Crowder v. Master Financial, Inc.

MEREDITH, J. This case arises from the dismissal of nineteen consolidated cases brought by twenty-one plaintiffs against various finance entities (“the lenders”) alleged to have violated Maryland’s ⁶³⁸ Secondary Mortgage Loan Law (“SMLL”), Maryland Code, Commercial Law Article (“CL”), §§ 12-401 et seq. Nine of the cases were filed as putative class actions, and the remaining ten were filed as individual lawsuits. After some defendants entered into class action settlements and others were voluntarily dismissed by the plaintiffs, the Circuit Court for Baltimore City granted several of the defendants’ motions to dismiss on the ground that the plaintiffs’ claims were barred by the three-year statute of limitations for civil claims. In addition, the circuit court ruled that the named plaintiffs in the putative class action suits lacked standing to assert, on behalf of unknown potential class members, claims against those defendants (the “non-holder” defendants) which had never held the loans of the named plaintiffs.

Appellants, in their brief, identify the following three issues for our review: 1. Whether a named Plaintiff in a class action has standing to assert a claim on behalf of absent class members against assignee defendants who are juridically linked to the class action because they all purchased second mortgage loans that included excessive closing costs from a common originator. 2. Whether the twelve-year statute of limitations established by Maryland Code (1974, 2006 Supp.), Courts & Judicial Proceedings Article (“CJP”), § 5-102, applies to the claims asserted in the various lawsuits in circumstances where either the promissory note or the deed of trust was signed “under seal.” 3. Whether the discovery rule requires that all causes of action challenging the legality of loan closing costs accrue three years after the date of the loan closing, irrespective of the date when the borrower discovered his or her injury.

We conclude that appellants lack standing to sue, on behalf of potential unnamed class members, those non-holder defendants which have never held the loans of the named plaintiffs. We further conclude that the three-year statute of limitations applies to all claims. We conclude that the circuit court properly dismissed appellants’ claims under the Consumer Protection Act (“CPA”), but that the circuit court erred in ⁶³⁹ dismissing in their entirety appellants’ claims under the SMLL and appellants’ claims for declaratory judgment. The statutory remedy that is provided in CL § 12-413 for a violation of the SMLL eliminates the lenders’ right to collect any interest, costs or other charges beyond the principal amount of the loan, and such statutory remedy does not become unavailable three years from the date of closing on the loan.

Consequently, although the statute of limitations will preclude the plaintiffs from seeking to recover monies they paid more than three years prior to the date on which they filed suit, the plaintiffs are not barred from seeking to recover any sums defendants collected in excess of the principal amount of the loan within three years prior to the date suit was filed and thereafter. Accordingly, we shall affirm the decision of the circuit court in part and reverse in part. We shall remand for further proceedings with respect to appellants’ claims under the Secondary Mortgage Loan Laws and appellants’ claims for declaratory judgment. I. Facts and Procedural History At various times in 2001, 2002, and 2003, the twenty-one appellants in this consolidated appeal filed a total of nineteen lawsuits against more than fifty defendant finance entities.

Appellants’ complaints alleged that the original lenders violated the SMLL generally in three respects: (1) by failing to obtain the state licenses for making secondary mortgage loans; (2) by charging the borrowers impermissible fees in excess of those permitted by the statute; and (3) by failing to provide loan applicants a required disclosure form. The plaintiffs sued, in addition to the originating lenders who committed the alleged violations of the SMLL, the entities that purchased the promissory notes and deeds of trust and became subsequent assignees of the loans. Plaintiffs contend that, under the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1641 (d)(1), all such successive holders of the plaintiffs’ loan obligations are subject to all claims and defenses that can be asserted against the originating lender. And in the putative class action complaints, appellants also sued ⁶⁴⁰ various non-holder defendants, alleging that such non-holder defendants had purchased similar loans from the originating lenders notwithstanding the fact that the non-holder defendants never had any direct relationship with the named plaintiffs.

Six of the nineteen lawsuits were filed as putative class actions seeking damages, as well as declaratory and injunctive relief, upon three theories: (1) the defendants’ violation of the SMLL entitled the plaintiffs to damages; (2) the defendants’ conduct also constituted a violation of the Maryland CPA, such that plaintiffs were entitled to relief under that statute; and (3) because the loan agreements violated the SMLL, they were void or voidable. In three putative class action suits, the complaints alleged only violation of the SMLL and the Consumer Protection Act. In the remaining ten lawsuits filed without asserting class action claims, the complaints sought relief only on the ground that the defendants had violated the SMLL. On July 31, 2002, the circuit court ordered the cases consolidated.

