Hoffman v. Stamper

WILNER, J. In an amended complaint filed in the Circuit Court for Baltimore City, nine plaintiffs claimed that, through an elaborate “flipping” scheme, the defendants had conspired to defraud them, and did defraud them, into purchasing dilapidated residential properties in Baltimore City at inflated prices. 1 The participants in this alleged conspiratorial scheme were (1) the “flippers,” Robert Beeman, Suzanne Beeman, and a corporation controlled by the Beemans, A Home of Your Own, Inc. ⁷ (AHOYO), (2) the lenders, Irwin Mortgage Corporation (then known as Inland Mortgage Corporation) and one of Irwin’s loan officers, Joyce Wood, and (3) the appraiser, Arthur Hoffman. 2 Each of the nine plaintiffs charged all of the defendants with conspiracy to defraud, fraud, violations of the State Consumer Protection Act (CPA), and negligent misrepresentation, and Irwin and Wood were charged as well with general negligence. Compensatory and punitive damages were sought by each plaintiff against each defendant. After disposition by the court of various motions, a jury found each of the defendants liable to each of the plaintiffs for fraud, conspiracy to defraud, and violations of the CPA. The jury awarded each plaintiff, as against all of the defendants, differing amounts of economic damages and $145,000 for non-economic (emotional) damages, for an aggregate total of $1,434,020. 3 In addition, it awarded each plaintiff $200,000 in punitive damages against the Beemans and AHOYO.

Through a partial judgment in their favor, the court had previously withdrawn from the jury the punitive damage claims against Irwin, Wood, and Hoffman. Their liability, joint and several, was only for the compensatory damages. In post-trial proceedings, the court awarded attorneys’ fees and expenses under the CPA against all defendants in the aggregate amount of $195,591, subject to a dollar-for-dollar credit for attorneys’ fees and expenses received by plaintiffs’ counsel under their contingent fee agreement. Everyone except Robert Beeman and AHOYO appealed, although Suzanne Beeman later withdrew her appeal.

The Court of Special Appeals affirmed the judgments for compensatory damages, but, after concluding that there was sufficient evidence to show that Irwin, Wood, and Hoffman participated in the fraudulent scheme and made misrepresentations of ⁸ their own with actual knowledge of the fraud and the falsity of those representations, it reversed the partial judgment in their favor with respect to punitive damages, and remanded for further proceedings on those claims. See Hoffman v. Stamper, 155 Md.App. 247 , 843 A.2d 153 (2004). On the premise that an award of attorneys’ fees under the CPA must take into account all of the circumstances, including the amount of recovery, and because, on remand, there was the prospect of a punitive damage award being entered against Irwin, Wood, and Hoffman, the intermediate appellate court also vacated the award of attorneys’ fees and remanded that as well for reconsideration. As “guidance” for the trial court, the Court of Special Appeals observed that an award of attorneys’ fees under the CPA would not duplicate fees paid by the plaintiffs under a contingent fee agreement but would simply reimburse them for all or part of those fees.

We granted petitions for certiorari filed by Irwin, Wood, and Hoffman to consider the following questions: (1) Was there sufficient evidence of culpability on Hoffman’s part to sustain the verdicts for conspiracy, fraud, and violation of the CPA; (2) In affirming the judgment for compensatory damages, did the Court of Special Appeals err in holding that, in an action based on fraud, non-economic damages may be awarded in the absence of any physical injury; (3) Did the trial court err in instructing the jury that damages in an action based on fraud need be proved only by a preponderance of the evidence and, if so, did the Court of Special Appeals err in holding that Irwin and Wood waived their objection to such an instruction; (4) Did the Court of Special Appeals err in reversing the judgment for Irwin, Wood, and Hoffman as to punitive damages and, if not, did it err in remanding for only a partial new trial on punitive damages rather than an entire new trial on all issues; and ⁹ (5) Did the Court of Special Appeals err in vacating the award of attorneys’ fees and remanding that issue for further reconsideration? We shall answer some of these questions in the affirmative and some in the negative and shall therefore affirm in part and reverse in part the judgment of the Court of Special Appeals. For convenience, we shall refer to the Beemans and AHOYO collectively as “Beeman,” unless the context requires otherwise. Robert Beeman was the principal culprit.

Irwin’s culpability is a vicarious one, resting on the conduct of its employee, Wood. BACKGROUND The basis of the plaintiffs’ case, in a nutshell, was that Beeman (1) bought dilapidated properties in Baltimore City at low prices, (2) then searched for unsophisticated, low-income buyers with poor credit histories, (3) promised them that he could sell them a renovated home for a down payment of only $500, (4) got those buyers to sign contracts of sale at significantly inflated prices upon a promise to make extensive repairs, many of which were never made, (5) arranged for the buyers to finance the purchases with 100% FHA loans obtained through Wood, and (6) obtained those loans for the buyers in part by conspiring with Wood to have Hoffman prepare erroneous appraisals showing the value of the homes to be at or above the grossly inflated contract price and in part by engaging in practices that clearly violated Department of Housing and Urban Development (HUD) regulations and requirements regarding the FHA program in order to consummate the transactions. All nine plaintiffs — two of whom (Brower and Spencer) purchased one house together — testified that, after taking possession, they experienced major problems with their homes, some of which were uninhabitable. Six of the nine eventually lost their homes to foreclosure.

