Bits \N\" Bytes Computer Supplies

MOTZ, Judge. During 1985 and 1986, appellant, Bits “N” Bytes Computer Supplies, Inc. (BNB), entered into a series of directory advertising contracts with appellee, The Chesapeake & Potomac Telephone Company of Maryland (C & P), for advertisements in various yellow page telephone directories owned by C & P. BNB also purchased telephone service from C & P. On January 28, 1988, C & P filed suit against BNB in the District Court of Maryland, asserting that BNB failed to pay “statement[ s ] of accounts” submitted to it by C & P and so owed C & P $8,918.18. BNB filed a notice of intent to defend and a request for a jury trial. The case was transferred to the Circuit Court for Montgomery County where C & P filed its complaint and a motion for summary judgment, asserting once again that $8,918.18 was due and owing from BNB.

This entire amount was owing on unpaid directory advertising bills, rather than on telephone service bills. In response, BNB filed an extensive answer, an opposition to the motion for summary judgment, and a three-count ⁵⁶² counterclaim. BNB asserted that C & P, a public utility, was “regulated by the Maryland Public Service Commission” (PSC), and that in violation of a regulation of the PSC, COMAR 20.45.04.07(D), C & P wrongfully interrupted telephone service to BNB when BNB did not pay its outstanding bill for directory advertising. BNB further asserted that C & P falsely advised BNB that C & P had a right to interrupt BNB’s telephone service if BNB failed to pay its directory advertising bill, which led BNB to terminate its Baltimore area telephone service.

Additionally, BNB asserted that C & P’s “illegal threats and false claims” constituted a breach of its directory advertising contracts with BNB and caused BNB to suffer “a substantial loss of profits, as well as other incidental and consequential damages.” BNB asked that its directory advertising contract with C & P be rescinded (Count I), or alternatively that BNB be awarded “consequential damages of $20,000” and “incidental damages of $5,000 and costs” sustained because of C & P’s breach of the contracts (Count II). Finally, BNB asserted that C & P’s “threat to interrupt service and actual interruption” of BNB’s service “constituted intentional interference with [BNB’s] business relations and prospective advantage” because, as C & P “well knew,” BNB’s business “was primarily conducted on the telephone”; on this count (Count III) BNB claimed “consequential damages of $20,000, incidental damages of $5,000 and punitive damages of $1,000,000 and costs.” C & P’s motion for summary judgment was denied on June 21, 1988. On that same day, C & P moved to dismiss BNB’s counterclaim, arguing that BNB’s asserted failure to exhaust its administrative remedies before the PSC meant that the circuit court lacked subject matter jurisdiction over the counterclaim. After extensive briefing of these points and oral argument by counsel for both C & P and BNB, on October 19, 1988, the circuit court (Raker, J.) granted C & P’s motion to dismiss the counterclaim “pursuant to Maryland Rule 2 — 322(b)(1) for lack of subject matter jurisdiction because of Bits “N” Bytes Computer Supplies, Inc.’s failure to exhaust administrative ⁵⁶³ remedies.” C & P’s complaint remained in the circuit court and discovery proceeded on the claim stated in it.

On May 25, 1989, BNB filed a complaint with the PSC, alleging inter alia essentially the same facts as originally alleged in its circuit court counterclaim. BNB asked the PSC to “[f]ind that C & P violated.... COMAR, Section 20.45.04.-07(D) in that [C & P] threatened to and did, in fact, interrupt plaintiff’s telephone service for failure to pay directory advertising charges,” to “[o]rder C & P to comply with the aforesaid section[s] of COMAR” and to “[p]rovide such other and further relief as the nature of the case may require.” 1 On August 3, 1989, the PSC directed C & P to satisfy or answer the complaint. C & P did subsequently answer the complaint.

