Williams v. Housing Authority

WILNER, Judge. This case presents an unfortunate combination of errors on the part of the District Court of Maryland and the Circuit Court for Baltimore City, exacerbated by a procedural lapse on the part of petitioner. We shall reverse the judgment of the Circuit Court and direct further proceedings in the District Court. ¹⁴⁶ PROCEDURAL HISTORY Respondent is the Housing Authority of Baltimore City (HABC), an agency that, for over 60 years, has been responsible for providing decent, safe, and sanitary public housing for low-income residents of the City. See Maryland Code, Article 44A, § 3-102.

Petitioner has been renting her home at 1513 North Bethel Street from HABC for more than 18 years. Beginning in June, 1998, she attempted to get HABC to repair conditions in the home that she considered dangerous. Among other things, the house was infested with rodents and other vermin; the bathtub leaked water, causing sinking holes in the floors and mildew and water damage in other rooms; and there was a large hole in the kitchen ceiling above the stove, from which debris fell into meals as she cooked. Petitioner informed HABC of those conditions in a letter dated June 4,1998, and in follow-up telephone conversations, but the problems were not corrected.

In May, 1999, petitioner filed a rent escrow action in the District Court. Rent escrow actions in Baltimore City are authorized by both State public general law and a public local law of Baltimore City. Maryland Code, § 8-211 of the Real Property Article, applicable throughout the State, imposes an obligation on landlords, including HABC when acting in that capacity, to repair and eliminate conditions and defects that constitute, or, if uncorrected, would constitute, a serious and substantial threat to the life, health, or safety of the occupants. If the tenant has given written notice to the landlord of those conditions and, after a reasonable period, the landlord has failed to correct them, the tenant may bring an action for rent escrow in the District Court.

After a hearing, the court may take a number of actions, including (1) entry of an order abating or reducing the rent to an amount determined by the court to be fair and equitable and to represent the existence of the defects found by the court to exist, (2) establishment of a rent escrow account into which the rent, whether or not abated, shall be paid, and (3) issuance of an injunction ordering the landlord to make repairs. If an escrow account is established, the court, after a further hearing, must decide ¹⁴⁷ how the money paid into the account shall be disbursed — to the landlord if the repairs are made, to the tenant if they are not, to both of them in some proportion, to a mortgagee of the property to stay a foreclosure, or to a third person who makes the repairs. See § 8~211(m) and (n). A similar procedure, with essentially the same prerequisites and relief, is provided for by § 9.9 of the Public Local Laws of Baltimore City.

In addition to complaining about the conditions in her own home, petitioner apparently complained to HABC about the state of the unoccupied dwelling that HABC owned next door, at 1515 North Bethel Street. That house, she said, was filled with garbage and debris. The doors and -windows were open, allowing for casual entrance by anyone. Noise from trespassers, she said, was often so loud that petitioner could not sleep at night, and their very presence made her feel unsafe.

The filth in the property contributed to the rodent infestation in her home. On June 7, 1999, a City Housing Inspector inspected petitioner’s property and issued two code violation notices to HABC. One required that pipes and drains in the bathroom be repaired within 72 hours; the other required that certain woodwork, floors, and walls be repaired within 30 days. We are informed by HABC, in its response to the petition for certiorari, that neither the 72-hour violations nor the 30-day violations were entirely abated until July 28,1999.

On June 8, the City issued a violation notice for the adjoining property as well, ordering that the house be cleaned and boarded within 30 days. The record does not reveal when those violations were corrected. Petitioner’s rent escrow action was filed on the form printed and supplied by the District Court (Form DC/CY 83 (Rev.9/97)). It alleged the various deficiencies complained of by petitioner and noted by the City Housing Inspector, which, in the statutory pre-printed language, petitioner averred constituted or, if not corrected, would constitute a fire hazard or serious threat to the life, health, and safety of occupants.

The form complaint contains printed language setting forth various ¹⁴⁸ forms of relief, with boxes to check as appropriate. By checking various boxes and writing relevant numbers in the blank spaces, petitioner requested that the court (1) order HABC to repair the alleged defects, (2) reduce her rent to $100/month, (3) establish a rent escrow account until the conditions were corrected, and (4) award damages in the amount of $4,416 for breach of the covenant of quiet enjoyment or warranty of habitability. An initial hearing was held on the complaint on June 29, 1999. At that hearing, the court apparently found some merit in petitioner’s complaint, for it reduced the rent for the month of June, 1999, to $100 and established a rent escrow account for the regular rental payments of $477/month thereafter.