Throughout the remainder of 2002, various defendants filed motions to dismiss or motions for summary judgment on the ground that appellants’ claims were barred by the statute of limitations. On January 23, 2003, and January 30, 2003, the circuit court held hearings on the motions to dismiss. For reasons unclear from the record, there was no disposition of the motions for more than three years. In the meantime, various plaintiffs dismissed their claims against various defendants, either unilaterally or pursuant to settlements.

On July 26, 2006, the circuit court held another hearing on the outstanding motions to dismiss. On August 25, 2006, the circuit court issued a memorandum opinion and order granting one of the motions to dismiss. The circuit court concluded that the plaintiffs’ claims were all barred by the three-year statute of limitations applicable to most civil cases in Maryland. The court ruled that the statute began to run on the date of the loan closing, and that the statute of limitations had not been tolled by the discovery rule. ⁶⁴¹ The circuit court further concluded that the named plaintiffs in the putative class action lacked standing to assert, on behalf of unnamed potential class members, claims against the non-holder entities that had never held loans of the named plaintiffs.

In addition to granting the motion to dismiss filed jointly by PB Investment Corp. and PB REIT, Inc., the order said: [I]t is further ordered that all defendants, in this case and other related second mortgage actions pending before this Court, who have filed Motions to Dismiss premised on the assertions that the plaintiff(s)’s [sic] claims are time-barred by the statute of limitations and/or that the plaintiff(s)’s [sic] lack standing, and whose facts are consistent with the Memorandum of Decision accompanying this order are hereby directed to submit proposed orders to which the plaintiffis) will have twenty (20) days to file an opposition setting forth the reasons why those proposed orders are not consistent with the accompanying Memorandum of Opinion. The remaining defendants submitted final judgment orders which were subsequently signed by the circuit court and entered on the docket on September 26, 2006. Appellants filed separate notices of appeal from each judgment.

II

Final Judgment On May 9, 2007, this Court issued a show cause order directing appellants to file responses showing why the appeal should not be dismissed as premature. Although some of the orders purporting to be final judgment orders invoked Maryland Rule 2-602(b), certifying those judgments as final despite the fact that the orders did not apply to all defendants, others of the orders did not mention Rule 2-602(b). 1 ⁶⁴² Appellants responded to this Court’s show cause order with the requested documents, detailing the result as to each defendant in each of the nineteen cases. Included in the documents provided were complete docket entries, as well as copies of stipulations of dismissal and voluntary dismissals that were not previously provided to this Court in the record extract. In anticipation of the circuit court’s grant of the motions to dismiss, the plaintiffs had, on September 14, 2006, filed in seven of the cases dismissals as to those defendants which had not previously filed motions to dismiss.

The voluntary dismissals, although filed separately, contained identical language stating: Plaintiffs, by their undersigned counsel, pursuant to Maryland Rule 2-506(a) voluntarily dismiss, without prejudice, all claims pending against_only, in order to facilitate appeal, with each party to bear its own costs and expenses. (Emphasis in original.). Generally, this Court reviews only final judgments of the circuit court. CJP § 12-301; Md. Rule 2-602.

Neither party in this case has raised the issue of finality of judgment in their briefs to this Court, but because the issue of finality of judgment is jurisdictional, we raise it nostra sponte. Milburn v. Milburn, 142 Md.App. 518, 523 , 790 A.2d 744 (2002). To qualify as a final judgment, an order “must either decide and conclude the rights of the parties involved or deny a party the means to prosecute or defend rights and interests in the subject matter of the proceeding.” Nnoli v. Nnoli, 389 ⁶⁴³ Md. 315, 324, 884 A.2d 1215 (2005). A final judgment must satisfy the following three criteria: (1) [I]t must be intended by the court as an unqualified, final disposition of the matter in controversy, (2) unless the court properly acts pursuant to Md. Rule 2-602(b), it must adjudicate or complete the adjudication of all claims against all parties, and (3) the clerk must make a proper record of it in accordance with Md. Rule 2-601.

Rohrbeck v. Rohrbeck, 318 Md. 28, 40 , 566 A.2d 767 (1989) (emphasis added). In this case, our reason for issuing the show cause order was that the September 26, 2006, orders appeared not to satisfy the second requirement. The orders did not dismiss the claims against all defendants in all nineteen cases. Recognizing this fact, appellants filed voluntary dismissals to dispense with claims against those remaining defendants that had not settled, stipulated to dismissal, or filed motions to dismiss.

