C&B CONSTRUCTION, INC.
JEFFREY DASHIELL, ET AL.
Circuit Court for Wicomico County Case No. 22-C-15-001518.
Barbera, C.J., Greene, McDonald, Watts, Hotten, Getty,
Rodowsky, Lawrence F., (Senior Judge, Specially Assigned) JJ.
case concerns a breach of contract dispute before the Circuit
Court for Wicomico County, stemming from the failure to pay
for labor and materials provided by a construction
subcontractor, C&B Construction Inc. (hereinafter
"Petitioner"), to a general contractor, Temco
Builders Inc. (hereinafter "Temco"), through six
construction contracts. Temco failed to pay the amounts due
to Petitioner for the labor and materials expended, which
ultimately resulted in a consent judgment agreed to by Temco
in the amount of $225, 607. At all relevant periods, Temco
was co-owned by Jeffrey Dashiell and Edward J. Maguire
(hereinafter "Respondents"). At trial, Petitioner
alleged that Respondents had either diverted or
misappropriated funds received by Temco from the owners of
the construction projects, and that the funds received were
supposed to be held in trust pursuant to Md. Code (1974,
Repl. Vol. 2015), §§ 9-201, 9-202, and 9-204 of the
Real Property Article (hereinafter "Real Prop.")
also known as the Maryland Construction Trust Statute
discussed infra. The circuit court entered judgment
for the Respondents.
the entry of the circuit court judgment on July 19, 2016,
Petitioner noted a timely appeal to the Court of Special
Appeals of Maryland. The Court affirmed the judgment of the
circuit court. Thereafter, we granted certiorari to
review the following questions:
1. Does Section 9-204(a) of the Maryland Construction Trust
Statute limit its application to projects covered by the
Maryland Mechanic's Lien Law and Maryland Little Miller
Act even though the plain language of the statute as a whole
and Section 9-204(a) specifically contain no such limitation?
2. Did the trial court err in granting judgment to
Respondents despite evidence showing that funds received by
the general contractor were earmarked for payment to
reasons discussed infra, we shall affirm the
judgment of the Court of Special Appeals.
was engaged as a subcontractor by Temco to perform related
construction work, including the installation of drywall and
ductwork. Petitioner completed its subcontract work for the
six construction projects. Temco received payment from the
project owners, but failed to pay Petitioner for the work
performed. Petitioner contends that instead of paying it for
the work performed, Respondents either misappropriated those
funds, diverted the funds to themselves individually, or paid
October 1, 2015, Petitioner filed a breach of contract
complaint in the Circuit Court for Wicomico County against
Temco, and Respondents individually, pursuant to the Maryland
Construction Trust Statute. On May 3, 2016, Temco entered
into a consent judgment with Petitioner for $225, 607,
leaving the remaining claims against Respondents outstanding.
At the close of Petitioner's case, Respondents moved for
judgment arguing that the Maryland Construction Trust Statute
was not applicable, because the subcontracts at issue were
not subject to the Maryland Little Miller Act or the Maryland
Mechanics' Lien Statute,  as required by the plain language
of Real Prop. § 9-204. In granting Respondents'
motion, the circuit court noted:
[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 [Petitioner]
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 [Petitioner], which I'm not
required to do, but even if I did do that, I don't think
the evidence is sufficient.
I'm going to grant the motion for judgment on behalf of
[Respondents]. Following the circuit court's denial of
Petitioner's motion for new trial, a timely appeal was
noted to the Court of Special Appeals.
Court of Special Appeals issued its reported opinion on
November 1, 2017. See C & B Constr., Inc. v.
Dashiell, 234 Md.App. 424, 430-31, 172 A.3d 960, 964
(2017), cert. granted, 457 Md. 137, 177 A.3d 72
(2018). In affirming the circuit court, the Court interpreted
Real Prop. § 9-204 narrowly, focusing on four primary
determinations. First, the Court reasoned that the plain
language of Real Prop. § 9-204 explicitly states that
its intended purpose was to limit its application to
contracts subject to the Maryland Little Miller Act or the
mechanics' lien statute. Second, the Court determined
that the context surrounding the enactment of the statute,
including its reliance on definitions established under the
mechanics' lien statute, suggested that the General
Assembly intended a connected and limited application of the
statute. Third, the Court determined that the consequences of
adopting Petitioner's proposed application "would
impose unprecedented liability upon officers and directors of
contractor corporations." Id. at 437, 172 A.3d
at 968. Finally, the Court noted that the previous
interpretations of the Maryland Construction Trust Statute in
Walter v. Atl. Builders Group, Inc., 180 Md.App.
347, 351 n. 3, 951 A.2d 94 (2008), U.S. for the use of
DMI, Inc. v. Darwin Const. Co., 750 F.Supp. 536, 541
(D.D.C. 1990), and Jaguar Techs., Inc. v. Cable-LA,
Inc., 229 F.Supp.2d 453 (D. Md. 2002) unanimously
interpret the Maryland Construction Trust Statute as
requiring a demonstration that the Maryland Little Miller Act
or mechanics' lien statute apply to the contracts in