The court postponed consideration of any further abatement to the time when it would be called upon to disburse the escrowed rent. Because, we are told, of the lateness of the hour and a large docket, the judge postponed argument on petitioner’s claim for breach of warranty until July 28, 1999. In preparation for the July hearing, petitioner filed with the court a memorandum in support of the damages she was seeking for breach of the two warranties. Her complaint regarding the warranty of habitability was based on the warranty implied by § 9-14.1 of the Public Local Laws of Baltimore City.

Section 9-14.1 provides that, in any lease for the rental of a dwelling intended for human habitation, the landlord shall be deemed to warrant that the dwelling is fit for human habitation. She pointed out that § 9 — 14.2(b) makes the warranty a continuing one and allows the tenant to maintain an action for breach of the warranty at any time during the tenancy if the dwelling becomes unfit for human habitation. Section 9-14.2(d) directs that damages for breach of the warranty “shall be computed retroactively to the date of the landlord’s actual knowledge of the breach of warranty and shall be the amount of rent paid or owed by the tenant during the time of the breach less the reasonable rental value of the dwelling in its deteriorated condition.” Petitioner recounted the various deficiencies complained of, noted that she had brought the problem to HABC’s attention in June, 1998, and ¹⁴⁹ stated that nothing had been done to that point to correct them. She averred that those deficiencies constituted a violation of the implied warranty of habitability, that the agreed rent on her home was $468/month, that, because of the alleged conditions, the reasonable rental value of the home was only $100/month, and that, as a result, for the 12 month period from June, 1998, through May, 1999, she had overpaid $368/ month, or a total of $4,416. 1 The warranty of quiet enjoyment alleged by petitioner was that provided for in Maryland Code, § 2-115 of the Real Property Article (“[I]n a lease, unless the lease provides otherwise, there is an implied covenant by the lessor that the lessee shall quietly enjoy the land”).

The breach, she said, arose from the condition of the property next door, which served to deprive her of the quiet enjoyment of her home. She did not quantify the damages sought for the violation of that warranty. It appears that, pursuant to an established rotation system, the judge who had presided at the initial hearing and postponed argument on the warranty claims was no longer handling the landlord-tenant docket on July 28, and the judge before whom the parties then appeared decided that warranty claims were not cognizable in “rent court.” Although requested, a transcript of the proceeding that day has never been prepared — a matter we shall consider further — but the parties have agreed that the judge, when presented with petitioner’s claim, concluded that the “rent division” or “rent court” of the District Court had no “jurisdiction” to consider the breach of warranty claims and instructed petitioner to file separate claims at another location. 2 It is not clear what, if any, kind of ¹⁵⁰ order was entered, but, effectively, petitioner’s claim for damages for breach of warranty was dismissed for lack of jurisdiction. Petitioner continued to pay her full rent in escrow pursuant to the June 29 order.

On April 18, 2000, the District Court disbursed the accumulated funds, 75% ($3,652) to petitioner and 25% ($1,217) to HABC, indicating a determination by the court that, even after June, 1999, petitioner was entitled to a partial abatement of the rent. Aggrieved at the dismissal of her warranty claim, petitioner filed a notice of appeal on August 27, 1999. The notice of appeal was signed by an attorney from the Public Justice Center, as counsel for petitioner, and it gave the attorney’s address and telephone number at the Public Justice Center. The Public Justice Center occupies space in the Legal Aid Building at 500 E. Lexington Street, in Baltimore.

The notice stated that, in accordance with § 12-401(f) of the Courts and Judicial Proceedings Article and Maryland Rule 7-102, the appeal was to be heard on the record because the amount in controversy exceeded $2,500, and that, in accordance with Maryland Rule 7-103, all filing fees would be waived. Contemporaneously with filing the notice of appeal, the attorney filed in the District Court a request for preparation of the transcript of the July 29 hearing. In that request, she checked a box adjacent to pre-printed language averring that petitioner was indigent and was seeking a waiver “of costs.” 3 She did not specifically request a waiver of the transcript cost, although the form warned that a deposit of $50 was required for the transcript. Possibly because petitioner failed to make the required $50 deposit, or other arrangements for payment, a transcript of ¹⁵¹ the proceeding was never prepared or filed.

Nonetheless, on September 17, 1999, the balance of the District Court record was transmitted to the Circuit Court. Someone — who is not clear — wrote on the District Court document entitled “Receipt for Papers Delivered to Circuit Court of Baltimore City” the notation “Rent Case Escrow De Novo Costs Waived.” Whether or not as a result of that notation, the Circuit Court waived its filing fee, treated the appeal as a de novo one, placed the case on an expedited track, and set trial for November 9, 1999. 4 Notwithstanding that both the District Court records and the Circuit Court Case History sheet showed that petitioner was represented, gave the name and address of the attorney, and directed that mail to petitioner be sent in care of the attorney at the attorney’s address, neither petitioner nor the attorney were notified of the trial date. It appears that no notice at all was sent to the attorney; notice was sent addressed to the petitioner, but it was sent to the 500 E. Lexington Street address, where no one in the mail room would know her or have any record of her presence in the building. When neither petitioner nor her attorney appeared for trial, the court dismissed the appeal for lack of prosecution.

