessary, at the outset, to observe that there are two types of privilege potentially applicable here, and to make clear the distinction between them. The privilege discussed in Adams v. Peck and Gersh v. Ambrose is the common law privilege of a witness in a judicial proceeding to testify without fear of subsequent harassment by means of a suit for defamation. This privilege is not of Constitutional origin; it evolved from and is part of the law of libel and slander. In 1888, the Court of Appeals adopted the rule laid down in English cases that witnesses and parties in judicial proceedings were not subject to liability for defamation by reason of what they said in court.

Such persons were protected by an absolute, unconditional privilege that applied even if the statements complained of