Podles v. Consumer Protection Div.

Robert A. Podles v. Consumer Protection Division, Office of the Attorney General of Maryland, No. 184, September Term, 2021. Opinion by Harrell, Glenn T., Jr. ANTITRUST AND TRADE REGULATION – STATUTORY UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION – ENFORCEMENT AND REMEDIES – STATE AND LOCAL ADMINISTRATIVE AGENCIES – SUBPOENAS; WITNESSES ANTITRUST AND TRADE REGULATION – STATUTORY UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION – PARTICULAR RELATIONSHIPS – PROFESSIONALS Circuit court did not err in granting summary judgment in favor of the Consumer Protection Division of the Office of the Attorney General of Maryland (the “Division”) against Robert A. Podles, appellant, after Podles, a Maryland-licensed real estate salesperson, failed to produce documents in accordance with an administrative investigatory subpoena issued by the Division regarding allegations that Podles had violated the Maryland Consumer Protection Act (“MCPA”). Although the MCPA expressly exempts the “professional services” of a real estate salesperson from the Act’s purview, that exemption did not preclude the Division from issuing and enforcing an investigatory subpoena against Podles simply because he was a real estate salesperson or because the information being sought may turn-out to have been related to his “professional services” as a real estate salesperson. Circuit Court for Harford County Case No. C-12-CV-20-000677 REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 184 September Term, 2021 ROBERT A. PODLES v. CONSUMER PROTECTION DIVISION, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND Nazarian, Shaw Geter, Harrell, Glenn T., Jr. (Senior Judge, Specially Assigned), JJ.

Opinion by Harrell, J. Filed: December 15, 2021 Pursuant to Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2022-06-15 14:01-04:00 Suzanne C. Johnson, Clerk The Consumer Protection Division of the Office of the Attorney General of Maryland (the “Division”) filed, in the Circuit Court for Harford County, a Petition to Enforce Administrative Subpoena directed to Robert A. Podles, appellant, after Podles, a Maryland-licensed real estate salesperson, failed to produce documents in accordance with an administrative subpoena issued by the Division regarding allegations that he had violated the Maryland Consumer Protection Act (“MCPA”). The court entered summary judgment in favor of the Division and ordered Podles to produce all documents requested by the Division. Podles noted this timely appeal, in which he presents a single question for our consideration: Did the circuit court err in granting summary judgment in favor of the Division, where the statutory scheme granting the Division its subpoena powers, the MCPA [Maryland Consumer Protection Act], expressly states that the Act does not apply to the professional services of a real estate salesperson? For reasons to be explained, we hold that the circuit court did not err.

Therefore, we affirm its judgment. BACKGROUND The MCPA, codified in Commercial Law Article (“CL”) § 13-101, et seq., of the Maryland Code, was enacted to protect consumers from unfair or deceptive trade practices. Within that statutory framework, the General Assembly granted the Division the power to receive and investigate complaints regarding potential violations of the MCPA and to initiate its own investigation of unfair and deceptive trade practices. Md. Code, Comm.

Law § 13-204(a). In the course of such an investigation, the Division may subpoena witnesses and compel the production of documents. Md. Code, Comm. Law § 13-405(a).

Regarding the potentially relevant scope of its field of regulation of unfair or deceptive trade practices in the present case, the Legislature included certain activities concerning “consumer realty,” e.g., “the sale, lease, rental, loan, or bailment of any … consumer realty[.]” Md. Code, Comm. Law § 13-303(1). “Consumer realty” is defined as “credit, debts or obligations, goods, real property, and services which are primarily for personal, household, family, or agricultural purposes.” Md. Code, Comm. Law § 13- 101(d)(1). The General Assembly also included a provision, which is set forth in CL § 13-104, that exempts certain professionals from liability under the MCPA when those individuals are engaged in “professional services.” Md. Code, Comm.

