Court for Wicomico County Case No. 22-C15-1518
Nazarian, Beachley, Zarnoch, Robert A. (Senior Judge,
Specially Assigned), JJ.
a dispute over the nonpayment for construction work performed
by subcontractor, appellant C & B Construction ("C
& B") for general contractor Temco Builders, Inc.
("Temco"). At the heart of this case is whether C
& B may employ the Maryland Construction Trust Statute,
Md. Code (1974, 2015 Repl. Vol.), Real Property Article (RP)
§ 9-201 et seq., to hold officers of Temco,
appellees Vice President Jeffrey Dashiell
("Dashiell") and President Edward J. Maguire
("Maguire"), personally liable for money owed to C
& B by Temco. After C & B concluded its case at a
bench trial in the Circuit Court for Wicomico County,
Dashiell and Maguire filed a motion for judgment, which the
circuit court granted based on its finding that RP §
9-204(a) did not permit C & B to hold Dashiell
and Maguire personally liable. The key issue we must address,
therefore, is whether the applicability clause in §
9-204(a) required C & B to establish that its
subcontracts were subject to either the Little Miller Act or
the mechanics' lien statute. If the Construction Trust
statute does apply, C & B asks us to address whether the
circuit court erred in granting judgment to Dashiell and
Maguire, despite evidence showing that Temco had been paid by
the owners in full or in large part based on Temco's
applications for payment.
AND PROCEDURAL HISTORY
construction projects located across Maryland, C & B
performed various drywall, ductwork, and other related
construction work as part of a subcontract with Temco.
According to C & B, for five of the six projects, C &
B completed all of its obligations under the subcontract with
Temco, and Temco was paid by the owners for all or the
majority of the work performed by C & B. However, Temco
failed to pay C & B for the work it performed.
Additionally, on a sixth project, C & B alleged that
Temco owed C & B for work for which Temco had received
credit against a debt to another company, but failed to pay C
& B. Neither party disputes that Temco failed to pay C
& B for work performed under the subcontracts. According
to C & B, rather than paying C & B for the work it
performed, Dashiell and Maguire spent the money they received
from the project owners by paying other subcontractors and
Temco office expenses, or by repaying themselves for money
they had put into the business.
October 1, 2015, C & B filed a complaint in the Circuit
Court for Wicomico County against Temco, as well as Dashiell
and Maguire individually. For each of the six projects, C
& B alleged breach of contract against Temco and sought
to hold Dashiell and Maguire individually liable under the
Maryland Construction Trust Statute. C & B's claims
against Dashiell and Maguire included primarily three
allegations: (1) "During the course of the Project, the
owner paid Temco for labor and materials supplied to the
Project by C&B" and "Temco held these monies in
trust for C&B"; (2) "Defendants Maguire and
Dashiell, as officers/managing agents for Temco, had
direction over and control of the monies held in trust by
Temco for the benefit of C&B"; and (3)
"Defendants Maguire and Dashiell used and/or retained
the monies held in trust for C&B for purposes other than
to pay C&B for the materials and labor it supplied to the
Project." For the six projects for which C & B
alleged it was not paid for work performed, C & B sought
a total of $218, 349.90.
3, 2016, Temco entered into a consent judgment with C &
B, agreeing to the entry of an award against it in the amount
of $225, 607.00. C & B's claims against Dashiell
and Maguire, however, proceeded to trial on July 13, 2016. At
the conclusion of C & B's case, the Temco officers
moved for judgment, asserting that the Construction Trust
statute did not apply in this case, because the subcontracts
were not subject to either the Little Miller Act or the
mechanics' lien statute. After hearing argument, the
Circuit Court Judge Donald C. Davis agreed with Dashiell and
[I]t seems to me really looking at the Statute and Section
9-204(a) . . ., it applies to contracts under the Maryland
Little Miller Act, and there is no contention that any of the
contracts in this case would be subject to the Maryland
Little Miller Act as well as properties subject to 9-102 of
this Article which is the Mechanics Lien Statute.
