Case Title: Blackstone v. Sharma

Citation: 

Docket Number: 40/17

State: maryland

Court: Maryland Supreme Court

Date: 2018-08-02T00:00:00Z

Document:
Kyle Blackstone, et al. v. Dinesh Sharma, et al.; Terrance Shanahan, et al. v. Seyed 
Marvastian, et al., No. 40, September Term, 2017; Laura O’Sullivan, et al. v. Jeffrey 
Altenburg, et al., No. 45, September Term 2017; Martin Goldberg, et al. v. Martha 
Neviaser, et al., No. 47, September Term 2017.  Opinion by Getty, J. 
 
COLLECTION 
AGENCIES 
— 
MARYLAND 
COLLECTION 
AGENCY 
LICENSING ACT — SCOPE OF LICENSING REQUIREMENT  
 
The Court of Appeals of Maryland concluded that the plain language of the Maryland 
Collection Agency Licensing Act (“MCALA” or “the Act”) is ambiguous as to whether 
the Maryland General Assembly intended foreign statutory trusts, acting as a special 
purpose vehicle in the mortgage industry, to obtain a license as a collection agency.  Md. 
Code (1992, 2015 Rep. Vol.), Bus. Reg. (“BR”) § 7-301, et seq.  The Court, therefore, 
analyzed the legislative history, subsequent legislation, and related statutes in order to 
determine the legislative intent in enacting the original version of MCALA in 1977 as well 
as the reason the Department of Labor, Licensing, and Regulation (“DLLR” or 
“Department”) requested a departmental bill to revise MCALA in 2007.  The Court 
ultimately held that the General Assembly did not intend for foreign statutory trusts to 
obtain a collection agency license under MCALA before its substitute trustees filed 
foreclosure actions in various circuit courts.  As such, the Court held that the circuit courts 
improperly dismissed the foreclosure actions solely on the basis that the two foreign 
statutory trusts, which owned the mortgage loans in each of the cases sub judice, were not 
licensed as a collection agency under MCALA before the substitute trustees instituted the 
foreclosure proceedings.   
 
 
Circuit Court for Montgomery County 
Case No. 397954V 
 
Circuit Court for Montgomery County 
Case No. 396663V 
 
Circuit Court for Howard County 
Case No. 13-C-16-106882 
 
Circuit Court for Washington County 
Case No. 21-C-15-055314 
 
Argued: November 30, 2017 
 
 
IN THE COURT OF APPEALS 
OF MARYLAND 
 
No. 40, 45, & 47 
 
September Term, 2017 
 
  
KYLE BLACKSTONE, ET AL. 
 
 
 
v. 
 
DINESH SHARMA, ET AL. 
 
  
TERRANCE SHANAHAN, ET AL. 
 
 
 
v. 
 
SEYED MARVASTIAN, ET AL.  
 
   
LAURA O’SULLIVAN, ET AL. 
SUBSTITUTE TRUSTEES 
 
 
 
v. 
 
JEFFREY ALTENBURG, ET AL.  
 
  
MARTIN S. GOLDBERG, ET AL. 
SUBSTITUTE TRUSTEES 
 
 
 
v. 
 
MARTHA LYNN NEVIASER, ET AL.  
 
 
Greene, 
Adkins, 
McDonald, 
Watts, 
Hotten, 
Getty, 
Harrell, Glenn T., Jr., 
        (Senior Judge, Specially Assigned) 
 
JJ. 
 
 
Opinion by Getty, J. 
Adkins and McDonald, JJ. dissent. 
 
 
Filed: August 2, 2018 
Pursuant to Maryland Uniform Electronic Legal 
Materials Act 
(§§ 10-1601 et seq. of the State Government Article) this document is authentic. 
 
 
 
 
 
Suzanne C. Johnson, Clerk 
2019-02-19 
10:56-05:00
This case is a consolidated appeal of four circuit court cases in which the parties 
contest the application of a 2007 departmental bill revising the Maryland Collection 
Agency Licensing Act (“MCALA” or “the Act”).  Md. Code (1992, 2015 Rep. Vol.), Bus. 
Reg. (“BR”) § 7-301, et seq.  The overarching issue presented in these consolidated cases 
is whether MCALA, as revised by the 2007 departmental bill, is constrained to the original 
scope of collection agencies seeking consumer claims or whether the revised statutory 
language propels MCALA requirements across the threshold of the mortgage debt arena, 
requiring principal actors of Maryland’s mortgage market to obtain a collection agency 
license.   
MCALA was first enacted in 1977 to protect Maryland consumers from abusive 
debt collection practices employed by the collection agency industry.  1977 Md. Laws, ch. 
319.  The Act specifically defined “collection agencies” as entities engaged in the practice 
of collecting consumer debts for others, excluding those entities collecting debts they 
owned.  Pursuant to MCALA, these third-party debt collectors were required to obtain a 
license as well as file a surety bond of $5,000 for the benefit of the State and any member 
of the public damaged by such collection agencies.  BR § 7-301; 7-304.  The State 
Collection Agency Licensing Board (“the Board”),1 located within the Department of 
                                                 
1 The Board also enforces the Maryland Consumer Debt Collection Act (“MCDCA”).  Md. 
Code (1975, 2013 Repl. Vol.), Com. Law (“CL”) § 14-201, et seq.  The MCDCA generally 
prohibits “a collector” from threatening consumers, disclosing consumer information, 
contacting the consumer’s employer, harassing the consumer, using obscene language with 
consumers, claiming a nonexistent right, or simulating the legal, judicial, or governmental 
process when collecting or attempting to collect an alleged debt.  CL § 14-202.  Although 
the MCDCA is separate from MCALA, a collection agency that seeks a license under 
 
2 
 
Labor, Licensing, and Regulation (“DLLR” or “Department”), is responsible for enforcing 
the Act.  BR § 7-201.   
In 2007, DLLR requested a departmental bill (House Bill 1324) to revise the 
definition of collection agencies required to obtain the MCALA license.  Specifically, the 
Department submitted a bill request, explaining that the legislation would allow DLLR to 
regulate actors in the collection industry that employ a loophole in MCALA’s licensing 
requirement by purchasing delinquent consumer debt for goods and services by way of a 
purchase contract that mirrors a collection agency agreement.  When enacted, the 
departmental bill specifically changed MCALA’s definition of “collection agencies” to 
include a person who engages directly or indirectly in the business of “collecting a 
consumer claim the person owns, if the claim was in default when the person acquired it[.]”  
2007 Md. Laws, ch. 472.   
Each of the circuit courts below, along with the Court of Special Appeals, found 
that foreign statutory trusts acting as a repository for defaulted mortgage debts were 
required to obtain a license as a collection agency pursuant to MCALA before its substitute 
trustees filed a foreclosure action in the circuit court.  The substitute trustees each 
petitioned this Court for certiorari, asserting that the circuit courts improperly dismissed 
the foreclosure actions because the foreign statutory trusts do not fall under the definition 
of “collection agencies” that are licensed and regulated by MCALA.  This Court is 
                                                 
MCALA must agree to comply with the MCDCA in order to obtain a license.  BR § 7-
304(c)(3). 
 
3 
 
therefore called upon to determine the scope of MCALA.2  Specifically, the limited legal 
issue in these consolidated cases is whether the General Assembly intended a foreign 
statutory trust, as owner of a delinquent mortgage loan, to obtain a license as a collection 
agency under MCALA before substitute trustees instituted a foreclosure action against a 
homeowner who defaulted on his or her mortgage.  As explained below, the legislative 
history, subsequent legislation, and related statutes make clear that the 2007 departmental 
bill did not expand the scope of MCALA to include mortgage industry players seeking 
foreclosure actions; thus, this Court answers that question in the negative.3   
                                                 
2 On June 28, 2018, the Supreme Court granted certiorari in Obduskey v. McCarthy & 
Holthus LLP, which presents a somewhat parallel federal issue.  -- S. Ct. -- (2018) (No. 17-
1307), 2018 WL 1335753, at *1.  Specifically, the Supreme Court granted certiorari in 
order to resolve whether the Fair Debt Collection Practices Act (“FDCPA”) applies to non-
judicial foreclosure proceedings.  See 15 U.S.C. §§ 1692(e).  The Supreme Court’s decision 
to grant certiorari in this case emphasizes that the language of the FDCPA has generated 
conflicting opinions as to its scope amongst federal and state courts alike.  This also 
underscores that courts have struggled to decide whether the FDCPA, if found to apply to 
foreclosure proceedings, would conflict with state foreclosure law.  See Brief for Petitioner 
at *2, Obduskey v. McCarthy & Holthus LLP, -- S. Ct. -- (2018) (No. 17-1307), 2018 WL 
1359494 (“This case presents an important and recurring question of statutory construction 
that has squarely divided the lower courts.  According to the Tenth Circuit, the FDCPA 
does not apply to non-judicial foreclosure proceedings.  In so holding, the court sided with 
a split panel of the Ninth Circuit, and openly rejected the contrary decisions of multiple 
courts of appeals and two state supreme courts. . . .  It reasoned that applying the FDCPA 
in this context ‘would conflict with Colorado mortgage foreclosure law.’”).   
 
3 This Court holds that the 2007 departmental bill does not expand the scope of MCALA 
to the mortgage industry.  Therefore, the Court need not reach the following three issues: 
(1) whether instituting a foreclosure action constitutes “debt collection” under MCALA 
when a person or entity apart from foreign statutory trusts owns the loan; (2) whether the 
other actors, such as the trustees, substitute trustees, and the mortgage loan servicer, held 
the appropriate licenses; and (3) whether the foreign statutory trusts, its trustees, substitute 
trustees, or mortgage loan servicers engaged in practices in violation of the Maryland 
Consumer Debt Collection Act, Md. Code Ann., Com. Law §§ 14-201, et seq., the 
Maryland Consumer Protection Act, Md. Code Ann., Com. Law §§ 13-101, et seq., or the 
 
4 
 
BACKGROUND 
This appeal constitutes two cases consolidated before the Court of Special Appeals 
as well as two additional actions appealed to this Court directly from circuit court 
foreclosure proceedings.  In each of the cases sub judice, the respondents obtained a 
mortgage loan from a creditor to purchase, convey, or refinance their homes.  The loans 
were evidenced by a promissory note and secured by a deed of trust.  Eventually, the 
homeowners all missed loan payments, resulting in the banks declaring the loans to be in 
default.  At some point after the respondents defaulted on the mortgage loans, the banks 
transferred the loans and all beneficial interest in the deed of trust as part of a securitized 
pool of mortgage loans to either Ventures Trust 2013-I-H-R (“Ventures Trust”) or LSF9 
Master Participation Trust (“LSF9”), both of which are foreign statutory trusts organized 
under Delaware law.   
These foreign statutory trusts acted through trustees which in these cases were other 
banks.  A separate loan servicer was assigned to communicate with the borrowers and 
collect the monthly mortgage payments.  The trustees subsequently appointed substitute 
trustees, conveying all rights and duties under the deeds of trust, including the power of 
sale.  The substitute trustees subsequently initiated foreclosure actions to enforce the 
                                                 
FDCPA, 15 U.S.C. §§ 1692, et seq.  Our holding today in no way undermines the consumer 
protections found in any of these statutes, including MCALA.  Instead, this Court clarifies 
that foreign statutory trusts, acting as special purpose vehicles in the mortgage industry, 
were outside of the purview of the collection agency industry that the General Assembly 
intended to license when it enacted MCALA and passed the 2007 departmental bill.   
 
5 
 
security interest against the defaulting borrowers, meaning that the substitute trustees are 
the petitioners in each of the cases sub judice.   
In response, the defaulting homeowners filed counter complaints arguing that the 
foreign statutory trusts acted as collection agencies as defined under MCALA when they 
obtained defaulted mortgage loans and then collected mortgage payments through 
communication and foreclosure actions without being licensed as required by MCALA.  
See BR § 7-301, et seq.  The counter complaints further alleged that, by attempting to 
collect mortgage payments without the required license under MCALA, the foreign 
statutory trusts violated the Maryland Consumer Debt Collection Act (“MCDCA”).  Md. 
Code (1975, 2013 Repl. Vol.), Com. Law (“CL”) § 14-201, et seq.    
In addition to filing counter complaints, the borrowers in default requested that the 
circuit courts dismiss or enjoin the foreclosure sales.  To support the request, the borrowers 
argued that the foreign statutory trusts brought the foreclosure action without being 
licensed as a collection agency, violating MCALA and MCDCA, and that any judgment 
obtained by an unlicensed entity acting as a collection agency would be void.  See Finch v. 
LVNV Funding, LLC, 212 Md. App. 748, 759 (2013).  In response, the substitute trustees 
argued that the foreign statutory trusts were neither doing business in the State nor doing 
business as a collection agency when they filed foreclosure actions, that MCALA did not 
apply to the in rem proceedings, that the foreign statutory trusts constituted trust companies 
exempted from the Act, and that the homeowners failed to specify a relevant defense under 
Maryland mortgage foreclosure law.  See Md. Code Ann., Real Prop. (“RP”) § 7-101, et 
seq.; Md. Rules 14-201, et seq.; Md. Code Regs. 09.03.12.01, et seq. 
 
6 
 
The circuit courts all held motions hearings to consider the various arguments 
regarding MCALA.  In each of the cases sub judice, the circuit courts issued an order 
dismissing the foreclosure proceeding without prejudice after finding that the foreign 
statutory trusts were in the business of collecting consumer debt because the entities 
indirectly attempted to collect on a defaulted mortgage loan purchased at a discount.  The 
courts also determined that the foreign statutory trusts did not fall under the trust company 
exemption to MCALA.  After determining that the foreign statutory trusts were subject to 
the MCALA licensing requirements, the circuit courts noted that there was no dispute that 
Ventures Trust and LSF9 lacked the required collection agency license.  As such, the circuit 
courts concluded that foreign statutory trusts had no right to bring the foreclosure actions, 
dismissing each of the cases without prejudice. 
We will summarize the factual background of each of the individual cases in turn 
below.  
A. Kyle Blackstone, et al. v. Dinesh Sharma, et al.; Terrance Shanahan, et al. v. 
Seyed Marvastian, et al. 
 
i. 
Kyle Blackstone, et al. v. Dinesh Sharma, et al. 
 
In 2006, Ruchi Sharma owned a home located at 10302 Oaklyn Drive, Potomac, 
Maryland, which she wished to sell to her parents, Mr. Dinesh Sharma and Mrs. Santosh 
Sharma.  In order to finance the home purchase, Dinesh and Santosh Sharma sought to 
obtain a loan in the amount of $1,920,000.00 from Washington Mutual Bank, FA 
(“WMB”).  The loan was evidenced by a promissory note and secured by a deed of trust.  
WMB asked Ms. Ruchi Sharma, who accompanied Dinesh and Santosh to the bank, to sign 
 
7 
 
the deed of trust because the conveyance was not an arm’s length transaction.  Therefore, 
Rushi Sharma, Dinesh Sharma, and Santosh Sharma (“the Sharmas”) all signed the closing 
documents, including the deed of trust.4   
On December 2, 2007, WMB declared the Sharmas to be in default on the 
promissory note.  A little less than six years later, Ventures Trust acquired the Sharmas’ 
loan and all beneficial interest in the deed of trust as part of a securitized pool of mortgage 
loans.  Ventures Trust acted through its trustee, MCM Capital Partners, LLC (“MCM”).  
In 2014, Ventures Trust, through MCM, appointed substitute trustees, Kyle Blackstone, 
William O’Neil, and Terrance Shanahan.  On November 25, 2014, the substitute trustees 
initiated a foreclosure action in the Circuit Court for Montgomery County to enforce the 
security interest in the Sharmas’ real property.   
In response, the Sharmas filed a counter complaint against the substitute trustees as 
well as MCM, as trustee for Ventures Trust.  The counter complaint alleged that Ventures 
Trust acted as a collection agency as defined under MCALA when it purchased the 
defaulted mortgage loan without being licensed.  See BR § 7-301, et seq.  The counter 
complaint5 further alleged that by attempting to collect mortgage payments from the 
                                                 
4 The record indicates that there may have been some inconsistencies in executing the loan.  
For example, the record states that the Sharmas were required to return to the bank in order 
to sign additional loan documents on August 7, 2006; there is also some evidence that the 
Sharmas were misinformed about the amount of the principal loan as well as monthly 
payments.  However, these facts are not relevant to the central issue in this case. 
   
