Harrison v. John F. Pilli & Sons, Inc.

McAULIFFE, Judge. In 1985, John F. Pilli & Sons, Inc. (seller) entered into contracts with petitioners for the sale of homes in the Fair Oaks subdivision in Anne Arundel County. Each of the six contracts involved in this case specified a particular lot and a particular home to be built by the seller on that lot, and required conveyance of the improved property within a specified time. At the time the contracts were signed, § 14-118 of the Real Property Article of the Maryland Code (1974, 1988 Repl.Vol.) provided, in pertinent part, as follows: 1 (a) A contract of sale of improved, residential real property shall disclose to the initial purchaser the estimated cost, as established by the appropriate water and sewer authority, of any deferred water and sewer charges for which the purchaser may become liable____ ³³⁹ (b) Violation of this section entitles the initial purchaser to recover from the seller two times the amount of deferred charges he is required to pay.

None of petitioners’ contracts disclosed the existence or amount of any deferred water or sewer facilities charges. 2 Indeed, one cannot determine from the printed form contract used in each instance whether the property was subject to deferred water or sewer charges of any kind. Each contract provided for adjustment at settlement of any such charges if they did exist, but also provided that “[t]he septic system and well, if any, are being installed under the direction of the county health officer____” At settlement, or soon thereafter, petitioners learned that their lots were subject to a lien for the payment of deferred water and sewer charges. Each lot owner was obliged to pay annual charges of $240 for water facilities charges, and a like amount for sewer facilities. The deferred charges, which began in 1984, will continue until 2017.

In October of 1986, petitioners sued the seller in the Circuit Court for Anne Arundel County, seeking judgment for twice the amount of the deferred water and sewer charges, computed over the entire 31 year period of payments due subsequent to settlement. The seller denied liability, and each party moved for summary judgment. Judge Eugene M. Lerner granted petitioners’ motion, finding that the seller was liable to each property owner for twice the amount of the deferred water and sewer facilities charges that had accrued at the time of the hearing. Each party appealed to the Court of Special Appeals.

The seller contended, among other things, that: 1) the contracts at issue were not for the “sale of improved, ³⁴⁰ residential real property” within the meaning of the statute, because the lots were not improved at the time the contracts were signed; 2) the purchasers waived any right they may have had under the statute when they learned, at settlement, of the lien for deferred charges, and failed to object; 3) there was no evidence that Belleview Sewer and Water, Inc., the entity imposing the deferred charges, was an “appropriate water and sewer authority” within the meaning of the statute; and 4) in any event, damages should have been limited to twice the amount actually paid, rather than twice the amount of payments accrued. The purchasers contended they were entitled to judgment for twice the amount of the entire deferred charges, without regard to the amount that had accrued or been paid. The Court of Special Appeals reversed the judgment of the circuit court, holding that the contracts were not for the “sale of improved, residential real property,” and therefore the disclosure statute did not apply. Harrison v. John F. Pilli & Sons, 78 Md.App. 199, 204 , 552 A.2d 971 (1989).

The purchasers sought certiorari on the issue decided by the Court of Special Appeals. The seller filed a conditional cross-petition for certiorari, asking that in the event we agreed with the purchasers, we address the remaining questions the seller raised in the intermediate appellate court. We granted both petitions. I. We first address the applicability of the disclosure statute to the contracts involved in this case.

As previously noted, § 14-118 of the Real Property Article required disclosure, in any “contract of sale of improved, residential real property,” of any deferred water and sewer charges for which the initial purchaser might become liable. We conclude that under the clear language of the statute, these contracts are covered by the statute. In each instance, the purchaser agreed to buy and the seller agreed to sell a piece of property with a single-family residential dwelling on it. The purchase price in each instance was for the lot im ³⁴¹ proved by the home.