The transactions at issue in this case were as follows: 4 ¹⁰ [[Image here]] The trial lasted three weeks, during which a great deal of documentary and testimonial evidence, some of it conflicting, was presented. We must view that evidence in a light most favorable to the part(ies) who prevailed on the issues to which it relates and shall recite the facts accordingly. Beeman began his business of buying distressed houses in Baltimore City at low prices and selling them to unsophisticated buyers at inflated prices in 1996. Initially, he arranged financing for the buyers through conventional mortgage loans, but those loans financed only 60% to 80% of the purchase price.

At some point in 1997, he met Wood, who was a loan officer for Irwin and dealt in FHA insured loans. Wood received a commission on loans generated by her and looked upon Beeman (and others in his line of business) as customers ¹¹ and a source of commission income for her. She educated Beeman about the FHA program. Mortgage loans approved under that program are insured by HUD.

If a loan goes into default, the lender, or current holder of the mortgage, forecloses, buys the property at the foreclosure sale for the balance due on the loan, transfers the property to HUD, and is reimbursed by HUD for 100% of the unpaid balance of the loan. Because of the greatly reduced risk of loss under that arrangement, lenders are willing to lend up to 100% of the appraised value of the property. Most of Beeman’s prospective buyers had both poor credit and insufficient funds to meet their share of the closing costs. At their initial meeting, Wood advised Beeman that, under the HUD program, a seller could not contribute more than six percent of the loan amount (which, with a 100% loan, was equivalent to the purchase price), and that if the seller contributed more, the purchase price would be reduced accordingly.

Included in the six percent cap were a seller’s contributions to the buyer’s share of closing costs and payments made to clear up the buyer’s credit problems. 5 To maximize his profit, of course, Beeman had an incentive not to have any reduction of the contract price. Wood explained that it was possible for closing costs to be donated by a friend or relative of the buyer but that any such gift must be verified by (1) a gift letter from the donor, and (2) evidence that the funds were drawn from the donor’s bank account. Wood offered a range of services to Beeman to permit him to pursue his business. First, presumably aware that Bee-man’s buyers would be unable, on their own, to pay their share of closing costs, she gave him a supply of blank gift letters.

She also agreed to generate on Irwin’s computer, for ¹² each buyer referred by Beeman, a “good faith estimate.” The “good faith estimate,” according to Wood, was based on the contract price and the estimated share of closing costs to be paid by the buyer and determined how much cash the buyer would need to close. That would allow Beeman to determine how much of a “gift” would be required. In fact, that estimate had a greater significance. In most, if not all, of the transactions, the “good faith estimate” prepared by Wood became the purchase price for the house.

The purchase price thus was. determined by the maximum loan amount, not the other way around. It was not negotiated between Beeman and the buyers but was inserted into the contract by Beeman after the “good faith estimate” was calculated by Wood. Each of the nine plaintiffs called Beeman in response to one of his ads offering a “rehabbed” home for only $500 down or after learning of such an offer by word-of-mouth. Beeman met with the plaintiff, ascertained the area of the City where the plaintiff wanted to live, got some basic credit information regarding the plaintiff, and showed the plaintiff the houses that he had in that part of the City, without clearly disclosing that the properties were his.

Most of the plaintiffs thought that Beeman was an agent of some kind or a lender and did not realize that he was the owner/seller. Each house was still in a dilapidated condition, but Beeman promised that the house would be fixed by his own contractor, that he would have it inspected, and that he would assist in obtaining FHA financing for the plaintiff. When the plaintiff indicated interest, Beeman, either that day or shortly thereafter, drove him/her to Irwin’s office in Columbia, where they met with Wood and made application for an FHA loan. . Some of the plaintiffs testified that they signed a contract of sale with Beeman prior to meeting with Wood based on a price quoted or estimated by Beeman, that the purchase price was nonetheless left blank in the contract, and that, when or after meeting with Wood, a price had been inserted in the contract that was higher than was first quoted.

Wood confirmed that Beeman and the buyer would bring contracts of sale when they met with her, that the price was sometimes missing from ¹³ the contract, but that it was inserted before the end of the meeting. Plaintiff McFadden said that Beeman had estimated the price of the house on Kresson Street at $50,000, but that, at the meeting with Wood the price had been filled in at $52,000. Plaintiff Haley said that he thought the price of the house on 41st Street was between $35,000 and $40,000, but that, when presented with the contract at Wood’s office, the price was $57,200. Plaintiff Green was told by Beeman that the price for the house on Belnord Avenue would be $38,000, but that the contract handed to her by Wood showed the price as $44,000.

