Richwind Joint Venture 4 v. Brunson

CHASANOW, Judge. Before this Court are a number of related cases involving the tragic circumstances of children suffering from various injuries due to their consumption of lead-based paint. The petition for certiorari was granted in the instant case in order to address the following issues: I. To what extent, if any, do the lead-based paint provisions of Baltimore City ordinances and Public Local Laws supersede the common law requirement that a landlord’s liability for negligence depends upon notice of a particular defect and a reasonable opportunity to correct it? 2. To what extent, if any, does the Maryland Consumer Protection Act impose strict liability for personal injury upon a landlord without requiring proof of knowledge, deception, reliance, or causation? ⁶⁶⁷ For the reasons discussed herein, we affirm the Court of Special Appeals as to the jury’s verdict regarding negligence, but reverse the intermediate appellate court’s holding with respect to Maryland’s Consumer Protection Act.

See Richwind v. Brunson, 96 Md.App. 330 , 625 A.2d 326 (1993). See also Maryland Code (1975, 1990 ReplVol.), Commercial Law Article, §§ 13-101 through 13-501. I. Facts In December of 1983, Barbara Richardson moved into a residential rental property located at 2119 West Fairmount Avenue in Baltimore City and owned by Harry and Rita Baitch. While residing at the property, Ms. Richardson gave birth to her daughter Jamika Holman on March 18, 1984, and to her son Jamall Holman on March 13, 1985.

In December 1985, Richwind Joint Venture (a general partnership) purchased the premises from Mr. and Mrs. Baitch. At the time Richwind assumed ownership, Barbara Richardson was already in possession of the premises under a preexisting lease. Shortly thereafter, Richwind hired Scoken Management Corporation to manage the property and collect rent payments from the tenant. At that time, Scoken managed approximately 400 residential real estate properties, most of which were located in Baltimore City.

Mark Chodak was the president of Scoken Management Corporation. Scoken’s services were retained because of Richwind’s prior business dealings with Mr. Chodak. Chodak had been a property manager for approximately sixteen years, prior to which he was a housing inspector for Baltimore City for two years. Chodak also attended and graduated from law school.

Scoken assumed the management of 2119 West Fairmount Avenue in January of 1986. At that time, Chodak knew that homes built prior to 1957 “often” contained lead-based paint, and that the property in question was built before 1957. Chodak also testified, however, that he possessed no specific knowledge that the premises contained lead-based paint at the time Scoken assumed the management of it. Richwind also alleged it did not know of any lead-based paint contained in ⁶⁶⁸ the property at the time of its purchase.

At the time of the purchase, there were no outstanding or “uncorrected violation notices” regarding the property. Richwind did not inspect the property when it was purchased, nor did it instruct Scoken to do so. Once Scoken assumed management of the property, it immediately sent a letter apprising the tenant of that fact, and indicating that if she had any complaints regarding the property she should notify Scoken. Beginning on January 15, 1986, Ms. Richardson forwarded a series of complaints to Scoken about the disrepair of the premises.

According to Scoken’s records, the following complaint was made on January 17, 1986: “[P]aint & plaster peeling from walls.” Chodak thereafter dispatched one of Scoken’s workmen to correct the problem. Chodak testified that he did not inspect the property himself to determine either the condition of the paint or whether his employee corrected the problem in a satisfactory manner. On the other hand, Chodak also testified that he did visit the property sometime between January and September of 1986, though he could not recall the exact dates. The record further reflects that on at least three separate occasions (January 20, February 5, and April 30, 1986) after Scoken’s employee responded to the initial complaint, Ms. Richardson requested paint from Scoken in order to repaint portions of the premises herself.

Scoken provided the paint each time Ms. Richardson requested it. On September 3, 1986, Jamika and Jamall Holman were both evaluated by the Kennedy Institute’s Lead Poisoning Prevention Program, and they were determined to have elevated blood-lead levels. Due to Jamall’s exceedingly high blood-lead level, he was immediately hospitalized to undergo chelation therapy. 1 Because of these high blood-lead levels, the Baltimore City Health Department inspected the property. On September 22, 1986, the Department served Richwind and Chodak with an “Emergency Violation Notice and Order ⁶⁶⁹ to Remove Lead Nuisance.” The Department’s notice enumerated 42 specific lead paint violations of the Baltimore City Code.