The subject matter of each contract of sale was, therefore, “improved, residential real property.” It is of no consequence that the lots were unimproved at the time the contracts were signed. The contracts required the seller to make the improvements in order to convey that which it had agreed to sell. The sale of “custom” homes forms a substantial part of the residential real estate market, and is every bit as much a “sale of improved, residential real property” as is the sale of a “speculation” home, i.e., one completed by the seller before being offered for sale. In reaching a contrary result, the Court of Special Appeals was persuaded by two factors.

First, that Court held that the statute must be strictly construed because it is in contravention of common law. 78 Md.App. at 203 , 652 A.2d 971 . The canon of construction relied on by the Court of Special Appeals may have efficacy in appropriate cases. It must be recognized, however, that most statutes have the effect of changing existing law, and therefore the canon “has been most commonly employed where the statute threatens to invade an existing property or contract right, or tends to interfere substantially with a cherished personal liberty.” 3 Sutherland Statutory Construction, § 61.06 (4th ed. 1986 rev.). Moreover, as Chief Judge Murphy pointed out for this Court in State v. Fabritz, 276 Md, 416, 422, 348 A.2d 275 (1975), cert. denied, 425 U.S. 942 , 96 S.Ct. 1680 , 48 L.Ed.2d 185 (1976), even in the case of statutes ordinarily calling for strict construction, it is the intention of the legislature that governs and, like other statutes they “are to be fairly and reasonably construed, and courts should not, by narrow and strained construction, exclude from their operation, cases plainly within their scope and meaning.” Finally on this point, we note that the statute is clearly remedial, and that there also exists a canon of statutory construction that remedial statutes are liberally construed to suppress the evil and advance the remedy.

See State v. Barnes, 273 Md. 195, 208 , 328 A.2d 737 (1974); Fisher v. Bethesda Discount Corp., 221 Md. 271 , 157 A.2d ³⁴² 265 (1960); Smith v. Higinbothom, 187 Md. 115 , 48 A.2d 754 (1946); 2 Sutherland Statutory Construction § 60.01 (4th ed. 1986 rev.). Conflicting canons of statutory construction are nothing new, as Judge Adkins pointed out for the Court in Kaczorowski v. City of Baltimore, 309 Md. 505, 512 , 525 A.2d 628 (1987), for “[jjust as in the science of Physics every action has an equal and opposite reaction, so it seems that every canon of statutory construction has an equal and opposite canon.” The cardinal rule of statutory construction is to determine the intent of the legislature. The logical starting place is with the language of the statute, and where that language is clearly consistent with the apparent purpose of the legislation, and does not produce any absurd results, further research may be unnecessary. Kaczorowski, supra, 309 Md. at 515 , 525 A.2d 628 ; Taylor v. Dep’t of Employment and Training, 308 Md. 468, 472 , 520 A.2d 379 (1987).

Here, the language of the statute clearly embraces the sales contracts involved in this case, and the result of this interpretation is entirely consistent with the obvious intent and purpose of this remedial legislation. Resort to conflicting canons of construction is neither necessary nor desirable in this case. The second factor the Court of Special Appeals found persuasive is the definition of “property” within the Land Installment Contracts subtitle of the Real Property Article. Section 10-101(d) provides as follows: ‘Property’ means improved property or improved chattels real, occupied or to be occupied by the purchaser as a dwelling, or an unimproved, subdivided lot or lots intended to be improved for residential purposes.

The Court of Special Appeals reasoned that § 10 — 101(d) distinguished between improved real property and unimproved property intended to be improved for residential purposes. Additionally, the Court noted that § 14-118 had originally been enacted as § 10-109, and therefore had originally been included within the Land Installment Contracts subtitle. ³⁴³ We do not find it necessary to interpret § 10-101(d) as it applies to land installment sales contracts. It is clear to us the legislature never intended the definition provided by § 10-101(d) to apply to the disclosure requirements of a contract not involving installment sales. As the legislative history of § 14-118 makes clear, the initial placement of that section in the Land