Ford v. General Motors Acceptance Corp.

WILNER, Chief Judge. Appellant filed suit in the Circuit Court for Baltimore City against appellee, General Motors Acceptance Corporation (GMAC), claiming that GMAC had wrongfully repossessed appellant’s truck. He sought both money damages for the wrongful conduct to date and an order staying any sale of the vehicle. On GMAC’s motion, the court dismissed the complaint for failure to state a claim upon which relief could be granted, and appellant has filed this appeal.

Regrettably, the record is somewhat thin as to all of the essential underlying facts. We do know this much. In July, 1990, appellant purchased a 1990 Nissan Pathfinder truck and financed part of the purchase price with GMAC. The financing was evidenced by a Retail Installment Sales Contract signed by appellant and GMAC.

The section of that contract dealing with repossession provided, in relevant part: “Repossession means that, if you fail to pay according to the payment schedule or if you break any of the agreements in this contract (default), or if the vehicle is seized by the police, the Creditor can take the vehicle from you. To take the vehicle the Creditor can enter your property, or the property where it is stored, so long as it is done peacefully. If the Creditor repossesses the vehicle, you have the right to get it back (redeem) at any time before it is sold, unless the vehicle was seized by the police.” (Emphasis added). On May 30, 1991, appellant lent the vehicle to his girlfriend, Laurenea Nias.

Ms. Nias, in turn, picked up a passenger. Officers of the Baltimore City Police and the Federal Drug Enforcement Agency, having apparently been previously informed that this passenger would be carrying drugs, stopped the car, searched the passenger, and found the drugs in his tennis shoe. With Ms. Nias’s consent, the officers also ²⁶⁰ searched the truck but found no other controlled substance. Ms. Nias was not charged, but, presumably because an occupant of the vehicle had been found in possession of the contraband, the officers seized the vehicle and had it transported to an impound lot.

GMAC was informed of the seizure by DEA; it elected then to exercise its right under the contract to repossess the vehicle and, on August 19, 1991, notified appellant that unless he paid the accelerated balance of $15,176-by September 6, 1991, the truck would be sold. Through letters from his attorney, appellant protested, pointing out, first to GMAC and later to its attorney, that all payments under the contract were current and that he was totally innocent in the matter. In his September 3 letter to GMAC’s lawyer, counsel averred that appellant had lent the truck to his girlfriend who, herself, had no knowledge that the passenger was carrying drugs. Asserting the lack of any evidence that Ms. Nias was in any way involved in illegal activity or was acting as appellant’s agent, he demanded the' return of the vehicle.

When GMAC ignored that demand, appellant brought this suit seeking, as we indicated, an order staying any sale of the truck and damages. In its motion to dismiss, GMAC informed the court that, as appellant had failed to redeem the vehicle in accordance with the August 19 notice, the car had been sold. In support of its contractual right to repossess and sell goods seized by the police, GMAC cited Md.Code.Comm.Law art., § 12-624(a), authorizing the holder of a retail installment sales contract to repossess goods sold under the contract if “[t]he goods were seized by a police department, bureau, or force,” and § 12-625(d), declaring that no right of redemption existed in goods that were so seized. GM1AC stands by that position in this appeal — that it acted pursuant to contractual powers that were, in turn, specifically authorized by the Legislature as part of the Retail Installment Sales Act.

Appellant counters that § 12-624 of the Commercial Law article must be read in conjunction with § 297 of art. 27, which provides for, but establishes certain conditions to, the seizure ²⁶¹ and forfeiture of vehicles (and other property) used in connection with controlled dangerous substances. One of those conditions is that a vehicle shall not be seized and recommended for forfeiture when it appears that an innocent owner has lent the vehicle to another and that person or someone invited by that person causes controlled substances to be brought into the vehicle without the owner’s knowledge. A harmonic reading of the two statutes, he avers, leads to the conclusion that, unless the buyer is otherwise in default under the agreement, the right of repossession given in § 12-624 does not apply to an “innocent owner.” Implicit in appellant’s argument is the assumption that, absent statutory authorization for a creditor to repossess solely upon a seizure by the police, any such provision in a retail installment sales contract would be unlawful. GMAC has taken no issue with that assumption, and, indeed, we think it is a fair and accurate one.