5 Although not relevant to the instant analysis, the counter complaint also alleged that 
Ventures Trust violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.  
The counter complaint also included two counts for declaratory judgment and injunctive 
 
8 
 
Sharmas without the required license under MCALA, Ventures Trust violated the 
MCDCA.  CL § 14-201, et seq.    
In addition to the counter complaint, the Sharmas filed a motion to dismiss or enjoin 
the foreclosure sale pursuant to Md. Rule 14-211.  In their motion, the Sharmas contended 
that any responsive legal claim in a foreclosure proceeding should be heard and decided 
before the equitable claims.  As to the legal issue, the Sharmas argued that the circuit court 
should dismiss or stay the foreclosure action primarily because Ventures Trust brought the 
foreclosure action without being licensed as a collection agency.  As such, the Sharmas 
contended that Ventures Trust violated MCALA and MCDCA.  The Sharmas further 
asserted in their motion that Ventures Trust could not obtain relief because of a ruling by 
the Court of Special Appeals, which held that a judgment obtained by an unlicensed entity 
acting as a collection agency is void.  See Finch, 212 Md. App. at 759.   
The substitute trustees filed an opposition to the homeowners’ motion on behalf of 
Ventures Trust.  In the opposition, the substitute trustees contended that the Sharmas failed 
to specify a relevant defense, such as a violation of the Maryland Rules or Maryland 
mortgage foreclosure laws.  In addition, Ventures Trust’s substitute trustees argued that 
Ventures Trust falls within the trust companies exemption to MCALA and, as such, is not 
subject to the licensing requirements under MCALA.  Based on this argument, Ventures 
                                                 
relief against all of the counter defendants as well as one count for accounting against 
Ventures Trust.    
 
 
9 
 
Trust maintained that it was entitled to bring the foreclosure action without first having to 
obtain a MCALA license.6   
The Circuit Court for Montgomery County held a motions hearing, during which 
the presiding judge heard arguments on the Sharmas’ motion and Venture Trust’s 
opposition thereto.  On August 28, 2015, the circuit court issued an order, granting the 
Sharmas’ motion and dismissing the foreclosure proceeding without prejudice.  In a 
corresponding opinion, the circuit court reasoned that the legislature specifically and 
explicitly referred to foreign statutory trusts in certain sections of the Maryland Code but 
decided not to list foreign statutory trusts as an excepted entity from the MCALA 
requirements.  Therefore, the circuit court found that the legislature intentionally omitted 
the term foreign statutory trusts from the MCALA sections of the Maryland Code.  
Moreover, the circuit court found that Ventures Trust failed to provide any convincing 
evidence that they constituted a trust company, which is one type of entity specifically 
exempted from MCALA.  After determining that Ventures Trust was subject to the 
MCALA licensing requirements, the circuit court also noted that there was no dispute that 
Ventures Trust lacked the required MCALA license.  As such, the circuit court concluded 
that the Sharmas established that Ventures Trust had no right to bring the foreclosure 
action, dismissing the case without prejudice.  
                                                 
6 The trustee and substitute trustees also filed a supplemental memorandum in opposition 
to defendants’ motion to dismiss on June 3, 2015.  The Sharmas filed a pleading entitled 
supplemental authority in support of the motion to dismiss or enjoin the foreclosure sale.  
However, there is no docket entry date on the Sharmas’ supplemental pleading.  Neither of 
the supplemental motions sets forth a new argument.  
 
 
10 
 
ii. 
Terrance Shanahan, et al. v. Seyed Marvastian, et al. 
 
On or about June 23, 2006, Seyed Marvastian (“Mr. Marvastian”) obtained a loan 
in the amount of $1,396,500.00 from Premier Mortgage Funding, Inc. to purchase a home 
located at 7809 Bradley Blvd., Bethesda, Maryland.  The loan was evidenced by a 
promissory note and secured by a deed of trust.  Mr. Marvastian’s wife, Mrs. Sima 
Marvastian, was listed as the record owner of the real property.  In 2012, Mr. Marvastian 
defaulted on the loan after he failed to make payments.  Two years after Mr. Marvastian’s 
loan was declared in default, Ventures Trust acquired the mortgage loan and all beneficial 
interest in the deed of trust as part of a securitized pool of mortgage loans.  Several months 
later, the substitute trustees initiated a foreclosure action in the Circuit Court for 
Montgomery County to enforce the security interest in the real property.  Mr. and Mrs. 
Marvastian (“the Marvasistans”) timely requested foreclosure mediation, which concluded 
without agreement. 
The Marvastians filed a counter complaint against one of the substitute trustees, 
Terrance Shanahan, as well as MCM, as trustee for Ventures Trust.  The counter complaint 
alleged that Ventures Trust acted as a collection agency as defined under MCALA when it 
brought a foreclosure action on the defaulted mortgage loan that Ventures Trust had 
purchased without the required license.  BR § 7-301, et seq.  The counter complaint7 further 
                                                 
7 Although not relevant to the instant analysis, the counter complaint also alleged that 
Ventures Trust violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.  
The counter complaint also included one count for declaratory judgment and injunctive 
relief against all of the counter defendants as well as one count for accounting against 
Ventures Trust.    
 
11 
 
alleged that by attempting to collect mortgage payments from Mr. Marvastian without the 
required license under MCALA, Ventures Trust violated MCDCA.  CL § 14-201, et seq.    
Along with the counter complaint, the Marvastians filed a Rule 14-211 motion to 
dismiss and/or stay the foreclosure proceeding pending resolution of legal questions.  In 
their motion, the Marvastians argued that the court should stay the foreclosure proceedings 
in order to first resolve the legal issues presented in the counter complaint.  The 
Marvastians further argued that any court judgment in favor of Ventures Trust would be 
rendered void because the entity is not licensed as a collection agency as required by 
MCALA.  The substitute trustee and MCM, as trustee for Ventures Trust, filed an 
opposition to the homeowners’ Rule 14-211 motion to dismiss and/or stay foreclosure 
proceedings.  In their opposition, the substitute trustees argued that adjudicating the counter 
complaint will not have any effect on the foreclosure action because Ventures Trust is 
exempt from the licensing requirements under MCALA.  The substitute trustees further 
contended that the Marvastians failed to specify any viable defenses to the foreclosure.  In 
addition, the opposition asserted that the Marvastians’ motion was frivolous with the only 
purpose of delaying the foreclosure.   
The circuit court held a motions hearing on March 26, 2015.8  After hearing 
arguments from both parties on the Rule 14-211 motion, the Court issued an order dated 
May 12, 2015, making findings of fact and conclusions of law.  Specifically, the order 
                                                 
8 The circuit court also heard arguments on the trustee and substitute trustee’s motion to 
dismiss the counter complaint filed on February 6, 2015 and the Marvastians’ opposition 
thereto filed on February 23, 2015 during the motions hearing held on March 26, 2015.  
 
12 
 
found that “Ventures Trust did business as a ‘collection’ agency in Maryland by seeking 
to collect [Mr. Marvastian’s] mortgage debts that it purchased after default through a loan 
servicer.”  As such, the order concluded that “Ventures Trust is [] subject to MCALA’s 
licensing requirements for collection agencies” and “none of the Maryland Code’s 
definitions of ‘trust company’ includes Delaware Statutory Trusts[.]”  Ultimately, the 
circuit court dismissed the foreclosure action without prejudice after concluding that the 
Marvastians established that Ventures Trust had no right to file the foreclose action.   
 
After the circuit court issued the order, the trustee and substitute trustee filed a 
motion to alter or amend judgment pursuant to Md. Rule 2-534.  Through its trustees, 
Ventures Trust argued that the circuit court erred in concluding that MCALA applies to 
foreclosure proceedings and statutory foreign trusts mainly because of the potential conflict 
between Maryland registration requirements for statutory trusts, Md. Code Ann., Corps. & 
Ass’ns (“CA”) § 12-902(a), and MCALA, BR § 7-301(a).  The Marvastians filed a reply, 
contending that the circuit court properly concluded that a foreclosure proceeding is a form 
of debt collection and that Ventures Trust does not fall under the MCALA exemption for 
trust companies.   
On July 22, 2015, the circuit court held a second motions hearing in order to hear 
arguments on the motion to alter the court’s judgment and any opposition thereto.  After 
the second motions hearing, the circuit court issued another order, finding that there is “a 
clear legislative intent to subject foreign statutory trusts that collect debts in Maryland by 
bringing foreclosure actions in Maryland courts to MCALA’s licensing requirement[.]”  
The circuit court also found that “MCALA’s licensing requirement, Bus. Reg. § 7-301(a), 
 
13 
 
and the registration requirement of CA § 12-902(a) serve distinct purposes; thus, it is not 
incongruous for the legislature to subject foreign statutory trusts that bring foreclosure 
action in Maryland to the former but to exempt them from the latter.”  As such, the circuit 
court denied Venture Trust’s motion to alter or amend the judgment.  
iii. 
Consolidation and Court of Special Appeals 
On September 10, 2015, Ventures Trust, through its trustees and substitute trustees, 
filed a notice of appeal to the Court of Special Appeals in both cases, i.e., the foreclosure 
actions against the properties owned by the Sharmas and the Marvastians.  The Court of 
Special Appeals consolidated the two foreclosure cases into one appeal and issued a 
reported opinion on June 6, 2017.9  Blackstone v. Sharma, 233 Md. App. 58, 61, cert. 
granted, 456 Md. 53 (2017).  The consolidated appeal involved two questions: (1) whether 
a party who authorized a trustee to initiate a foreclosure action needs to be licensed as a 
collection agency under MCALA; and (2) whether the MCALA licensing requirement 
applies to foreign statutory trusts, such as Ventures Trust.  The Court of Special Appeals 
held that Ventures Trust, as a foreign statutory trust, must meet the licensing requirements 
under MCALA before bringing a foreclosure action unless some other exception in 
MCALA applies.  The Court of Special Appeals further concluded that the exception for 
trust companies under MCALA does not apply to Ventures Trust because it does not act as 
a trustee or operate as a commercial bank under the Black’s Law Dictionary 10th ed. 2014 
                                                 
9 The Court of Special Appeals previously issued an identical, unreported version of the 
opinion on April 17, 2017.  Blackstone v. Sharma, No. 1524, SEPT.TERM, 2015, 2017 
WL 1376699 (Md. Ct. Spec. App. Apr. 17, 2017). 
 
14 
 
definitions.  See BR § 7-102.  As such, the Court of Special Appeals ultimately held that 
Ventures Trust was barred from bringing the foreclosure action without the MCALA 
license, affirming the judgment of the Circuit Court for Montgomery County.  Ventures 
Trust, through its substitute trustees, filed a petition for writ of certiorari to this Court on 
July 14, 2017.   
B. Laura O’Sullivan, et al. v. Jeffrey Altenburg, et al. 
On or about March 30, 2007, Jeffrey and Brenda Altenburg (“the Altenburgs”) 
obtained a loan in the amount of $592,250.00 from Bank of America, N.A. (“Bank of 
America”) to refinance their home located at 11810 Tridelphia Road, Ellicott City, 
Maryland.  The loan was evidenced by a promissory note and secured by a deed of trust.  
The Alternburgs defaulted on the loan by failing to make a loan payment in 2011.   
Four years later, Bank of America assigned all beneficial interest under the 
promissory note and deed of trust to U.S. Bank Trust, as trustee for LSF9.  In 2016, U.S. 
Bank Trust appointed substitute trustees, Laura H.G. O’Sullivan, Erin M. Shaffer, Chasity 
Brown, Lauren Bush, and Rachel Kiefer.  The substitute trustees subsequently initiated a 
foreclosure action in the Circuit Court for Howard County to enforce the security interest 
in the real property.  
The Altenburgs filed a motion to dismiss the foreclosure action pursuant to Md. 
Rule 14-211.10  In their motion to dismiss, the Altenburgs argued that LSF9 did not have 
any legal right to pursue the foreclosure action because the entity lacked the required 
                                                 
10 The Altenburgs also filed a supplement to the motion to dismiss on May 5, 2016. 
 
15 
 
MCALA license.  Moreover, the Altenburgs contended that any judgment in favor of LSF9, 
acting as an unlicensed debt collector, would be void.  See Finch, 212 Md. App. at 759.  
The Altenburgs also asserted that LSF9 does not constitute a trust company, which is one 
entity exempted from the MCALA licensing requirement.  In response, the substitute 
trustees filed an opposition to the motion to dismiss, arguing that MCALA does not apply 
to in rem proceedings in which substitute trustees pursue the right to foreclose on real 
property pursuant to a deed of trust.  The substitute trustees further asserted that LSF9 
constitutes a trust company, which is specifically exempted from MCALA, because a 
foreign statutory trust could easily fit within the broad, undefined phrase.   
The circuit court held a hearing on the Altenburgs’ motion to dismiss and opposition 
thereto.  During the motions hearing, the parties argued as to whether certain facts should 
be stipulated.  As a result, the circuit court scheduled a second motions hearing at a later 
date to allow the parties time to either stipulate to certain facts or to file discovery requests.  
On July 13, 2016, the parties filed a pleading, stipulating to the fact that LSF9 “acquired 
the Promissory Note (‘Note’) secured by the Deed of Trust that is the subject to this action 
for a sum less than the total amount remaining due on the Note on the date on which LSF9 
acquired the Note.”    
The circuit court held a second motions hearing, during which the court heard 
additional arguments on the motion to dismiss the foreclosure action.  At the end of the 
second motions hearing, the circuit court made oral findings of fact and conclusions of law 
on the record.  The court specifically concluded that the instant action constituted a 
consumer claim and that LSF9 required a license under MCALA before bringing the 
 
16 
 
foreclosure action.  As such, the circuit court further found that LSF9 did not have the 
ability to bring the foreclosure action because the foreign statutory trust did not have a 
license under MCALA at the time it initiated the action.  For those reasons, the court 
granted the Altenburgs’ motion to dismiss.  The circuit court entered an order dated August 
25, 2016, dismissing the action without prejudice.  The substitute trustees filed a timely 
notice of appeal to the Court of Special Appeals.  Before the Court of Special Appeals 
could hear oral arguments, however, the intermediate appellate court issued its reported 
opinion in Blackstone v. Sharma, 233 Md. App. 58, 61, cert. granted, 456 Md. 53 (2017).  
As such, the substitute trustees filed a petition for writ of certiorari with this Court on 
August 4, 2017.   
C. Martin Goldberg, et al. v. Martha Neviaser, et al.  
On or about October 2, 2007, Marvin and Martha Neviaser (“the Neviasers”) 
obtained a loan in the amount of $171,000.00 from Countrywide Bank, FSB, to refinance 
their home located at 18103 Maze Lane, Knoxville, Maryland.  The loan was evidenced by 
a promissory note and secured by a deed of trust.  The Neviasers defaulted on the loan in 
2009 when they failed to make a loan payment.  Six years later, Bank of America, as 
successor by merger to Countrywide Bank, FSB, transferred all interest in the Neviasers’ 
loan to LSF9.  In 2015, LSF9 assigned the deed of trust to U.S. Bank Trust, as trustee for 
LSF9.  The trustee, in turn, appointed substitute trustees, Martin S. Goldberg, Doreen A. 
Strothman, Virginia S. Inzer, William K. Smart, and Taryn L. Alvey.  The substitute 
 
17 
 
trustees subsequently initiated a foreclosure action in the Circuit Court for Washington 
County to enforce the security interest in the real property.11  
On November 8, 2016, the Neviasers filed a motion to dismiss the foreclosure 
case.12  The Neviasers argued that LSF9 was required to have a license under MCALA 
before initiating the foreclosure action because they acquired a debt in default and then 
attempted to collect on that debt through foreclosure.  Moreover, the Neviasers contended 
that LSF9 is not exempt from MCALA under the trust company exception because it is not 
an incorporated entity engaged in banking.  In addition to these arguments, the Neviasers 
urged the circuit court to conclude that LSF9 is estopped from obtaining a different result 
in the present action than the judgment by the Circuit Court for Howard County in the 
Alternburgs’ case, discussed supra.  In response, the substitute trustees filed an opposition 
to the motion to dismiss the foreclosure case, making four arguments: (1) LSF9 was not 
doing business in the State as defined under MCALA when it brought the foreclosure 
action; (2) LSF9 was not engaging in the business of a collection agency; (3) LSF9 fell 
under MCALA’s trust company exemption; and (4) the rule of lenity required that any 
                                                 
11 The record reflects that the Neviasers filed a request for foreclosure mediation on April 
21, 2016.  The parties attended foreclosure mediation on August 23, 2016, at which time 
the parties agreed to extend the time for mediation by thirty days.  The parties attended a 
second mediation on October 25, 2016, at which time the parties reached an agreement 
contingent on a future event within thirty days.  It appears from the record that the 
Neviasers filed the motion to dismiss while the contingent mediation was pending.   
 