When Beeman took Plaintiff Henderson to see the house on Oldham Street, he told her the purchase price would be $58,000; at the meeting with Wood, the price was changed to $65,000. When he took Plaintiff Coward to see the house on Carroll Street, he told her that the price was $40,000; at the meeting with Wood, she was handed a document showing the price to be $58,000. As none of the plaintiffs had sufficient funds to pay their share of the closing costs, Beeman paid those costs through a sham transaction. Beeman asked each of them to find a friend or relative with a bank account who would be willing to act as a “donor.” Once that was done, Beeman filled out one of the gift letters given to him by Wood and had the buyer and the “donor” sign the letter.

The letter was an attestation by the “donor” that he/she was making a gift of the amount specified to the buyer, to be applied to the purchase of the property described, and that no repayment was expected. Beeman then arranged to meet the “donor,” sometimes with the buyer, at the “donor’s” bank or credit union. Beeman arrived with cash in an amount equal to the “gift.” He gave the cash to the “donor,” who deposited it into his/her account. The “donor” then obtained a certified check for that amount payable to the buyer and gave the check to Beeman.

That check was then used to pay the buyer’s share of transactional costs. The “donor” made no contribution to the costs; they were contributed entirely by Beeman. 6 Wood was aware that ¹⁴ a “gift” would be required in each of the eight cases now before us. Although all of the plaintiffs knew that Beeman was providing the funds and that the gift letters were not accurate, Beeman explained, when asked, that the gift letter procedure was necessary to provide the closing costs and was a standard and legitimate procedure in buying a house. The plaintiffs testified that they did not know that the process used by Beeman was illegal and that, had they known it was illegal, they would not have participated in it.

The third piece of the scheme was the appraisal. Hoffman, a licensed appraiser, had once worked for HUD and was familiar with the regulations and requirements pertaining to FHA loans. He also had worked for Irwin as an in-house appraiser. After leaving that employment, he continued to do freelance appraisal work for Irwin and was paid $300 for each appraisal.

Indeed, he said that, after leaving Irwin’s employ, 99% of his income still came from work he did for Irwin. We shall recite more of the evidence against Hoffman shortly. It will suffice here to note that there was evidence showing that (1) Hoffman was aware of a HUD requirement that, if an appraisal showed the value of the property to be less than the contract price, the buyer had to be informed and that the buyer then had an absolute right to cancel the contract, in Hoffman’s words “that would kill the deal”, (2) most of the appraisals he did in these cases contained admitted errors of one kind or another, either with respect to the appraised property itself or regarding the properties he used as comparable sales, (3) in most cases, he used inappropriate sales as comparable — properties in different kinds of neighborhoods or that were distant from the subject property that sold for higher prices — and ignored closer and more similar properties that had sold for much less, (4) in each case, he appraised the dilapidated property at or above the contract price without ¹⁵ regard to the much lower price paid by Beeman just months before, (5) although he justified the difference between Bee-man’s purchase price and his much higher appraisals on the basis that substantial repairs would be made to the property, he did not make reasonable efforts to assure that those repairs had, in fact, been made and many of them were not, in fact, made, (6) he was aware of a HUD requirement that an appraiser keep the supporting data for appraisals made with respect to FHA loans for a period of five years, and (7) in knowing and deliberate violation of that requirement, he destroyed those records shortly after Beeman’s activity became public and investigations into it commenced. Because in each case the appraisal showed the value as equal to or greater than the inflated contract price, the buyer lost the option to cancel the contract.

With this somewhat general background, we turn to the issues before us. DISCUSSION A. Hoffman’s Culpability Pursuant to Maryland Rule 2-519, Hoffman moved for judgment at the end of the case, and, when that motion was denied and the verdicts against him were rendered, he moved for judgment NOY pursuant to Rule 2-532. That motion, too, was denied. He makes two complaints about the denial of those motions: (1) the trial court and the Court of Special Appeals applied the wrong evidentiary standard in resolving the motions addressing the conspiracy and fraud claims; and (2) because, under the correct standard, the evidence was legally insufficient to establish conspiracy, fraud, or violations of the CPA on his part, those motions should have been granted.

(1) Standard of Proof Hoffman contends that findings of conspiracy and fraud require proof by clear and convincing evidence and that, when reviewing the denial of the motions for judgment, the Court of ¹⁶ Special Appeals looked only to see whether there was “any evidence ... however slight” to support the claims. Hoffman, supra, 155 Md.App. at 288 , 843 A.2d at 178 . That, he claims, is not the proper standard. Hoffman is correct in stating that fraud must be proved by clear and convincing evidence.