The Retail Installment Sales Act is remedial in nature and was intended “to curb serious actual or potential evils.” Hudson v. Md. State Housing Co., 207 Md. 320, 331 , 114 A.2d 421 (1955). It provides extensive regulation of that form of marketing, including, in § 12-624, specifying the events and circumstances under which a creditor is entitled to repossess the goods sold. Prior to the addition in 1984 of the language allowing repossession when the goods were “seized” by a police agency, there was no suggestion that a contract subject to that Act could permit repossession solely on that account. We hold, therefore, that the authority provided in the contract must be read in pan materia with § 12-624, and that the contractual authority cannot extend beyond the statutory authority.

The question presented to us by appellant is thus a very limited one of statutory construction — the meaning of the word “seized” in §§ 12-624 and 12-625. The fundamental rules of statutory construction have been recited many times by the Court of Appeals. A fair and ²⁶² recent summary is provided in Motor Vehicle Admin. v. Shrader, 324 Md. 454, 462-63 , 597 A.2d 939 (1991): “The cardinal rule of statutory construction is to ascertain and effectuate legislative intent---- Because the language of the statute is the primary source of legislative intent ... the words of the statute must be given their ordinary and natural meaning.... On the other hand, the plain meaning rule is not rigid and does not force us to read legislative provisions in rote fashion and in isolation....

One equally well-settled principle of statutory interpretation is that a statute is to be construed reasonably with reference to the purpose, aim or policy of the legislature reflected in the statute.... Additionally, a statute must be construed in context; ‘[t]he “meaning of the plainest language” is controlled by the context in which it appears’____ Thus, when construing a provision that is part of a single statutory scheme, the legislative intent must be gleaned from the entire statute, rather than from only one part.... Also, legislative reports and other pertinent legislative history may help to provide the appropriate context.” (Citations omitted.) In furtherance of this general policy of effectuating legislative intent, it is also a paramount principle of statutory construction that “two statutes that relate to the same subject matter will be harmonized to the fullest possible extent.” Biggus v. Ford Motor Credit Co., 328 Md. 188, 208 , 613 A.2d 986 (1992). GMAC’s position is simplicity itself.

The Retail Installment Sales Act (§ 12-624) says that a holder may repossess goods sold under an installment sales contract if the goods have been “seized” by a police agency; words used in a statute are given their ordinary common meaning; “seized” means “seized” and nothing more; appellant’s truck was “seized” by a police agency; therefore, GMAC was entitled to exercise its contractual right to repossess the vehicle. Indeed, at oral argument, GMAC insisted that it was authorized to repossess and sell a ²⁶³ vehicle, without any right of redemption, even if the vehicle was impounded because it had broken down and was obstructing traffic or because it was illegally parked. GMAC’s argument, we think, is much too simplistic, for it ignores the fact that the authorization in § 12-624 relied upon by GMAC was enacted as part of a statute dealing more generally with the seizure and forfeiture of vehicles, a statute that rewrote part of art. 27, § 297 as well. The two Code provisions are closely connected and have to be read in harmony.

We cannot just look at § 12-624 and stop, as GMAC urges. There is, indeed, a good bit of legislative history with respect to the seizure and forfeiture of vehicles allegedly used in connection with illegal drug transactions, and it is from that history that the evident legislative intent emerges. In 1951, the General Assembly first entered these waters by enacting a statute (1951 Code art. 27, § 352A) providing that any vehicle used in the transportation of illegal narcotic drugs or used during the violation of the narcotic drug laws, upon conviction of the violator, shall be declared forfeited to the county. There was a proviso, however, that “no vehicle shall be forfeited hereunder unless the owner thereof authorized or permitted such use or employment.” In Commercial Credit Corp. v. State, 258 Md. 192 , 265 A.2d 748 (1970), the question arose whether the assignee of a vendor under a conditional sales contract could be considered as an “owner” for purposes of the exemption.