12 The Neviasers’ motion to dismiss also included an alternative request to stay the 
foreclosure sale pending resolution of a class action case against the secured parties filed 
in the United States District Court for the District of Maryland.  As the Circuit Court for 
Washington County dismissed the foreclosure sale without consideration of the Neviasers’ 
alternative request for stay, this issue is not relevant to the instant appeal.   
 
18 
 
ambiguity in the coverage of MCALA favors a ruling for LSF9 because the act contains 
criminal penalties.   
The court held a motions hearing, at which time the judge heard arguments from the 
Neviasers and the substitute trustees as to whether the foreclosure proceeding should be 
dismissed.  After the hearing, the court held the matter sub curia.  By memorandum order, 
the circuit court concluded that the foreclosure proceedings constituted consumer claims 
under MCALA.  Moreover, the court determined that LSF9 was in the business of 
collecting consumer claims because the entity indirectly attempted to collect on a defaulted 
mortgage that it purchased at a discount.  The court also rejected LSF9’s argument that the 
trust company exemption under MCALA applied or that the rule of lenity resolved any 
ambiguities in LSF9’s favor.  Ultimately, the court granted the Neviasers’ motion and 
dismissed the case without prejudice.  The substitute trustees filed a timely notice of appeal 
to the Court of Special Appeals.  Before the Court of Special Appeals could hear oral 
arguments, however, the intermediate appellate court issued its reported opinion in 
Blackstone v. Sharma, 233 Md. App. 58, 61, cert. granted, 456 Md. 53 (2017).  As such, 
the substitute trustees filed a petition for writ of certiorari with this Court on August 4, 
2017.  
D. Court of Appeals of Maryland 
On September 12, 2017, this Court granted certiorari in each of the above cases.  
Blackstone v. Sharma, 456 Md. 53 (2017);13 O'Sullivan v. Altenburg, 456 Md. 56 (2017); 
                                                 
13 This citation constitutes the cases consolidated in the Court of Special Appeals: (1) 
Blackstone v. Sharma; and (2) Shanahan v. Marvastian.  
 
19 
 
Goldberg v. Neviaser, 456 Md. 54 (2017).  This Court accepted separate briefs in each of 
the appeals.14  Moreover, this Court scheduled individual oral arguments for each of the 
three cases.  The parties presented six questions for our review, which we have rephrased 
as follows:  
1. Whether a foreign statutory trust seeking a mortgage foreclosure action, 
which is a purely in rem proceeding against the subject real property, 
constitutes a “consumer claim” for “money owed” under MCALA? 
2. Whether a foreign statutory trust filing a mortgage foreclosure action, which 
by statute is not “doing business in this State,” nevertheless is “doing 
business as a collection agency in the State” under MCALA? 
3. Whether the Court of Special Appeals’ previous ruling in Finch v. LVNV 
Funding, LLC, 212 Md. App. 748, 759 (2013) – i.e., that a judgment in favor 
of an unlicensed debt collection agency is void as opposed to voidable – 
should apply to mortgage foreclosure judgments?  
4. Whether the circuit court can dismiss a foreclosure action because a foreign 
statutory trust lacks a collection agency license under MCALA, despite 
established Maryland authority holding that entities, such as a trustee of the 
trust and its duly appointed substitute trustees, may enforce a promissory 
note indorsed in blank in their possession, regardless of who owns the debt 
or the foreign statutory trust’s legal status?  
5. Whether a foreign statutory trust pursuing a foreclosure is “doing business 
as a collection agency” in Maryland under MCALA?  
6. Whether a foreign statutory trust that owns mortgage assets falls within 
MCALA’s “trust company” exemption? 
 
Questions 1, 2, 4, and 5 above require this Court to first answer one question: Did 
the Maryland General Assembly intend to require foreign statutory trusts, one of the 
                                                 
14 Along with their brief to this Court, Martha and Marvin Neviaser filed a Motion to Strike 
the substitute trustees’ Opening Brief and Appendix on October 10, 2017.  The substitute 
trustees filed an Opposition to the Motion to Strike on October 20, 2017.  By Order on 
October 30, 2017, this Court deferred ruling on the Motion and Opposition until after oral 
argument.  This Court now denies the Motion to Strike as part of this opinion. 
 
20 
 
entities in the mortgage industry, to obtain a collection agency license pursuant to MCALA 
before pursuing an in rem foreclosure proceeding?  This is the ultimate question before this 
Court.  By answering this question in the negative, this Court does not need to reach 
questions 3 and 6, both of which are questions that inherently and incorrectly assume that 
the MCALA licensing requirement applies to foreign statutory trusts like Ventures Trust 
and LSF9.   
STANDARD OF REVIEW 
Generally, the “standard of review of the grant or denial of a motion to dismiss is 
whether the trial court was legally correct.”  Davis v. Frostburg Facility Operations, LLC, 
457 Md. 275, 284 (2018) (citing RRC Ne., LLC v. BAA Maryland, Inc., 413 Md. 638, 643–
44 (2010)).  Specific to foreclosure actions, Md. Rule 14-211 states that the borrower “may 
file in the action a motion to stay the sale of the property and dismiss the foreclosure 
action.”  Md. Rule 14-211(a).  In addition, the rule instructs circuit courts how to make a 
final determination:  
After the hearing on the merits, if the court finds that the moving party has 
established that the lien or the lien instrument is invalid or that the plaintiff 
has no right to foreclose in the pending action, it shall grant the motion 
and, unless it finds good cause to the contrary, dismiss the foreclosure 
action. If the court finds otherwise, it shall deny the motion. 
 
Md. Rule 14-211(e) (emphasis added). 
 
In each of the cases below, the circuit courts concluded that the substitute trustees 
were unable to bring the foreclosure action on behalf of the foreign statutory trust because 
the trust did not have a collection agency license under MCALA.  To that end, the circuit 
 
21 
 
courts determined that the foreign statutory trusts were engaged in the business of a 
collection agency by acquiring a mortgage loan in default and then having substitute 
trustees pursue a foreclosure action to collect that mortgage debt.  The circuit courts 
subsequently granted each of the mortgagor’s motions, dismissing the foreclosure 
proceedings.  As these determinations constitute issues of law, this Court will review the 
circuit courts’ decisions to grant the various motions to dismiss de novo.  See e.g., Anderson 
v. Burson, 424 Md. 232, 243 (2011); Williams v. Peninsula Reg’l Med. Ctr., 440 Md. 573, 
578 (2014).  In our review, we will “accept all well-pled facts in the complaint, and 
reasonable inferences drawn from them, in a light most favorable to the non-moving 
party[.]”  Sprenger v. Pub. Serv. Comm’n of Maryland, 400 Md. 1, 21 (2007) (quoting 
Converge Servs. Grp., LLC v. Curran, 383 Md. 462, 475 (2004)).  
DISCUSSION 
The main dispute between the parties in this case involves the proper interpretation 
of MCALA as revised by the 2007 departmental bill.  The petitioners in these consolidated 
cases, the substitute trustees of the foreign statutory trusts, each make slightly nuanced 
arguments as to why the foreign statutory trusts did not need to obtain a license under 
MCALA before the substitute trustees filed foreclosure proceedings on the trusts’ behalf.  
Specifically, the substitute trustees of Ventures Trust, the foreign statutory trust that owned 
the mortgage loans obtained by the Sharmas and the Marvastians, contend that entities do 
not need an MCALA license when pursuing an in rem foreclosure action because such a 
proceeding is brought against the property rather than for money owed on a consumer debt.  
In addition, Ventures Trust’s substitute trustees assert that requiring a foreign statutory 
 
22 
 
trust foreclosing on a mortgage to obtain a license under MCALA for “doing business” as 
a collection agency would conflict with the Corporations & Associations Article of the 
Maryland Code, which states that foreign statutory trusts are not doing business in the State 
by foreclosing mortgages and deeds of trust.  See CA § 12-908(a)(5).  The substitute 
trustees of Ventures Trust finally argue that requiring foreign statutory trusts to obtain a 
license under MCALA will not ultimately protect consumers because foreign statutory 
trusts do not have employees or offices; instead, the trusts act only through trustees and 
substitute trustees.  See Deutsche Bank Nat. Tr. Co. v. Brock, 430 Md. 714, 718 (2013).   
Substitute trustees of LSF9, holder of the Altenburgs’ and Neviaser’s mortgage 
loans, make slightly different arguments before this Court.  First, LSF9 substitute trustees 
contend that the entities that either need to be licensed or exempted pursuant to MCALA 
are the trustees (who appoint the substitute trustees), the substitute trustees (who pursue 
the foreclosure proceeding), and the mortgage loan servicer (who contacts the debtor). To 
that end, the substitute trustees for LSF9 argues that the licensure of the foreign statutory 
trust (a repository that owns the mortgage loans) is irrelevant because these entities do not 
act or conduct any business.  The substitute trustees further assert that “doing business” is 
a legal term of art that can be interpreted by looking to the phrase’s definition found within 
other articles of the Maryland Code.  Furthermore, the substitute trustees argue that 
foreclosure proceedings are not consumer claims as defined under MCALA and that 
statutory trusts are not engaging in the business of debt collection by having substitute 
trustees pursue a foreclosure action.  The LSF9 substitute trustees also urge this Court to 
interpret MCALA’s exemption for trust companies to include foreign statutory trusts.   
 
23 
 
In response, the defaulting homeowners argue that the plain language of MCALA 
unambiguously requires any person or entity that collects a consumer claim, if the claim 
was in default when the party acquired it, to have a collection agency license.  Specifically, 
the respondents contend that the legislature could have intentionally added an exemption 
for foreign statutory trusts under MCALA, but chose not to do so.  In undertaking the 
statutory interpretation, the borrowers in default assert that other statutes are not relevant 
to this Court’s analysis.  Moreover, the respondents argue that the petitioners have 
conceded that a foreign statutory trust is simply an account, requiring a finding by this 
Court that such an account cannot fall under the exemption for trust companies.  The 
defaulting homeowners also urge this Court to apply Maryland’s longstanding principle 
that unlicensed persons will not be given the assistance of the courts when the person has 
not obtained a license for conducting certain business required by statute.  As becomes 
clear by the parties’ various arguments, this Court must conduct a statutory interpretation 
analysis.    
“This Court provides judicial deference to the policy decisions enacted into law by 
the General Assembly.  We assume that the legislature’s intent is expressed in the statutory 
language and thus our statutory interpretation focuses primarily on the language of the 
statute to determine the purpose and intent of the General Assembly.”  Phillips v. State, 
451 Md. 180, 196 (2017).  
When 
conducting 
a 
statutory 
construction 
analysis, 
we 
begin 
“with 
the plain language of the statute, and ordinary, popular understanding of the 
English language dictates interpretation of its terminology.”  Schreyer v. Chaplain, 416 
 
24 
 
Md. 94, 101 (2010) (quoting Adventist Health Care Inc. v. Maryland Health Care 
Comm’n, 392 Md. 103, 124 n. 13 (2006)).  When the “words of a statute are ambiguous 
and subject to more than one reasonable interpretation, or where the words are clear and 
unambiguous when viewed in isolation, but become ambiguous when read as part of a 
larger statutory scheme, a court must resolve the ambiguity by searching for legislative 
intent in other indicia[.]”  State v. Bey, 452 Md. 255, 266 (2017).  Moreover, after 
determining a statute is ambiguous, “we consider the common meaning and effect of 
statutory language in light of the objectives and purpose of the statute and Legislative 
intent.”  Stachowski v. Sysco Food Servs. of Baltimore, Inc., 402 Md. 506, 517 (2007).   
Even in instances “when the language is unambiguous, it is useful to review 
legislative history of the statute to confirm that interpretation and to eliminate another 
version of legislative intent alleged to be latent in the language.”  State v. Roshchin, 446 
Md. 128, 140 (2016).  See also Shealer v. Straka, __ Md. ___, ___, No. 38, Sept. Term, 
2017, 2018 WL 1959440, *7 (Apr. 26, 2018).   
In addition to legislative history, “[w]e may and often must consider other ‘external 
manifestations’ or ‘persuasive evidence,” in order to ascertain the legislative purpose 
behind a statute.  Kaczorowski v. Mayor & City Council of Baltimore, 309 Md. 505, 515 
(1987).  Specifically, this Court should consider the context of the bill, including the title 
and function paragraphs, the amendments to the legislation, as well as the “bill request 
form[.]”  Id.  This Court may also analyze the statute’s “relationship to earlier and 
subsequent legislation, and other material that fairly bears on the fundamental issue of 
 
25 
 
legislative purpose or goal, which becomes the context within which we read the particular 
language before us in a given case.”  Id.  
In the event the language of a statute is ambiguous, we will often apply rules of 
statutory construction to ascertain the intent of the legislature.   One such rule is to read the 
language of a statute in such a way that “will carry out its object and purpose.”  Harbor 
Island Marina, Inc. v. Bd. of Cty. Comm'rs of Calvert Cty., Md., 286 Md. 303, 311 (1979).  
This Court will also “consider the consequences resulting from one meaning rather than 
another, and adopt that construction which avoids an illogical or unreasonable result, or 
one which is inconsistent with common sense.”  Spangler v. McQuitty, 449 Md. 33, 50 
(2016) (quoting Rosemann v. Salsbury, Clements, Bekman, Marder & Adkins, LLC, 412 
Md. 308, 315 (2010)). 
In this case, therefore, we must determine if the General Assembly intended to 
require foreign statutory trusts, such as Ventures Trust and LSF9, to obtain a collection 
agency license under MCALA before substitute trustees file a foreclosure action on the 
trust’s behalf.  
A. 
Plain Language 
 
Pursuant to our longstanding statutory interpretation case law, we will first analyze 
the plain language of the statute in discerning the issue before this Court.  MCALA 
generally requires that “a person must have a license whenever the person does business as 
a collection agency in the State.”  BR § 7-301(a).  The Act defines collection agency as 
follows:  
 
26 
 
(d) “Collection agency” means a person who engages directly or indirectly 
in the business of: 
(1)(i) collecting for, or soliciting from another, a consumer claim; or 
(ii) collecting a consumer claim the person owns, if the claim was in 
default when the person acquired it; 
(2) collecting a consumer claim the person owns, using a name or 
other artifice that indicates that another party is attempting to collect 
the consumer claim; 
(3) giving, selling, attempting to give or sell to another, or using, for 
collection of a consumer claim, a series or system of forms or letters 
that indicates directly or indirectly that a person other than the owner 
is asserting the consumer claim; or 
(4) employing the services of an individual or business to solicit or 
sell a collection system to be used for collection of a consumer claim. 
 
BR § 7-101(d).  Under MCALA, a consumer claim is defined as a claim “for money owed 
or said to be owed by a resident of the State” and “arises from a transaction in which, for a 
family, household, or personal purpose, the resident sought or got credit, money, personal 
property, real property or services.”  BR § 7-101(f).    
 
  The key provisions of MCALA require a person to have a license “whenever the 
person does business as a collection agency[.]”  BR § 7-301(a).  Perhaps most significant 
to the instant appeal is the new language from the 2007 departmental bill that includes an 
entity that “engages directly or indirectly in the business of . . . collecting a consumer claim 
the person owns, if the claim was in default when the person acquired it” to the definition 
of collection agency.  BR § 7-101(d).   
The General Assembly also limited the scope of MCALA by listing entities 
exempted from the statute all together.  See BR § 7-102(b).  Specifically, the statute “does 
not apply to” many of the mortgage industry actors, including “(1) a bank; (2) a federal or 
 
27 
 
State credit union; (3) a mortgage lender; . . . (5) a licensed real estate broker, or an 
individual acting on behalf of the real estate broker, in the collection of rent or allied charge 
for property; (6) a savings and loan association; (7) a title company as to its escrow 
business; (8) a trust company; [and] (9) a lawyer . . . .”  Id.  However, the statute does not 
define any of the exempted entities. 
  