VF Corp. v. Wrexham Aviation, 350 Md. 693, 704 , 715 A.2d 188, 193 (1998). It is not so clear whether that standard applies to the conspiracy count. In Daugherty v. Kessler, 264 Md. 281, 292 , 286 A.2d 95, 101 (1972), we held that “[i]n a civil case not involving a criminal act, conspiracy may be shown by a preponderance of the evidence.” Compare, however, Rent-A-Car Co. v. Globe & Rutgers Fire Ins. Co., 161 Md. 249, 267-68 , 156 A. 847, 855 (1931), which could be read either consistently or inconsistently with that holding.

In this case, it matters not. Hoffman’s argument arises from the statement by the Court of Special Appeals that, in a civil jury case, “if there is any evidence adduced, however slight, from which reasonable jurors could find in favor of the plaintiff on the claims presented, the trial court should deny the defendant’s motion for judgment at the close of the evidence and submit the claims to the jury for decision.” Hoffman, supra, 155 Md.App. at 288 , 843 A.2d at 178 . That is a correct statement, which mirrors what this Court has said in many cases. It would, however, be more precise if it read, “from which reasonable jurors, applying the appropriate standard of proof, could find in favor of the plaintiff on the claims presented.” In Darcars v. Borzym, 379 Md. 249, 270 , 841 A.2d 828, 840 (2004), we essentially made that point — that, in deciding a motion for judgment, a court “must account for and consider the appropriate burden of persuasion in deciding whether to allow the jury to decide an issue.” Even though the Court of Special Appeals failed to cite Darcars when discussing this point, there is no indication that the intermediate appellate court failed to apply the appropriate standard in its review. 7 It ¹⁷ understood that fraud needed to be shown by clear and convincing evidence and, indeed, believed that conspiracy required that heightened standard of proof as well.

The important thing, in any event, is not how the Court of Special Appeals articulated the standard but whether the appropriate standard was applied by the trial court in deciding the motion, and we think that it was. The trial judge filed a memorandum explaining his reasons for denying the motions for judgment NOV filed by Hoffman, Wood, and Irwin. In that memorandum, he clearly recognized that, although civil conspiracy need be proved only by a preponderance of the evidence, fraud must be shown by clear and convincing evidence, and there is no indication that he ever lost sight of that standard in finding the evidence sufficient to warrant submission of the fraud count to the jury. Whether the trial court was correct in that conclusion and, indeed, in its further conclusion that the evidence sufficed to warrant submission of the conspiracy and CPA counts, is now before us, and we shall examine those conclusions in light of what we said in Darcars .

(2) Evidence of Culpability As noted, the basic charge against Hoffman was that, in furtherance of the conspiracy by Beeman and Wood, Hoffman knowingly prepared inflated appraisals that he knew were necessary in order for the transactions to take place. Evidence to that end was presented with respect to each of the appraisals he prepared. (a) McFadden — Kresson Street Beeman purchased the property at 17 N. Kresson Street on April 23, 1997 for $14,500. Less than three weeks later, on or about May 9, 1997, he sold the property to McFadden for $52,000.

When the property was sold to McFadden, it was in the same condition as when Beeman bought it. On June 5, Hoffman, knowing that Beeman had only recently bought the property for $14,500, appraised the property for $52,000. 8 ¹⁸ There were a number of deficiencies noted in that report. A glaring, though relatively minor, one was that Hoffman reported that the property was in a residential zone, when, in fact, it was in a manufacturing zone. The census track number was also incorrect.

The more significant errors concerned the condition of the structure and the comparable sales that Hoffman used to establish his estimate of value. Hoffman noted that the property was in “poor condition” when purchased by Beeman but was in “good” condition “now.” That could not have been so, for, on an attached Valuation Condition sheet, he listed 14 repairs that still needed to be made, from replacing rotted wood on the porch floor and ceding, to repairing chipped paint in various parts of the house, to installing a downspout and gutter, to patching, pointing, and painting parts of the house, to replacing windows. He apparently assumed that all of them would be made. On July 2, Hoffman certified that those repairs had been completed, but there was evidence that some of them had not been done.

Apart from the listed items, Hoffman stated on his Valuation Condition sheet that there was no evidence of roof leakage or damage. McFadden, when first inspecting the property with Beeman, noted that repairs needed to be made to the roof. Although someone — Wood thought it was probably Beeman — prepared and submitted to Wood a document showing that extensive repairs had been made, including a “new 2-ply roofing system on entire roof of property,” a month after moving into the house McFadden said that the roof was leaking and that, when it rained, water poured into his laundry room. The plaintiffs’ expert appraiser described the Kresson Street property as being part of a residential “pocket” surrounded by industrial use properties and fronting on a “heavy truck traffic” road.