And the only way to know whether the property is subject to
9-102 is for evidence to be provided that it is subject to
9-102, which I am just going to shorten it up and say that
it's either basically new construction or every building
repaired, rebuilt or improved to the extent of 15 percent of
And in this case, I have looked at the contracts, and there
is nothing to indicate that the contracts are for any of the
other exceptions. [ . . . ]
There is no way for the Court to make any judgment as to
whether or not that improvement is to the extent of 15
percent of the value of the project.
And as I said, there is no way for the Court to infer that[,
] because there is no evidence that would permit a finding, a
direct finding from the evidence. And it does seem to me that
a basic proposition is that one cannot proceed under the
Construction Trust Statute without first establishing that
the . . . contract for which that construction trust is
sought to be imposed is one which would be lienable.
So I think sort of the basic proposition is that Plaintiff
must first establish that the property is I will say lienable
under Section 9-102 as a predicate for anything under Section
9-201 [et seq.], and there is really no evidence in
this case that would permit me to make that finding directly
from the evidence or by any inference from the evidence that
has been submitted.
So I don't think -- the question is a closer one as to
whether or not there is adequate evidence of earmarking, but
I don't think I need to get to that point really, because
I don't believe that the evidence as submitted is
sufficient for me to, even if I looked at it in the light
most favorable to the Plaintiff, which I'm not required
to do, but even if I did do that, I don't think the
evidence is sufficient.
So I'm going to grant the motion for judgment on behalf
of Mr. Maguire and Mr. Dashiell.
19, 2016, the circuit court issued a formal ruling in favor
of Dashiell and Maguire. C & B filed a Motion for New
Trial, which the circuit court denied without a hearing on
August 16, 2016. C & B's appeal to this Court
focus here is on the proper interpretation of RP §
9-204. The Court of Appeals reiterated in Nesbit v.
Gov't Emps. Ins. Co. that "[w]hen the trial
court's order 'involves an interpretation and
application of Maryland statutory and case law, our Court
must determine whether the lower court's conclusions are
legally correct under a de novo standard of
review.'" 382 Md. 65, 72 (2004) (quoting Walter
v. Gunter, 367 Md. 386, 392 (2002)). In this case, the
trial court found that the Construction Trust statute does
not apply and concluded that Dashiell and Maguire could not
be held personally liable. We must examine whether that
determination is legally correct.
Principles of Statutory Construction and Applicable
issues of statutory construction are resolvable on the basis
of three factors: (1) text; (2) purpose; and (3)
consequences. Town of Oxford v. Coste, 204 Md.App.
578, 585 (2012), aff'd 431 Md. 14 (2013).
Text is the plain language of the relevant provision,
typically given its ordinary meaning, . . . considered in
light of the whole statute, . . . and generally evaluated for
ambiguity. . . . Legislative purpose, either apparent from
the text or gathered from external sources, often informs, if
not controls, our reading of the statute. . . . An
examination of interpretive consequences, either as a
comparison of the results of each proffered construction, . .
. or as a principle of avoidance of an absurd or unreasonable
reading, . . . grounds the court's interpretation in
204 Md.App. 585-86 (Citations omitted); see also Blue v.
Prince George's County, 434 Md. 681, 689 (2013).
Court of Appeals has said:
[w]e may and often must consider other "external
manifestations" or "persuasive evidence, "
including a bill's title and function paragraphs,
amendments that occurred as it passed through the
legislature, its relationship to earlier and subsequent
legislation, and other material that fairly bears on the
fundamental issue of legislative purpose or goal, which
becomes the context within which we read the particular
language before us in a given case.
Kaczorowski v. Cty. of Baltimore, 309 Md. 505, 515
Construction Trust statute was designed to "protect
subcontractors from dishonest practices by general
contractors and other subcontractors for whom they might
work." Ferguson Trenching v. Kiehne, 329 Md.
169, 174-175 (1993). Thus, the legislature made officers,
directors and managing agents within a contractor corporation
personally liable when such agent knowingly uses monies held
in trust improperly. See RP § 9-202. The
legislative purpose was "to ensure that funds disbursed
by an owner or contractor for payment to a subcontractor for
work done are actually paid to the subcontractor."
See S.B. 374, 1987 General Assembly of Maryland,
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