Messitte v. Colonial Mortgage Service Co. Associates, Inc.

Smith, J., delivered the opinion of the Court. Michael F. Messitte sold his home to a military veteran who obtained VA guaranteed financing from Colonial Mortgage Service Company Associates, Inc. Messitte then brought a class action against Colonial. The essence of his complaint is that since the buyer-borrower had paid Colonial a 1-percent origination fee, Colonial violated a regulation of the Veterans Administration when it charged him at settlement for certain items. He seeks to recover these sums.

A trial judge (Shearin, J.) granted Colonial’s motion for summary judgment. We shall affirm. Messitte’s claim is based on VA Regulation 36:4312 (D), Part I (codified as 38 C.F.R. § 36.4312 ) as interpreted by ²⁹¹ Loan Guaranty Release No. 16-69. 1 It is the contention of ²⁹² Messitte that under this regulation, as interpreted by this release, Colonial was forbidden to collect from him as seller such fees as a lender’s inspection fee, notary fee, and settlement fee. After a pretrial conference the trial court directed "that an appropriate pleading designed to test the validity, construction and applicability of VA Loan Guaranty Release 16-69, shfould] be filed by the Defendant within 30 days. . . .” In granting summary judgment in favor of Colonial, he said in pertinent part: The regulation on its face purports to and does in some detail govern the dealings between lenders and veteran borrowers.

Nowhere in it is there any express reference to the sellers of property to veteran borrowers. Nor, indeed, does the Court find any proper basis for holding that sellers are intended to be the beneficiaries of Subsection (b) by necessary implication. In reaching that conclusion, the Court believes that it need go no further than the language of that section of the regulation itself. In construing statutes, rules, regulations, ordinances and the like, there is no necessity for resorting to extrinsic aids to construction unless there be some latent or patent ambiguity in the enactment, rule or regulation so construed.

I find no such latent or patent ambiguities in that language. It says, "A lender may charge and the veteran may ²⁹³ pay a flat charge not exceeding one percent of the amount of the loan provided that such flat charge shall be in lieu of all other charges relating to cost of origination expressly specified and allowed in this schedule.” The plaintiff earnestly contends that the charge in lieu of all other charges of necessity refers to charges made to sellers. The context in my view permits of no such construction. Messitte appealed to the Court of Special Appeals.

We granted the writ of certiorari prior to consideration of the matter by that court. After argument before us last spring, we invited the Department of Justice to submit a brief amicus curiae. We have now had the benefit of that brief after which the matter was reargued. We have just said in Brown v. Brown, 287 Md. 273 , 412 A.2d 396 (1980), citing Kadan v. Bd. of Sup. of Elections, 273 Md. 406 , 329 A.2d 702 (1974), and New Cent.

Co. v. George’s Creek Co., 37 Md. 537 (1873), "Generally speaking, the same rules that are applicable to the construction of statutory language are employed in interpreting constitutional verbiage.” We know of no reason why any other rule should be used for the interpretation of regulations of an administrative agency. See, generally, Miller v. United States, 294 U.S. 435, 439 , 55 S. Ct. 440 , 79 L. Ed. 977 , rehearing denied, 294 U.S. 734 , 55 S. Ct. 635 , 79 L. Ed. 1262 (1935). For the proposition that the same rules apply see 2 Am. Jur. 2d Administrative Law § 307 (1962), and 73 C.J.S. Public Administrative Bodies and Procedure § 105 (1951).

We discussed the rules for statutory construction in Police Comm’r v. Dowling, 281 Md. 412 , 379 A.2d 1007 (1977). A number of cases were cited for each of the statements there made. That which is pertinent to the case at bar includes: The cardinal rule of statutory construction is to ²⁹⁴ ascertain and carry out the real legislative intent. In determining that intent the Court considers the language of an enactment in its natural and ordinary signification. ...

A corollary to this rule is that if there is no ambiguity or obscurity in the language of a statute, there is usually no need to look elsewhere to ascertain the intent of the General Assembly.... A court may not insert or omit words to make a statute express an intention not evidenced in its original form.... The General Assembly is presumed to have had, and acted with respect to, full knowledge and information as to prior and existing law and legislation on the subject of the statute and the policy of the prior law.... Absent a clear indication to the contrary, a statute, if reasonably possible, is to be read so that no word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless, or nugatory .... [Id. at 418-19.] See also In re James S., 286 Md. 702, 705 , 410 A.2d 586 (1980); Board v. Stephans, 286 Md. 384, 388 , 408 A.2d 1017 (1979); Harbor Island Marina v. Calvert Co., 286 Md. 303, 311 , 407 A.2d 738 (1979); and Baltimore Gas & Elec. v. Department, 284 Md. 216, 219 , 395 A.2d 1174 (1979). 38 C.F.R. 36.4312 (d) (2) provides, in pertinent part: A lender may charge and the veteran may pay a flat charge not exceeding 1 percent of the amount of the loan, provided that such flat charge shall be in lieu of all other charges relating to costs of origination not expressly specified and allowed in this schedule.

(Emphasis supplied.) As the Government puts it in its brief, "At issue in this case is the meaning of 'all other charges relating to costs of ²⁹⁵ origination.’ ” Thus, we consider paragraph (d) in the context of the entire regulation. 38 C.F.R. 36.4312 provides: (a) No charge shall be made against, or paid by, the borrower incident to the making of a guaranteed or insured loan other than those expressly permitted under the schedule set forth in paragraph (d) of this