Lockett v. Blue Ocean Bristol, LLC

McDonald, j. State law protects a residential tenant from retaliation by a landlord for certain specified activities, including participation in a tenants association. Proof of an act of retaliation may be a defense to eviction and may entitle the tenant to an award of damages, attorneys’ fees, and court costs. But, even if a tenant proves an act of retaliation, the tenant is eligible for relief only if the tenant is “current on the rent.” This case concerns what is meant by “rent” — a term left undefined in the statute — and how a court should handle a request for an award of attorneys’ fees.

Petitioner Felicia Lockett is a tenant in an apartment building known as Bristol House in Baltimore City. She has participated in the tenants association at Bristol House and advocated vigorously on behalf of the tenants there. This apparently resulted in a contentious relationship with the landlord, Respondent Blue Ocean Bristol, LLC (“Blue Ocean”). In 2014, Blue Ocean decided not to renew Ms. Lockett’s lease and, when she did not vacate the apartment, Blue Ocean filed a tenant holding over action.

Ms. Lockett defended on the basis that the non-renewal and tenant holding over action were in retaliation for her advocacy on behalf of the tenants association. The Circuit Court ultimately ruled in Ms. Lockett’s favor on the question of retaliation. However, it awarded her damages ⁴⁰⁴ for only one of two alleged acts of retaliation on the ground that she failed to prove that she was “current on the rent” at the time of the second alleged act and therefore was not eligible for relief as to that act. Although she had fully paid the fixed monthly amount specified as the “rent” in one part of her lease, she had an ongoing dispute with Blue Ocean over her liability for other charges, such as utility charges and other fees that varied from month-to-month and that the lease “deemed rent.” We hold that Ms. Lockett’s other debts to Blue Ocean — even if she in fact owed them — do not factor into whether she was “current on the rent” for the purposes of the anti-retaliation statute.

With respect to Ms. Lockett’s request for attorneys’ fees, 1 the trial court declined to allow Ms. Lockett to provide evidence on that issue following the trial and denied the award simply by noting that an award of attorneys’ fees is “discretionary.” While it is true that the decision whether to award fees and the amount of any such fees is entrusted to the discretion of the trial court, we hold that the court must follow the procedure set forth in Maryland Rule 2-703 and give some explanation of its reasons for how it chose to exercise its discretion. I Background A. Landlord — Tenant Litigation Maryland law provides a variety of remedies for the many possible disputes that may arise between a landlord and a tenant who are parties to a residential lease. Most such disputes are refereed by the District Court, but on occasion, as here, the case may be adjudicated in a circuit court. We ⁴⁰⁵ begin with a brief review of the particular remedies pursued by the landlord and the tenant in this case, as they appear in the Real Property Article of the Maryland Code.

Similar or superseding remedies are sometimes provided by local laws, such as those of Baltimore City. See Parkington Apts., Inc. v. Cordish, 296 Md. 148 , 460 A.2d 52 (1983). While there are a few differences between the provisions of the Real Property Article and the Baltimore City provisions, none of those differences matter to our resolution of this case. In their arguments, the parties have focused on the provisions of the Real Property Article — and so shall we. 1.

Landlord Remedies Summary ejectment and tenant holding over actions are remedies available to landlords in the context of both commercial and residential leases. Summary ejectment When a tenant does not pay rent that is owed, a landlord may bring an action for summary ejectment under Maryland Code, Real Property Article (“RP”), § 8-401. “Summary ejectment proceedings empower the court to enter a money judgment for the amount of rent determined to be owing and also to issue an order for the tenant to yield possession of the premises when the jurisdiction over the tenant has been obtained.” Schuman, Kane, Felts & Everngam, Chartered v. Aluisi, 341 Md. 115, 122 , 668 A.2d 929 (1995) (internal quotation marks omitted). If judgment is for the landlord, the tenant ordinarily must vacate the premises within four days. RP § 8-401(c)(3).

However, the tenant may satisfy the complaint at the trial by “tendering] to the landlord the rent and late fees determined by the court to be due and unpaid, together with the costs of the suit[.]” RP § 8-401(c)(5). Even after a judgment is rendered in favor of the landlord, except under circumstances not relevant here, the tenant may redeem the premises “by tendering in cash, certified check or money order to the landlord or the landlord’s agent all past due amounts ... plus all court awarded ⁴⁰⁶ costs and fees, at any time before actual execution of the eviction order.” RP § 8-401(e)(l). Tenant holding over action When a lease expires or is terminated, but the tenant does not vacate the leased premises, the landlord may bring an action for damages against the tenant under RP § 8-402— known as a “tenant holding over” action. If judgment is awarded in favor of the landlord, the tenant is “liable to the landlord for the actual damages caused by the holding over.” RP § 8-402(a)(l).

