Lomax v. Comptroller of the Treasury

CHASANOW, Judge. Mary L. Lomax is a retired Maryland state school teacher who receives benefits from her state retirement pension. On August 18, 1987, the Comptroller of the Treasury, Income Tax Division (Comptroller) had a judgment and tax lien entered against Lomax for unpaid income tax for the tax years 1985-86. On March 13, 1989, in an attempt to satisfy this judgment against Lomax, the Comptroller filed with the Clerk of the Circuit Court for Baltimore County a request for writ of garnishment to be served on the Maryland State Retirement and Pension Systems (the garnishee).

The writ was duly issued. The garnishee filed an answer/confession of assets and has expressly consented to the garnishment. Both the Comptroller and the garnishee were represented by the Attorney General. Lomax filed a motion to vacate the garnishment of her pension benefits, contending her state retirement system pension benefits were exempt from garnishment by either private creditors ⁴²¹ or by the State pursuant to Maryland Code (1957, 1988 Repl.Vol.), Article 73B, § 96(c), which pertains to the Teachers’ Retirement System of the State of Maryland (Retirement System), Md.Code (1957, 1988 Repl.Vol.), Art. 73B, § 81 et seq., and provides in relevant part: “The right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or death benefit, any other right accrued or accruing to any person under the provisions of this subtitle, and the money in the various funds created by this subtitle, shall not be subjected to execution, garnishment, attachment, or any other process whatsoever____” A hearing was held in the Circuit Court for Baltimore County, and the circuit court denied Lomax’s motion to vacate the garnishment and entered an order directing payment of the sum of $7,583.12 to the Comptroller.

Lomax appealed to the Court of Special Appeals, and in an unreported opinion, the intermediate appellate court held that “the State is not barred by § 96(c) from garnishing [Lomax’s] retirement pension.” This Court granted certiorari to consider the issues of statutory construction raised by Lomax. In State v. Milburn, 9 Gill. 105 (1850), this Court quoted with approval Justice Story’s statement: “General Acts of the Legislature are meant to regulate and direct the acts and rights of citizens, and in most cases, the reasoning applicable to them applies with very different, and often contrary force, to the government itself. It appears to me, therefore, to be a safe rule, founded in the principles of the common law, that the general words of a statute ought not to include the government, or affect its rights, unless that construction be clear and indisputable upon the text of the Act.” Id. at 118. Generally this rule is applied where the statute in question regulates or affects citizens or private corporations and ⁴²² does not manifest an intention that the State be bound by it.

For example, in Glascock v. Baltimore County, 321 Md. 118 , 581 A.2d 822 (1990), we held that the Legislature did not intend the State to be bound by zoning regulations for the construction of a communication tower. This Court declared: “Because the General Assembly neither named the State nor manifested an intention that it be bound by the provisions of the enabling act which granted zoning authority to the City, we concluded that the City was without power to subject the State’s use of the property to its zoning ordinance.” Id. at 121 , 581 A.2d at 824 . In Harden v. Mass Transit Adm., 277 Md. 399 , 354 A.2d 817 (1976), the issue before the Court was whether Md.Code (1957, 1972 Repl.Vol., 1975 Cum.Supp.), Art. 48A, § 539, compelled the Mass Transit Administration (MTA) to carry basic required primary insurance coverage. Since there was no clear manifestation of the intent of the Legislature to include the State within the purview of the regulatory scheme, we held that the MTA was not obligated to conform to the provisions. “We conclude that there was no manifest intention demonstrated on the part of the General Assembly to include MTA within the ‘no fault’ insurance provisions and that if it had intended to include MTA within those provisions it would have made a specific provision to that effect.” Harden, 277 Md. at 413 , 354 A.2d at 824 .

Additionally, in City of Baltimore v. State, 281 Md. 217 , 378 A.2d 1326 (1977), Baltimore City argued that the State must comply with local zoning ordinances when constructing a correctional institution. Once again, the statute in question neither specifically provided nor clearly implied that the State was intended to fall within its purview. This Court held that, since no clear implication could be derived from the language of the statute that the State should be bound by the local zoning ordinances, the State was not bound. Id. at 224 , 378 A.2d at 1330 . ⁴²³ The principle underlying this line of cases was well stated in Nationwide v. USF & G, 314 Md. 131 , 550 A.2d 69 (1988).

Judge Eldridge observed that “a statute regulating or affecting the activity of persons or corporations is ordinarily construed as not encompassing the government itself unless it expressly so provides.” 1 Id. at 137 , 550 A.2d at 72 (Citations Omitted). An example of a statute that is construed as implicitly encompassing a government entity, although it did not expressly so provide, is the Historic Area Zoning legislation set forth in Md.Code (1957, 1988 Repl.Yol. & 1990 Cum. Supp.), Art. 66B, §§ 8.01-.15. In City of Annapolis v. Anne Arundel Co., 271 Md. 265 , 316 A.2d 807 (1974), we discussed the purposes of historical preservation and the necessity of uniformity of application of the statutory mandates to accomplish these purposes: “First of all, traditional zoning is primarily directed at the use of land, as well as the density and the location of buildings on the land.

Historic area zoning, on the other hand, is not directed at any of these factors, but only at the preservation of the exterior of buildings having historic or architectural merit____ Secondly, to accomplish the primary purposes of historic area zoning, it is necessary that the exterior of the building having historic or architectural value be preserved against destruction or substantial impairment by every one, whether a private citizen or a governmental body. In short, the historically or architecturally valuable building is just as much lost by destruction by a public body as it would be by a private owner____ The General Assembly could well conclude that, to accomplish ⁴²⁴ historic and architectural preservation, the jurisdiction of the Commission should extend to all owners be they private persons or governmental agencies. Otherwise, the primary purpose of the legislation would be frustrated.” (Emphasis in original) Id. at 291-92 , 316 A.2d at 821 . The question before this Court, in the instant case, is whether the Legislature intended to preclude the State, as well as private creditors, from garnishing state teachers’ retirement pension benefits.

If the statute had expressly so provided, then the State would be prohibited from garnishing the retirement pension. Since the statute did not expressly provide, the intent of the General Assembly must be determined. It has been suggested that the search for legislative intent should be an attempt to “seek to discern some general purpose, aim, or policy reflected in the