Court for Anne Arundel County Case No. 02-C-14187207 Hon.
William C. Mulford II
Graeff, Kehoe, Friedman, JJ. [*]
buyers purchase consumer debt at deep discount, obtain
judgments, and try to collect on those judgments. Md. Code
Ann., Business Regulation Article § 7-301 (2015). In
2010, the Maryland State Collection Agency Licensing Board
clarified that these debt buyers fall within the definition
of collection agencies and, therefore, must have a license
before engaging in debt collecting. Md. State Collection
Agency Licensing Bd. Advisory Notice 05–10, May 5, 2010
(quoted in Finch v. LVNV Funding, 212 Md. App. 748,
758 (2013)); see also Cain v. Midland Funding, __
Md.__, __, No. 2280, September Term 2016, Slip Op. at 2
(filed March 24, 2017). And, in Finch v. LVNV
Funding, this Court held that judgments obtained by
unlicensed debt buyers while they were unlicensed are void.
212 Md. App. at 764.
Murray-on behalf of a proposed class of similarly-situated
consumers-brought a lawsuit against Midland Funding, an
allegedly unlicensed debt buyer, to have the judgment that Midland obtained
against her declared void. Murray sought to recover money
that she paid to Midland (with fees and expenses), as well as
to obtain equitable relief. By the time the matter arrived in
the Circuit Court for Anne Arundel County, however, the
counts seeking monetary damages had been dismissed and only
the two non-monetary counts-a count seeking a declaratory
judgment and a count seeking injunctive relief-remained
viable. On November 30, 2015, the circuit court dismissed
these final two counts, finding that they were barred by the
three-year statute of limitations set forth in § 5-101
of the Courts & Judicial Proceedings ("CJ")
Article of the Maryland Code. Murray noted a timely appeal.
months after the circuit court's decision in Murray's
case, this Court decided another Finch-style case
predicated on similar facts, Jason v. National Loan
Recoveries. 227 Md. App. 516 (2016) (decided April 1,
2016). Because the circuit court here did not have the
benefit of our Jason opinion, it erroneously
determined that Murray's non-monetary, equitable remedies
are barred by limitations. We, therefore, will vacate the
circuit court's decision and remand the case for
reconsideration in light of our holding in
Jason. We summarize the
rules that apply.
rules have emerged for Finch-style cases, in which a
judgment debtor files a lawsuit to void a previously-obtained
judgment by an unlicensed debt collector.
claims for monetary damages are actions at law and, thus,
subject to a statute of limitations. Jason, 227 Md.
App. at 529-530 (applying CJ §5-101's three-year
statute of limitations). Murray's complaint, in its current
form, does not advance any claims-direct or ancillary-for
claims for purely equitable remedies, including claims for
injunctive relief, are potentially subject to laches. Laches
is the limit equity places on stale claims. "Laches
derives from concerns similar to those that undergird
statutes of limitations. Both devices-one a product of
legislation, the other a development of the common law-are
intended to set time limits on the assertion of claims."
Lopez v. State, 433 Md. 652, 653 (2013). There is no
firm time limit for laches: rather a judge sitting in equity
considers plaintiff's delay in asserting the claim and
its causes and weighs that against the prejudice to the
defendant caused by the late assertion of the equitable
claim. "Laches bars an action where there has been both
an inexcusable delay and prejudice to the party asserting the
defense." Dep't of Human Serv. v. Kamp, 180
Md. App. 166, 205 (2008) (citations and quotations omitted).
"[I]n most cases involving an exclusively equitable
remedy, [courts] refer to the limitations period for the
cause of action at law most analogous to the one in
equity." State Ctr., LLC v. Lexington Charles Ltd.
P'ship, 438 Md. 451, 604 (2014) (citations omitted).
noted above, one of Murray's remaining claims seeks the
equitable remedy of injunction. The purpose of an injunction
is to prohibit future conduct. 100 Harborview
Drive Condo. Council of Unit Owners v. Clark, 224 Md.