In responding to this Court’s show cause order, appellants included as exhibits the voluntary dismissals in seven of the nineteen cases. The voluntary dismissals explicitly said that certain defendants were being voluntarily dismissed, without prejudice, “in order to facilitate appeal.” We questioned whether, under our holding in Collins v. Li, 158 Md.App. 252, 255-56 , 857 A.2d 135 (2004), appellants’ voluntary dismissal without prejudice of the remaining defendants impermissibly circumvented the final judgment rule. In Collins , we held that voluntary dismissals without prejudice as to remaining defendants could not be used by the plaintiffs to facilitate what was essentially an interlocutory appeal of the summary judgment granted to a deep-pocket defendant. We noted that, in the dismissals, the plaintiffs clearly expressed their intent to refile their claims against the voluntarily dismissed defendants after our ruling on appeal, and we therefore concluded that the plaintiffs in Collins had dismissed the remaining defendants without prejudice in order to obtain what amounted to an advisory opinion from this Court.

We ⁶⁴⁴ held that such action to circumvent the final judgment rule was impermissible, and we dismissed the appeal. Collins was a case of first impression in Maryland, presenting the issue of whether, in the absence of a Rule 2-602(b) certification, plaintiffs could obtain a final judgment by voluntarily dismissing remaining defendants without prejudice. After reviewing decisions from other jurisdictions, we noted: [T]he general rule is that a plaintiff cannot appeal from the dismissal of some claims when the balance of his or her claims have been voluntarily dismissed without prejudice____ [Bjecause a dismissal without prejudice does not preclude another action on the same claims, a plaintiff who is permitted to appeal following a voluntary dismissal without prejudice will effectively have secured an otherwise unavailable interlocutory appeal. 158 Md.App. at 267 , 857 A.2d 135 (internal quotes and citations omitted). In Collins , we focused on the appellants’ undisguised intent to use voluntary dismissals as a vehicle for obtaining an advisory opinion from this Court and then later resurrect the dismissed claims in circuit court.

Id. at 273-74 , 857 A.2d 135 . The present case is in a different posture than Collins presented. Despite appellants’ clear intent to voluntarily dismiss the remaining defendants in order to perfect an appeal, the appellants in this case, unlike those in Collins , did not do so with the intent of obtaining an advisory judgment from this Court and then reviving their claims against the dismissed defendants. At oral argument, counsel for appellants represented to the Court that appellants have no intention of refiling claims against the voluntarily dismissed defendants.

Counsel further explained that some of those defendants were entities that are no longer in existence. Counsel for appellees do not dispute those representations, and, unlike the appellees in Collins , have not challenged the appellants’ use of voluntary dismissals as illusory. Furthermore, appellants’ counsel explained that the voluntarily dismissed defendants had never filed appearances in the ⁶⁴⁵ case. Rule 2-506(a), governing voluntary dismissal of claims, provides: Except as otherwise provided in these rules or by statute, a party who has filed a complaint, counterclaim, cross-claim, or third-party claim may dismiss all or part of the claim without leave of the court by filing (1) a notice of dismissal at any time before the adverse party files an answer or (2) a stipulation of dismissal signed by all parties to the claim being dismissed.

Because it is clear that appellants did not voluntarily dismiss the various defendants in order to circumvent the final judgment rule, secure an advisory opinion, and re-file the same claims against the voluntarily dismissed defendants at a later date, we conclude that the court’s September 26, 2006, orders of dismissal constitute final, appealable judgments.

III

The Merits of the Dismissal A. Standard of Review This Court reviews a circuit court’s grant of a motion to dismiss to determine whether the dismissal was legally correct. 1000 Friends of Maryland v. Ehrlich, 170 Md.App. 538, 545 , 907 A.2d 865 (2006), cert. denied, 396 Md. 12 , 912 A.2d 648 (2006). A motion to dismiss is properly granted “when there is no ‘justiciable controversy.’ ” Young v. Medlantic Laboratory Partnership, 125 Md.App. 299, 303 , 725 A.2d 572 (1999) (quoting Broadwater v. State, 303 Md. 461, 467 , 494 A.2d 934 (1985)). A defendant may file a motion to dismiss based on the defense that the statute of limitations bars the claim “when a limitations defense is apparent on the face of the complaint, [in which case] the complaint fails to state a cause of action upon which relief can be granted.” Id. (citations omitted).