 
 On the one hand, this Court cannot ignore that the term “collection agency” is 
commonly understood as those entities with a business model of sending letters to debtors, 
making collection calls, and filing collection suits for consumer debt.  See Alexander 
Gordon, IV, FEDERAL INTERVENTION IN THE MORTGAGE MARKETS, Maryland State Bar 
Association Inc., GOMF MD-CLE 1707 (2004) (“traditional debt collection activities 
(sending dunning letters, making collection calls to consumers)”); Finch v. LVNV Funding, 
LLC, 212 Md. App. 748, 752 (2013) (involving a collection agency named LVNV Funding, 
LLC that brought collection suits against consumers who accumulated credit card debt in 
district court without first obtaining a license under MCALA).  This ordinary meaning of 
collection agencies aligns with a majority of the collection agency definition under 
MCALA.  See BR § 7-101(d)(1)(ii); (2)–(4) (defining collection agencies as those engaged 
directly or in directly in the business of: collecting for, or soliciting from another, a 
consumer claim; collecting a consumer claim the person owns, using a name or other 
artifice that indicates that another party is attempting to collect the consumer claim; giving 
or using, for collection of a consumer claim, a series or system of forms or letters that 
indicates that a person other than the owner is asserting the consumer claim; and employing 
 
28 
 
the services of an individual or business to solicit or sell a collection system to be used for 
collection of a consumer claim). 
On the other hand, however, this commonly understood meaning does not 
necessarily comport with the prong of MCALA’s definition of collection agencies added 
by the 2007 departmental bill: “a person who engages directly or indirectly in the business 
of . . .  collecting a consumer claim the person owns, if the claim was in default when the 
person acquired it[.]”  BR § 7-101(d)(1)(ii).  Reading this language alone, it is unclear 
whether the General Assembly intended to move away from the ordinary meaning of 
collection agencies.  Moreover, the statutory language excerpted above is undoubtedly 
capable of more than one reasonable interpretation.  See Barbre, 402 Md. at 173.  This 
language, especially when considering that it includes entities that act “indirectly,” could 
mean that any individual who obtains a single defaulted debt and pursues one lawsuit or 
contacts the debtor once to collect that debt engages in the business of a collection agency 
and is required to obtain a license before doing so.  BR § 7-101(d).  In the alternative, the 
language added by the 2007 departmental bill could signify that the General Assembly 
intended to license those businesses that are commonly understood to be collection 
agencies that were also buying defaulted consumer debt.  
 
In addition to the conflict between the common understanding of collection agencies 
and the language added by the 2007 departmental bill, MCALA also includes the phrase 
“engages directly or indirectly in the business of[.]”  BR § 7-101(d).  The Court of Special 
Appeals has previously recognized the ambiguity of this phrase in Old Republic Ins. Co. v. 
Gordon, 228 Md. App. 1, 17 (2016).  In Gordon, the intermediate appellate court analyzed 
 
29 
 
whether an insurance company pursuing a subrogation right constitutes doing business as 
a collection agency, requiring the company to obtain a license under MCALA.  Id. at 2, 13.  
Specifically, the Court of Special Appeals examined the phrase “in the business of,” noting 
the “dearth of authority in Maryland addressing the meaning of the phrase[.]”  Id.  After 
evaluating the “different interpretations of the phrase ‘in the business of,’” the Court of 
Special Appeals concluded “that the language of the statute is ambiguous in the context of 
the issue presented here.”  Id. at 18.   
 
The Court of Special Appeals was correct that this Court has never explicitly opined 
on the meaning of the phrase “in the business of” let alone the more specific MCALA 
phrase “engages directly or indirectly in the business of[.]”  BR § 7-101(d).  However, we 
have previously analyzed the meaning of the word “business.”  In Zurich Insur. Co. v. 
Friedlander, this Court specifically analyzed the meaning of “business” as used in an 
exclusionary clause.  261 Md. 612, 616–17 (1971).  This Court opined:  
The ordinary and customary meaning is that reflected in Webster’s Third 
New International Dictionary as ‘commercial or mercantile activity 
customarily engaged in as a means of livelihood’ or two definitions given 
by Funk and Wagnall’s New Standard Dictionary of the English 
Language: 
‘1. A pursuit or occupation that employs or requires energy, time 
or thought; trade, profession, calling. 
2. Any occupation connected with the operations and details of 
trade or industry,’ 
 
Id. (Emphasis added).  We then confirmed that the “Funk and Wagnall’s definition of 
business . . . has been used by various courts as a test of whether one was or was not 
engaged in a business.”  Id. at 617.  
 
30 
 
 
Applying that definition of “business” as used in MCALA to the consolidated cases 
before us presents further ambiguity.  Specifically, the foreign statutory trusts that own the 
mortgage loans in the cases sub judice do not have any employees or offices, do not have 
any registered agent, and do not have any specifically identified pursuit in the State of 
Maryland.  Instead, LSF9 and Ventures Trust both act solely through trustees and substitute 
trustees.  Therefore, it would be hard for this Court in the first instance to conclude that the 
foreign statutory trusts engage, either directly or indirectly, in the business of a collection 
agency when it is hard to deduce if these entities are even conducting “business” under 
Funk and Wagnall’s definition.15  
The defaulting homeowners contend that MCALA’s definition of consumer claim 
is unambiguous and resolves the issue before this Court.16  Specifically, MCALA defines 
                                                 
15 See the discussion of special purpose vehicles and repositories that play a particular role 
in the mortgage industry infra at 52–54.  See also the discussion of a conflict between the 
homeowners’ interpretation of MCALA and the Maryland Statutory Trust Act infra at 58–
59.  
 
16 The respondents also argue that this Court should give considerable weight to the Board’s 
interpretation of MCALA’s licensing requirement.  Specifically, the defaulting 
homeowners point this Court to an advisory notice and a FAQs sheet prepared by the Board 
for trusts applying for the collection agency license.  The advisory notice was issued on 
July 5, 2007, just after the legislative session that passed the 2007 departmental bill and 
can 
be 
found 
at: 
https://www.dllr.state.md.us/finance/advisories/archive.shtml 
[https://perma.cc/8E79-K2FP].  The notice repeats the same departmental bill language 
that is fully interpreted by this Court in the legislative intent analysis below.  The FAQs 
sheet was prepared in October 2017, just before the instant appeal came before this Court, 
and can be found at: http://www.dllr.state.md.us/finance/industry/frnmlstrantrustfaqs.pdf 
[https://perma.cc/W6VC-MTJL].  However, this Court has repeatedly stated that an 
agency’s interpretation of a statute is not binding upon courts.  See, e.g., Baltimore Gas & 
Elec. Co. v. Pub. Serv. Comm’n of Maryland, 305 Md. 145, 161 (1986); Sinai Hosp. of 
Baltimore, Inc. v. Dep’t of Employment & Training, 309 Md. 28, 46 (1987); Spencer v. 
Maryland State Bd. of Pharmacy, 380 Md. 515, 529 n.3 (2004).  Although this Court often 
 
31 
 
consumer claim to include a claim that “is for money owed or said to be owed” and “arises 
from a transaction in which . . . the resident sought or got . . . real property[.]”  BR § 7-
101(f) (emphasis added).  Though the borrowers may be correct that certain real property 
transactions or other consumer loans involving property fall within this definition, that is 
not the crucial question presented in this appeal.  This Court must instead determine 
whether the General Assembly intended to license certain actors in the mortgage industry, 
such as foreign statutory trusts, as opposed to solely those actors in the collection agency 
industry.  
Just as the Court of Special Appeals determined in Gordon, this Court concludes 
that the plain language of MCALA is ambiguous “in the context of” whether a foreign 
statutory trust that owns a defaulted mortgage debt falls under the scope of MCALA when 
a substitute trustee brings a foreclosure action on the trust’s behalf. 17  Id.  We cannot 
                                                 
accords deference to an agency’s interpretation of its administering statute, we have also 
made clear that an “important consideration is the extent to which the agency engaged in a 
process of reasoned elaboration in formulating its interpretation of the statute.”  Baltimore 
Gas & Elec. Co., 305 Md. at 161.  After the circuit courts and the Court of Special Appeals 
ruled in the cases below, the Board simply instructed trusts on how to apply for a license 
rather than conducting a full analysis of the original collection agencies licensing act or the 
2007 departmental bill.  
 
17 This Court does not ignore the United States District Court for the District of Maryland 
cases that conclude the language of MCALA is unambiguous in that a passive debt 
purchaser, including foreign statutory trusts, must obtain an MCALA license before 
pursuing a foreclosure action.  See Bradshaw v. Hilco Receivables, LLC, 765 F.Supp.2d 
719, 726–27 (D. Md. 2011); Ademiluyi v. PennyMac Mortg. Inv. Tr. Holdings I, LLC, 929 
F. Supp. 2d 502, 523 (D. Md. 2013); Altenburg v. Caliber Home Loans, Inc., No. CV RDB-
16-3374, 2017 WL 2733803, at *6 (D. Md. June 26, 2017).  However, the federal courts 
“are bound by the interpretation given by this Court to a Maryland statute[.]”  Am. Radiator 
& Standard Sanitary Corp. v. Mark Eng’g Co., 230 Md. 584, 588 (1963). 
 
 
32 
 
determine from the plain language alone if the legislature intended the MCALA licensing 
requirement to apply to a foreign statutory trust that obtained a defaulted mortgage loan, 
after which a substitute trustee filed a foreclosure action to protect the trust’s security 
interest.  This Court will, therefore, consider the legislative history, subsequent legislation, 
and related statutes in order to discern the intent of the General Assembly when it enacted 
the original MCALA statute and any pertinent revisions.  See Kaczorowski, 309 Md. at 
515. 
B. 
Legislative History 
 
    
In 1977, the General Assembly enacted the first collection agency licensing statute, 
which generally instructed that a “person may not engage in the business of a collection 
agency in this State without an annual license[.]”  1977 Md. Laws, ch. 319.  The statute 
also created the Collection Agency Licensing Board responsible for licensing collection 
agencies and enforcing the Maryland Consumer Debt Collection Act.  1977 Md. Laws, ch. 
319.  Senate Bill 435 of 1977 specifically defined “Collection Agency” as:  
all persons directly or indirectly engaged in the business of soliciting from, 
or collecting for others any claim due or asserted to be owed or due, to a 
seller, lender, holder, or creditor, arising from transactions involving a 
Maryland resident seeking or acquiring real or personal property, services, 
money, or credit for personal, family, or household purposes.   
 
Id. 
The original legislation further clarified that a “‘Collection Agency’ includes any 
person who gives away, sells, or attempts to give away or sell to others, any system or 
series of letters or forms used in the collection of claims which assert or indicate, directly 
 
33 
 
or indirectly, that the claim is being asserted or collected by any person other than the 
creditor or owner of the claim.”  Id.  The 1977 collection agencies licensing statute 
indicated that:  
(2) “Collection Agency” does not include any: 
(I) Regular employee of a creditor acting under the general direction 
and control of that creditor in the collection of a claim owned by that 
creditor;  
(II) Regular employee of a collection agency licensed under this 
subtitle;  
(III) 
Bank, 
trust 
company, 
savings 
and 
loan 
association, or building and loan association or mortgage banker;  
(IV) Abstract company doing an escrow business;  
(V) Attorney at law; or  
(VI) Any person acting under the order of any court of competent 
jurisdiction. 
 
Id.  (Emphasis added).  
 
The language of the initial collection agency licensing statute conveys that the 
General Assembly originally intended only to require licensure for third party collection 
agencies that collect or solicit the debt of others or sells a system by which to collect debt.  
The 1977 legislation also included similar exemptions as the present version of MCALA.  
Critical to this analysis, the legislature grouped together a subsection of exempted actors 
for banks, trust companies, savings and loan associations, as well as building and loan 
associations, and mortgage bankers.  The plain language of the original legislation provides 
this Court with evidence that the General Assembly exempted all of these parties with a 
similar consideration relating to the mortgage industry.  See id. 
 
34 
 
In addition to the plain language, the Fiscal Note for Senate Bill 435 emphasized 
that the “bill prohibits any person from engaging in the business of a collection agency in 
the State of Maryland without an annual license[.]”  Dep’t Fiscal Servs., Fiscal and Policy 
Note, Senate Bill 435, at 1 (1977 Session) (hereinafter cited as “SB 435 Fiscal Note”).  The 
Fiscal Note further advised that the Department of Licensing and Regulation18 “assumes 
that 110 collection agencies will apply for the licensure.”  Id.   
The sponsor of the legislation, Senator Clarence W. Blount, submitted written 
testimony in support of the bill, stating:  
A survey of 1900 complaints made to the Consumer Protection 
Division during the first six months of 1976 shows that 3% involve debt 
collection.  This means that they are receiving an average of 2 or 3 calls a 
week about debt collection.  In 9 or 10 of these cases the Division has issued 
cease and desist orders.  However, the Division reports that they don’t go 
into harassment cases because they are too difficult to prove.  They only 
pursue complaints where they have something in writing to base their case 
on. . . .  In the years that I have worked on this legislation we have managed 
to resolve most of the differences with the industry[.] 
 
Senator Clarence W. Blount, Senate Bill 435, Re: Licensing of Debt Collection Agencies, 
Hearing on Senate Bill 435 Before the Economic Affairs Comm. of the Senate, 1977 Leg., 
383rd Sess. (Md. 1977) (written testimony of Senator Clarence W. Blount) (hereinafter 
cited as “Senator Blount Testimony”).  Senator Blount stressed the urgent “need for this 
legislation” largely because the “present conditions, inflation, the high rate of 
                                                 
18 The Department of Licensing and Regulation is the predecessor to DLLR.  Specifically, 
the Department of Licensing and Regulation served Maryland between 1970 – 1995.  Then 
in 1995, Maryland established the Department of Labor, Licensing, and Regulation, which 
this opinion refers to as the Department or DLLR. 
 
35 
 
unemployment, and the layoffs and hardships” have led to “[m]ore cases of abuse” by 
collection agencies.  Id. 
 
Senator Blount also testified regarding the exempted actors.  Specifically, Senator 
Blount indicated in his written testimony that “[e]xcluded from the licensure requirement 
are regular employees of a creditor or collection agency, banks, and savings and loan 
association, abstract [title] companies, lawyers, and those acting under court order. . . .  
Mortgage bankers should also be excluded under this section, and I have an amendment to 
do this.”  Id.  Indeed, Senator Blount submitted amendments to Senate Bill 435 before the 
second reading of the bill, which added “mortgage banker” to the list of entities exempted 
from MCALA.  Senator Clarence W. Blount, Amendments to Senate Bill No. 435, Second 
Reading Bill File Before the Economic Affairs Comm. of the Senate, 1977 Leg., 383th 
Sess. (Md. 1977) (hereinafter cited as “Senator Blount Amendments”).  On March 21, 
1977, the Senate Economic Affairs Committee passed Senate Bill 435 as favorable with 
amendments, agreeing with Senator Blount that mortgage bankers should be excluded from 
the MCALA licensing requirements.     
Three years after the General Assembly passed Senate Bill 435, the Department of 
Fiscal Services issued an evaluation report prepared pursuant to the Regulatory Program 
Evaluation Act of 1978.  Dep’t Fiscal Servs., The Collection Agency Licensing Board: An 
Evaluation Report Prepared Pursuant to the Regulatory Programs Evaluation Act of 1978 
(1980) (hereinafter cited as “Evaluation Report”); see also 1978 Md. Laws, ch. 808.  In an 
introductory letter to the report, the Department of Fiscal Services explained that the 
document consisted of an “evaluation of the Maryland Collection Agency Licensing 
 
36 
 
Board” meant “to assist the Senate Economic Affairs Committee and the House 
Environmental Matters Committee in preparing their report to the General Assembly.”  
Evaluation Report at 1.   
The evaluation report first provided a description of “the Industry,” in which the 
Department of Fiscal Services noted that in “Maryland, only third-party collectors are 
licensed. Currently, 174 debt collection agencies have received licenses through the 
Collection Agency Licensing Board of Maryland.”  Id. at 2.  The report continued its 
description of the collection agency industry:  
Collection agencies collect money due to businesses or creditors other than 
the agency itself.  Usually creditors refer to collection agencies accounts that 
are long overdue and difficult to collect.  The service is generally performed 
on a commission or on a percentage basis. . . .  A mail survey of 89 licensed 
collection agencies in Maryland reveals that most clients are either hospitals, 
doctors, retail stores or banks. . . .  Collection agencies usually attempt to 
collect debts over the telephone or by mail.  Typically, an agency has a 
telephone bank of employees and a clerical support staff.  Most collection 
agencies are small businesses.  
 
Id. at 2-3.  In connection with its industry description, the Department of Fiscal Services 
included a table (“Table 1”) in which the Department broke down the clients of collection 
agencies, listing medical clients, such as doctors and hospitals, as constituting 54% of 
clients, retail stores as constituting 23% of clients, banks as constituting 10% of clients, 
and insurance companies, credit card companies, utilities, newspapers, and contractors as 
constituting 13% of clients.  Id. at 3.  
The Department of Fiscal Services also explained the continued need for regulation.  
Specifically, the Department noted: 
 
37 
 
Creditors typically refer to collection agencies only the least 
collectible accounts.  Since agencies are compensated only when they 
collect, this can lead to abuse.  Board members mention harassment, abusive 
language, and attempting to collect debts not owed as the most prevalent 
forms of abuse in Maryland.  Other abuses include misrepresentation, 
disclosing credit information to third parties, impersonating government 
officials or attorneys and simulating the legal process. . . .  The primary 
justification for regulation of this industry is the protection of the public.   
 