See, e.g., Baltimore City Code (1983 Repl-Vol.), Article 13. Barbara Richardson filed a complaint in the Circuit Court for Baltimore City as the mother and next friend of Jamika and Jamall for injuries allegedly sustained by the children as a result of exposure to lead-based paint. Ms. Richardson died while the case was still pending and Ernestine Brunson, the children’s grandmother and personal representative of Barbara Richardson’s estate, was substituted as the plaintiff. Among others not here relevant, the complaint named the following as defendants: Harry and Rita Baitch (the original owners of the property), Richwind Joint Venture 4 (the current owner) and Scoken Management Corporation (Richwind’s management company).

As amended, the complaint alleged that the defendants were negligent, created a nuisance, and violated Maryland’s Consumer Protection Act (“CPA”). See Md.Code (1975, 1990 RepLVol.), Comm.Law Art., §§ 13-101 through 13-501. Rita Baitch settled with the plaintiffs prior to trial. 2 Also, the common law nuisance counts against the remaining defendants were dismissed prior to trial. The case proceeded to trial on the negligence and consumer protection counts, and after the parties presented their cases, the trial judge granted the defendants’ motion for judgment on the CPA counts.

Subsequently, the jury returned a verdict in favor of the plaintiffs and awarded compensatory damages of $252,000.00 for Jamall Holman and $247,500.00 for Jamika Holman. In addition, the court awarded damages to Richardson’s estate in the amount of $18,944.00. The defendants appealed and the plaintiffs cross-appealed to the Court of Special Appeals which affirmed the jury’s negligence finding, reversed the circuit court’s dismissal of the ⁶⁷⁰ consumer protection counts, and remanded the case. See Richwind v. Brunson, 96 Md.App. 330 , 625 A.2d 326 (1993).

This Court granted the defendants’ petition for a writ of certiorari.

II

Negligence In order to establish a cause of action for negligence, the plaintiffs must prove the following elements: “(1) that the defendant was under a duty to protect the plaintiff from injury, (2) that the defendant breached that duty, (3) that the plaintiff suffered actual injury or loss, and (4) that the loss or injury proximately resulted from the defendant’s breach of the duty.” Rosenblatt v. Exxon, 335 Md. 58, 76 , 642 A.2d 180, 188 (1994) (citing Faya v. Almaraz, 329 Md. 435, 448 , 620 A.2d 327, 333 (1993) and Lamb v. Hopkins, 303 Md. 236, 241 , 492 A.2d 1297, 1300 (1985)). In its brief before this Court, Richwind asserts that a landlord’s liability for negligence depends upon actual knowledge of a defective condition on the premises, a contractual duty to repair it and a reasonable opportunity to do so. Even though Richwind concedes that “numerous statutory enactments impact upon the relationship between landlord and tenant,” it further contends that “they do not supersede the common law requirement that a landlord’s liability for negligence depends upon notice of a particular defect and a reasonable opportunity to correct it.” We agree with Richwind’s concession that certain statutory enactments impact upon the common law requisites of liability in the instant case. For instance, even if Richwind is not liable for negligence under the common law, absent a covenant to repair, its duty to protect the plaintiffs from injury may nonetheless emanate from specific provisions of the Baltimore City Code.

See Balt.City Code (1983 RepLVol.), Art. 13, §§ 702, 703 and 706. Section 702 of the city code provides that every building in Baltimore City which is occupied as a dwelling is to be “kept in good repair, in safe condition, and fit for human habitation.” Section 703(2)(c) ⁶⁷¹ defines one of the standards for good repair as follows: “All walls, ceilings, woodwork, doors and windows shall be kept clean and free of any flaking, loose or peeling paint and paper.” Section 706 also states that “[n]o paint shall be used for interior painting of any dwelling ... unless the paint is free from any lead pigment.” 3 The implied warranty of habitability established by §§ 702 and 703 necessarily includes flaking, loose or peeling lead-based paint within the scope of hazardous conditions that render the premises unfit for human habitation. Thus, a landlord leasing property in Baltimore City is under a statutory obligation to correct such a hazardous condition even in the absence of a contractual duty to do so. Violation of these city code provisions may be the basis for a negligence action.