The actual owner of the car purchased it for use by another person in the illegal drug trade. He financed the purchase through a conditional sales contract that the seller assigned to Commercial Credit. In the contract, the buyer agreed not to use the car illegally. When the user of the vehicle was arrested and convicted for violating the drug laws, the county moved to have the car forfeited.

The owner was, by then, behind in his monthly payments, and Commercial Credit filed a petition to stay the forfeiture and have the car returned to it. ²⁶⁴ The issue before the Court, as we indicated, was whether Commercial Credit could be considered an innocent “owner,” for it was clear that the actual owner was anything but innocent. Noting that, unlike some other States, Maryland’s statute did not expressly protect innocent lienholders directly, the Court nonetheless gave an expansive meaning to the word “owner.” It observed, at 203, 265 A.2d 748 , that the purpose of the law was to deter violations of the narcotics laws, “but not at the expense of innocent persons,” and that the Legislature did not intend “to enact legislation that could seriously impede or obstruct the usual outlets of the automobile business.” Any contrary assumption, it declared, “would surely be unreasonable.” Id. at 204 , 265 A.2d 748 . Largely on that basis, but noting as well that, as the lien on the car exceeded its value Commercial Credit was the only entity with any real economic interest in the vehicle, the Court held that Commercial Credit was an “owner” within the meaning of the proviso and was therefore entitled to possession of the car. While the Commercial Credit case was pending in the Court of Appeals, the Legislature, through 1970 Md.Laws, ch. 403, rewrote the controlled dangerous substance law and, with it, the provision dealing with forfeitures. 1 It did not, however, address the problem of an innocent lienholder, and, indeed, significantly circumscribed the “innocent owner” provision enacted in 1951.

In new § 297 added to art. 27, the General Assembly declared that all “conveyances” used or intended for use to transport controlled dangerous substances were subject to forfeiture “and no property right shall exist in them.” There were two exceptions to that provision: a conveyance was not subject to forfeiture if (1) it was used by a person as a common carrier, unless it appeared that the owner “or other person in charge of such conveyance” was a consenting party or was privy to a violation; or (2) the violation was committed by a person other than the owner while the conveyance was ²⁶⁵ “unlawfully” in the possession of that other person in violation of State or Federal criminal law. The 1970 statute came before the Court in Pr. George’s Co. v. Blue Bird Cab, 263 Md. 655 , 284 A.2d 203 (1971). The cab company had leased one of its cabs to a driver named Gray.

The lease was for a year but required a daily rental of $16, payable each day. Gray was arrested for selling drugs from the cab, and the county seized the vehicle pursuant to § 297. The cab company, claiming under the two exemptions, petitioned for release, which the circuit court granted. The Court of Appeals reversed.

It held first that “under the applicable statute at the time of this seizure, lack of complicity by the owner, unless rescued by the stated exceptions in the law, is not a defense and in fact it makes no difference whether there is any conviction of a crime related to those seized goods.” Id. at 659, 284 A.2d 203 . It then rejected the argument that either exemption applied under the facts of the case. The culpable party — Gray—was “in charge” of the cab, but, although his conduct was illegal, his possession of the cab was not in violation of any criminal law. The Legislature responded swiftly to Blue Bird, but not in a way that was of much assistance to lienholders.

The focus, rather, was on innocent owners. By 1972 Md.Laws, ch. 659, it added a number of new subsections to § 297 to “provide certain guidelines and procedures for the seizure and forfeiture of motor vehicles” used in violation of the controlled substance laws. The major features of the 1972 law were to draw a clear distinction between the seizure and the forfeiture of motor vehicles and the forfeiture of other kinds of property, to distinguish between the process for seizing a vehicle and that of forfeiting it, and to protect an innocent owner of a motor vehicle with respect to both seizure and forfeiture. The seizure and forfeiture of “conveyances,” including vehicles, was dealt with generally in subsections (a) through (d) of § 297.

The 1972 law added additional subsections (f) through (w) dealing specifically with the seizure and forfeiture of motor ²⁶⁶ vehicles. Seizure was effected by the police; they were directed in new subsection (f) to seize motor vehicles and recommend their forfeiture in three situations: (1) where controlled