 Id. at 7.   
This legislative history provides insight into the purpose of the original collection 
agency licensing statute.  Specifically, Senator Blount’s testimony confirms that the 
legislature was acting to license and regulate the collection agency industry after the high 
number of complaints regarding the industry’s harassing practices.  Indeed, the bill file 
makes clear that collection agency harassment was prevalent during this time period in 
1976 and 1977 when the rate of unemployment and inflation sharply increased.  See 
Senator Blount Testimony.  The Fiscal Note also indicated that the Department of 
Licensing and Regulation only anticipated that 110 collection agencies would be required 
to apply for a license, which signifies that the legislature had a general idea of the actors 
involved in the collection agency industry and intended specifically to license and regulate 
those actors in order to prevent abusive practices.  See id.; see also SB 435 Fiscal Note, at 
1.  Senator Blount made clear to the Senate Economic Affairs Committee that certain actors 
would be excluded and that mortgage bankers should be added to those entities exempted 
from MCALA.  See Senator Blount Amendments.  Overall, the language of the original 
collection agency licensing statute and the pertinent legislative history indicates that the 
 
38 
 
scope of the initial licensing requirement was limited to an industry of collection agencies, 
which largely consisted of small businesses collecting medical and retail accounts by 
contacting debtors via telephone or mail.   
 
In 2007, DLLR requested House Bill 1324, which sought to address new issues 
under the collection agency licensing act.  See 2007 Md. Laws, ch. 472.  Significant to the 
instant appeal, the 2007 departmental bill changed the definition of “collection agency” to 
include “a person who: (1) engages directly or indirectly in the business of: . . . collecting 
a consumer claim the person owns, if the claim was in default when the person acquired 
it[.]”  Id.  Once again, the plain language of the legislation does not provide a definitive 
scope of regulation.  In other words, the language of House Bill 1324 does not 
unambiguously indicate whether DLLR requested the bill in order to expand the scope of 
MCALA to industries beyond the ordinary understanding of collection agencies.  
Moreover, it is not clear whether the Department intended to regulate any person who buys 
a single defaulted account and then pursues a lawsuit to collect that debt.  Equally unclear 
is whether DLLR was simply trying to license certain collection agencies that bought the 
defaulted accounts before engaging in collection practices.  This Court will consider further 
legislative history to discern the reason the General Assembly revised MCALA in 2007.  
This Court has long considered the “bill request form” as part of its legislative intent 
analysis.   Kaczorowski, 309 Md. 505, 515 (1987) (“We identified that scheme or purpose 
after an extensive review of the context of [the contested legislation], which had effected 
major changes [on the overall statute]. That context included, among other things, a bill 
request form, . . . a bill title, related statutes, and amendments to the bill.”) (Emphasis 
 
39 
 
added) (citations omitted).  See also In re Anthony R., 362 Md. 51, 58 (2000); State v. One 
1983 Chevrolet Van Serial No. 1GCCG15D8D 104615., 309 Md. 327, 329 (1987).   
When a department requests legislation,19 that department is required to submit a 
bill request directly to the Governor’s office for review and approval.20  In this case, DLLR 
submitted a bill request for proposed revisions to MCALA to the Governor’s office in 
2006.21  The Department’s “Proposal for Legislation 2007 Session” included a section 
                                                 
19 For a bill to be introduced in the General Assembly, it must be sponsored by a member 
of the Senate or House of Delegates.  There is no constitutional provision for the 
introduction of bills from other sources, such as a citizen’s initiative for legislation or draft 
legislation submitted directly by the voters.  However, there are two exceptions to this rule: 
(1) administration bills, which provide the Governor an opportunity to introduce major 
initiatives; and (2) departmental bills, which constitute requests from departments and 
agencies to make revisions to statutes for general housekeeping purposes or to close 
loopholes.  See Library and Information Services, Maryland Department of Legislative 
Services, Legislative Lingo, at 5 (defining a departmental bill as a “bill introduced by a 
committee chairman at the request of the Executive Branch of State government.”).  As 
part of a long-standing courtesy provided by custom in the General Assembly, the bills 
requested by the departments are introduced by committee chairmen as described in the 
Legislator’s Handbook. See Department of Legislative Reference, Maryland General 
Assembly, Legislator's Handbook, at 13, 49 (1990).  
 
20 Since 1969, Maryland Governors have required departments to submit to the Governor’s 
legal or legislative office all proposed departmental bills for approval.  This review 
procedure began when Governor Marvin Mandel instructed “state department heads to 
submit all legislation they propose to his office first rather than directly to the General 
Assembly[.]”  Mandel Asks [To] Look At Bills, THE BALTIMORE SUN (1837–1992), July 
17, 1969, ProQuest Historical Newspapers: The Baltimore Sun, at A14.  Thus, at the 
beginning of his first term, Governor Mandel initiated procedure for the review and 
approval of departmental bills that continues today.  Id. 
 
21 House Bill 1324 was not cross-filed; instead, the bill was only introduced in the House 
of Delegates.  As a late-filed bill, it was first referred to the House Rules and Executive 
Nominations Committee.  Once House Bill 1324 was considered there on February 28, 
2007, it was re-referred to the Economic Matters Committee.  When it passed the House 
and crossed over to the Senate, it was first referred to the Senate Rules Committee as 
provided under Senate Rule 32(e).    
 
40 
 
entitled Summary for Governor’s Review that provided an overview of Maryland’s 
collection agency industry as regulated under MCALA:  
Debt collectors/collection agencies are an essential part of commerce 
when credit is used to buy goods and services.  Collection activities in 
regard to commercial debt remain largely unregulated.  However, abusive 
collection practices concerning consumer debt resulted in state and federal 
regulation of the activities of collection agencies collecting consumer 
debt.  In 1978 [sic], Maryland enacted the Collection Agencies Licensing 
Act, which required any person engaged in the practice of collecting debts 
for others to be licensed by the State Collection Agency Licensing Board. 
The Collection Agency Licensing Board is made up of two public members, 
two industry members and the Commissioner of Financial Regulation.  This 
Board has unanimously recommended that this legislation be adopted.    
 
Maryland law regulates collection firms that collect debt as agents on 
behalf of other entities.  The law [] does not require licensing for businesses 
that collect their own consumer debt.  Elements of the collection industry 
have noted a loophole and now enter into “purchase agreements” in 
regard to delinquent debt rather than act as an agent for the original 
creditor. The terms of the purchase contract may closely resemble the 
terms of a collection agency agreement (the purchase price is primarily 
a percentage of the amount collected) etc. Although federal law governs 
the collection activities of these firms in collecting “purchased” debt, 
they currently need no Maryland license and the complaint resolution 
and regulatory action provided to Maryland residents is avoided. “Debt 
purchasers” circumvent current State collection laws, by engaging in 
debt collection business in Maryland without complying with any licensing 
or bonding requirement. . . .   
   
This legislative proposal would include debt purchasers within the 
definition of a “collection agency”, [sic] and require them to be licensed by 
the State Collection Agency Licensing Board before they may collect 
consumer claims in this State.  Businesses that are collecting their own debt 
continue to be excluded from this law. . . .  
 
 
41 
 
Secretary James D. Fielder, Proposal for Legislation 2007 Session, Department of Labor, 
Licensing, and Regulation (Md. 2007) (hereinafter cited as “Secretary Proposal for 
Legislation”) (emphasis added).22   
Here, the department highlights the narrow scope of its request.  DLLR requested 
the 2007 bill specifically to regulate actors in the “collection industry” that employed a 
loophole in MCALA’s licensing requirement by purchasing the delinquent consumer debt 
for “goods and services” via a purchase contract that “may closely resemble the terms of a 
collection agency agreement[.]”  Id.  Moreover, the bill request explains that the 
department considered “debt purchasers” to be those firms engaged in “debt collection 
business” that were entering into these purchase contracts.  Id.  Therefore, the department 
clarifies that it did not intend to regulate or license any actors outside the scope of the 
collection agency industry; rather, DLLR requested the 2007 departmental bill in order to 
ensure that all actors within that industry were complying with the licensing requirement 
as well as the “complaint resolution and regulatory action” under MCALA.  Id.     
The bill request also included a Fiscal Estimate Worksheet in which DLLR analyzed 
the “effect of the proposed legislation on the agency (operations, funding, etc.).”  Id. 
                                                 
22 The Maryland State Archives is the repository for public documents including legislative 
files from the Governor’s Office, state departments and agencies.  The Proposal for 
Legislation 2007 Session is a factual memorandum of the Department of Labor, Licensing 
and Regulation and may be requested by the public through the procedures of the State 
Archives for records of prior Administrations.  The Summary for Governor’s Review 
contains the identical justification for the departmental bill as presented in the written 
testimony submitted to the legislative committees by the Commissioner for Financial 
Regulation. 
 
 
42 
 
(cleaned up).  The Department estimated only 40 debt purchasers to become licensed under 
the 2007 bill and “anticipate[d] a small growth in the number of licensees, approximately 
2 new licensees per year.”  As such, this Court finds unlikely that the Department was 
proposing regulation of new industries.  Id.  Specifically, DLLR requested this 
departmental bill in order to close a loophole within the collection agency industry rather 
than to broaden the scope of MCALA to apply to other industries, such as the mortgage 
industry.  
In addition to the bill request, the purpose paragraph of House Bill 1324 states: 
“FOR the purpose of altering the definition of ‘collection agency’ as it related to the 
licensing and regulation of collection agencies; requiring certain additional persons to be 
licensed by the State Collection Agency Licensing Board before they may collect 
consumer claims in this State[.]”  Id. (Emphasis added).  The language in the purpose 
paragraph conveys that the General Assembly intended to alter the definition of collection 
agencies only insofar as it related to the licensing and regulation of the collection agencies 
seeking consumer debt.  Moreover, the purpose paragraph indicates that these additional 
actors need to obtain a license under MCALA before they “collect consumer claims[.]”  
Nothing in the purpose paragraph indicates that the General Assembly intended to expand 
the scope of MCALA beyond the collection agency industries that collect consumer claims.  
Indeed, nothing in the above language suggests that the departmental bill was enacted for 
the purpose of regulating and licensing the mortgage industry.   
In addition, the Fiscal Note for House Bill 1324 outlines the general purposes of the 
legislation: the “bill extends the purview of the State Collection Agency Licensing Board 
 
43 
 
to include persons who collect a consumer claim acquired when the claim was in default[.]” 
See Dep’t Legis. Servs., Fiscal and Policy Note, House Bill 1324, at 1 (2007 Session) 
(hereinafter cited as “HB 1324 Fiscal Note”).  The Fiscal and Policy Note also has key 
language regarding the scope of the legislation: 
DLLR advises that the State Collection Agency Licensing Board currently 
regulates 1,304 collection agencies. The department estimates that the bill 
would make 40 debt purchasers subject to State regulation. Debt 
purchasers are not currently subject to regulation, as they purchase the 
debt directly from the creditor and are generally compensated as a 
percentage of their recovery.   
 
Id. at 2 (emphasis added).   
 
Another key legislative history document in the bill file is the floor report.23  The 
Floor Report for House Bill 1324 contains the following anticipated question: “What 
problem is this bill addressing?”  Floor Report, House Bill 1324, Collection Agencies - 
Licensing, Economic Matters Committee of the House of Delegates, 2007 Leg., 423th Sess. 
(Md. 2007) at 3 (hereinafter cited as “HB 1324 Floor Report”).  In response, the Floor 
Report recommends the Delegate answer as follows:  
Although debt collectors must be licensed in Maryland to collect debts owed 
to a creditor, currently individuals collecting debts owed to themselves are 
exempt. Creditors have taken to selling defaulted receivables at a discount to 
collectors who are not licensed under Maryland law[.] 
 
                                                 
23 A floor report is a document prepared by the relevant committee’s staff, in this case the 
staff for the House Economic Matters Committee, for the purpose of preparing the 
Committee Chairman who presents the second reader report on the House floor.  Typically, 
the committee staff will include a section with questions that other Delegates may ask after 
hearing the second reader as well as suggested responses to those questions.   
 
44 
 
Id. (Emphasis added).  The Floor Report’s answer indicates that the legislature intended to 
regulate “debt purchasers” who essentially act as “collectors,” but avoid the license 
requirement by purchasing the defaulted account from the creditor before engaging in 
collection activities.   
These legislative history documents convey that the legislature was concerned 
specifically with certain collection agencies, or “collectors,” that own a defaulted account 
but are still compensated as a percentage of recovery.  Floor Report at 3.  Indeed, the 
Department only expected “40 debt purchasers” to become subject to regulation as a result 
of the 2007 departmental bill.  HB 1324 Fiscal Note, at 2.  This language affirms that House 
Bill 1324 did not intend to expand the coverage of MCALA beyond those collection 
agencies that purchase delinquent consumer debts.   
This interpretation is again confirmed by the Department’s written testimony 
submitted by the Commissioner of Financial Regulation and Chairman of the Collection 
Agency Licensing Board, Charles W. Turnbaugh.  The Commissioner encouraged the 
legislators to issue a favorable report for the bill requested by DLLR, stating: 
Maryland law regulates collection firms that collect consumer debt as 
agents of the creditor (hospitals, retailers, credit card issuers etc.).  The law 
does not require licensing for businesses that only collect their own consumer 
debts[.]  However, the evolution of the debt collection industry has 
created a “loophole” used by some entities as a means to circumvent 
current State collection agency laws.  Entities, such as “debt purchasers” 
who enter into purchase agreements to collect delinquent consumer debt 
rather than acting as an agent for the original creditor, currently collect 
consumer debt in the State without complying with any licensing or 
bonding requirement.   
 
 
45 
 
Charles W. Turnbaugh, Testimony in Support of HB 1324, Hearing on House Bill 1324 
Before the Economic Matters Committee of the H.D., 2007 Leg., 423rd Sess. (Md. 2007) 
(written testimony of Charles W. Turnbaugh) (emphasis added) (hereinafter cited as “HB 
1324 Turnbaugh Testimony”).  The Commissioner’s testimony focuses solely on consumer 
debt with no mention of expanding MCALA’s licensing requirement to the mortgage 
industry.  
In addition to the Chairman of the State Collection Agency Licensing Board, Susan 
Hayes, who served as one of the consumer members on the Board, provided her perspective 
in written testimony in support of the 2007 bill.  Ms. Hayes indicated that “HB 1324 closes 
a loophole in licensing of debt collectors under Maryland law.  Just because a 
professional collector of defaulted debt ‘purchases’ the debt, frequently on a 
contingent fee basis, should not exclude them from the licensing requirements of 
Maryland law concerning debt collectors.”  Susan Hayes, Statement on House Bill 1324, 
Hearing on House Bill 1324 Before the Economic Matters Committee of the H.D., 2007 
Leg., 423rd Sess. (Md. 2007) (written testimony of Susan Hayes) (emphasis added) 
(hereinafter cited as “HB 1324 Hayes Testimony”).   
A second board member of the State Collection Agency Licensing Board, Eileen 
Brandenberg, also submitted written testimony in support of the bill.  Ms. Brandenberg 
offered her “perception as a Board member” in her testimony, stating:  
[T]he majority of serious debt collection problems now are coming from 
a small number of maverick collectors and from unregulated newly-
evolved kinds of businesses not covered under current licensing laws. Debt 
purchasers are increasing in number – problems with their debt collection 
 
46 
 
practices need to come under the same regulations that govern other 
collectors. To keep doing the job of protecting Marylanders we need 
adequate tools to give us a measure of control over the actions of businesses 
that now exist to collect consumer debts outside the scope of traditional 
collection agencies.  
 
It is frustrating to hear of complaints that are outside our authority only 
because the purchase of a debt has put the collector outside the current 
definition of “collection agency.”  
 
