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

MOYLAN, Judge. Appellants/cross-appellees (Buyers) appeal from an Order of the Circuit Court for Anne Arundel County which granted their motion for summary judgment and ordered appellee/cross-appellant (Seller) to pay damages of $1,920 to each Buyer for violation of Maryland Real Property Code Annotated § 14-118. Seller cross-appealed raising several contentions. The crux of both sides’ arguments is the construction of § 14-118.

Maryland Real Property Code Annotated § 14-118, then in force, provided: “(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 ²⁰¹ sewer authority, of any deferred water and sewer charges for which the purchaser may become liable. If the appropriate water and sewer authority has not established a schedule of charges for the water and sewer project that benefits the property or if a local jurisdiction has adopted a plan to benefit the property in the future, the contract of sale shall disclose that fact to the initial purchaser. (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.” Buyers contend that the trial court misinterpreted the statute and miscalculated the damages. Buyers are six married couples who purchased residential real property in Anne Arundel County from Seller under separate “New Construction” contracts of sale.

The homes described in these contracts were not built at the time the agreements were executed. Rather, the homes were to be built on the sub-divided lots sold to Buyers. The contracts failed to disclose the estimated cost of any deferred water and sewer charges for which the Buyers may become liable as a result of the real property purchase. The Buyers filed suit in the Circuit Court for Anne Arundel County on October 28, 1986 based on Seller’s alleged violation of § 14-118.

Both sides moved for summary judgment and at a hearing held April 4,1988, Judge Eugene M. Lerner found that Buyers were initial purchasers of improved, residential real property and granted Buyers’ motion. Pursuant to the statute, Seller was ordered to pay to each Buyer twice the amount of deferred water and sewer charges paid to Belle-view Sewer & Water, Inc. (Belleview), namely, $1,920. Thereafter, Buyers noted this appeal. Buyers urge us to read § 14-118 as entitling them to two times the amount of deferred water and sewer charges that they would have to pay to Belleview over the life of their agreements with Belleview.

These agreements are to last for 33 years. Thus, Buyers seek damages of double the ²⁰² water and sewer charges they would have to pay over the next 31 years. 1 Conversely, Seller agrees with the trial court’s reading of that portion of the statute that Buyers contest, but raises the following issues on cross-appeal: 1. That it was error for the trial court to apply § 14-118 to the real property contract when there was no evidence that Buyers were initial purchasers of improved real property or that Belleview was an appropriate water and sewer authority; 2. That it was error for the trial court to hold, as a matter of law, that Buyers did not waive their rights under the statute by failing to object to payment of the deferred water and sewer charges upon learning of the charges prior to taking title to the lots; and 3.

That it was error for the trial court to award $1,920 per couple when the record established that Buyer had only been assessed $480 in water and sewer charges as of the date of the hearing below. It is not necessary to address the propriety of ordering year-by-year rather than lump sum damages 2 because ²⁰³ we hold that the contract of sale in the instant case was not for improved, residential real property as contemplated by § 14-118. It is well-settled in Maryland that the cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Frazier v. Warfield, 13 Md. 279, 301 (1859); Comptroller of Treasury v. Fairchild Industries, Inc., 303 Md. 280, 284 , 493 A.2d 341, 343 (1985).

Maryland courts are charged with interpreting the words of a statute “according to their genuine and natural signification and import,” Allen v. The Mutual Fire Insurance Co., 2 Md. 111, 120 (1852); Fairchild Industries, supra, 303 Md. at 284 , 493 A.2d 341 , but