Law § 13-104(1). The exemption relevant to this case includes the professional services of a “real estate broker, associate real estate broker, or real estate salesperson[.]” Id. This case arises out of an investigation by the Division into whether Podles was involved in certain lease-to-own and land installment contracts that may have violated the MCPA. According to the Division, the disputed contracts appeared to violate the MCPA “through the inclusion of illegal fees, provisions shifting to the tenant the responsibility for maintaining leased property in a habitable condition, and default provisions which allow[ed Podles] to terminate the contracts without refunding payments made toward the principal.” As noted, Podles is a real estate salesperson.

He has been licensed by the Maryland Real 2 Estate Commission since 2016 and has provided various real estate services to clients in Maryland. In February 2020, as part of its investigation into whether Podles had violated the MCPA, the Division issued an administrative subpoena commanding him to produce documents that were “related to his trade practices concerning consumer realty.” The subpoena asked also for various documents that were related to “any Maryland real estate- related transaction” in which Mr. Podles had been involved. Podles did not produce any documents in response. The Division filed a Petition to Enforce Administrative Subpoena and motion for summary judgment in the circuit court.

The Division asked the court to order Podles to respond to the subpoena. He filed a written opposition, arguing that the Division was not authorized to issue the subpoena because CL § 13-104 states expressly that the MCPA does not apply to real estate salespersons. Following a hearing, the circuit court granted the Division’s motion for summary judgment and ordered Podles to produce the documents. The court found that, although CL § 13-104 precluded enforcement of the MCPA against the professional services of real estate salespersons, it did not preclude completely the Division from issuing a subpoena as part of an investigation into whether a real estate salesperson violated the MCPA.

This timely appeal followed. Additional facts will be supplied below. 3 DISCUSSION Podles contends that the circuit court erred in granting the Division’s motion for summary judgment and in ordering him to comply with its subpoena. He argues, as he did below, that the statutory exemption in CL § 13-104 precludes enforcement of the subpoena. The Division contends that the circuit court granted properly its motion for summary judgment.

The Division argues that it had the authority to issue the investigatory subpoena and that Podles was not immune from the Division’s subpoena power simply because he was a real estate salesperson. Standard of Review Maryland Rule 2-501(f) provides that a court “shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” “In reviewing the grant of summary judgment, the appellate court asks whether it was legally correct, without deference to the trial court.” Muse-Ariyoh v. Bd. of Educ. of Prince George’s Cnty., 235 Md. App. 221, 235 (2017). “We evaluate the record in the light most favorable to the non-moving party and construe any reasonable inferences that may be drawn from the well-pleaded facts against the moving party[.]” Id. (citations and quotations omitted). “In conducting our review of a grant of a motion for summary judgment, we consider only the grounds upon which the trial court relied in granting summary judgment.” D’Aoust v. Diamond, 424 Md. 549, 575 (2012) (internal citations and quotations omitted). 4 To determine the validity of an investigatory subpoena issued by an administrative agency, the following threefold test is applied: “[w]hether the inquiry is authorized by statute, the information sought is relevant to the inquiry, and the demand is not too indefinite or overbroad.” Washington Home Remodelers, Inc. v. State, Off. of Att’y Gen., Consumer Prot. Div., 426 Md. 613, 623 (2012) (citation and quotations omitted).

Podles’s arguments implicate only the first element: whether the Division’s subpoena was authorized by statute. That is a question of statutory interpretation. We review the circuit court’s ruling in that regard without deference. Id. at 623-24 . “The paramount object of statutory construction is the ascertainment and effectuation of the real intention of the Legislature.” Andrews & Lawrence Pro.

Servs., LLC v. Mills, 467 Md. 126, 149 (2020) (citation and quotations omitted). “The starting point of any statutory analysis is the plain language of the statute, viewed in the context of the statutory scheme to which it belongs.” Kranz v. State, 459 Md. 456, 474 (2018) (citations and quotations omitted). ‘“If the language of the statute is unambiguous and clearly consistent with the statute’s apparent purpose, our inquiry as to legislative intent ends ordinarily and we apply the statute as written, without resort to other rules of construction.”’ Noble v. State, 238 Md. App. 153, 161 (2018) (quoting Espina v. Jackson, 442 Md. 311, 322 (2015)). If, on the other hand, words of a statute are ambiguous, “a court must resolve the ambiguity by searching for legislative intent in other indicia, including the history of the legislation or other relevant sources intrinsic and extrinsic to the legislative process.” Id. at 162 (citation and quotations omitted). 5 In any event, when the statute is part of a larger statutory scheme, as is the case here, the statute must be interpreted in that context. Andrews, 467 Md. at 149 . “That means that, when interpreting any statute, the statute as a whole must be construed, interpreting each provision of the statute in the context of the entire statutory scheme.” Id. (citations and quotations omitted). “Thus, statutes on the same subject are to be read together and harmonized to the extent possible, reading them so as to avoid rendering either of them, or any portion, meaningless, surplusage, superfluous or nugatory.” Id.