Eileen Brandenberg, Testimony in Support of HB 1324, Hearing on House Bill 1324 Before 
the Economic Matters Committee of the H.D., 2007 Leg., 423rd Sess. (Md. 2007) (written 
testimony of Eileen Brandenberg) (emphasis added) (hereinafter cited as “HB 1324 
Brandenberg Testimony”).  Once again, the testimony of the two State Collection Agency 
Licensing Board members focused on consumer debt sought by specific collection 
agencies.  Neither of the board members indicated that the departmental bill would require 
actors within the mortgage industry to obtain a license as a collection agency.  
It is also significant that the bill file does not contain any written testimony in 
opposition of the bill from any other representatives of the mortgage industry, such as 
Wells Fargo Home Mortgage Servicing, Maryland Mortgage Bankers Association, 
Mortgage Bankers Association of Metropolitan Washington, Maryland Coalition of Title 
Insurers, etc.  These same representatives, along with other mortgage industry members, 
 
47 
 
submitted written and oral testimony24 in response to the 2009 foreclosure reform bills.25    
If these same lobbyists believed the 2007 departmental bill required mortgage industry 
members to obtain a license as a collection agency, then they most assuredly would have 
submitted written testimony in opposition of the bill or proposed specific amendments 
excluding those mortgage industry members.  It is understandable, however, that these 
mortgage industry representatives did not file any testimony because all of the bill file 
documents above indicate that the departmental bill aimed only to clarify that MCALA 
applies to those collection agencies that were buying defaulted consumer debts before 
engaging in collection practices to avoid the licensing requirement.  Nothing in the bill file 
suggests that DLLR was requesting the General Assembly to expand their regulating and 
licensing authority under MCALA to the mortgage industry.  Moreover, the language in 
the purpose paragraph does not provide the mortgage industry with any notice that the 
departmental bill would be including mortgage industry actors or mortgage loans into the 
realm of the collection agency industry.  This lack of notice would explain why the 
mortgage industry actors did not submit testimony in opposition to the bill, believing that 
House Bill 1324 was still limited to “professional collector[s] of defaulted debt.”  HB 1324 
Hayes Testimony. 
                                                 
24 For example, the Mid-Atlantic Financial Services Association submitted written 
testimony in response to Senate Bill 269 in the 2009 regular session of the General 
Assembly, seeking an amendment clarifying that mortgage loan servicers do not need to 
be licensed as mortgage loan originators.   
 
25 Discussed on pages 54-56 infra.  
 
48 
 
The 2007 viewpoint of the Commissioner and Board members, who are ultimately 
responsible for licensing and regulating the collection agencies, is critical to this Court’s 
legislative intent analysis.  Ms. Brandenberg emphasized that the issue before the State 
Collection Agency Licensing Board was a few collection agencies that are outside the 
scope of authority only because the actors purchased the consumer debt.  Similarly, Ms. 
Hayes supported House Bill 1324 because unlicensed “professional collector[s]” were 
purchasing defaulted debt and subsequently receiving contingent fees from the original 
creditor if the debt purchaser successfully collected the debt.  Moreover, the 
Commissioner’s testimony highlights that the 2007 departmental bill still focused on 
regulation of the “collection agency industry,” in which certain collection agencies were 
purchasing debt in order to own the debt and thus avoid the licensing requirement. The 
legislative history, therefore, highlights that the Board was seeking to regulate those 
collection agencies that purchased the defaulted consumer debts as a means of avoiding 
obtaining a license under MCALA.  As such, this Court is persuaded that the General 
Assembly did not intend to significantly enlarge the scope of MCALA to entities outside 
of the collection agency industry.  Instead, the 2007 legislation merely served as a way to 
regulate those collection agencies that exploited a loophole that occurred when the agency 
purchased the defaulted account before collecting as owners of the consumer debt.    
 
This Court interprets the legislative history to signify that the General Assembly 
intended MCALA, when originally enacted and when revised in 2007, to regulate and 
license the collection agency industry.  The legislative history persuades this Court that the 
General Assembly did not intend to regulate or license the mortgage industry actors, 
 
49 
 
including foreign statutory trusts serving as a repository for mortgage loans, as collection 
agencies due to the specific exemptions and the limited scope of MCALA.  Nevertheless, 
we will also look to related statutes and subsequent legislation in order to confirm this 
interpretation.   
C. 
MCALA’s Relationship with Subsequent and Related Legislation  
In addition to the legislative history, we will also look at “the statute’s relationship 
to earlier and subsequent legislation[.]”  Rose v. Fox Pool Corp., 335 Md. 351, 360 (1994). 
This Court should also consider “the context in which the statute appears . . . and that 
context may include related statutes[.]”  Mayor & City Council of Baltimore v. Chase, 360 
Md. 121, 129 (2000).  This type of comparison can assist this Court in narrowing the 
purpose and scope of the ambiguous statute.  See Rose v. Fox Pool Corp., 335 Md. at 358–
59 (“Every statute is enacted to further some underlying goal or purpose—‘to advance 
some interest, to attain some end’—and must be construed in accordance with its 
general purposes and policies”) (quoting Kaczorowski, 309 Md. at 513).  Moreover, a 
review of subsequent and related statutes is necessary to determine whether two statutes 
apply to the same situation.  If so, this Court must “attempt first to reconcile them. . . .  
Thus, if two acts can reasonably be construed together, so as to give effect to both, such a 
construction 
is 
preferred, 
and 
the 
two 
should 
be 
construed 
together 
to 
be interpreted consistently with their general objectives and scope.” Immanuel v. 
Comptroller of Maryland, 449 Md. 76, 87 (2016).  This Court will, therefore, review and 
consider subsequent legislation and related statutes enacted by the General Assembly after 
 
50 
 
MCALA, and the pertinent departmental bill, in order to confirm the intended scope of the 
collection agencies licensing statute.  
In response to a foreboding foreclosure crisis, Governor Martin J. O’Malley26 
established the Homeownership Preservation Task Force (“Task Force”) on June 13, 2007, 
just over a month after the General Assembly enacted and the Governor signed the 
MCALA departmental bill into law.27  The Task Force was created in response to the rising 
foreclosure rates occurring in 2006 and 2007.  Raymond A. Skinner & Thomas E. Perez, 
Final Report of the Maryland Homeownership Preservation Task Force Report, Maryland 
Homeownership Preservation Task Force, November 29, 2007 (hereinafter cited as “Task 
Force Report”).  One of the main objectives for the Task Force was examining “current 
laws and regulations in Maryland governing the mortgage industry and the foreclosure 
process and recommend[ing] necessary changes, including legislative and regulatory 
actions where warranted[.]”  Id. at 3.  The Task Force recognized that a full review of the 
Maryland mortgage foreclosure law was necessary to develop an action plan for addressing 
the increased foreclosure rates.  As a result, the Task Force recommended, in part, that the 
State strengthen the laws against fraud in mortgage transactions as well as improve 
Maryland’s foreclosure process.  Id. at 6.   
                                                 
26 Martin J. O’Malley served as Maryland Governor from January 17, 2007 to January 21, 
2015.  Previously, Governor O’Malley served as the Mayor of Baltimore from December 
7, 1999 to January 17, 2007.   
 
27 Specifically, the 2007 departmental bill passed the House of Delegates on March 30, 
2007 (legislative date March 26, 2007), passed the Maryland Senate on Sine Die, April 9, 
2007(legislative date April 3, 2007), and then was signed by the Governor on May 8, 2007.   
 
51 
 
When identifying the causes of the foreclosure problem in Maryland, the Task Force 
described today’s mortgage marketplace.  
Today’s mortgage marketplace is quite different. Nearly 70 percent of 
all homeowners obtain their residential mortgage loans through a broker. In 
mortgage transactions, non-bank originators, such as brokers, collect fees up 
front for their services. The broker originates the loan and a lender 
underwrites the loan. Often as soon as the loan settles, the loan is packaged 
with other loans into mortgage backed securities (MBS) to make them 
attractive to investors. The homeowner has no connection with the holder 
of the mortgage note and may not even know who the note holder is. The 
loan goes to a servicer who services the loan for the note holder and 
collects payments and fees from the homeowner. 
 
Id. at 9 (emphasis added).  Therefore, the Task Force explained that the current model of 
the mortgage industry includes: (1) a broker, matching the lender to borrower; (2) a lender, 
typically a bank; (3) a mortgage backed security, which is typically a package of loans to 
be sold to investors; and (4) a mortgage loan servicer, who services the loan and collects 
payments from the borrower.   
This “mortgage marketplace,” or “mortgage industry,” encompasses a “primary and 
secondary mortgage market” that requires securitization.  Robin Paul Malloy, Mortgage 
Market Reform and the Fallacy of Self-Correcting Markets, 30 Pace L. Rev. 79, 82 (2009).  
After a typical home loan and mortgage, the mortgage lenders often “wish to sell the 
mortgages that they originate.”  Id. at 95.  The secondary mortgage market serves this exact 
purpose by creating “a market for primary mortgages[.]”  Id. at 96.  Specifically, the 
secondary mortgage market “enhances liquidity, reduces risk by diversifying the primary 
lender’s investment portfolio, and increases the available funds for lending by recharging 
 
52 
 
the assets of the primary lender.”  Id. at 95–96.  The secondary mortgage market 
intermediaries “buy and sell loans and loan participations, as well as package loans into 
pools for securitization.”  Id. at 96.  
This Court has previously explained the securitization process in detail: 
Securitization starts when a mortgage originator sells a mortgage and its note 
to a buyer, who is typically a subsidiary of an investment bank. The 
investment bank bundles together the multitude of mortgages it 
purchased into a “special purpose vehicle,” usually in the form of a trust, 
and sells the income rights to other investors.  A pooling and servicing 
agreement establishes two entities that maintain the trust: a trustee, who 
manages the loan assets, and a servicer, who communicates with and 
collects monthly payments from the mortgagors. 
 
Anderson v. Burson, 424 Md. 232, 237 (2011) (emphasis added) (citations omitted).  In 
Deutsche Bank Nat. Tr. Co. v. Brock, this Court clarified that a “special purpose vehicle ‘is 
a business entity that is exclusively a repository for the loans; it does not have any 
employees, offices, or assets other than the loans it purchases.’”  430 Md. 714, 718 (2013) 
(quoting Anderson, 424 Md. at 237 n. 7).  See also Christopher L. Peterson, Predatory 
Structured Finance, 28 Cardozo L. Rev. 2185, 2261 (2007) (“In a typical transaction, a 
third party company is hired to service the loan – meaning collect the debt. Much like 
a ‘debt collector’ as defined under federal law, mortgage loan servicers are not chosen 
by consumers. A consumer does not have the right to refuse to do business with a company 
granted servicing rights by a securitization pooling and servicing agreement.”) (Emphasis 
added).  
 
53 
 
The securitization process of the mortgage industry highlights that a trust, such as a 
foreign statutory trust, serves a specific purpose in the mortgage industry.  Indeed, such 
trusts are called “special purpose vehicles” because they simply hold the loans managed 
by the trustees and collected by the mortgage servicers.  See Deutsche Bank, 430 Md. at 
718.  In other words, the trust solely constitutes a pool of loans that will eventually be sold 
off to investors.  See id. at 2209.  The trustees and substitute trustees are the actors that 
manage and control the trust assets.  See Anderson, 424 Md. at 237.  The mortgage servicer, 
as opposed to the statutory trust, acts as the debt collector and interacts with the borrowers.  
See Peterson, 28 Cardozo L. Rev. at 2261.   
When examining this mortgage industry model, the Task Force did not mention or 
discuss MCALA or collection agencies licensing requirements.  Instead, the Legal and 
Regulatory Reform Work Group within the Task Force noted that the mortgage brokers, 
mortgage lenders, and mortgage servicers can engage in those businesses with a license 
under the Maryland Mortgage Lender Law.  Task Force Report, at 27.  The Task Force 
also recognized that mortgage originators must obtain a separate license under Maryland 
law.  Id. at 27.  Specifically, the Work Group stated that “there are 6,154 mortgage lending 
licensees in Maryland and there are 10,493 mortgage originators. . . it is estimated that 
approximately two-thirds of the mortgage lending licensees, or about 4,120, are brokers.”  
Id.  These numbers are in stark contrast to DLLR’s estimate that 1,304 hold a collection 
agency license under MCALA.  See HB 1324 Fiscal Note. 
After summarizing the current law, the Task Force made certain recommendations 
as to licensing and lending.  Specifically, the Work Group recommended that “Maryland 
 
54 
 
increase the Commissioner of Financial Regulation’s legal and regulatory oversight and 
enforcement of the mortgage lending industry to strengthen protections for homeowners 
and ensure the integrity of the industry.”  Task Force Report, at 25.  In addition, the Task 
Force suggested that Maryland “[e]nact a criminal mortgage fraud statute that would apply 
to all possible players involved in mortgage transactions and would incorporate a reporting 
requirement to the Commissioner of Financial Regulation or other licensing body.”  Id. at 
33.  The Work Group also incorporated specific recommendations for amending the 
statutory requirements for the foreclosure process as appears in the Maryland Rules.  Id. at 
35–39.   
Pursuant to these recommendations, the General Assembly enacted the proposed 
foreclosure policy bills during the 2008, 2009, and 2010 legislative sessions that amended 
the recordation requirements of mortgages, added requirements to the foreclosure process, 
created a comprehensive mortgage fraud statute to protect homeowners in foreclosure, 
altered the mortgage lender and mortgage loan originator licensing requirements, and 
extended legal protections for homeowners in foreclosure and mortgage default.  See e.g., 
2008 Md. Laws, ch. 1; 2008 Md. Laws, ch. 2; 2008 Md. Laws, ch. 3; 2008 Md. Laws, ch. 
4; 2008 Md. Laws, ch. 5; 2008 Md. Laws, ch. 6; 2008 Md. Laws ch. 7; 2008 Md. Laws, 
ch. 8; 2009 Md. Laws; ch. 4; 2009 Md. Laws, ch. 615; 2010 Md Laws, ch. 485; 2010 Md. 
Laws, ch. 323.  In addition, this Court accepted the proposals of the Standing Committee 
on Rules of Practice and Procedure (“Rules Committee”) to amend the Maryland Rules in 
2009 and 2010 in order to strengthen the requirements in foreclosure proceeding filings.  
See One Hundred Sixtieth Report of the Standing Committee on Rules of Practice and 
 
55 
 
Procedure (2009); One Hundred Sixty-Sixth Report of the Standing Committee on Rules 
of Practice and Procedure (2010).  These changes to the Maryland Code and Maryland 
Rules created a comprehensive scheme, which this Court has referred to as the Maryland 
mortgage foreclosure law, regulating the actors in the mortgage industry for the purpose of 
protecting homeowners.  See RP § 7-101, et seq.; Md. Rules 14-201, et seq.; Md. Code 
Regs. 09.03.12.01, et seq.  
When comparing the legislative history of MCALA, including the 2007 
departmental bill, against the almost contemporaneous Maryland mortgage foreclosure law 
reform, this Court concludes that the General Assembly consciously separated the 
consumer debt collection agency industry under MCALA from the mortgage industry.  See 
Rose, 335 Md. at 360.  In other words, the General Assembly did not intend MCALA to be 
regulating the mortgage industry actors involved in foreclosure proceedings because the 
legislature addressed that exact issue in the subsequent legislative sessions.  See 2008 Md. 
Laws, ch. 1.   
Indeed, the Task Force specifically reviewed Maryland laws relating to foreclosure 
and mortgage industry actors as of 2007 and never mentioned or discussed MCALA or any 
requirements for a collection agency license.  See generally Task Force Report.  The Task 
Force, instead, specifically recognized that the current mortgage industry model includes 
mortgage backed securities, in the form of a foreign statutory trust, and a separate loan 
servicer, which collects the payments from the homeowners.  Id. at 9.  Moreover, the Work 
Group concluded that as of 2007 there were approximately 6,154 mortgage lending 
licensees in Maryland, including 4,120 mortgage brokers, and estimated that there were 
 
56 
 
10,493 mortgage originator licensees.  Id. at 27.  Comparing these numbers to the 
Department’s estimations regarding the number of current licensed collection agencies and 
projected licenses makes clear that MCALA was intended to regulate a much smaller 
industry.  As discussed supra, DLLR estimated that there were 1,304 licensed collection 
agencies in 2007, and that the departmental bill would place 40 new debt purchasers under 
the Board’s regulation with an additional two applications each year.  See, e.g., HB 1324 
Fiscal Note, at 2; Secretary Proposal for Legislation. 
 