On December 10 and 11, 1990, the PSC hearing examiner conducted a hearing on these issues. On August 1, 1991, the examiner issued a 36 page proposed order in which he found, inter alia, that C & P did not falsely advise BNB that C & P had the right to terminate BNB’s telephone service for failure to pay advertising charges, leading BNB to cancel this service. The examiner did find, however, that C & P’s failure to distinguish directory advertising charges “from the other telephone charges at the time of initial interruption of service on August 19, 1986 resulted in BNB’s telephone service being interrupted for non-payment of directory charges, which is in violation of the COMAR restrictions.” The examiner also stated that “while this proceeding concerns the various complaints by BNB regarding the alleged ⁵⁶⁴ improper actions of C & P, there is a judicial proceeding pending between the parties in Montgomery County wherein the question of damages, if any, will be resolved. Thus, the focus of the instant proceeding before the Commission is to determine the propriety of C & P’s actions rather than to make findings regarding damages.” Similarly, at the conclusion of his proposed order, the examiner explained that he did not address BNB’s behavior in failing to pay its bills because, “the jurisdiction of the Commission in this proceeding is limited to the matters of complaint that have been raised” and “the jurisdiction of the Commission is limited to supervisory and regulatory powers over public service companies.” As far as PSC sanctions against C & P, the examiner concluded that “on a prospective basis, C & P should first separate [directory advertising] charges prior to any disconnections for nonpayment even before the customer has raised such an issue,” and that “no sanctions or other action need be invoked at this time as this matter [violation of the COMAR regulation] has never been specifically addressed prior to this case.” C & P appealed the proposed order to the PSC itself.

Although the Commission noted that C & P disagreed with “some aspects” of the proposed order, “the only aspect” it appealed was the hearing examiner’s recommendation that C & P separate its bills; C & P asserted that this was impossible. BNB also appealed to the PSC, asserting inter alia that (1) because the facts found by the PSC were to be determinative in its civil suit for damages, it was “critical” that the actual duration of the interruption of service be determined, and (2) the PSC should impose sanctions on C & P for violation of the PSC regulation. On October 10, 1991, the PSC issued an Order modifying the hearing examiner’s proposed order by granting C & P some modest relief (less than C & P requested) from the burden of separating bills. In all other respects, the PSC confirmed the proposed order of the hearing examiner.

In doing so, the PSC noted: [W]hile this complaint was filed for the purpose of exhausting administrative remedies, the Commission is not a fact finder for purposes of civil litigation. In a complaint based ⁵⁶⁵ on a violation of the PSC Law or regulations, the Commission or the Hearing Examiner will determine facts which are necessary to establish a violation [o]f or compliance with COMAR regulations. A week later, on October 17, BNB moved for reconsideration before the PSC on the imposition of sanctions; that motion was denied on February 27, 1992. Neither party sought judicial review of the PSC order.

On April 20, 1992, BNB moved in the circuit court that Counts II and III of the counterclaim (claiming damages for breach of contract and for tortious interference with business advantage, respectively) be reinstated. BNB never asked that its recision claim (Count I) be reinstated. C & P opposed the motion, asserting that BNB still had failed to exhaust its administrative remedies. The circuit court denied BNB’s motion to reinstate two counts of its counterclaim.

Trial on the claim set forth in C & P’s original complaint was set for September 14, 1992. On the day of trial, C & P again moved for summary judgment. C & P asserted, inter alia, that (1) because BNB’s counterclaim had been dismissed and not reinstated, BNB could not raise “defensively” any of the issues raised in the counterclaim, even though those issues had also been set forth in BNB’s answer to the complaint, and (2) all material facts were undisputed and C & P was entitled to judgment, as a matter of law, as to $8,291.08 (C & P decided not to proceed on its claim to one portion of the bill, thus lowering its demand from $8,918.18 to $8,291.08). After hearing argument of counsel for both sides, the circuit court granted summary judgment to C & P in the amount of $8,142.92, thus allowing BNB to set off against the claimed charges $148.16, which represents a pro rata deduction of its bills for directory advertising and telephone service for the three days it was without telephone service.

On appeal BNB raises five questions: 1. Did the court err in dismissing BNB’s counterclaim for failure to exhaust administrative remedies? ⁵⁶⁶ 2. Is the administrative remedy before the PSC exclusive as to the causes of action in the Counterclaim? 3. Did BNB “exhaust” its administrative remedies? 4.