The damages are at least “the apportioned rent for the period of holdover at the rate under the lease.” RP § 8-402(a)(2). If the landlord gave the tenant at least one-month advance notice of the landlord’s desire for the tenant to vacate the premises upon expiration of the lease and the tenant refused to comply, 2 the landlord can ask the court to issue a warrant of restitution to restore possession to the landlord. RP § 8-402(b). If the landlord assents to the tenant remaining in the property, the statute creates a periodic tenancy.

Unless otherwise provided in the lease and initialed by the tenant, “when a landlord consents to a holdover tenant remaining on the premises, the holdover tenant becomes a periodic week-to-week tenant if the tenant was a week-to-week tenant before the tenant’s holding over, and a periodic month-to-month tenant in all other cases.” RP § 8 — 402(c). 2. Residential Tenant Remedies Among the statutory remedies available specifically to residential tenants are rent escrow and anti-retaliation claims. Rent escrow There is “an obligation upon landlords to repair and eliminate conditions and defects which constitute, or if not prompt ⁴⁰⁷ ly corrected will constitute, a fire hazard or a serious and substantial threat to the life, health or safety of occupants.” RP § 8-211(e). If the tenant notifies the landlord of such conditions and defects, and “[i]f the landlord refuses to make the repairs or correct the conditions, or if after a reasonable time the landlord has failed to do so, the tenant may bring an action of rent escrow to pay rent into court because of the asserted defects or conditions.” RP § 8-211(i).

The tenant also “may refuse to pay rent and raise the existence of the asserted defects or conditions as an affirmative defense” to an action brought by the landlord to obtain the rent or recover possession of the premises. Id. Moneys in the rent escrow account may ultimately be disbursed to the landlord, the tenant, or third parties, depending on the facts of the particular case. RP § 8-211(n).

A public local law or ordinance containing similar provisions for rent escrow supersedes the State statute. RP § 8-21 l(o). Claim under anti-retaliation statute The law prohibits a landlord from taking certain adverse actions against a tenant for reasons that the law deems improper. RP § 8-208.1(a).

If a landlord does so, the tenant may make a claim for “retaliatory action,” either as a defense in an action for possession brought by the landlord or as an affirmative claim. RP § 8-208.1(b). In particular, a landlord may not do the following for improper reasons: (i) Bring or threaten to bring an action for possession against a tenant; (ii) Arbitrarily increase the rent or decrease the services to which a tenant has been entitled; or (iii) Terminate a periodic tenancy. RP § 8-208.1(a)(l).

The statute specifies the following as improper reasons for a landlord to take one of those actions against a tenant: (i) Because the tenant or the tenant’s agent has provided written or actual notice of a good faith complaint about an alleged violation of the lease, violation of law, or condition ⁴⁰⁸ on the leased premises that is a substantial threat to the health or safety of occupants to: 1. The landlord; or 2. Any public agency against the landlord; (ii) Because the tenant or the tenant’s agent has: 1. Filed a lawsuit against the landlord; or 2.

Testified or participated in a lawsuit involving the landlord;, or (iii) Because the tenant has participated in any tenants’ organization. RP § 8-208(a)(2). If the court finds that a landlord committed a retaliatory action, the court may award the tenant damages against the landlord in an amount not to exceed the equivalent of three months’ rent, reasonable attorneys’ fees, and court costs. RP § 8-208.1(c)(l). 3 However, a tenant may obtain such relief only if the tenant is “current on the rent due and owing to the landlord at the time of the alleged retaliatory action,” unless the tenant is withholding rent for various legal reasons.

RP § 8 — 208.1(d). B. Facts The pertinent facts are undisputed. Ms. Lockett has been a tenant in an apartment building in Baltimore City known as Bristol House since 2010. She originally entered into the lease with the entity that managed the property in 2010 — an annual lease that renews automatically at the end of every July.