Overall, the subsequent legislation in response to the 2007 Homeownership 
Preservation Task Force’s recommendations confirms that the General Assembly intended 
to solve two different problems by enacting revisions to MCALA (i.e., to regulate and 
license certain collection agencies engaged in collecting consumer debts in exchange for a 
percentage of the debt) and changes to the Maryland Code and Maryland Rules relating to 
the mortgage industry actors and foreclosure (i.e., to protect homeowners by adding certain 
requirements to the foreclosure process and heavier regulation of the mortgage industry 
actors).  The complete absence of any discussion of MCALA or collection agencies when 
the legislature considered the problem of rising foreclosure rates as well as bad practices 
by certain actors within the mortgage industry persuades this Court that the General 
Assembly did not intend to license one of the mortgage industry actors, foreign statutory 
trusts, under MCALA.    
After a majority of the Maryland mortgage foreclosure law reform legislation was 
passed in 2008 and 2009, the General Assembly also enacted the Maryland Statutory Trust 
Act in 2010.  See CA § 12-901 et seq.  A “statutory trust” constitutes any unincorporated 
 
57 
 
business, trust, or association that filed an initial certificate of trust in Maryland and is 
governed by a governing instrument.  CA § 12-101(h).  A “foreign statutory trust” is simply 
a statutory trust that is formed under the laws of another state.  CA § 12-101(d).  The 
Statutory Trust Act requires foreign statutory trusts to “register with the State Department 
of Assessments and Taxation prior to conducting business in the State.”  Dep’t Legis. 
Servs., Fiscal and Policy Note, Senate Bill 787, at 3 (2010 Session).  Moreover, all foreign 
statutory trusts are to submit to certain penalties for failing to register.  Id.   
When passing the 2010 Maryland Statutory Trust Act, the General Assembly 
recognized that a statutory trust has “general powers” to: make contracts; incur liabilities 
and borrow money; sell, mortgage, convey, or otherwise dispose of assets; issue notes and 
secure obligations by mortgage or deed of trust; acquire or purchase or hold interests in 
real or personal property; purchase, receive, or deal in stock; acquire shares of beneficial 
interest; invest or lend money; and, sue and be sued in all courts.  Id. at 2.  By specifically 
noting these general powers, the Fiscal and Policy Note affirms that the legislature 
understood that statutory trusts serve functions within many different industries.  However, 
the legislature specifically concluded that: “In addition to any other activities which may 
not constitute doing business in this State, for the purposes of this subtitle, the following 
activities of a foreign statutory trust do not constitute doing business in this State . . .  
(5) Foreclosing mortgages and deeds of trust on property in this State[.]”  CA § 12-
908(a)(5) (emphasis added).  
 
Therefore, there is a direct conflict between the homeowners’ arguments that 
MCALA requires foreign statutory trusts to obtain a license before engaging in the business 
 
58 
 
of a collection agency by instituting a foreclosure action and the Maryland Statutory Trust 
Act’s recognition that foreign statutory trusts are not doing business in Maryland when 
foreclosing on a mortgage.  As such, these consolidated cases present an instance in which 
both of the statutes, MCALA and the Maryland Statutory Trust Act, may apply and 
conflict.  We have previously explained that when two statutes apply to the same situation, 
then this Court will attempt to harmonize the statutes.  
We presume that the legislature intends its enactments “to operate together 
as a consistent and harmonious body of law.”  Thus, when two statutes 
appear to apply to the same situation, this Court will attempt to give effect to 
both statutes to the extent that they are reconcilable.  Nevertheless, “if two 
statutes contain an irreconcilable conflict, the statute whose relevant 
substantive provisions were enacted most recently may impliedly repeal any 
conflicting provision of the earlier statute.” 
 
State v. Ghajari, 346 Md. 101, 115 (1997) (citations omitted).  
 
Given the legislative history and the subsequent legislation, this Court can easily 
give effect to both statutes.  When enacting and revising MCALA, the legislature intended 
to license a certain group of actors within the collection agency industry, including those 
entities that purchased delinquent consumer debt in exchange for a contingency fee.  
Foreign statutory trusts were not within the purview of the collection agency industry that 
the General Assembly intended to license.  The year after the General Assembly enacted 
the 2007 departmental bill, the legislature enacted a comprehensive foreclosure reform, 
addressing the rising number of foreclosures in Maryland by requiring all entities 
instituting foreclosure proceedings to comply with specific homeowner protection 
procedures.  When enacting the Maryland Statutory Trust Act in 2010, the legislature did 
 
59 
 
not require foreign statutory trusts to register with the State when bringing foreclosure 
actions because the General Assembly appreciated that MCALA was limited to the 
collection agency industry and the previously enacted foreclosure reform would control the 
foreclosure proceedings.  
The defaulting homeowners in these consolidated cases assert that the above 
language is irrelevant to the present inquiry because the Maryland Statutory Trust Act 
specifically states that it is only “for purposes of [that] subtitle[.]”  CA § 12-908(a).  As 
such, the borrowers contend that the Maryland Statutory Trust Act does not in any way 
reflect on the General Assembly’s intent in enacting and revising MCALA.  However, this 
argument ignores the practical considerations of the legislature.  The General Assembly 
enacted the Maryland Statutory Trust Act in 2010, three years after the departmental bill 
sought to close a loophole under MCALA and just one year after major foreclosure reform 
legislation.  Needless to say, requiring the statutory trusts to comply with a separate 
registration system to pursue an in rem foreclosure would have been redundant after 
enacting a comprehensive scheme governing all foreclosure proceedings in Maryland.  
When viewing MCALA, the foreclosure reform legislation, and the Maryland 
Statutory Trust Act together, it becomes clear that the General Assembly sought to regulate 
and license a separate collection agency industry that assists creditors in obtaining 
consumer debt (or buys that debt, whether at a discounted price or contingently, to pursue 
on its own account) when it enacted and revised MCALA.  In 2008 and 2009, the legislature 
enacted specific procedures and requirements for any person, party, or entity seeking an in 
rem foreclosure proceeding.  Then in 2010, the General Assembly enacted a registration 
 
60 
 
statute for statutory trusts and foreign statutory trusts under the Maryland Statutory Trust 
Act.  When enacting the Maryland Statutory Trust Act, the legislature specifically 
exempted the trusts from obtaining registration when simply seeking a foreclosure, 
recognizing that the previous foreclosure law reform would provide the required 
procedures and protections.  This reading of the related statutes prevents any direct conflict 
and gives effect to all of the General Assembly’s individual policy goals.  See Immanuel, 
449 Md. at 87.  
CONCLUSION 
Although the plain language of MCALA is ambiguous as to whether the General 
Assembly intended to require licensure for foreign statutory trusts as collection agencies, 
the legislative history, subsequent legislation, and related statutes provide this Court with 
strong evidence of legislative intent.  Specifically, the broad legislative history conveys 
that the General Assembly was concerned with abusive practices within the collection 
agency industry when it enacted the original collection agencies licensing statute.  1977 
Md. Laws, ch. 319.  When the legislature enacted the first statute requiring collection 
agencies to obtain a MCALA license, the General Assembly specifically exempted 
mortgage industry actors.  Id.   
In the years leading up to 2007, the Department recognized that certain collection 
agencies pursuing consumer debt had found a way to bypass the licensing requirement 
under MCALA.  Specifically, certain members of the collection agency industry were 
purchasing the debt from their clients, often on a contingent fee basis, so that they would 
not be a third-party collection agency.  In other words, the collection agencies were entering 
 
61 
 
into agreements with their clients in which the agencies agreed to collect the debt they 
bought as opposed to acting as an agent for the original creditor.  These agreements would 
effectively put the collectors outside of the Board’s authority.  Therefore, the Department 
submitted a bill request to the Governor for his consideration of a departmental bill that 
would close this loophole.  DLLR stated in its bill request that the departmental bill aimed 
to license persons who buy the defaulted debt for “goods and services” before engaging in 
typical collection practices. Secretary James D. Fielder, Proposal for Legislation 2007 
Session, Department of Labor, Licensing, and Regulation (Md. 2007).   
The Department did not request, and the General Assembly did not intend, to expand 
the scope of MCALA’s licensing requirement to other industries beyond the collection 
agency industry.  There is nothing in the Department’s bill request form, the fiscal and 
policy note, or the written testimonies that suggest DLLR was proposing to license and 
regulate the mortgage industry by revising the definition of “collection agency” under 
MCALA.  Overall, the legislative history of the 2007 departmental bill reveals that the 
changes did not intend to expand the scope of MCALA beyond the collection agency 
industry. 
Similarly, there is nothing in the legislative history of the Maryland mortgage 
foreclosure law reform that suggests the General Assembly considered MCALA to be 
licensing the mortgage industry actors.  In fact, the Task Force, which was created 
specifically to review the Maryland laws relating to foreclosure as well as suggest changes 
to that foreclosure law, did not mention MCALA’s licensing requirement.  The Task Force 
explained to the General Assembly that the mortgage marketplace often involves packages 
 
62 
 
of loans, called mortgage backed securities.  See generally Task Force Report.  As this 
Court has explained, securitization requires special purpose vehicles, such as trusts, to 
serve as a repository for the mortgage backed securities.  Both this Court and the Task 
Force recognized that a separate trustee would serve to manage the loans in the mortgage 
backed securities while a loan servicer would collect payments from the borrowers.  See 
Anderson, 424 Md. at 237; Deutsche Bank, 430 Md. at 718.   
After the Task Force’s Report, the General Assembly enacted Maryland foreclosure 
law reform in the 2008, 2009, and 2010 legislative sessions to set forth specific procedures 
and requirements for all parties seeking an in rem foreclosure proceeding.  It would have 
been contradictory for the General Assembly to have passed foreclosure reform legislation 
specifying how mortgage industry entities should purse foreclosure actions without 
mentioning the requirement for an MCALA license if the legislature believed that these 
same parties were included under the scope of MCALA.   
Similarly, when the General Assembly enacted the Statutory Trust Act in 2010, the 
legislature specifically decided that the statutory trusts were not doing business in 
Maryland when foreclosing on deeds of trust, recognizing that the previous Maryland 
mortgage foreclosure law reform would dictate the requirements for the in rem proceeding.  
As such, the legislative history surrounding MCALA, the Maryland mortgage foreclosure 
law, and the Statutory Trust Act all confirm the mortgage industry did not fall under the 
scope of MCALA.     
 
Therefore, this Court holds that the General Assembly did not intend for foreign 
statutory trusts to obtain a collection agency license under MCALA before its substitute 
 
63 
 
trustees file a foreclosure action in circuit court.  Pursuant to our legislative intent analysis, 
we conclude that foreign statutory trusts are outside of the scope of the collection agency 
industry regulated and licensed under MCALA.  In each of the cases sub judice, the owner 
of the mortgage loan was a foreign statutory trust serving as a special purpose vehicle.  
These foreign statutory trusts were not required to obtain a license under MCALA before 
the substitute trustees instituted foreclosure proceedings on their behalf.  As such, the 
circuit courts in the cases sub judice erred in dismissing the foreclosure proceedings on the 
basis that the owners of the mortgage loans were foreign statutory trusts that were not 
licensed as a collection agency under MCALA.   
 
IN NO. 40, THE JUDGMENT OF THE 
COURT OF SPECIAL APPEALS I S  
REVERSED, AND THE CASE IS 
REMANDED 
TO 
THAT 
COURT 
WITH DIRECTIONS TO REVERSE 
THE JUDGMENTS OF THE CIRCUIT 
COURT 
FOR 
MONTGOMERY 
COUNTY AND REMAND THE CASES 
TO THE CIRCUIT COURT FOR 
MONTGOMERY 
COUNTY 
FOR 
FURTHER 
PROCEEDINGS 
CONSISTENT WITH THIS OPINION. 
COSTS IN THIS COURT TO BE PAID 
BY RESPONDENTS.  
 
IN NO. 45, THE JUDGMENT OF THE 
CIRCUIT COURT FOR HOWARD 
COUNTY IS REVERSED AND THE 
CASE IS REMANDED TO THAT 
COURT 
FOR 
FURTHER 
PROCEEDINGS CONSISTENT WITH 
THIS OPINION. COSTS IN THIS 
COURT 
AND 
THE 
COURT 
OF 
 
64 
 
SPECIAL APPEALS TO BE PAID BY 
APPELLEES. 
 
IN NO. 47, THE JUDGMENT OF THE 
CIRCUIT 
COURT 
FOR 
WASHINGTON 
COUNTY 
IS 
REVERSED AND THE CASE IS 
REMANDED TO THAT COURT FOR 
FURTHER 
PROCEEDINGS 
CONSISTENT WITH THIS OPINION.  
COSTS IN THIS COURT AND THE 
COURT OF SPECIAL APPEALS TO 
BE PAID BY APPELLEES.  
Circuit Court for Montgomery County 
Case No. 397954V 
 
Circuit Court for Montgomery County 
Case No. 396663V 
 
Circuit Court for Howard County 
Case No. 13-C-16-106882 
 
Circuit Court for Washington County 
Case No. 21-C-15-055314 
 
Argued: November 30, 2017 
 
IN THE COURT OF APPEALS 
OF MARYLAND 
 
No. 40, 45, & 47 
 
September Term, 2017 
 
  
KYLE BLACKSTONE, ET AL. 
 
 
 
v. 
 
DINESH SHARMA, ET AL. 
 
  
TERRANCE SHANAHAN, ET AL. 
 
 
 
v. 
 
SEYED MARVASTIAN, ET AL.  
 
   
LAURA O’SULLIVAN, ET AL. 
SUBSTITUTE TRUSTEES 
 
 
 
v. 
 
JEFFREY ALTENBURG, ET AL.  
 
  
MARTIN S. GOLDBERG, ET AL. 
SUBSTITUTE TRUSTEES 
 
 
 
v. 
 
MARTHA LYNN NEVIASER, ET AL.  
 
 
Greene, 
Adkins, 
McDonald, 
Watts, 
Hotten, 
Getty, 
Harrell, Glenn T., Jr.,  
         (Senior Judge,  
Specially Assigned) 
 
JJ. 
 
 
Dissenting Opinion by McDonald, J. 
which Adkins, J., joins. 
 
 
 
Filed: August 2, 2018
 
I agree with the conclusions reached by the Circuit Court judges who decided these 
four cases, now consolidated before us, and with the succinct and well-reasoned reported 
opinion of the Court of Special Appeals in the two cases that passed through that court.  
233 Md. App. 58 (2017).  Accordingly, I must dissent from the Majority Opinion.   
The Issue 
The issue in this case is relatively simple.  In 2007, the General Assembly amended 
the Maryland Collection Agency Licensing Act,1 known by the mellifluous acronym 
“MCALA,” to extend the licensing requirement of that law to a “person” – a term that 
includes entities2 – that collects consumer debt that the person owns as well as consumer 
debt owned by others.  The obvious purpose, demonstrated both by the amendment’s 
language and by its legislative history, was to require those who buy, and attempt to collect, 
defaulted consumer debt to obtain the requisite license.  The main question before us is 
whether the amended statute applies to those who buy, and attempt to collect, defaulted 
consumer mortgage debt. 
Petitioners are substitute trustees who have initiated foreclosure proceedings on 
behalf of foreign statutory trusts with respect to defaulted residential mortgage debt 
purchased by the trusts.  The circuit courts and the Court of Special Appeals all concluded 
that MCALA covers that collection activity and that the trusts must be licensed under 
MCALA to undertake it. 
                                                 
1 Maryland Code, Business Regulation Article (“BR”), §7-101 et seq. 
 
2 See BR §1-101(g). 
 
2 
 
Petitioners have advanced essentially three theories for reversing those decisions:  
(1) that the trusts do not act as a “collection agency” under MCALA; (2) that the act of 
foreclosing on a residential mortgage is not the collection of a debt under the statute; and 
(3) that, even if their activities do bring the trusts within MCALA, they need not obtain a 
license because the trusts qualify for a statutory exemption in MCALA for financial 
institutions known as “trust companies.”3 
Application of MCALA in these cases 
The starting point, of course, is the text of the statute.  Pertinent to these cases, the 
licensing requirement of MCALA applies to an entity that “engages directly or indirectly 
in the business of … collecting a consumer claim the [entity] owns if the claim was in 
default when the [entity] acquired it….”  BR §7-101(d)(1)(ii) (definition of “collection 
agency”).  A “consumer claim” is defined to be a claim that is “for money owed” and that 
“arises from a transaction in which, for a family, household, or personal purpose, the 
[debtor] sought or got … real property….”  BR §7-101(f). 
Application of the statute in these cases is straightforward.  The debt at issue in each 
case is a loan for the purchase of a residential property secured by a deed of trust – 
colloquially, a mortgage.  Thus, the debt represents money owed in connection with a 
transaction for “a family, household, or personal purpose” involving real property.  There 
is no question that these debts fit the definition of “consumer claim.”  In each case, a 
statutory trust acquired the consumer claim at a discount, as the debt was already in default.  
                                                 
3 BR §7-102(b)(8). 
3 
 
These trusts were created specifically for the purpose of acquiring these claims (together 
with numerous other similar consumer claims) for the purpose of collecting those debts for 
the benefit of the trust and, of course, the owners of the trust.  Accordingly, each of these 
trusts, acting through the Petitioner trustees, is an entity in the business of collecting 
consumer claims that it owns and that it acquired when the claim was already in default.  
Thus, in each case, the trust must be licensed pursuant to MCALA. 
The Majority Opinion 
The Majority labors over 64 pages to justify its conclusion that the statute does not 
mean what it says.  Before detailing the problems with that analysis, it is worth noting that 
the Majority Opinion explicitly declines to endorse Petitioners’ argument that a foreclosure 
action is not collection of a debt under MCALA.4  See Majority slip op. at 3-4 n.3.  Nor 
does the Majority Opinion adopt Petitioners’ argument that these entities are “trust 
companies” – correctly in my view.5  (If these entities were trust companies, there would  
                                                 
4 Petitioners’ argument on this score is without merit.  They ask us to view the act 
of foreclosure with a set of blinders and to focus on the process of foreclosure while 
ignoring the fact that the deed of trust exists to secure a consumer debt and the foreclosure 
proceeding is an effort to collect at least part of that debt by dispossessing the debtor of the 
property and selling it. 
 