Did the court err in dismissing BNB’s motion to reinstate its Counterclaim after Public Service Commission proceedings were concluded and a final PSC Order was entered finding that C & P had improperly interrupted BNB’s service? 5. Did the court err in granting C & P summary judgment? (i) BNB’s first four questions all involve issues concerning the asserted necessity for BNB to exhaust administrative remedies and its alleged failure to do so. The first is directed at the trial court’s original dismissal of BNB’s counterclaim.

BNB concedes before us that its counterclaim was based “on the contention that C & P’s interruption of service due to unpaid directory advertising was improper as being a violation of applicable regulations.” 2 BNB asserts, however, that the “thrust” of its counterclaim was not a complaint about service but “to make legal claims” and so the “determination of whether C & P’s interruption of service” violated the PSC regulation “could properly have been made by the court as a matter of law, or by the jury either purely as a matter of fact or as a mixed question of law and fact.” Specifically, BNB argues it need not have exhausted administrative remedies before the PSC because (1) administrative expertise was not necessary for determination of this case and (2) the administrative remedy was inadequate because the PSC could not award money damages. C & P counters that the Public Service Commission Act, Md.Code (1957, 1991 Repl.Vol., 1992 Cum.Supp.) Art. 78, §§ 1-107 (hereinafter Art. 78) sets forth a ⁵⁶⁷ “comprehensive and detailed administrative machinery for the regulation of public utilities throughout the State,” Spintman v. Chesapeake & Potomac Tel. Co. of Maryland, 254 Md. 423, 427 , 255 A.2d 304 (1969), and that BNB was required to exhaust its remedies pursuant to this “machinery,” and that the circuit court lacked jurisdiction over the counterclaim because BNB failed to do so. C & P further asserts that the PSC clearly had jurisdiction over the counterclaim because the counterclaim concededly was based on a PSC regulation and no exception to the exhaustion doctrine is applicable here.

Contrary to the finding of the circuit court and argument of C & P, the requirement that administrative remedies be exhausted “is not ordinarily a limitation upon the subject matter jurisdiction of a trial court.” Maryland Nat’l Capital Park & Planning Comm’n v. Crawford, 307 Md. 1 , 13 n. 4, 511 A.2d 1079 (1986). Thus, a court is usually not without subject matter jurisdiction to consider an original civil suit brought by a party who has failed to exhaust his exclusive administrative remedies. Because, however, of the public policy underlying the exhaustion doctrine, i.e., it “produces the most efficient and effective results,” Secretary, Dep’t of Human Resources v. Wilson, 286 Md. 639, 645 , 409 A.2d 713 (1979), exhaustion “is for some purposes treated like a jurisdictional issue.” Crawford, 307 Md. at 13 n. 4, 511 A.2d 1079 . (emphasis in original).

Accord, Board of Educ. for Dorchester County v. Hubbard, 305 Md. 774, 787 , 506 A.2d 625 (1986). That is, “trial courts generally should not act until there has been compliance with the statutory comprehensive remedial scheme” and “an appellate court ... will raise the issue of exhaustion ... even though not raised by the parties.” Wilson, 286 Md. at 645 , 409 A.2d 713 . Accordingly, when a party attempts to bring a judicial action without exhausting exclusive administrative remedies, a trial court properly should dismiss the case. See, e.g., Quesenberry v. Washington Suburban Sanitary Comm’n, 311 Md. 417, 426 , 535 A.2d 481 (1988) (containing mandate remanding to circuit court for the entry of an order “dismissing the case for failure to exhaust administrative remedies”); Maryland Comm’n on Human ⁵⁶⁸ Relations v. Mass Transit Admin., 294 Md. 225, 235 , 449 A.2d 385 (1982) (containing mandate remanding to circuit court “with directions to dismiss the bill of complaint”); Wilson, 286 Md. at 647, 648 , 409 A.2d 713 (same).

Therefore, although the circuit court did not lack subject matter jurisdiction over the counterclaim, its decision to dismiss the counterclaim was nonetheless correct if BNB failed to exhaust its administrative remedies. The general exhaustion rule is that “where a statute provides a special form of remedy, the plaintiff must use that form [of remedy] rather than any other[.]” Soley v. State Comm’n on Human Relations, 277 Md. 521, 526 , 356 A.2d 254 (1976) (citations omitted). The statute involved here, the Public Service Commission Act, provides that C & P, as a “public service company,” is under the “jurisdiction” of the PSC, which is specifically empowered to “supervise and regulate” it. Art. 78, § 1 and § 56.