The three properties used by Hoffman as comparable sales — 3500 Claremont Avenue, 3613 East Fayette Street, and 3811 Gough Street — were all in residential areas quite some distance away. Indeed, the distances were misleadingly stated in the appraisal. Hoffman reported the Claremont Avenue property as five blocks away when, in fact, it was ¹⁹ eleven blocks away; the East Fayette Street property was reported as being four blocks away when, in fact, it was ten blocks away; he declared the Gough Street property to be four blocks away when it was shown to be twelve blocks away. 9 Evidence was presented that there were eight more comparable recent sales of properties in the neighborhood overlooked or ignored by Hoffman, and that the predominant value in the area was between $35,000 and $45,000. (b) Haley — 612 East 41st Street Beeman purchased the 41st Street property for $20,000 and, on May 28, 1997, sold it to Haley for $57,200.

It is not clear when Beeman bought the property; the exhibit noted shows a date of June 25, but that is subject to question, for it would indicate that Beeman sold the property before he owned it. Hoffman appraised the property on July 17, 1997 at $57,500, subject to a $90 ground rent. 10 He reported that the property had been purchased a month earlier for “$25,000 ± ” claiming to be unaware that the price paid was only $20,000. He stated that the house had been “recently re-habbed” and characterized its condition as “good.” When Haley took possession in August, he found that the sump pump was broken and the basement had flooded, the kitchen windows and the kitchen and bedroom ceilings leaked when it rained, the floorboards under the living room carpet were rotting, the walls behind the paneling were crumbling, and the front porch had exten ²⁰ sive dry rot. Hoffman based the inflation in price on his having seen workmen, sheetrock, carpeting, paint, and windows in the house when he inspected it.

He did not ask for documentation, with respect to this appraisal or any other, that the work had been done. Instead, he made a cursory walk-around, often of just the exterior of the house, prior to closing. Hoffman identified the sales of three properties as comparable, two of which he emphasized because the properties were only two blocks away. One, the evidence showed, was larger than he reported — 1, 830 sf. rather than 1,600 sf.

It also had a fireplace and a modern kitchen, which the subject property did not have. Evidence showed that the second comparable was “in far superior condition than the subject property.” Three other lower-price sales in the area were ignored. (c) Green — 610 North Belnord Avenue Beeman purchased the Belnord Avenue property on June 18, 1997 for $12,500 and sold it to Green for $44,000 on July 30, 1997. On August 13, 1997, Hoffman appraised the property for $44,000, subject to a $180 ground rent ($3,000).

For purposes of selecting comparable sales, he defined the “neighborhood” as “East Baltimore” with “no precise boundaries.” The first comparable sale he chose was of 3501 East Baltimore Street, which, using his “as the crow flies” approach, he claimed was seven blocks away when in fact, it was sixteen blocks away. Another comparable sale was of 3613 East Fayette Street, which Hoffman said was five blocks away when, in fact, it was seventeen blocks away. Evidence showed that Beeman was also the person who sold that property, a fact that should have been, but was not, disclosed on the appraisal report. Evidence also showed that there were seven closer sales, at much lower prices, that were ignored by Hoffman.

(d) Brower/'Spencer — 5601 Force Road Beeman sold the property at 5601 Force Road to Brower and Spencer on July 21, 1997, for $65,900. He purchased the ²¹ property for $24,000, but, as with some of the other properties, it is not clear when he actually bought it. The record shows that he purchased it on August 7, 1997, but that is questionable. On August 26, 1997, Hoffman appraised the property for $65,900 subject to a $96 ground rent ($1,600).

Unlike some of his other appraisals, Hoffman did not note that the property had been recently purchased by Beeman, although he did state that it was “recently renovated.” Hoffman selected three comparable sales, stressing the second one, 5531 Force Road, because it was on the same street. That house had sold very recently — settlement was in August, 1997 — for $75,000. In deposition testimony that he sought to disavow at trial, Hoffman conceded that, without that sale as a comparable, he could not have justified a $65,900 appraisal of the subject property. What he did not disclose, although he knew, was that the allegedly comparable property had been sold by Beeman.

The plaintiffs’ expert noted that Beeman had purchased that property in August, 1997 for $27,000. He opined that the 5531 Force Road sale was “out of line” and that Beeman’s role as seller should have been noted. The expert also identified six comparable sales, all within three blocks of the subject property, ignored by Hoffman— houses that sold for $36,500, $50,000, $44,500, $55,000, $55,000, and $45,000. (e) Henderson — k06 Oldham Street Beeman purchased 406 Oldham Street for $17,550.

The record indicates that he purchased the property on March 27, 1997, but that is questionable, for, on February 17, 1997, he entered into a contract to sell it to Henderson for $58,000 and was given a $500 deposit at that time. Nothing more transpired for several months. Beeman was supposed to be making repairs. In August, 1997, Henderson took possession under a lease calling for $500/month rent.

No application for financing was made until September 9, 1997, when Beeman and Henderson met with Wood. At that meeting, the price was increased to $65,000, and a new contract at that price was ²² signed. On September 26, 1997, Hoffman appraised the property for $65,500 subject to a $90 ground rent ($1,500). Plaintiffs’ expert stated that the three comparables used by Hoffman were, for a variety of reasons, inappropriate.