5 In touting the statutory trusts as “trust companies,” Petitioners cobble together 
dictionary definitions and out-of-state statutes to develop an argument that would sweep 
just about anything called a “trust” into the category of “trust company.”  If Petitioners’ 
approach had any merit, a family that finances its children’s education would qualify as a 
savings and loan association:  the parents save, the kids get loans, and they are all associated 
– presto, a “savings and loan association.”  Petitioners’ creative argument ignores more 
relevant statutory provisions – e.g., Maryland Code, Financial Institutions Article, §1-
101(d), 3-101(g); Commercial Law Article, §4-105(1), 4A-105(a)(2) – as well as the fact 
that the “trust company” exclusion in the original codification of MCALA was grouped 
with other financial institutions.  Petitioners have not identified any subsequent amendment 
4 
 
be no need for the Majority Opinion to comb through the legislative history to justify an 
exemption for them – the text of the statute clearly exempts trust companies.  BR §7-
102(b)(8)). 
To the extent that the Majority Opinion agrees with the Petitioners, it deviates from 
our usual approach to statutory construction and, in the course of that journey, creates its 
own criteria for application of MCALA that do not appear in the statute itself.  The 
problems with this approach and with the conclusions that the Majority Opinion draws are 
several:  
●  In the beginning is the text. 
Every appellate decision that sets forth the process for the interpretation of statutes 
– decisions too numerous to be counted – says that we start with the text.  The Majority 
Opinion acknowledges this bedrock principle,6 but essentially skips that step and focuses 
on the legislative history to find some justification for ignoring the clear import of the plain 
text of the statute.  Indeed, a reader of the Majority Opinion does not encounter the current 
text of the key statutory provisions until pages 25-27, nearly halfway into the opinion.  The 
Majority Opinion notes that the statute defines “collection agency.”  But it then quickly 
casts aside the statutory definition in favor of what it describes as the “commonly 
understood” definition, declares a “conflict” between the two, and then spends most of its 
analysis on legislative history materials.  This approach to statutory construction has been 
                                                 
of MCALA intended to expand that exclusion substantively along the lines that Petitioners 
imagine. 
 
6 Majority slip op. at 23. 
5 
 
likened by a federal appellate judge to “entering a crowded cocktail party and looking over 
the heads of the guests for one’s friends.”  Jack Schwartz & Amanda Stakem Conn, The 
Court of Appeals at the Cocktail Party:  The Use and Misuse of Legislative History, 54 
Md. L. Rev. 432 (1995). 
To escape the plain meaning of the text and find its way to the more malleable 
legislative history, the Majority Opinion must declare the text to be ambiguous.  And so it 
does.  Majority slip op. at 31, 49, 60. 
●  The Majority Opinion finds ambiguity where there is none. 
 
The vast majority of the judges who have been called upon to apply MCALA have 
found that its language is not ambiguous.  See Bradshaw v. Hilco Receivables, LLC, 765 
F.Supp.2d 719, 726-27 (D.Md. 2011) (“MCALA is clear on its face”); Ademiluyi v. 
PennyMac Mortgage Investment Trust Holdings I, LLC, 929 F.Supp.2d 502, 520-24 
(D.Md. 2013) (“The plain language of MCALA is not ambiguous”); Blackstone, 233 Md. 
App. at 70 (“insofar as the issue here presented [i.e., application to a purchaser of defaulted 
mortgage debt], MCALA is unambiguous”); Altenburg v. Caliber Home Loans, Inc., 2017 
WL 2733803 at *6 (same); Old Republic Insurance Co. v. Gordon, 228 Md. 1, 22 (2016) 
(Nazarian, J., dissenting) (rejecting the argument “that there is any ambiguity in [the 
MCALA definition of “collection agency”]); but see Old Republic, 228 Md. App. at 17-
18.7  The Majority Opinion discounts those decisions on the basis that in matters of 
                                                 
7 Old Republic concerned whether a credit insurer that was subrogated to a defaulted 
debt under one of its insurance policies was covered by MCALA.  Two of the judges on 
the panel concluded that it was not “in the business” of acquiring defaulted debt; one judge 
concluded that it was.  The case was not reviewed in this Court, as neither party sought a 
6 
 
Maryland law, we rule.  See Majority slip op. at 31 n.17.  That may be true, but the Majority 
Opinion’s use of legislative history to reach a contrary result is shaky, even if one is willing 
to ignore the statutory text. 
●  The Majority Opinion substitutes its own criteria for the statutory criteria. 
Instead of focusing on the terms used in the statute, the Majority Opinion instead 
explores the legislative history materials to determine whether these trusts are “actors” in 
the appropriate “industry.”  The Majority Opinion posits that the General Assembly 
exempted the “mortgage industry” from MCALA (ignoring the statutory language that 
exempts specific entities or individuals, but not “industries”), identifies Petitioners as 
“actors” in the “mortgage industry” (again, terms not found in the statute), and concludes 
that Petitioners are not subject to MCALA.  Majority slip op. at 32-48.  The terms 
“collection agency industry,” “mortgage industry,” or “actors” in those industries do not 
appear in the statute.  It is not necessary to wrestle with those concepts when the actual 
statutory language can be applied in a straightforward manner.  
 
In tagging these statutory trusts as “actors” in the “mortgage industry,” the Majority 
Opinion describes in some detail the use of securitized mortgage pools.  Majority slip op. 
at 51-53.  Of course, securitized mortgage pools were a key driver of the financial downturn 
known as the Great Recession, although there is nothing inherently bad, and probably much 
that is economically beneficial, in the securitization of mortgage pools when it is done 
                                                 
writ of certiorari.  Unlike that case, in which the insurer simply accepted a risk that it might 
end up with a right to a defaulted debt, in these cases, the trusts deliberately purchased 
mortgage debt that was already in default at a discount. 
7 
 
ethically with appropriate standardization and regulation.8  But the Majority Opinion never 
quite explains how it has determined that these particular statutory trusts are part of what 
it characterizes as the exempt “mortgage industry.”  There is no indication in the record 
that these trusts make loans for residential properties or originate mortgages.  Nor is there 
any indication that they provide liquidity to the mortgage market by purchasing a mortgage 
from an originator shortly after the mortgage is issued.   
What these trusts do, apparently, is buy mortgage debt at a price below face value 
after the mortgage is in default and attempt to collect that debt through foreclosure of the 
deed of trust or otherwise.  These entities are not supporting the mortgage market by 
spreading the risk of default.  The mortgages that are pooled and securitized in these entities 
were already in default.  This is simply the incursion of the debt buying and collection 
industry into another sphere of economic activity involving yet another form of bad debt – 
defaulted mortgage debt – a recent phenomenon documented in legal literature and the 
financial press.  See Judith Fox, The Foreclosure Echo:  How Abandoned Foreclosures are 
Re-entering the Market Through Debt Buyers, 26 Loyola Consumer L. Rev. 25, 68-70 
(2013) (“As debt collectors, who traditionally shied away from mortgage deficiency 
collection, enter the market, they are likely to bring the problems associated with the 
                                                 
8 The needless complexity, unethical behavior, and sheer greed that powered the 
explosion of securitized mortgage pools in the late 1990s and early 2000s and that helped 
trigger the Great Recession have been chronicled in works sacred and profane.  See, e.g., 
Gretchen Morgenson & Joshua Rosner, Reckless Endangerment (2011) at 48-49, 142-53; 
Adam McKay (director), “The Big Short” (Paramount Pictures 2015) (based on nonfiction 
book by the same name by Michael Lewis (2010)); Pope Francis, Considerations for 
ethical discernment regarding some aspects of the present economic-financial system (May 
17, 2018) at ¶¶25, 26. 
8 
 
collection of credit cards into the world of mortgage deficiencies.”); see also Matthew 
Goldstein, As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages, 
New York Times (September 28, 2015); Carolyn Said, Vulture Investors buy up distressed 
mortgages, San Francisco Chronicle (June 7, 2010); Jim Wasserman, Debt collectors can 
come calling years after a mortgage default, Washington Post (March 27, 2010). 
●  The Majority Opinion confuses registration of a type of business organization  
    with regulation of a type of business. 
 
The Majority Opinion conjures a false dichotomy when it argues that foreign 
statutory trusts, like the entities involved in these cases, are regulated separately from 
collection agencies.  Majority slip op. at 56-59.  This argument confuses registration 
requirements related to the form of business organization of an entity with regulation of 
the type of business that the entity engages in. 
The Foreign Statutory Trust Act requires foreign statutory trusts that “do business” 
in Maryland to register with the State Department of Assessments and Taxation (“SDAT”).  
Maryland Code, Corporations & Associations Article (“CA”), §12-902.  If a foreign 
statutory trust fails to register, the consequence is that the trust cannot bring suit in a 
Maryland court.  CA §12-903.  The statute excludes certain activities from the concept of 
“doing business,” with the result that a foreign statutory trust may engage in those activities 
in Maryland without having to register with SDAT in order to bring suit in a Maryland 
court.  CA §12-908.  The Majority Opinion notes that one of activities on the list of 
exclusions is “foreclosing mortgages and deeds of trust”9 and concludes that “there is a 
                                                 
9 CA §12-908(a)(5). 
9 
 
direct conflict [with the argument] that MCALA requires foreign statutory trusts to obtain 
a license as a collection agency before engaging in foreclosure proceedings.”  Majority slip 
op. at 57.  Based in part on that alleged conflict, it concludes that the licensing requirement 
in MCALA must not apply to a foreign statutory trust. 
But that analysis does not pay heed to the statutory text – this time, the text of the 
Foreign Statutory Trust Act.  The exceptions to the concept of “doing business” in the 
Foreign Statutory Trust Act are “for the purposes of this subtitle”10 – i.e., the Foreign 
Statutory Trust Act – not for purposes of MCALA or any other statute.  There is no 
“conflict.”  All the exception in the Foreign Statutory Trust Act means is that a foreign 
statutory trust may initiate a foreclosure action in a Maryland court without first registering 
with SDAT.  It does nothing to exempt the trust from other applicable Maryland laws.  
There are seven other listed exceptions from the concept of “doing business” that also have 
the effect of exempting a foreign statute trust from the SDAT registration requirement.  See 
CA §12-908(a).  But those exceptions do not set the foreign statutory trust free from other 
Maryland laws.  For example, under CA §12-908(a)(7), a foreign statutory trust may rent 
and operate property as a result of a foreclosure proceeding without registering with SDAT.  
But that does not exempt the trust from landlord-tenant laws in Maryland. 
 
More broadly, a statutory trust is simply a form of business organization, in the same 
way that a corporation or a limited liability company is a form of business organization.  
                                                 
  
10 CA §12-908(a). 
  
10 
 
Depending on an entity’s form of business organization, the entity must comply with 
different organizational and registration requirements set forth in the Corporations & 
Associations Article of the Maryland Code.11  But the form of business organization does 
not necessarily tell one anything about what kind of business the entity conducts.   
 
The type of business that an entity engages in may subject it to regulation by the 
State, local, or federal governments.  That substantive regulation of the entity’s business 
does not necessarily depend on its form of organization.  An entity may be appropriately 
organized and registered under the Corporations and Associations Article, but may still be 
required to obtain a license and comply with statutes that regulate the type of business that 
it conducts.  A collection agency organized as a corporation that complies with whatever 
filing and registration requirements would apply to that form of business organization does 
not thereby become exempt from MCALA.  Neither does a statutory trust. 
●  The Majority Opinion limits the scope of MCALA contrary to legislative intent. 
 
The Majority Opinion refers repeatedly to the small number of collection agencies 
(110) covered by MCALA when it was first enacted in 1977 and the reported number of 
entities (40) that exploited a loophole in that statute in the mid-2000s.  See Majority slip 
op. at 34, 37, 41, 43, 44, 55.  It infers that the statute was intended to be very limited in its 
scope.  Of course, the numbers cited by the Majority Opinion relate to a period before the 
                                                 
11 See, e.g., Maryland Code, Corporations & Associations Article (“CA”), §2-101 
et seq. (corporations); CA §3-101 et seq. (close corporations); CA §4A-101 et seq. (limited 
liability companies); CA §8-101 et seq. (real estate investment trusts); CA §9A-101 et seq. 
(partnerships); CA §10-101 et seq. (limited partnerships); CA §12-101 et seq. (statutory 
trusts). 
11 
 
proliferation of statutory trusts that buy defaulted mortgages and attempt to collect them.  
This is not a situation where there are a limited number of collection agency licenses to be 
awarded, like taxi medallions.  Rather, the number of individuals or entities subject to a 
particular type of regulation grows with the growth of the activity that is regulated.12  The 
number of lawyers has grown exponentially since the profession was first regulated in this 
State.  The same is likely true of most other regulated businesses.  
There is no question that the public officials responsible for enforcing MCALA at 
that time of the 2007 amendment of the statute believed that the original definition of 
“collection agency” in the statute was too narrow in not encompassing debt buyers and that 
they pointed to specific entities that were exploiting that loophole at that time.  But that 
does not mean that the reach of the amended statute was limited to those few examples.  
As the Majority Opinion recounts, one of the agency board members who testified before 
the Legislature sought the amendment because debt purchasers “are increasing in number” 
partly as a result of “unregulated newly-evolved kinds of businesses not covered under 
current licensing laws” that were engaged in the purchase and collection of defaulted 
debt.13  See Majority slip op. at 45-46 (quoting testimony of Eileen Brandenberg, member 
                                                 
12 As the legislative history of MCALA demonstrates, the number of collection 
agencies covered by the statute had increased 13-fold in the period from 1977 (110) when 
it was originally enacted to 2007 (1304), when it was amended.  See Floor Report for House 
Bill 1324 (March 28, 2007) at 2.  
 
13 In its effort to find a legislative intent to exclude the purchase of defaulted 
mortgage debt from the purview of MCALA despite the statute’s clear language, the 
Majority Opinion makes some curious leaps of logic.  For example, it notes the absence of 
opposition to the 2007 amendments by the bankers associations, title insurers, and 
mortgage servicers.  Majority slip op. at 46-47.  It infers from that silence that the 2007 
12 
 
of State Collection Agency Licensing Board before House Economic Matters Committee).  
The statutory trusts in these cases are “a newly evolved kind of business” that would not 
have been covered under the original version of MCALA.  But they come clearly within 
the plain language that the General Assembly enacted to respond to that concern.  
Summary 
The Majority Opinion concludes that foreign statutory trusts are not required to be 
licensed under MCALA.  However, it explicitly does not decide whether foreclosure of 
defaulted mortgage debt by someone other than a foreign statutory trust is “debt collection” 
under the statute and whether trustees or substitute trustees, who are the agents of these 
trusts, must be licensed under MCALA.  Majority slip op. at 3-4 n.3.  It may well be that 
the bottom line of the Majority Opinion is that the homeowners in these cases simply 
identified the wrong party in their motions and counter-complaints. 
In my view, however, the language of MCALA is clear.  The legislative history of 
the statute does not contradict that language.  The statutory trusts in these cases are in the 
business of buying and attempting to collect defaulted consumer debt that was already in 
                                                 
amendment of the statutory definition of “collection agency” does not encompass the trusts 
in this case.   
 
The Majority Opinion thus looks for legislative intent by first looking at what 
potential opponents of the bill that was adopted did not say, speculating on why they did 
not say it, and then attributing that speculation to the intent of the legislators who passed 
the bill.  Apart from the fact that this seems to take the path of a Rube Goldberg contraption 
to discerning legislative intent, the premise is dubious.  The silence of those lobbyists could 
well be explained by the fact that the amendment did nothing to alter the existing exclusion 
of banks, title companies and various financial institutions from MCALA.  See BR §7-
102(b). 
13 
 
default when they acquired it.  They must obtain a collection agency license.  The decisions 
of the circuit courts and the Court of Special Appeals should be affirmed. 
Judge Adkins has advised that she joins this opinion.