(citations and quotations omitted). Analysis In 1967, the General Assembly created the Division out of concerns “that there was an erosion of public confidence in merchants who, in increasing numbers were engaging in deceptive practices during the course of consumer transactions[.]” Washington Home Remodelers, 426 Md. at 629-30 . Several years later, the General Assembly enacted the MCPA and tasked the Division with its enforcement. Id. at 630-31 ; see also Andrews, 467 Md. at 149-50 .

The purpose of the MCPA was “to set certain minimum statewide standards for the protection of consumers across the State” and to “maintain the health and welfare of the citizens of the State.” Md. Code, Comm. Law § 13-102(b)(1) and (3). In enacting the statute, the General Assembly found “that consumer protection is one of the major issues which confront all levels of government” and that “improved enforcement procedures are necessary to help alleviate the growing problem of deceptive consumer practices[.]” Md. Code, Comm. Law § 13-102(a)(1) and (3).

The General Assembly found also that it needed 6 to “take strong protective and preventive steps to investigate unlawful consumer practices” and that “favorable consideration be given to requests … to improve the enforcement capabilities or increase the authority of the Division.” Md. Code, Comm. Law § 13- 102(a)(3) and (b)(3). The General Assembly declared, therefore, that the MCPA “shall be construed and applied liberally to promote its purpose.” Md. Code, Comm. Law § 13-105.

Within the MCPA’s statutory framework, the Division was established as an arm of the Attorney General and was given broad powers to enforce and interpret the MCPA. Consumer Prot. Div. Off. of Att’y Gen. v. Consumer Publ’g Co., 304 Md. 731, 745 (1985).

Specifically, the Division was granted, among other things, “the powers and duties to: (1) [r]eceive and investigate complaints from any person affected by any potential or actual violation of [the MCPA]; [and] (2) [i]nitiate its own investigation of any unfair or deceptive trade practice[.]” Md. Code, Comm. Law § 13-204(a)(1) and (2). The Division was afforded also the power to “issue cease and desist orders, adopt rules and regulations which further define unfair or deceptive trade practices or otherwise effectuate the purposes of the [MCPA], and seek a temporary or permanent injunction in a civil enforcement proceeding.” Consumer Publ’g Co., 304 Md. at 745 . The Division was granted subpoena powers, which are set forth in CL § 13-405.

Under that statute, “[i]n the course of any examination, investigation, or hearing conducted by him, the Attorney General may subpoena witnesses, administer oaths, examine an individual under oath, and compel production of records, books, papers, contracts, and other documents.” Md. Code, Comm. Law § 13-405(a). 7 As noted, the General Assembly, in enacting the MCPA, exempted certain activities of specified individuals from the Act’s purview. That exemption, found in CL § 13-104, provides, in pertinent part, that the MCPA “does not apply to … [t]he professional services of a … real estate broker, associate real estate broker, or real estate salesperson[.]” Md. Code, Comm. Law § 13-104(1).

Furthermore, it is well-settled that administrative agencies “have power to subpoena information but only through the express statutory grant of such power by the General Assembly.” Miller v. Baltimore Cnty. Police Dep’t, 179 Md. App. 370, 378 (2008); see also Washington Home Remodelers, 426 Md. at 623 . The question here, then, is whether the exemption contained in CL § 13-104 circumscribes the Division’s subpoena powers, as set forth in CL § 13-405. That is, we must decide whether the Division is authorized by statute to issue a subpoena in a case such as this one, where the professional services of the individual target of the subpoena may implicate an exemption from the