On November 17, 1999, counsel for petitioner filed a motion for new trial and reinstatement of the appeal. She noted that the appeal should have been heard on the record, that neither she nor her client were notified of the hearing, and that the hearing was premature because the transcript had never been filed. The lack of notice was attested to in an accompanying affidavit of the attorney. HABC did not respond to the motion and thus did not attempt to contest the assertions in it.

No hearing was requested on the motion, and none was held. On December 16, 1999, the court summarily denied the mo ¹⁵² tion. Petitioner then filed a petition for certiorari, which we granted. The issue presented is whether the Circuit Court abused its discretion in denying petitioner’s motion to revise the judgment dismissing her appeal.

In resolving that issue, we need to address whether petitioner had-a meritorious claim in the Circuit Court, which necessarily leads us to examine the determination of the District Court judge that breach of warranty claims of the kind asserted by petitioner may not be filed (or tried) in a rent escrow case. DISCUSSION Procedural Errors We begin with the undisputed fact that petitioner’s appeal to the Circuit Court was to be heard on the record made in the District Court. It was not a de novo appeal, and there was nothing in the District Court record from which anyone could reasonably believe that it was a de novo appeal. Some clerk simply mislabeled the case when, or just before, the record was transmitted to the Circuit Court, and no one apparently looked into the file itself thereafter.

There were only a few documents in the District Court record, and nearly all of them — the initial petition, the memorandum filed by petitioner, the notice of appeal, and the request for transcript — disclosed on their face that the claim exceeded $2,500 and that this was an appeal on the record. Maryland Rule 7-114 lists the permissible reasons for dismissing an appeal from the District Court. One is if an appeal de novo has been withdrawn pursuant to Rule 7-112, and another is if the record from the District Court was not transmitted within the time prescribed by Rule 7-108. Md. Rule 7-114(d) and (e).

None of the other permissible grounds stated in Rule 7-114 are relevant to this case. Rule 7-112, which deals with de novo appeals, provides that an appeal is considered “withdrawn if the appellant fails to appear as required for trial, in which event the Circuit Court shall dismiss the appeal and return the file to the District Court. Md. Rule 7-112(d). That is the provision — the only provision — under ¹⁵³ which the Circuit Court acted.

As we have indicated, however, that provision did not apply because the appeal was not to be heard de novo. The court clearly erred, therefore, as a matter of law, in dismissing the appeal because of the nonappearance of petitioner. Petitioner brought the error to the court’s attention through a motion filed within 10 days after entry of the judgment. Whether such a motion is considered under Rule 2-534 or 2-535(a), both of which apply, the court had broad discretion to grant or deny relief.

We have made clear, however, that the court must exercise its discretion liberally, “lest technicality triumph over justice.” J.B. Corp. v. Fowler, 258 Md. 432, 435 , 265 A.2d 876, 878 (1970) (quoting Eshelman Motors Corp. v. Scheftel, 231 Md. 300, 301 , 189 A.2d 818, 818 (1963)); see also Haskell v. Carey, 294 Md. 550, 558 , 451 A.2d 658, 663 (1982). A number of factors may enter into the exercise of that discretion, but certainly, when the court is reliably informed, without contradiction from an opposing party, that its judgment was based on a clear mistake made by court personnel and was erroneous as a matter of law, that it was based solely on the nonappearance of a person who was never properly notified of the hearing, and that there is an arguably meritorious claim or defense, it is an abuse of discretion not to strike the judgment and allow further proceedings. See Triplin v. Jackson, 326 Md. 462 , 605 A.2d 618 (1992). Because HABC did not respond to petitioner’s motion, it gave the Circuit Court no basis for denying the motion.

On what the court had before it when it acted on the motion, the court clearly abused its discretion in not granting the motion. Before this Court, HABC, citing Purvis v. Forrest Street Apts., 286 Md. 398 , 408 A.2d 388 (1979) and Cottman v. Princess Anne Villas, 340 Md. 295 , 666 A.2d 1233 (1995), seeks to sustain the judgment on the ground that, even if the Circuit Court had treated the appeal as a “record” appeal, the court was bound to dismiss the appeal in any event because of petitioner’s failure to produce the transcript of the District ¹⁵⁴ Court proceeding. In effect, HABC is arguing that the Circuit Court could and should have dismissed