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Jason v. National Loan Recoveries, LLC

Court of Special Appeals of Maryland

April 1, 2016

RASHAD AHMAD JASON
v.
NATIONAL LOAN RECOVERIES, LLC

          JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AFFIRMED IN PART AND REVERSED IN PART. CASE REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH THIS OPINION. COSTS TO BE PAID ONE-THIRD BY APPELLANT AND TWO-THIRDS BY APPELLEE.

         For Appellant: Scott C. Borison (Legg Law Firm, LLC, San Mateo, CA; Philip R. Robinson, Consumer Law Center, LLC, Silver Spring, MD) all on the brief.

         For Appellee: Brian L. Moffet (Zachary S. Schultz, Gordon, Feinblatt, LLC on the brief) Baltimore, MD.

          Meredith, Graeff, Friedman, JJ.

          OPINION

         [227 Md.App. 519] ON MOTION FOR RECONSIDERATION

         Meredith, J.

         This appeal flows from a suit for damages and declaratory relief filed in the Circuit Court for Baltimore City by Rashad Ahmad Jason (" Jason" ), appellant, against National Loan Recoveries, LLC (" National Loan" ), appellee.[1] Appellee moved to dismiss the complaint as time barred, and the circuit court granted that motion. Jason appealed.

         QUESTIONS PRESENTED

         The " Questions Presented" in Jason's brief were framed as follows:

1. Did the Circuit Court err in holding that the Plaintiff's claims for declaratory relief were untimely when they sought a declaration that outstanding judgments obtained by Defendant were void?
2. Did the Circuit Court err in granting a Motion to Dismiss the Plaintiff's declaratory judgment claims without entering a declaratory judgment?
3. Did the Circuit Court err in applying the three year limitation to Plaintiff's claims for unjust enrichment relating to judgments obtained by the Defendant?
4. Did the Circuit Court err in determining that the Plaintiff's claims under the [Maryland Consumer Debt Collection Act] were time barred?

         We answer " yes" to question 1, which obviates the need for us to address question 2. In response to question 3, we conclude that a claim of unjust enrichment is subject to the three-year statute of limitations, but, because the record was not clear as to the date of National Loan's alleged enrichment, the circuit court erred in granting the motion to dismiss on that count. We answer " no" to question 4. We will affirm in [227 Md.App. 520] part and reverse in part, and we will remand the case for further proceedings.

         PROCEDURAL AND FACTUAL BACKGROUND

         In late 2008, National Loan, a " debt buyer," purchased Jason's credit card debt, as to which Jason was then in default. On January 29, 2009, National Loan filed a lawsuit against Jason in the District Court of Maryland for Baltimore City to collect that debt. At the time it filed suit against Jason, National Loan did not have a license to act as a debt collection agency in Maryland, and did not obtain a license in Maryland until September 10, 2010. The standing of National Loan to pursue collection of Jason's debt was apparently never challenged in the District Court. On March 31, 2009, the District Court entered a judgment in favor of National Loan in the amount of $1,323.39 plus $60.00 in costs and $1,051.65 for pre-judgment interest, based upon an affidavit filed by National Loan. Notice of the judgment was mailed to Jason on March 31, 2009.

         On April 16, 2009, the District Court issued a writ of garnishment that was served upon Jason's bank. Jason moved to dismiss the garnishment on April 30, 2009, but assets sufficient to satisfy the judgment were paid through garnishment on a date that does not appear in the record. On December 13, 2011, the District Court clerk made a docket entry confirming that the judgment against Jason had been satisfied.

         On July 30, 2013, Jason filed a complaint captioned " CLASS ACTION COMPLAINT" in the Circuit Court for Baltimore City, seeking relief for actions taken by National Loan in Maryland prior to the date it became licensed as a debt collection agency on September 10, 2010. Although Jason was the sole plaintiff identified by name in the complaint, he claimed that he was filing the suit " On his Behalf and on Behalf of a Class of Persons Similarly Situated." He alleged in the complaint that, if the court certified the case to proceed as a class action pursuant to Maryland Rule 2-231, [227 Md.App. 521] the proposed class would include " those persons sued by National Loan in Maryland state courts from October 30, 2007 through September 9, 2010 for whom National Loan obtained a judgment for an alleged debt, interest or costs, including attorney's fees in its favor in an attempt to collect a consumer debt." The circuit court never acted on Jason's request to certify his case to proceed as a class action.[2]

         The complaint included five counts. In Count I, the complaint asserted that National Loan " is not entitled to any interest from the Plaintiff Class Members on the purported debts since it was acting unlawfully as an unlicensed collection agency." The relief requested in this count included a declaration that National Loan was not entitled to interest on any judgment " obtained illegally," and an injunction ordering National Loan " to disgorge all interest amounts collected from Plaintiff Class Members" based upon judgments that had been obtained while National Loan had acted as a collection agency without a Maryland license. Count II was similar to Count I, but sought relief relative to any costs and attorney's fees National Loan had obtained as a result of judgments entered against Plaintiff Class Members during the time National Loan had acted as a collection agency without a Maryland license.

         Count III sought a declaration that National Loan " did not have legal standing to obtain any judgment in Maryland Courts against [Jason] and Plaintiff Class Members," as well as a declaration that the judgments it did obtain prior to being licensed were " void and unenforceable." In addition to the request for declaratory relief, Count III included a request for injunctive relief requiring National Loan to " disgorge all [227 Md.App. 522] judgment amounts" it had collected as a result of acting as an unlicensed collection agency.

         Count IV alleged that National Loan had been unjustly enriched by the " acceptance and retention" of any sums it had received as a result of its actions to enforce void judgments. This count included a claim for a money judgment and attorney's fees.

         Count V asserted that the actions National Loan had taken to collect debts in Maryland before being licensed to do so constituted violations of Maryland Code (1975, 2005 Repl. Vol.), Commercial Law Article (" Comm. Law" ), § 14-201, et seq. (also known as the Maryland Consumer Debt Collection Act), and Comm. Law § 13-101, et seq. (the Maryland Consumer Protection Act). Under the Consumer Protection Act, Comm. Law § 13-301(14)(iii), " [u]nfair or deceptive trade practices include any . . . [v]iolation of a provision of . . . the Maryland Consumer Debt Collection Act." Count V requested a money judgment for the violations of the Maryland Consumer Debt Collection Act, and attorney's fees and litigation expenses pursuant to Comm. Law § 13-408.

         National Loan moved to dismiss the suit for failure to state a claim, arguing that Jason's complaint was filed after the three-year statute of limitations had expired. Suit was filed on July 30, 2013, and National Loan argued that all of the events that Jason complained of occurred more than three years before his complaint was filed. National Loan urged the court to find that Jason's claims were therefore barred by the statute of limitations generally applicable to civil actions in Maryland. See Maryland Code (1973, 2013 Repl. Vol.), Courts and Judicial Proceedings Article (" CJP" ), § 5-101.[3]

          [227 Md.App. 523] Following a hearing, the circuit court concluded that Jason's claims all arose from conduct that occurred more than three years prior to the time he filed suit, and the court granted National Loan's motion to dismiss ...


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