See Restatement (Second) of Property, Landlord and Tenant § 17.6 (1977). Section 17.6 provides as follows: “A landlord is subject to liability for physical harm caused to the tenant and others upon the leased property with the consent of the tenant or his subtenant by a dangerous condition existing before or arising after the tenant has taken possession, if he has failed to exercise reasonable care to repair the condition and the existence of the condition is in violation of: (1) an implied warranty of habitability; or (2) a duty created by statute or administrative regulation.” We agree with § 17.6 of the Restatement (Second) of Property, Landlord and Tenant. We therefore conclude that a private cause of action in a landlord/tenant context can arise ⁶⁷² from a violation of any statutory duty or implied warranty created by the Baltimore City Code. If Richwind violated one of the city code provisions, that violation could provide the basis for a negligence action against it and its agent, Scoken Management Corporation.

The relevant issues in the instant case are, therefore, whether the city code’s notice provisions expand common law liability, and whether Richwind or its agent had adequate notice and/or knowledge of this hazardous lead paint condition. See Balt. City Code (1988 Repl.Vol.), Art. 18, §§ 801, 302 and 303. In resolving the issue of whether the city code expands the common law, we first recognize the well-settled principle in Maryland that, in construing a statute, we assume that the statute was not intended to modify, nullify, or supersede the common law of the State absent any clear indication to the contrary.

See Bradshaw v. Prince George’s County, 284 Md. 294, 302 , 396 A.2d 255, 260 (1979); Lutz v. State, 167 Md. 12, 15 , 172 A. 354, 355-56 (1934). In Bradshaw v. Prince George’s County, for example, this Court discussed the effect of a county charter upon the common law doctrine of sovereign immunity. The Court stated that “[i]t is presumed that the legislative body did not intend to make any alteration of the common law other than what is plainly stated.” 284 Md. at 302 , 396 A.2d at 260 . Thus, the Court determined that statutory provisions which are “in contravention of the common law of this State ... should be strictly construed.” Id.

In Lutz v. State, this Court also stated the following: “It has been said that statutes are not presumed to make any alterations in the common law further than is expressly declared, and that a statute, made in the affirmative without any negative expressed or implied, does not take away the common law. The rules of the common law are not to be changed by doubtful implication, nor overturned except by clear and unambiguous language.” (Interior quotation marks and attribution omitted). ⁶⁷³ 167 Md. at 15 , 172 A. at 356 . See also Equitable Life Assurance v. Jalowsky, 306 Md. 257, 263 , 508 A.2d 137, 140 (1986); Hardy v. State, 301 Md. 124, 131 , 482 A.2d 474, 478 (1984). The Lutz Court also remarked that a statute which “deals with an entire subject-matter is generally construed as abrogating the common law as to that subject.” 167 Md. at 15 , 172 A. at 356 .

The city code provision in question in the instant case provides as follows: “Whenever the Commissioner of Housing and Community Development determines that there has been a violation of any provision of this Code or of any rule or regulation adopted pursuant hereto, he shall give notice of such alleged violation to the person or persons responsible therefor as hereinafter provided.” Balt.City Code (1983 RepLVoL), Art. 13, § 301. Section 303 of the city code also states that the Commissioner “shall order the necessary corrections by notice and service” as provided therein. Each of these sections therefore provides that the landlord must be served with notice and afforded a reasonable opportunity to correct the defective condition. 4 Analogously, the common law of this State provides that a landlord is not liable for a defective condition on the property unless the landlord either knows or has reason to know of the condition and has a reasonable opportunity to correct it. See Scott v. Watson, 278 Md. 160, 169 , 359 A.2d 548, 554 (1976); Ramsey v. D.P.A. Associates, 265 Md. 319, 322 , 289 A.2d 321, 323 (1972); Katz v. Holsinger, 264 Md. 307 , ⁶⁷⁴ 311-12, 286 A.2d 115, 118 (1972); Elmar Gardens, Inc. v. Odell, 227 Md. 454, 458 , 177 A.2d 263, 265-66 (1962); State v. Feldstein, 207 Md. 20, 29-34 , 113 A.2d 100, 104-06 (1955). 5 See also Restatement (Second) of Torts §§ 357 and 358 (1965) (imposing liability only if landlord knows or has reason to know of the existence of a dangerous condition); Sonja Larsen, Annotation, Landlord’s Liability for Injury or Death of Tenant’s Child from Lead Paint Poisoning, 19 A.L.R.5th 405 , 418-24 (1994) (summarizing lead paint cases founded on negligence claims of which the vast majority that did not concern injuries sustained in “common areas” required some form of notice or knowledge as a prerequisite to imposition of liability on the landlord).