In December 2012, Blue Ocean took over ownership and management of Bristol House from the prior owner and manager — and stepped into the shoes of the landlord under Ms. Lockett’s lease. ⁴⁰⁹ The lease specifies an annual “rent” in a fixed amount payable in “equal monthly installments” due on the first day of each month. Paragraph 44 of the lease provides the mechanism for the annual renewal of the lease, for its termination upon 60 days’ notice, or for an alteration in its terms, such as setting a “higher rent.” The lease identifies the monthly rent as $795, but it is undisputed that it had increased to $837 as a result of annual renewals by the time Blue Ocean became landlord. Although the lease identifies a specific figure payable monthly as “rent” and provides a mechanism for setting a “higher rent,” paragraph 33 of the lease — which has a tag line “Definition of Rent” — states that “All payments from [Ms. Lockett] to [the landlord] required under the terms of this lease, including, but not limited to, Court costs, shall be deemed rent.” Other paragraphs of the lease identify various charges and circumstances under which a tenant may be liable to the landlord for those charges — e.g., late fees, administrative fees, indemnification of the landlord for certain types of liability, repair expenses, parking fees, among others — but do not specifically relate those charges to “rent.” Several pages at the end of the document entitled “Addendum to Rental Agreement (Utilities)” concern an amendment of paragraph 17 of the lease which is entitled “Utilities.” Pertinent to this case, the utilities addendum provides for the landlord to pay for the monthly gas charge for the entire building, describes how the charge is to be allocated among the residents, and obligates the tenant to reimburse the landlord for the tenant’s pro rata share on a monthly basis. The utilities addendum characterizes this reimbursement by the tenant as “additional rent.” The Tenant Association The tenants at Bristol House formed the Bristol House Tenant Association to address concerns of the residents of the property’s 74 residential units.

Since January 2012, Ms. Lockett has served as the liaison for the Tenant Association, representing it in communications and meetings with building ⁴¹⁰ management. During that time, the Tenant Association has been working to resolve complaints about alleged erroneous charges involving the master-meter utility billing system used in the building. This process included, among other things, communication with the Consumer Protection Division of the Office of the Attorney General in early 2013. The complaints were not fully resolved at the time this litigation began.

After a contentious meeting with the Tenant Association in early 2014 concerning the gas charge allocation, Blue Ocean decided in February 2014 not to renew Ms. Lockett’s lease. However, Blue Ocean did not inform her of its decision at the time. Conflicts regarding metering continued for the next several months and were never completely resolved. Eventually, Ms. Lockett found a notice dated May 28, 2014, posted on her door stating that her lease would not be renewed and that she was to vacate the premises by July 31, 2014.

While the parties have articulated different definitions of “rent,” it is undisputed that, as of the time she received the notice, Ms. Lockett was current on her rent, regardless of the definition. 4 Litigation in the District Court Despite the notice, Ms. Lockett did not vacate the premises. Instead, she remained in the property and withheld her June 2014 rent payment, which was due on June 1. On June 17, 2014, Blue Ocean filed a summary ejectment action in the District Court in Baltimore City against Ms. Lockett for failure to pay rent. On July 1, 2014, Ms. Lockett filed a rent escrow action in the District Court.

The District Court consolidated these actions. The District Court held an initial hearing on July 15, 2014. 5 Ms. Lockett advised the court that Catholic Charities would ⁴¹¹ pay her June 2014 rent and sought to pay her July and August rent into the court registry. After hearing from Ms. Lockett and Blue Ocean, the District Court ordered that she pay rent in the amount of $837 per month into the court registry for July and August 2014. On July 28, 2014, Catholic Charities paid the June rent.

On August 14, 2014, the District Court decided the case in favor of Blue Ocean. As a result, the two months of rent that had been deposited in the court registry, totaling $1674, was disbursed to Blue Ocean from the rent escrow for the July and August rent. These payments appear to have satisfied the complaint pursuant to RP § 8-401(c)(5) because, even though Blue Ocean won the summary ejectment action against Ms. Lockett, Ms. Lockett was not evicted at that time. The day after the District Court ruled in favor of Blue Ocean in the summary ejectment action and that action was resolved by disbursement of the rent escrow, Blue Ocean filed another action against Ms. Lockett in the District Court — this time, a tenant holding over action under RP § 8-402.

In its complaint, Blue Ocean alleged that Ms. Lockett’s lawful tenancy had ended on July 31, 2014. The complaint recited that the “rental for the premises” was $795 per month and sought restitution of the premises. The complaint did not refer to any other charges as “rent.” Ms. Lockett responded by alleging, both as a defense to the complaint and as a counterclaim, that Blue Ocean’s non-renewal of her lease on May 28 and its filing of the tenant holding over action on August 15 were retaliatory actions for her participation in the Tenant Association. In her response, she also asserted that her monthly rent was $837, as opposed to $795, as alleged by Blue Ocean.

