Neal v. Fisher

ADKINS, Judge. This case presents two questions under the 1975 Rent Escrow Act (the Act)—Md.Code (1988 Repl.Vol.), § 8-211 of the Real Property Article: 1 ⁶⁸⁸ 1. Does the District Court have jurisdiction (under § 8-211(n)(5)) to order payment of the rent escrow fund to the tenant, if the tenant has failed to request a hearing for that purpose? 2. May a court order payment of the escrow fund to the landlady (under § 8-211(n)(6)) if the tenant has failed to pay rent into the fund after the District Court has ordered the fund paid to the tenant?

We shall answer the first question in the affirmative and the second in the negative, thus reversing the judgment of the Circuit Court for Queen Anne’s County. I. Background We shall discuss additional facts as we review each question presented. For the present, we recite only enough to explain the development of the instant controversy between petitioner Maureen Neal (Tenant) and respondent Ruth Fisher (Landlady). In 1980 Landlady leased to Tenant a dwelling in Queen Anne’s County at a rental which, at times here relevant, was $125 per month.

Some time thereafter, Tenant fell through the rotted boards of the porch and injured her leg. Pursuant to § 8-211(g) she gave Landlady written notice of various defects in the dwelling. When Landlady did not make repairs or correct the conditions, Tenant brought a rent escrow action in the District Court in Queen Anne’s County pursuant to § 8—211(i). 2 On 3 January 1986 at a ⁶⁸⁹ hearing before the Hon. L. Edgar Brown, both Tenant and Landlady testified.

Judge Brown, after describing the dwelling as “what I wouldn’t put a dog into,” made the following findings: There’s no water, hot, cold or running, that’s a statutory defect, there’s structural defects involving the front porch and the stairwell, there are obviously no bath facilities, if there’s no running water. 3 He ordered “[r]ent escrow shall be established until these conditions are corrected and if it becomes apparent that they cannot be corrected, then either party can petition the Court to have another hearing on the disbursement of the funds.” Tenant faithfully paid her rent into escrow. In July 1986, after a further hearing in the District Court, the Hon. John T. Clark, III, invoked § 8-211(n)(5) and ordered the $1,000 that had then accumulated in the rent escrow account to be paid to Tenant. Landlady appealed. 4 Certain events that occurred during that appeal are the subject of this case and will be reviewed in detail below.

The upshot of the appeal, however, was that the Circuit Court for Queen Anne’s County (Clayton C. Carter, J.) ordered payment of the escrow fund to Landlady. The order was stayed pending the filing of a petition for certiorari to this Court pursuant to Md.Code (1984 Repl.Vol., 1987 Cum.Supp.), § 12-305 of the Courts and Judicial Proceedings Article. We granted it. 310 Md. 144 , 527 A.2d 331 (1987).

II

District Court Jurisdiction Under § 8-211(n)(5) We move back in time to 3 January 1986, when Judge Brown established the rent escrow. As we have said, ⁶⁹⁰ Tenant thereafter paid her monthly rent into the fund. In April the District Court, sua sponte, sent notice to Landlady and Tenant that the case was scheduled for hearing. Landlady and Tenant appeared before Judge Clark on 7 May, Tenant represented by counsel (supplied by Legal Aid), Landlady not.

Although nobody testified, there was a lengthy discussion, covering almost 30 pages of transcript, involving actions Landlady had taken since establishment of the escrow, Tenant’s proposals for resolving the problems, and Landlady’s various options. As to those last, Judge Clark explained them in lengthy and careful detail. He also suggested that Landlady might wish to obtain counsel. With the acquiescence of all concerned, he set another hearing date for July at which the court would further consider the disposition of the fund.

One possibility, explicitly pointed out to Landlady, was that if there had been no repairs “or good efforts ... made to repair after six months [from the date of the initial escrow order], the Court can indeed, release the money back to the tenant and find there’s a forfeiture----” Landlady said she understood this. The parties reconvened on 21 July 1986. After hearing testimony Judge Clark made written findings that “the violation(s) and/or condition(s) heretofore complained of have not been corrected or remedied and good faith efforts have not been made to repair the defects____” He ordered the escrow terminated and the fund paid to Tenant. When Landlady’s resulting appeal reached the circuit court, there was a trial de novo at which both parties testified.