See Maryland Rule 2-3 22(b)(2). On appeal, “ ‘we must determine whether the complaint, on its face, discloses a legally sufficient cause of action.’ ” 1000 Friends, supra, 170 Md.App. at 545 , 907 A.2d 865 (quoting Fioretti v. Md. State Board of Dental Examiners, 351 Md. 66, 72 , 716 A.2d 258 (1998)). The circuit court’s grant of the ⁶⁴⁶ motion to dismiss will be affirmed only if, viewed in a light most favorable to the non-moving party, and assuming the truth of all well-pleaded facts in the complaint and any inferences reasonably derived therefrom, the allegations in the complaint “ ‘would nevertheless fail to afford plaintiff relief if proven.’ ” Id. (quoting Faya v. Almaraz 329 Md. 435, 443 , 620 A. 2d 327 (1993)).

B. Standing to sue the non-holder defendants One basis on which the circuit court granted the non-holder defendants’ motions to dismiss was that appellants lacked standing to sue entities that had never held any of the named plaintiffs’ loans. Appellants argue that the “non-holder defendants” purchased similar loans that the originating lenders made to other borrowers who are potential members of the as-yet uncertified class, and that the non-holder defendants are therefore “juridically linked” to the lenders that originated the named plaintiffs’ loans. Appellants contend that this potential connection of the non-holder defendants to the proposed class action makes it not only efficient, but also appropriate, for the named plaintiffs to sue parties against whom these plaintiffs have no claim. Appellants in the putative class actions assert that they have standing to sue the non-holder defendants on behalf of unnamed potential class members.

We agree with the circuit court’s conclusion that such defendants should be dismissed. Generally, “[i]n a multi-defendant action or class action, the named plaintiffs must establish that they have been harmed by each of the defendants.” Miller v. Pacific Shore Funding, Inc., 224 F.Supp.2d 977, 996 (D.Md.2002), aff'd, 92 Fed.Appx. 933 (4th Cir.2004) (per curiam unpublished). As we observed in Cutler v. Wal-Mart, 175 Md.App. 177, 184 , 927 A.2d 1, 5 (2007), the class action is not a separate cause of action, but a procedural device for managing causes of action that are appropriate for class certification under the standards established by Maryland Rule 2-231. The appellants’ attempt to state a cause of action against a group of defendants as to whom the named plaintiffs have no claim puts the proverbial ⁶⁴⁷ cart far in front of the horse.

The questionable “doctrine of juridical link” is not consistent with the Maryland procedural rules for dealing with class action plaintiffs’ claims, and the circuit court properly rejected the appellants’ request to apply the doctrine in this case. The doctrine of juridical link refers to a theory recognized by courts in some jurisdictions for the purpose of “ ‘answering] the question of whether two defendants are sufficiently linked so that a plaintiff with a cause of action against only [one defendant] can also sue the other defendant under the guise of class certification.’ ” Popoola v. Md-Individual Practice Assoc., Inc., 230 F.R.D. 424, 431 (D.Md.2005) (quoting In re Eaton Vance Corporate Securities Litigation, 220 F.R.D. 162, 165 (D.Mass.2004)). The juridical link doctrine has never been addressed by Maryland appellate courts. The Fourth Circuit has discussed the juridical link doctrine only once, in an unreported opinion.

See Faircloth v. Financial Asset Securities Corporation Mego Mortgage Homeowner Loan Trust, 87 Fed.Appx. 314, 318 (4th Cir.2004) (per curiam unpublished). 2 The United States District Court for the District of Maryland rejected the juridical link doctrine in Popoola, supra. The district court discussed the genesis of the juridical link doctrine, explaining that it was originally used to determine whether named plaintiffs met the typicality requirement of a class action and could fairly and adequately represent the unnamed class members. 230 F.R.D. at 431 . The district court explained: In its infancy, the doctrine had nothing to do with Article III standing ... The crux of the doctrine held that “a plaintiff who has no cause of action against the defendant ⁶⁴⁸ can not [‘fairly and adequately protect the interests’ of] those who do have such causes of action.” [LaMar v. H & B Novelty & Loan Co., 489 F.2d 461, 466 (9th Cir.1973).] The Ninth Circuit, however, suggested that there were two exceptions to this rule: one for situations where the named plaintiffs injuries “are the result of a conspiracy or concerted schemes between the defendants,” and another for situations where it would be “expeditious” to combine the defendants into one action because they are “juridically related”.