She sought money damages in a total amount of $5,022 — that is, three times the amount of her monthly rent of $837 for each of two acts of retaliation — plus costs and attorneys’ fees, pursuant to RP § 8-208.1. ⁴¹² On October 8, 2014, the District Court decided in Blue Ocean’s favor in the tenant holding over action and awarded possession of the apartment to Blue Ocean. The District Court declined to consider Ms. Lockett’s counterclaim on the ground she had failed to perfect its filing by paying a $28 filing fee. De Novo Appeal in Circuit Court Ms. Lockett filed an appeal for a de novo trial in the Circuit Court for Baltimore City. She also re-filed her counterclaim in the Circuit Court.

She continued to seek damages in a total amount of $5,022 for the two alleged retaliatory acts, as well as attorneys’ fees and costs, both as part an of her affirmative defense as well as her counterclaim. 6 On January 22, 2015, the Circuit Court held a bench trial. While most of the testimony at trial focused on the terms of the lease, the controversies with the Tenant Association, the notice of non-renewal, and the Blue Ocean’s motive for that decision, Blue Ocean introduced evidence suggesting that Ms. Lockett was not current on her obligations to the landlord at the time of the alleged acts of retaliation. In particular, a representative of Blue Ocean introduced a ledger showing charges to, and payments by, Ms. Lockett for “rent” and other expenses, and testified that the last time prior to the trial that there was a net balance of zero or a credit in Ms. Lockett’s account was October 2013. On cross-examination, the Blue Ocean representative acknowledged that its ledger did not account for the timing of payments into the court registry in the rent escrow action.

Similarly, while Ms. Lockett’s testimony dealt primarily with the alleged acts of retaliation, she also addressed briefly her payments to the landlord. She testified that a pending balance of $90.63 in the ledger as of May 29, 2014 (the date she received the notice of non-renewal, one of the alleged acts ⁴¹³ of retaliation) related to a disputed gas charge that was resolved in her favor shortly thereafter. She also testified about the payment of her June rent by Catholic Charities and her payment of the July and August rent into the District Court registry. In the end, Blue Ocean did not dispute that Ms. Lockett was current on her payment of the fixed monthly installment of rent as of the filing of the tenant holding over action.

However, its counsel argued that the ledger demonstrated that she owed money “counted as rent” (although not designated as such on the ledger) to Blue Ocean as of that date. The ledger itself shows a balance of approximately $244 apparently attributable to items listed as a filing fee, late fees, and gas charges. Ms. Lockett’s counsel disputed that she owed some or all of those amounts and argued that, in any event, she had timely paid the fixed monthly amount actually designated as “rent” on the ledger. After considering the testimony and documentary exhibits, the Circuit Court ruled in favor of Ms. Lockett in the tenant holding over action, finding that Blue Ocean’s May 28, 2014 notice that it was not renewing her lease was “clearly an act of retaliation.” The court further determined that Ms. Lockett was current on her rent at the time she received the non-renewal notice, thus satisfying the condition for relief in the anti-retaliation statute as to the first alleged act or retaliation.

With respect to the second alleged act of retaliation — the filing of the tenant holding over action in the District Court — the Circuit Court found the evidence to be “muddled” as to her liability for rent and stated that it could not find that Ms. Lockett was current on her rent as of the date of filing of that action (August 15, 2014). Accordingly, the Circuit Court ruled in Blue Ocean’s favor on that claim. In awarding treble damages under the anti-retaliation statute for the first claim of retaliation, the Circuit Court found “that [$]837 is the monthly rental fee” and awarded Ms. Lockett damages in the amount of $2,511. The court noted that it had “received no evidence with respect to attorneys’ fees” during the trial.

Ms. Lockett’s counsel asked for the ⁴¹⁴ opportunity to submit an affidavit supporting the request for attorneys’ fees, but the court denied the request in the following fashion: “[T]hat request is denied. The statute indicates that it’s permissive. The Court may enter judgment and the Court may award attorneys’ fees. So that request is denied.” Finally, the court directed Blue Ocean to pay court costs.

Ms. Lockett filed a timely petition for a writ of certiorari to this Court, which we granted. We summarize the two issues raised by that petition as follows: (1) Do the disputed charges (the filing fee, late fees, and gas charges) matter? In other words, what is “rent” for purposes of the condition in the anti-retaliation statute (RP § 8-208.1) that a residential tenant be “current on the rent” in order to invoke the remedies provided by that statute? (2) What procedure should a circuit court follow and what, if any, explanation must a circuit court give when it decides whether or not to award attorneys’ fees to a tenant who has proven a retaliation claim in a de novo appeal?

II Discussion A. Standard of Review We accept the trial court’s fact findings unless they are clearly erroneous. Maryland Rule S — 131(c). However, we review the trial court’s conclusions of law and application of law to facts without deference to the trial court. Tribbitt v. State, 403 Md. 638, 644 , 943 A.2d 1260 (2008).