Moreover, the Act authorizes the PSC to “enforce compliance by such companies with all the requirement of law, including ... requirements with respect to ... service,” id., § 56, and provides that the PSC has “all implied and incidental powers necessary and proper to carry out effectually the provisions of [the Act]” and that these powers are to be “liberally construed.” Id. § 1. Further, the PSC is specifically empowered to make and enforce regulations “necessary to carry out the provisions of the [Act],” including “standards of safe, adequate, reasonable, and proper service.” Id. §§64 and 73. The PSC is to receive all complaints alleging a violation of the Act (including the regulations promulgated pursuant to it) and “take final action” directing “full or partial satisfaction” or “such action as may be warranted.” Id. § 77(a)(d). “In any contested case begun by complaint, filed by any person or by the Commission, the person complained of shall be entitled to a hearing,” id. § 79; any party to a proceeding has the “right to summon witnesses, present evidence,” cross examine witnesses, take depositions etc. Id. § 82. “Any party or any person in interest” dissatisfied with a final PSC decision is entitled to judicial review of that decision. Id. § 90.

The Public Service Commission Act ⁵⁶⁹ thus provides (1) the PSC with the power, id. § 64 and § 73, to create the very regulation that forms the basis of the rights asserted in BNB’s counterclaim, COMAR 20.45.04.07(D), and (2) a specific form of remedy, id. §§ 77(a) and (d), 82, and 90 to pursue violations of that regulation. In sum, the Act provides a special statutory remedy that ordinarily must be exhausted. BNB virtually concedes as much but asserts that exhaustion is not required here because of two “well recognized exceptions” to the exhaustion rule. In Prince George’s County v. Blumberg, 288 Md. 275, 284-85 , 418 A.2d 1155 , cert. denied, 449 U.S, 1083, 101 S.Ct. 869 , 66 L.Ed.2d 808 (1980) the Court of Appeals definitively explored exceptions to the exhaustion doctrine.

BNB invokes the fourth and fifth Blumberg exceptions, i.e., 4. Where the administrative agency cannot provide to any substantial degree a remedy. 5. When the object of, as well as the issues presented by, a judicial proceeding only tangentially or incidentally concern matters which the administrative agency was legislatively created to solve, and do not, in any meaningful way, call for or involve applications of its expertise. 288 Md. at 285 , 418 A.2d 1155 (citations omitted). Neither of these exceptions is applicable here.

Notwithstanding BNB’s protestations that no PSC expertise was necessary to interpret the PSC regulation, it seems to us virtually self-evident that an administrative agency, particularly one with the specialized responsibility of the PSC, does have special expertise in interpreting its own regulations. See generally Spintman v. Chesapeake & Potomac Tel. Co. of Maryland, 254 Md. 423 , 255 A.2d 304 (1969). See also, Maryland Comm’n on Human Relations v. Bethlehem Steel Corp., 295 Md. 586, 593 , 457 A.2d 1146 (1983) (“A question concerning the interpretation of an agency’s rule is as central to its operation as an interpretation of the agency’s governing statute” and “the agency’s expertise is more pertinent to the ⁵⁷⁰ interpretation of an agency’s rule than to the interpretation, of its governing statute.”) Nor does the fact that the PSC may be unable to grant BNB money damages mean that BNB’s administrative remedy is inadequate.

As the Court of Appeals recently explained, “[i]t is a settled principle of administrative law that an agency’s lack of power to grant the particular type of relief sought does not necessarily mean that the agency lacks jurisdiction over a matter or that the administrative remedy need not be invoked and exhausted.” McCullough v. Wittner, 314 Md. 602, 608 , 552 A.2d 881 (1989). See also, 3 Davis, Administrative Law Treatise § 19.07 (1958). Assuming without deciding that the PSC lacks this power, 3 BNB still was required to pursue its special statutory administrative remedy. McCullough is instructive.