The subject property was surrounded by industrial uses and was near heavy truck and rail traffic. The comparables were in residential areas and one was only half the age of the subject property. The expert noted a number of closer properties in the area that had sold for much lower prices. (f) Elder — 3132 Piedmont Avenue Beeman purchased 8132 Piedmont Avenue for $29,551 and, on August 12,1997, sold it to Elder for $51,000.

It is not clear when Beeman bought the property; the record indicates that he bought it on September 5,1997. On October 7,1997, aware that Beeman had purchased the property only a month earlier for about $29,000, Hoffman appraised the property for $53,000, subject to a $180 ground rent ($3,000). He noted that the property had a “modern kitchen,” although an inspection by the plaintiffs’ expert revealed that not to be the case. One of the comparables used by Hoffman- — 3033 Mondawmin Avenue — he reported as a center row house when in fact it was an end of group, which made it more valuable.

It also had a new kitchen, for which no adjustment was noted. A second comparable he reported as having only 1,200 sf. when, in fact, it had 1,584 sf.; Hoffman also erred in stating the ground rent on that property, thereby overvaluing it by $1,400. He miscalculated the square footage of the third comparable as well, showing it as 1,100 sf. when, in fact, it was 1,292 sf. As in the other cases, plaintiffs’ expert identified other comparables that Hoffman ignored.

(g) Stamper — 6521 Lenhert Street Beeman purchased 6521 Lenhert Street for $41,790 and, on August 14, 1997, sold it to Stamper for $86,250. It is not clear when Beeman purchased the property; in his appraisal, Hoffman notes that it was bought in September, 1997 — before it was sold to Stamper. Wood’s initial “good faith estimate” ²³ showed Stamper’s share of closing costs to be $4,149. At some point, Wood discovered that the taxes on the property were higher than she first thought, which would increase Stamper’s monthly payment.

She suggested to Beeman that, if she added an up-front fee of one point, she could reduce the interest rate enough to keep the monthly payment the same. Beeman agreed, so a new “good faith estimate” of $87,250 was prepared showing the closing costs to be $4,519. On November 14, 1997, Hoffman appraised the property for $87,500, subject to a $180 ground rent ($3,000). Hoffman reported that the house sat on a slab and had no crawl space, which the evidence showed was not the case.

The existence of a crawl space would have been apparent from just walking around the house. Hoffman said that he did walk around the house but that, because it was raining that day, he walked fast. Hoffman also incorrectly reported that the house had 1,804 sf., when, in fact, it had only 1,505 sf. Two experts regarded that discrepancy, of nearly 20%, as significant; one noted that an appraiser could be suspended by FHA for a discrepancy over 10%.

(h) Coward — 1127 Carroll Street Beeman purchased 1127 Carroll Street for $7,550 in September, 1997, and, on December 19, 1997, sold it to Coward for $58,000. On January 26, 1998, Hoffman appraised the property for $58,000, subject to a $180 ground rent ($3,000). Hoffman knew that Beeman owned the property and that he was required to report whether it had sold within the past year. Although, had he consulted the land records, he would have learned that Beeman bought the property a few months earlier, he reported “last sale unknown.” When Hoffman initially could not locate any sales that he regarded as comparable, he called Beeman, who supplied him with sales of his own properties, somewhat distant from the subject property.

Hoffman used those high-price sales as comparables, without disclosing that Beeman was the seller or that he had purchased those properties a short time before at far lower prices. The plaintiffs’ expert opined that, when relying on ²⁴ three comparables all controlled by the same seller, that fact should be disclosed. The first comparable used by Hoffman, 1207 West Cross Street, he reported sold in December, 1997, for $73,900. He did not report that Beeman had purchased the property in October, 1997, for $27,000 but instead reported that there was no other sale within the year.

The second comparable, 1202 Carroll Street, he reported as sold in September, 1997, for $54,900 without disclosing that Beeman had purchased it in August, 1997, for $24,000. Instead, he stated that there was no other sale of that property within the year. Similarly, with the third comparable, 1119 Ward Street, Hoffman reported as sold for $64,000 a month earlier, without disclosing that Bee-man had purchased that property for $12,700 in November, 1997. There, too, he stated that there was no other sale of the property within the year.

In place of these suspect sales, the plaintiffs’ expert found ten lower price comparable sales within the year prior to Hoffman’s appraisal. The range of values estimated by that expert was between $25,000 and $45,000. Hoffman views this evidence as establishing, at worst, nothing more than simple negligence, not a conspiratorial agreement to commit fraud, or fraud itself, or a violation of the CPA. Inaccuracies in his appraisals, he says, do not suffice to show a conspiratorial agreement between him and Beeman; nor, in the absence of any evidence that any of the plaintiffs ever saw or relied upon his appraisals, did they establish actual fraud.