Id. at 466 . Hence, the juridical link doctrine was born. Over time, the doctrine came to be used not only in the class certification analysis under Rule 23, but also in the standing analysis under Article III. Id.

(quoting Eaton Vance, supra, 220 F.R.D. at 169-70 ). The court in Popoola noted that it was “skeptical” of the juridical link doctrine as a means of establishing standing, and expressed its “concern that while [the] juridical link doctrine may be ‘expeditious,’ ‘Article III standing ... does not often bend to expediency and the Supreme Court has warned against such an approach.’ ” Id. at 432 (quoting Eaton Vance, supra, 220 F.R.D. at 170 ). We share the district court’s skepticism of the juridical link doctrine, and note that, as was the case in Faircloth , the circuit court in this case had not yet certified the proposed class, thereby making even more tenuous any connection between the named plaintiffs and the non-holder defendants that may have held the loans of potential unnamed class members. We conclude that the appropriate standing analysis is the one employed by the district court in Miller, supra, 224 F.Supp.2d at 996 .

In Miller , several mortgagors brought putative class actions in federal court, alleging violations by lending entities of the SMLL and the Consumer Protection Act, and seeking a declaratory judgment that their loan agreements were void or voidable as contracts that were contrary to Maryland public policy. As in this case, the named plaintiffs in Miller named as defendants certain lending entities that had never actually held the loans of the named plaintiffs. The district court in ⁶⁴⁹ Miller concluded that the named plaintiffs lacked standing to sue the non-holder defendants, explaining: Fundamentally, none of the plaintiffs alleges any contractual relationship whatsoever with Amaximis, Homeq, Banc One, or Bankers Trust. Indeed, they carefully avoid, stating that any of these defendants holds their mortgage-secured notes or services their loans.

Instead, in their allegations directed specifically at these defendants, the plaintiffs state only that they “[are] (or at one point during the life of the loans w[ere]) ... holder[s] of mortgage notes related to mortgage loans made by [Pacific] to Plaintiffs and/or the Class.” (emphasis added). They never identify them as assignees— past or present — or purchasers of their respective notes. Absent a contractual relationship with any of these defendants, the plaintiffs cannot possibly show that their injuries, such as they have suffered, are traceable to the conduct of any of these defendants; nor can they possibly show that a judicial ruling in their favor would likely redress their injuries. Therefore, plaintiffs lack standing to sue Amaximis, Homeq, Banc One, and Bankers Trust.

Their categorization of this suit as a putative class action in no way cures this defect. 224 F.Supp.2d at 995-96 (emphasis and alterations in original). Appellants concede that the non-holder defendants have at no time held the loans of the named plaintiffs. Appellants cannot “use the procedural device of a class action to bootstrap themselves into standing they lack.” Id. at 996 (citations omitted). Accordingly, we affirm the decision of the Circuit Court for Baltimore City to grant the non-holder defendants’ motions to dismiss on the ground that the named plaintiffs lacked standing to file suit against lenders who neither made a loan to the plaintiffs nor became a subsequent holder of the plaintiffs’ notes.

C. Twelve-year statute of limitations does not apply Appellants assert that in seventeen of their nineteen cases, the mortgage documents are documents under seal, and ⁶⁵⁰ their claims are therefore subject to a twelve-year statute of limitations pursuant to CJP § 5-102(a). 3 The circuit court rejected appellants’ argument that a twelve-year statute of limitations applies, concluding that the lawsuits did not constitute actions “on” a document under seal. The circuit court noted that “the Named Plaintiffs ... are not suing the Defendants on, or seeking to enforce, the notes or deeds of trust. They do not assert any breach of a note or deed of trust.” Instead, the plaintiffs alleged violations of statutes governing the actions the defendants took with respect to the notes. The circuit court concluded, therefore, that the case fell outside the scope of CJP § 5-102(a) and that the applicable statute of limitations was the one generally applicable to civil actions under CJP § 5-101, i.e., three years from the date the actions accrued.