There the Court similarly “assumed arguendo that the Inmate Grievance Commission [did] not have the statutory authority to make a monetary award” but could “only issue directives and orders of an equitable nature.” 314 Md. at 608 , 552 A.2d 881 . Nevertheless, the McCullough court concluded that an inmate claiming money damages from the Commission “was required to invoke and exhaust” his statutory administrative remedy. Id. at 610 , 552 A.2d 881 . We recognize that the statute at issue in McCullough , Maryland Code (1957, 1986 Repl.Vol., 1988 Cum.

Supp.), Art. 41, § 4-102(l), contained a specific mandate that an inmate invoke and exhaust administrative remedies, and that there is no comparable statutory mandate here. It seems to us, however, that this specific statutory mandate was not critical to the result reached in McCullough . Rather, we believe the teaching of McCullough is that when, as here, an applicable, special statutory remedy is available, an administrative agency’s lack of power to award certain forms of relief ⁵⁷¹ sought by a party does not relieve the party of its obligation to “invoke and exhaust” the administrative remedy. This conclusion is consistent with the general rule that “absent a legislative indication to the contrary, it will usually be deemed that the Legislature intended” a special statutory remedy to be exhausted.

White v. Prince George’s County, 282 Md. 641, 649 , 387 A.2d 260 (1978). See Magan v. Medical Mutual Liability Ins. Society of Md., 81 Md.App. 301, 309 , 567 A.2d 503 (1989). Thus, the circuit court did not err in dismissing BNB’s counterclaim for failure to exhaust administrative remedies.

(ii) BNB’s second, third and fourth questions all involve the circuit court’s refusal to reinstate BNB’s counterclaim after it obtained a final order from the PSC. BNB argues that it fully exhausted its administrative remedy and that this remedy was not exclusive. C & P counters by asserting BNB did not exhaust its administrative remedy because it failed to obtain judicial review of the PSC order and “[b]ecause BNB did not raise (and, therefore, waived) the PSC remedial powers issues at the PSC ... this case does not really present the issue of exclusivity of the remedy at the PSC level” and so “[t]his Court must await another day ... to tackle that thorny issue.” The parties’ phrasing of their arguments reflects a fundamental misunderstanding of the exhaustion doctrine. Pursuant to the doctrine of exhaustion of administrative remedies, a party’s exclusive initial remedy is the statutorily proscribed administrative procedure; usually, as here, a party’s only recourse to the courts is by limited judicial review of the administrative procedure. 4 Thus, we can hardly wait to “another day” to determine if the PSC remedy is exclusive; we have already determined that question.

As Judge Levine ⁵⁷² explained, the doctrine of exhaustion of administrative remedies “demands that a party fully pursue administrative procedures before obtaining limited judicial review and contemplates a situation in which the claim asserted is enforceable initially by administrative action exclusively.” Maryland Nat’l Capital Park & Planning Comm’n v. Washington Nat’l Arena, 282 Md. 588, 602 , 386 A.2d 1216 (1978) (emphasis in original). See also, White v. Prince George’s County, 282 Md. 641, 649 , 387 A.2d 260 (1978). Thus, when a party is provided with a statutory administrative remedy, which the legislature intended to be exclusive, a claim must be asserted initially before the administrative agency and the only judicial relief as to that claim is “limited judicial review” of the final administrative decision. 5 When the exhaustion doctrine is applicable, there is no right to assert a claim or counterclaim in an independent civil action after the administrative remedy has been exhausted. We repeat, the only opportunity for judicial consideration of a claim to which the exhaustion doctrine is applicable is through limited judicial review of the final administrative decision.

The parties’ confusion on this point may stem from the term “exhaustion” itself which perhaps implies, incorrectly, that independent judicial action always can be pursued after an administrative remedy is exhausted. This confusion is also evident in loose language in some appellate opinions. See, e.g., Wilson, 286 Md. at 647 , 409 A.2d 713 . (“The claimants failed to exhaust the effective, available [administrative] remedy ... ⁵⁷³ before seeking declaratory relief from the trial court.”) (emphasis added).

Nonetheless, it is well established that “where a statute provides a special form of remedy, the plaintiff must use that form rather than any other ... and if