See n. 4, supra. At this trial with both parties now represented by counsel, Judge Carter limited the issue to “whether or not Judge Clark properly directed the return of the escrow funds ... back to the tenant____” 5 As to ⁶⁹¹ that, he held that the District Court had lacked jurisdiction to do so. He relied on the following provision of § 8-211: (n) After rent escrow has been established, the court: * * * ¡it * * (5) May, after a hearing, if one is requested by the tenant, order, if no repairs are made or if no good faith effort to repair is made within six months of the initial decision to place money in the escrow account, that the moneys in the escrow account be disbursed to the tenant [emphasis supplied]. In an opinion delivered from the bench, Judge Carter explained: “[T]he Court is satisfied that the district court did not have jurisdiction to employ the provisions of Section 8-211 [(n)(5)], directing that monies in the amount of $1,000 ... should be disbursed to the tenant, because there is nothing in the record to indicate that after six months from the date of the original escrow order ... the tenant requested a hearing____” In a subsequent memorandum opinion he enlarged upon his earlier reasoning: [TJhis Court found that the tenant had not requested the hearing in the District Court and then ruled that the lower court was without authority under the Real Property Article, § 8-211(n)(5) to order the moneys disbursed to the tenant.

This Court held that the statute was in derogation of the common law and must be strictly construed. 20 M.L.E. Statutes, § 146. When a statute ⁶⁹² authorizes a proceeding which was not allowed previously by the general law and directs the mode in which an act shall be done, the mode pointed out must be strictly pursued, and a strict compliance with the directions of the statute is the condition on which alone a party can entitle himself to the benefit of the statute. Id. § 147. Landlady argues to us that Judge Carter’s effective reversal of the District Court can be supported by evidence, produced at the de novo trial, that she had made good faith efforts to repair the defects.

If this be so, she contends, the order to disburse to Tenant was incorrect and Judge Carter’s result was proper. Putting aside the problem that a finding of good faith efforts to repair would not necessarily compel Judge Carter’s ultimate decision to return the escrow money to Landlady {see the various options contained in § 8-211(n)), we note that the trial judge made no finding of good faith efforts, nor could he have done so, given the relevant evidence presented. Section 8-211(n)(5) speaks of return of the escrow money to the tenant if the landlord has made “no good faith effort to repair ... within six months of the initial decision to place money in the escrow account____” With but one exception, Landlady’s testimony about somewhat sporadic “efforts” to repair dealt with things done after 3 July 1986—that is, more than six months, after the initial escrow order. These belated “efforts” were simply irrelevant for purposes of § 8-211(n)(5).

The only testimony of anything done before 3 July related to a single meeting with a contractor in June 1986, just before the expiration of the six-month period. This could not have constituted a basis for any finding of good faith efforts to repair. Since Landlady’s fact-based argument is without merit, we turn to the trial judge’s interpretation of § 8-211(n)(5). The judge was, of course, correct in finding that Tenant had not requested a hearing under that paragraph.

He also may have been correct in noting that the statute appears to condition the release of money to a tenant on a ⁶⁹³ hearing requested by the tenant; an argument to that effect certainly can be made. But his conclusion that failure of the tenant to request a hearing deprived the District Court of jurisdiction was unwarranted. We are dealing here with statutory construction, and our endeavor must be to identify the “objective, goal, or purpose” of the legislative scheme, and to construe the statute in a way that will advance that purpose, not frustrate it. Kaczorowski v. City of Baltimore, 309 Md. 505, 513 , 525 A.2d 628, 632 (1987).

The General Assembly has told us of the purposes of the Act: § 8-211 (a) The purpose of this section is to provide tenants with a mechanism for encouraging the repair of serious and dangerous defects which exist within or as a part of any residential dwelling unit____ The defects sought to be reached by this section are those which present a substantial and serious threat of danger to the life, health and safety of the occupants of the dwelling unit, and not those which merely impair the aesthetic value of the premises, or which are, in those locations governed by such codes, housing code violations of a nondangerous nature____ (b) It is the public policy of Maryland that meaningful sanctions be imposed on those who allow dangerous conditions and defects to exist in leased premises, and that an effective mechanism be established for repairing these conditions and halting their creation.[ 6 ] In short, we have before us remedial legislation. When the legislature enacts a statute designed, as the Act is, to provide remedies not available at common law, it is not desirable that construction should be mindlessly guided by a ⁶⁹⁴ slogan, such as “statutes in derogation of the common law must be narrowly construed.” Statutes of this nature “are remedial and designed to close a gap in the preexisting law____” State v. Sherman, 234 Md. 179, 184 , 198 A.2d 71, 73 (1964). A court should not permit “a narrow or grudging process of construction to exemplify and perpetuate the very evils to be remedied____” Van Beeck v. Sabine Towing Co., Inc., 300 U.S. 342, 350-351 , 57 S.Ct. 452, 456 , 81 L.Ed. 685, 690 (1937). Canons of construction, like the one relied on by the trial court here, may sometimes be useful guidelines, but they are not a set of Procrustean beds, to the dimensions of which all statutory language must be made to conform, however poor the fit____ We look at the words of the statute in the context of their adoption and from that perspective determine the meaning of the language in a manner consistent with the goal the legislature was trying to achieve.

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