As Richwind has contended, “[liability for negligence may not be imposed based solely upon the existence of a defective condition that is violative of the statutes, without regard to whether the landlords had notice of the existence of the alleged defective condition and had a reasonable opportunity to correct it.” Thus, the common law and the city code appear consistent with each other as they apply to the prerequisite of knowledge and/or notice. Both require that a landlord have notice of the dangerous condition on the property and a reasonable opportunity to correct it. Neither impose upon Richwind a duty to periodically inspect 6 the premises during the leased period for dangerous conditions to determine if repairs are necessary. To hold otherwise would circumvent years of unbroken precedent concerning such a duty, and might force landlords to become the “insurers” of their ten ⁶⁷⁵ ants, a policy which has been repeatedly rejected by the courts of this State.

See Scott, 278 Md. at 165 , 359 A.2d at 552 (reiterating that “mere ownership of buildings does not render the owner liable for injuries sustained by tenants since the landlord is not an insurer of such persons”); Ramsey, 265 Md. at 321 , 289 A.2d at 323 (asserting that “the owner is not an insurer of the safety” of those rightfully on the premises); Elmar Gardens, Inc., 227 Md. at 457 , 177 A.2d at 265 (stating that “[m]ere ownership of land or buildings does not render the owner liable for injuries sustained by tenants or invitees rightfully on the premises, for the owner is not an insurer of such persons but owes them the duty only to exercise ordinary care”). The primary difference between the city code requirements and the common law is how the landlord obtains actual knowledge of a defective condition on the premises. Under the city code, the Commissioner of Housing and Community Development is obligated to serve the landlord with notice of a violation in order to require the needed repairs. Under the common law, however, it does not appear relevant who provides the landlord with notice of a hazardous condition, as long as the landlord knows or has reason to know of the problem and has an opportunity to correct it.

See McKenzie v. Egge, 207 Md. 1, 6-7 , 113 A.2d 95, 97 (1955) (recognized as the seminal case itemizing general requirements of notice and opportunity-to-eorrect). Under either theory, however, the notice and knowledge requirements remain the same no matter how the landlord obtains such knowledge. Thus, we agree with the proposition stated in the Amicus Curiae brief of the Apartment Builders and Owners Council of the Home Builders Association of Maryland: “Plainly, the landlord’s common law right to notice and an opportunity to correct a particular defect is reinforced, not superseded, by the provisions of the Baltimore City Code and the Balt.Pub.Local Laws.” (Emphasis in original). As Richwind has also contended, “there is no breach of any duty created by the statutes unless the landlord has notice of ⁶⁷⁶ the deficiency and fails to correct it.” We hold that the city code does not alter or supersede the common law concerning a landlord’s knowledge of a defective condition on the premises.