Finally, Hoffman argues, given the absence of any evidence that he dealt directly with any of the plaintiffs, the CPA simply does not apply. (3) Conspiracy We have defined a civil conspiracy as “a combination of two or- more persons by an agreement or understanding to accomplish an unlawful act or to use unlawful means to accomplish an act not in itself illegal, with the further requirement that the act or the means employed must result in damages to the plaintiff.” Green v. Wash. Sub. San.

Comm’n, 259 Md. 206, 221 , 269 A.2d 815, 824 (1970). Although the ²⁵ notion of a tortious conspiracy was derived from the common law criminal conspiracy and each requires proof of an agreement, the tort plaintiff must show more than just an unlawful agreement. The plaintiff must also prove the commission of an overt act, in furtherance of the agreement, that caused the plaintiff to suffer actual injury. See Alleco, Inc. v. Harry & Jeanette Weinberg Foundation, Inc., 340 Md. 176, 189-91 , 665 A.2d 1038, 1044-45 (1995) and cases cited there.

The tort actually lies in the act causing the harm; the agreement to commit that act is not actionable on its own but rather is in the nature of an aggravating factor. That is why this Court, in Alleco, held that civil conspiracy “ ‘is not a separate tort capable of independently sustaining an award of damages in the absence of other tortious injury to the plaintiff.’ ” Alleco, supra, 340 Md. at 189 , 665 A.2d at 1044 -45 (quoting Alexander & Alexander, Inc. v. B. Dixon Evander & Associates, Inc., 336 Md. 635 , 645 n. 8, 650 A.2d 260 , 265 n. 8 (1994)). There is little doubt here that Beeman, with the assistance of Wood, committed overt acts that were intended to defraud, and did defraud, the nine plaintiffs and that the plaintiffs suffered actual harm from that conduct. That is not really contested by Hoffman.

The only question, as to Hoffman, is whether the evidence sufficed to establish that he joined and helped to implement an agreement to achieve that result. In that regard, we pointed out in Western Md. Dairy v. Chenowith, 180 Md. 236, 243 , 23 A.2d 660, 664 (1942) that a conspiracy may be proved by circumstantial evidence, “for in most cases it would be practically impossible to prove a conspiracy by means of direct evidence alone.” We explained: “Conspirators do not voluntarily proclaim their purposes; their methods are clandestine. It is sufficient if the proven facts and circumstances, pieced together and considered as a whole, convince the court that the parties were acting together understandingly in order to accomplish the fraudulent scheme. Thus a conspiracy may be established by inference from the nature of the acts complained of, the individual and collective interest of the alleged conspirators, the situation and relation of the parties at the time of the ²⁶ commission of the acts, the motives which produced them, and all the surrounding circumstances preceding and attending the culmination of the common design.” Id. at 248-44 , 23 A.2d at 664 .

See also Daugherty, supra, 264 Md. at 292 , 286 A.2d at 101 . Viewing the evidence in that context and in a light most favorable to the plaintiffs, who prevailed at trial on this issue, we are convinced that it sufficed, under even a clear and convincing evidence standard, to permit the jury reasonably to have concluded that Hoffman acted together with Beeman and Wood to accomplish the fraudulent scheme. We are not dealing here with just with some isolated inaccuracies in individual appraisals or with honest differences of opinion between Hoffman and the plaintiffs’ expert over some fine points of appraisal practice. The evidence — clear and convincing — showed a pattern in all of the appraisals of: (1) actual knowledge by Hoffman in some cases and the ability to know in others, that Beeman had purchased the properties only months earlier for a fraction of what Hoffman appraised them for; (2) an attempt by Hoffman to justify the huge inflation, at least in part, by assuming that major improvements would be made to the properties when, in fact, many of those improvements were not made and, had Hoffman made a reasonable effort to investigate that critical assumption, he would have known, or had reasonable grounds to suspect, that they were not made; 11 and ²⁷ (3) a further attempt by Hoffman to justify the actual appraisal by positing as comparable the sale of distant properties that were not at all comparable, in part by including material misstatements as to both the physical characteristics of some of those properties and their actual proximity to the subject properties, and by ignoring recent sales at much lower prices of properties more like and in greater proximity to the subject properties.

The end result of this consistent pattern, documented in one form or another in each of the appraisals, was a seemingly automatic appraisal, in each case, at or just in excess of whatever the contract price happened to be. Overarching all of this were the facts that Hoffman derived 99% of his income from appraisals done for Irwin, that he knew if the appraisal did not match the contract price, the deal would fall through, thereby depriving Wood of her commission and Beeman of his profit, that in at least two cases, he actually consulted Beeman with respect to which comparables to use and used the high-price sales recommended by Beeman even though they were not truly comparable, and that, in direct violation of HUD and ethical requirements applicable to appraisers, he deliberately destroyed all of his notes once Beeman’s activities came to public attention. From that spoliation alone the jury was entitled to infer that those notes would have been detrimental to Hoffman’s defense, that they would not have supported what he said from the witness stand. Some of these departures, viewed in isolation, might be regarded as simple negligence, as Hoffman argues, but “pieced together and considered as a whole,” they suffice to show that Hoffman was aware of what Beeman was doing, that he understood that Beeman’s scheme could not work unless he produced appraisals at or above the inflated contract price, and that he knowingly participated in that scheme by providing those appraisals.