Finally, while a decision whether to award attorneys’ fees is reviewed under an abuse of discretion standard, “[t]he standard that a trial court applies in evaluating whether to award attorneys’ fees and costs is a legal decision” that we review without deference. Ocean City Chamber of Commerce, Inc. v. Barufaldi, 434 Md. 381, 391 , 75 A.3d 952 (2013) (emphasis added); see also Friolo v. Frankel, 373 Md. 501, 512 , 819 A.2d 354 (2003). B. Whether Ms. Lockett was “Current on the Rent ” In the complaint initiating this action Blue Ocean alleged that “[t]he rental for the premises is $795.00 per month” — the ⁴¹⁵ fixed monthly payment originally required by the lease. It is undisputed that, although $795 was the monthly rent provided by the lease when Ms. Lockett entered into it with the original landlord in 2010, that figure had risen as a result of annual renewals to $837 by the time of trial.

Blue Ocean has conceded that Ms. Lockett had paid that amount as of August 15, 2014, but argues that she was delinquent in paying other fees and charges — such as the gas charges for three months, the late fee for one month, and a court filing fee owed to the landlord — which were “deemed rent” or “additional rent” under the lease. 7 (Ms. Lockett disputed the extent to which she actually owed those charges). Blue Ocean reasons that all of those charges should be considered part of the “rent” that she allegedly owed to Blue Ocean as of August 15, 2014, and that she was therefore not current on her rent as of the date of the second alleged act of retaliation. In concluding that the evidence was “muddled” on whether Ms. Lockett was “current on the rent” as of August 15, 2014, the Circuit Court apparently accepted Blue Ocean’s argument that the disputed charges were part of “rent” for purposes of RP § 8-208.1(d). The question before this Court is whether these charges are “rent” for purposes of RP § 8-208.1(d).

If so and if the dispute over those charges was not resolved in her favor, Ms. Lockett would be ineligible for relief under the anti-retaliation statute even if she proved, to the satisfaction of the Circuit Court, that the filing of the tenant holding over action was an act of retaliation. If not, she would be eligible for relief. 8 1. Motion to Dismiss and Preservation of the Issue Blue Ocean moved to dismiss Ms. Lockett’s appeal pursuant to Maryland Rule 8-603(c), based on Maryland Rule ⁴¹⁶ 8-602(a)(l) (“the appeal is not allowed by these rules or other law”). Blue Ocean argues that the issue of the meaning of “rent” was not raised in the Circuit Court, so the issue is not preserved for review under Maryland Rule 8-131, and this Court cannot consider it, so the appeal should be dismissed.

The short answer is that these grounds are not a basis for dismissing an appeal. The longer answer — if Blue Ocean’s motion is considered an argument about preservation of the legal issue for appellate review — is that the issue was adequately preserved. Grounds for dismissal of an appeal First, failing to meet the requirements of Maryland Rule 8-131 is not grounds for dismissing the appeal under Maryland Rule 8-602. See State Ctr., LLC v. Lexington Charles Ltd. P’ship, 438 Md. 451, 495 , 92 A.3d 400 (2014) (“Neither a lack of preservation nor failure to present an argument in the petition for writ of certiorari is listed as a permissible ground upon which this Court may dismiss an appeal.”).

Thus, while a failure to comply with Rule 8-131 might affect whether we address the particular issue in our decision, it would not mandate dismissal of the appeal. In any event, this issue has been preserved in accordance with the requirements of Rule 8-131. Raised below Rule 8-131(a) provides, in pertinent part: “Ordinarily, the appellate court will not decide any other issue,” except subject-matter and personal jurisdiction of the trial court, “unless it plainly appears by the record to have been raised in or decided by the trial court----” The definition of “rent” does plainly appear to have been raised in the trial court. Testimony and documentary evidence was introduced in the Circuit Court, including the lease, related documents, and ledger sheet that concerned Ms. Lockett’s obligation to pay rent and other charges and her history of payment.

Both sides presented argument to the Circuit Court as to what that court should consider in resolving ⁴¹⁷ whether Ms. Lockett was current on her rent. For example, in closing, counsel for Ms. Lockett told the Circuit Court: [The] District Court, both in the failure to pay rent action in June and in the rent escrow case[,] had made a determination [of] what the rent owing would be and Ms. Lockett paid those amounts as the Court specified her to pay. Blue Ocean can’t come now and say that there are other amounts that they did not specify as rent and allege now that she was not current on the rent at that time. (emphasis added).

Similarly, in closing rebuttal, counsel for Blue Ocean said: You’ve heard testimony from Ms. Lockett that she