Section 358 of the Restatement (Second) of Torts (entitled “Undisclosed Dangerous Conditions Known to Lessor”) summarizes these knowledge requirements as follows: “(1) A lessor of land who conceals or fails to disclose to his lessee any condition, whether natural or artificial, which involves unreasonable risk of physical harm to persons on the land, is subject to liability to the lessee and others upon the land with the consent of the lessee or his sublessee for physical harm caused by the condition after the lessee has taken possession, if (a) the lessee does not know or have reason to know of the condition or the risk involved, and (b) the lessor knows or has reason to know of the condition, and realizes or should realize the risk involved, and has reason to expect that the lessee will not discover the condition or realize the risk.” Comment & to § 358 further explains as follows: “In order for the rule stated in this Section to apply, it is not enough that the dangerous condition of the land is one which might be discovered by a reasonable inspection of the premises. The lessor is under no duty to his lessee, or to any other person entering the land, to make such an inspection, except where premises are leased for a purpose involving the admission of the public, as stated in § 359. It is not, however, necessary that the vendor have actual knowledge of the condition, or that he be in fact aware that it involves an unreasonable risk of physical harm to persons on the land. It is enough that he has reason to know that the condition exists, as that phrase is defined in § 12(1)....” Finally, this Court has distinguished between “reason to know,” which is required by § 358, and “should know,” which is utilized in other sections, in the following manner: ⁶⁷⁷ “ ‘Both the expression “reason to know” and “should know” are used with respect to existent facts.

These two phrases, however, differ in that “reason to know” implies no duty of knowledge on the part of the actor whereas “should know” implies that the actor owes another the duty of ascertaining the fact in question. “Reason to know” means that the actor has knowledge of facts from which a reasonable man of ordinary intelligence or one of the superior intelligence of the actor would either infer the existence of the fact in question or would regard its existence as so highly probable that his conduct would be predicated upon the assumption that the fact did exist. “Should know” indicates that the actor is under a duty to another to use reasonable diligence to ascertain the existence or non-existence of the fact in question and that he would ascertain the existence thereof in the proper performance of that duty.’ ” Feldstein, 207 Md. at 33 , 113 A.2d at 106 (quoting Restatement of Torts § 12 cmt. a (1934)); Restatement (Second) of Torts § 12. See Landlord’s Liability for Injury or Death of Tenant’s Child from Lead Paint Poisoning, 19 A.L.R.5th at 418-24. Knowledge of a condition which involves unreasonable risk of physical harm to persons on the land may not be imputed to a landlord merely from general knowledge that other properties of like age, construction, or design might possibly contain such hazardous conditions. Likewise, a landlord is under no duty to inspect the premises in order to determine whether such conditions exist.

See Restatement (Second) of Torts § 358 cmt. b (stating that a lessor “is under no duty to his lessee ... to make such an inspection”). See also Kleiman v. Mono of Maryland, Inc., 254 Md. 548, 553-55 , 255 A.2d 393, 396-97 (1969) (adopting § 357 of the Restatement (Second) of Torts, and stating that a landlord is under no duty to inspect the property unless a contract so provides); Feldstein, 207 Md. at 33 , 113 A.2d at 106 ; New Summit Associates v. Nistle, 73 Md.App. 351, 361 , 533 A.2d 1350, 1355 (1987). ⁶⁷⁸ Substantially the same issue was recently addressed at some length by the United States District Court for the District of Maryland in Hayes v. Hambruch, 841 F.Supp. 706 (D.Md.1994). Hayes was before the federal district court on a motion for summary judgment, and it presented somewhat similar facts to those of the instant case. The district court determined that, even though the landlord had “notice of the existence of flaking paint in the leased premises,” there was “simply no evidence in the record indicating defendant had ‘reason to know of the existence of lead paint in the leased premises.” Hayes, 841 F.Supp. at 711 (emphasis added).

Unlike in the instant case, however, there was no evidence that the landlord in Hayes possessed independent knowledge of the existence or dangers of lead-based paint in older homes. The district court recognized that, “in her answers to plaintiffs’ interrogatories, defendant has denied that she had any knowledge of the presence of lead paint on the premises or of the alleged hazards of lead paint....” Id. Further, the court pointed out the following: “It is significant in this particular case that the lead poisoning here occurred in the mid-1970s. Defendant contends (and plaintiffs have not disputed the fact) that lead paint poisoning was not a well known problem at that time.

Thus, there is no evidence that defendant was unreasonable in not being aware of the potential danger resulting from paint in the leased premises. A different case might be presented if plaintiffs had shown that the potential for lead poisoning was a danger that landlords in general should have been aware of at the time of the alleged lead poisoning.” 841 F.Supp. at 711 n. 2 (emphasis in original). The