We agree. Appellants assert that, under Maryland law, the word “seal” appearing beside the borrower’s signature line on a loan document prepared by the lenders is sufficient to render the loan document an instrument or contract under seal. And indeed, in Warfield v. Baltimore Gas and Electric Company, 307 Md. 142, 143 , 512 A.2d 1044 (1986), the Court of Appeals held that “the inclusion of the word ‘seal’ in a pre-printed form executed by an individual is sufficient to make the instrument one under seal,” id., subject to the twelve-year statute of limitations. Id. at 148 , 512 A.2d 1044 .

The Court in Warfield quoted this statement from General Petroleum Corporation v. Seaboard Terminals Corporation., 23 F.Supp. 137 (D.Md. 1938): ⁶⁵¹ “[I]f the contract is signed by an individual opposite and in obvious relation to a legally sufficient seal, the instrument will be taken as a sealed document, where there is nothing on the face of the paper to indicate the contrary even though there be no reference to the seal in the wording of the paper.” 307 Md. at 143 , 512 A.2d 1044 . The Court in Warfield further quoted with approval the following passage from Federal Reserve Bank of Richmond v. Kalin, 81 F.2d 1003, 1007 (4th Cir.1936): “Whether a mark or character shall be held to be a seal depends on the intention of the executant, as shown by the paper. (Italics ours [i.e., added in Warfield ]). And, as the word ‘seal’ in parenthesis is in common use as a seal, its presence upon an instrument in the usual place of a seal, opposite the signature, undoubtedly evinces an intention to make the instrument a sealed instrument, which should be held conclusive by the court, in the absence of other indications to the contrary appearing on the face of the instrument itself.” 307 Md. at 145 , 512 A.2d 1044 .

See also Pacific Mortgage and Investment Group, Ltd. v. Horn, 100 Md.App. 311, 322 , 641 A.2d 913 (1994). Appellees contend, however, that, even if the borrowers signed the notes under seal, the twelve-year statute of limitations should not apply to these claims because: (1) the appellants’ suits are not suits “on” the instruments, and (2) the instruments are not instruments under seal with respect to the lenders who did not sign the notes or deeds of trust. As the lenders in this case correctly point out, a finding that the loan documents are instruments under seal does not end the analysis with respect to determining the applicable statute of limitations. Under the clear language of CJP § 5-102(a), the twelve-year statute of limitations applies only to “an action on one of the [specified] specialties.” (Emphasis added.) Maryland courts strictly construe statutes of limitation.

Murphy v. Merzbacher, 346 Md. 525, 532 , 697 A.2d ⁶⁵² 861 (1997). As the circuit court noted, appellants did not allege that the lenders breached the loan agreements, nor did appellants file suit seeking to enforce the loan agreements. Appellants’ suits challenging the lenders’ collection of certain fees alleged to have violated Maryland law do not constitute suits “on” the instruments. To the contrary, appellants seek to avoid enforcement of the terms of the promissory notes and loan instruments.

The circuit court therefore correctly concluded that CJP § 5-102 does not apply to this case, and that the appropriate statute of limitations is the general three-year statute of limitations set forth in CJP § 5-101. We also agree with the lenders’ alternative argument as to why the twelve-year limitations period described in CJP § 5-102(a) is not applicable in this case. Because the lenders did not sign the loan documents under seal, the contact is not under seal as to the lenders. The Restatement (Second) of Contracts, § 107 (1981) provides that when a promisee accepts a sealed document but does not sign it, any promise that the promisee makes in return “is not under seal.” Section 107 states: Creation of Unsealed Contract By Acceptance By Promisee Where a grantee or promisee accepts a sealed document which purports to contain a return promise by him, he makes the return promise.

But if he does not sign or seal the document his promise is not under seal, and whether it is binding depends on the rules governing unsealed contracts. (Emphasis added.) 4 The Restatement approach aligns with the Court of Appeals’s analysis in Mayor and Council of Federalsburg v. ⁶⁵³ Allied Contractors, Inc., 275 Md. 151, 157 , 338 A.2d 275 (1975). In Federalsburg, the Court of Appeals held that, because only the contractor, not the town, had signed the construction contract at issue under seal, the contractor’s claim against the town was subject to the standard three-year statute of limitations generally applicable to suits for breach of contract, not the twelve-year statute of limitations applicable to specialties. Id. at 157 , 338 A.2d 275 .