App. 13, 64 (2015) (citations omitted). We note,
parenthetically, that it is not clear to us how an injunction
would work in Murray's case. Specifically, Murray's
complaint seeks "an injunction against Midland from
collecting upon the void judgments." There doesn't
seem to be a dispute that Midland currently possesses the
requisite license to collect debt. Moreover, Midland has
completed collection on its judgment against Murray. Thus, as
to Murray herself, the proposed injunction would likely be
moot. Clark v. O'Malley, 186 Md. App. 194, 218
(2009) (explaining that, because a police commissioner's
contract had expired, the injunctive relief he
sought-reinstatement into his job as the Police
Commissioner-was moot), aff'd, 434 Md. 171
(2013). Moreover, Murray may also have difficulty
demonstrating that she has standing to assert the claim for
injunction on behalf of those who do. Finally, as we began
this discussion, on remand Midland will have the opportunity
to argue that Murray has inexcusably delayed in bringing this
claim and that, as a result, it has suffered prejudice, and
therefore, laches is a bar to this equitable
Actions seeking declaratory judgments present a unique,
hybrid situation. Claims for declaratory relief were unknown
at the common law and are exclusively a statutory
construction. See CJ §3-401 et seq.
The principal relief in a declaratory judgment action is a
declaration, a separate written statement of the court
declaring the rights of the parties. Bowen v. City of
Annapolis, 402 Md. 587, 608 (2007) (explaining that a
declaratory judgment defines the rights and obligations of
parties and must be in writing). In the context of these
Finch-style claims, three sub-rules have developed
about the timeliness of declaratory judgment actions.
is no time bar at all if Murray seeks the primary relief of a
simple declaration. Our courts (and others) hold that she can
obtain such a declaration "at any time," meaning
there is not, nor will there ever be a time bar to that cause
of action. Jason, 227 Md. App. at 525 ("[T]here
appears to be no time limit for asserting that a judgment is
void." … "We agree with Jason that [neither]
the statute of limitations [nor laches] preclude him from
seeking a declaration that the judgment was
void"); Cook v. Alexandria Nat.
Bank, 263 Md. 147, 151, 282 (1971) ("Although it is
not necessary to take any steps to have a void judgment
reversed or vacated, it is open to attack or impeachment
in any proceeding, direct or collateral, and at any time or
place, at least where the invalidity appears upon the
face of the record.") (Emphasis added); United
States v. One Toshiba Color Television, 213 F.3d 147,
158 (3d Cir. 2000) ("[W]e hold that laches is not
available to preclude a claimant from attacking a void
judgment."). This rule may reflect an implicit
conclusion about how a laches analysis would play out: the
value of such a declaration to the judgment debtor (for
example, to negate a derogatory notation on a credit report)
far outweighs any potential prejudice to the unlicensed debt
buyer. In part, this is because the evidentiary burdens of
proving the judgment void are light (the only relevant issues
are the date of the judgment and the date of licensure) and
there is minimal, if any, cost to the formerly unlicensed
debt buyer in allowing such a declaration to issue. Whatever
the reason, the rule is clear that a simple declaration that
a judgment is void, is subject neither to a statute of
limitations nor laches.
extent that a declaratory judgment action also seeks what the
Jason Court called "remedies,"
Jason, 227 Md. App. at 525; "remedial
relief," id.; and "ancillary
remedies," id. at 526; that ancillary relief
may be stale and therefore can be subject either to
limitations or laches as the case may be. "A declaratory
judgment can be obtained either at law or in equity."
LaSalle Bank, N.A. v. Reeves, 173 Md. App. 392, 411
(2007). "The determination of whether [a declaratory
judgment] action is properly at law or in equity must be made
by an examination of the nature of the claim asserted and the
relief requested." Id. (quoting Fisher v.
Tyler, 24 Md. App. 663, 668-69 (1975) (holding that ...