He was dependent on Wood for ²⁸ his livelihood, Wood was dependent on people like Beeman for her livelihood, and Hoffman made it all work. Hoffman argues that this case is similar to Electronics Store v. Cellco, 127 Md.App. 385 , 732 A.2d 980 (1999), cert, denied, 356 Md. 495 , 740 A.2d 613 (1999), and Cavalier Mobile Homes v. Liberty Homes, 53 Md.App. 379 , 454 A.2d 367 (1983), cert, denied, 295 Md. 736 (1983), in which the Court of Special Appeals held that there was insufficient evidence to support a finding of conspiracy under. Maryland antitrust law. The quantum and quality of evidence in this case is much greater than that presented in those cases, however, and they are therefore distinguishable.

(4) Fraud To prove an action for civil fraud based on affirmative misrepresentation, the plaintiff must show that (1) the defendant made a false representation to the plaintiff, (2) the falsity of the representation was either known to the defendant or the representation was made with reckless indifference to its truth, (3) the misrepresentation was made for the purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) the plaintiff suffered compensable injury as a result of the misrepresentation. See Nails v. S & R, 334 Md. 398, 415 , 639 A.2d 660, 668 (1994); VF Corp., supra, 350 Md. at 703 , 715 A.2d at 193 (1998); Environmental Trust v. Gaynor, 370 Md. 89, 97 , 803 A.2d 512, 516 (2002). 12 ²⁹ Hoffman contends that there was no evidence that any of the plaintiffs actually relied on his appraisals and that, in any event, because of an FHA warning that the purpose of the appraisal was to determine the value of the property for mortgage insurance purposes and that the buyer should independently evaluate the reasonableness of the purchase price, they had no right to rely on his appraisal. The Court of Special Appeals rejected both of those arguments on the premise of indirect reliance — that the plaintiffs were aware that if the appraisal was less than the contract price, they would have the right to cancel the contract and that, when that option was not afforded them because of the inflated appraisal, they relied and had a right to rely on the fact that the property was worth what they were paying for it. That kind of indirect reliance, Hoffman argues, does not suffice.

Hoffman is correct with respect to two of the factual underpinnings of his argument. There is no evidence that any of the plaintiffs actually read Hoffman’s appraisal. It is also clear that each of them entered into the contract of sale with Beeman prior to Hoffman even being employed to make the appraisal, so the appraisal could not have affected their decision to enter into the purchase contract. There are several other important facts to be considered, however.

As the Court of Special Appeals noted, the plaintiffs were aware of the HUD requirement that, if an appraisal showed the value of the property to be less than the contract price, they had an absolute right to cancel the contract, and Hoffman also knew that to be the case, although he said he was unaware that such an option was provided for in the contract itself. Wood testified that, if the appraisal did not support the contract price, she would have notified the plaintiffs of that fact, and the plaintiffs each testified that, had they been advised of the true value of the property and the reasons why it was less than the contract price, they would, in fact, have cancelled the contracts. In each contract of sale was an “FHA Amendatory Clause” that provided, in relevant part: ³⁰ “It is expressly agreed that ... Buyer shall not be obligated to complete the purchase of the Property described herein or incur any penalty by forfeiture of monies on deposit or otherwise, unless the Buyer has been given, in accordance with HUD/FHA or VA requirements, a written statement issued by the ...

Direct Endorsement Lender setting forth the appraised value of the Property of not less than the purchase price. Buyer shall have the privilege and option of proceeding with consummation of the Contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage [HUD] will insure. HUD does not warrant the value nor the condition of the Property.

Buyer should satisfy himself/herself that the price and the condition of the Property are acceptable.” 13 Although that clause makes clear that the buyer may not rely on the appraisal as a warranty either against defects in the property or that the value of the property is precisely as stated in the appraisal, it does permit the buyer to rely on the fact that, unless stated otherwise, the value is at least equal to the contract price. It could have no other effect. The buyer may not cancel the contract if the property is appraised at or above the contract price, but only if informed that the appraised value is less than the contract price. Significantly, if in that event if the buyer elects to cancel, his/her deposit or down payment is not forfeited, but must be returned.

The cancellation, in other words, is without cost to the buyer. Also implicit in that clause is the ability of the buyer, if the appraisal is less than the contract price, to attempt to renegotiate the price, so that it can be brought in line with the appraisal. Indeed, -with the appraisal effectively fixing the maximum contract price in an FHA transaction, even Beeman, who had a fairly