The Court explained: [E]ven though a contract need not always have as many separate seals as there are signatories to it, since in some circumstances a rebuttable presumption of a party’s adoption as his own of another party’s seal can be established (e.g., such as when the instrument purports on its face to be sealed by all the parties signing it), Stabler v. Cowman, 7 G. & J. 284 (1835); Rockwell v. Capital Traction Co., 25 App.D.C. 98 (1905); McNulty v. Medical Service of D.C., Inc., 176 A.2d 783 (Mun.Ct.D.C.1962), ordinarily when a seal is attached to the signature of one of the parties hut not to that of the other party, the contract as to the latter is a simple contract while as to the former it is a contract under seal. Pearl Hominy Co. v. Linthicum, 112 Md. 27 , 75 A. 737 (1910); State Use of Gilkeson v. Humbird, 54 Md. 327 (1880). Id. at 156-57 , 338 A.2d 275 (emphasis added). The Court of Appeals concluded in Federalsburg that the contract was not under seal as to the town, basing its holding on the following factors: (1) it was “undisputed that the only seal attached to this document is Allied’s corporate seal”; (2) “no reference to a seal is made in the body of the instrument”; and (3) “no extrinsic evidence was presented to prove that the town, through adoption of the other party’s seal or otherwise, intended the contract, at least as to itself, to operate as a specialty.” Id. at 157 , 338 A.2d 275 .

The same three factors ⁶⁵⁴ are present in this case as well. None of the lenders in this case signed any of the loan instruments. The only signatures present on the notes are those of the appellant borrowers. The loan documents do not refer to the instruments as “documents under seal,” nor did appellants proffer any evidence that the lenders intended the loan documents to operate as contracts under their respective seals.

Accordingly, CJP § 5-102(a) does not apply to this case. D. Appellants’ Claims Even though we agree with the circuit court’s conclusion that the three-year statute of limitations is applicable, and we further agree that the start of the limitations period was not deferred until the point in time that the plaintiffs “discovered” that they might have legal remedies, we ultimately come to a different conclusion with respect to the application of the statute of limitations to the appellants’ claims for relief. As to the claims based upon alleged misrepresentations that constituted violations of the Consumer Protection Act, we agree with the circuit court that all operative facts were known to the plaintiffs at the time of closing, and, because no actions based upon the CPA were instituted within three years of closing, those claims are barred by limitations and were properly dismissed. The claims under the SMLL, however, are of a different character.

The statutory remedy that the SMLL provides for a borrower “if a lender violates any provision of [the SMLL]” is that the lender “may collect only the principal amount of the loan and may not collect any interest, costs, or other charges with respect to the loan.” CL § 12-413 (emphasis added). 5 Accordingly, the SMLL creates for the borrower a statutory claim for recovery of an excess ⁶⁵⁵ payment, and that right of recovery accrues each time the borrower makes a payment that results in the lender collecting more than the principal amount of the loan. Although the three-year statute of limitations is applicable to the borrowers’ suits to recover any money wrongfully collected by the lenders, it only bars recovery of amounts collected by the lender more than three years before the date of the complaint. We explain in more detail. 1. Claims Under the Consumer Protection Act The Consumer Protection Act, CL § 13-301, et seq., was enacted to “protect the consumer by setting minimum standards and to restore an undermined public confidence in merchants.” Klein v. State, 52 Md.App. 640, 645 , 452 A.2d 173 (1982) (citations omitted).

Appellants contend that the lenders violated CL § 13-301(1), (2), (3), and (9), which provide: Unfair or deceptive trade practices include any: (1) False, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers; (2) Representation that: (i) Consumer goods, consumer realty, or consumer services have a sponsorship, approval, accessory, characteristic, ingredient, use, benefit, or quantity which they do not have; (ii) A merchant has a sponsorship, approval, status, affiliation, or connection which he does not have; (iii) Deteriorated, altered, reconditioned, reclaimed, or secondhand consumer goods are original or new; or (iv) Consumer goods, consumer realty, or consumer services are of a particular standard, quality, grade, style, or model which they are not; (3) Failure to state a material fact if the failure deceives or tends to deceive; ... (9) Deception, fraud, false pretense, false premise, misrepresentation, or knowing concealment, suppression, or omis ⁶⁵⁶ sion of any material fact with the intent that a consumer rely on the same in connection with: (i) The promotion or sale of any consumer goods, consumer realty, or consumer service; (ii) A contract or other agreement for the evaluation, perfection, marketing, brokering or promotion of an invention; or (iii) The subsequent performance of a merchant with respect to an agreement of sale, lease, or rental[.] In their brief, appellants contend: “The cause of action for violation of the Maryland Consumer Protection Act alleges that the same conduct which