Opinion ID: 2557276
Heading Depth: 2
Heading Rank: 2

Heading: The HBRA's Registration Requirements.

Text: The parties, as well as the lower courts, frame the flagship issue as one of pure statutory interpretation, therefore, a pure question of law. The question, they assert, involves the interplay between the class of individuals and entities defined as home builder[s], by Section 4.5-101(f)(1) of the HBRA, and therefore required to register with the State, and those excluded expressly from the registration requirement by Section 4.5-101(g)(3)(iv) as real estate developers who do not construct homes. The Division argues that the term home builder, defined in the statute as one who undertakes to erect or otherwise construct a new home, should include those who appear to contract to build new homes, but who, in fact, do not. Relying upon Section 4.5-101(g)(3)(iv), which exempts from registration real estate developer[s] who do[] not construct homes, the Passyns argue that the HBRA applies only to those who actually construct new homes. [10] Thus, the parties center their arguments on the statutory scheme, believing it to control the outcome of this case. At first blush, this appears to generate a question of statutory interpretation. Upon closer reflection, however, we observe that the heart of this dispute rests not with the meaning of the terms home builder or even real estate developer, as used in the HBRA, but with the way the Division applied those terms to a less than inclusive consideration of all of the relevant and material undisputed facts of the case. As in Vann, not only are the material facts undisputed, the parties rely correctly on the basic governing statute, without real quarrel as to its meaning. They agree that the HBRA requires those who undertake to construct new homes to register as home builder[s]. The parties only reach an impasse regarding the exclusion of real estate developers because the Division presumes, as a matter of contract construction, that Bayly, in fact, undertook to construct new homes. A complete reading of the relevant portions of the contracts, as demanded by the principles of contract interpretation, undermines this presumption. Thus, it seems that a mixed question of law and fact looms, rather than a pure legal question. In applying the HBRA (and the principles of contract interpretation) to the facts, the Division reads selectively the contracts, ignoring the direction that `in ascertaining [its] true meaning ... the contract must be construed in its entirety and, if reasonably possible, effect must be given to each clause so that ... an interpretation... [does not] cast[] out or disregard[] a meaningful part of the language of the writing....' Cochran v. Norkunas, 398 Md. 1, 17-18, 919 A.2d 700, 710 (2007) (quoting Sagner v. Glenangus Farms, 234 Md. 156, 167, 198 A.2d 277, 283 (1964)). [11] In concluding that Bayly undertook to erect or otherwise construct a new home, the Division relied upon contractual provisions where it seemed that Bayly agreed to sell and construct, as well as complete new homes. When the sections that the Division highlights in its final decision are read in isolation, the contracts might appear to constitute an undertaking, on the part of Bayly, to construct new homes. [12] When the contracts are read in their entirety, however, it is clear that the contracts specified who, exactly, was going to be performing the actual construction of the new homesT.B. Passyns & Sons, Inc., a registered home builder in Maryland. Indeed, the buyers were not only required to acknowledge, by executing the contracts, that T.B. Passyn & Sons, Inc. is my home builder, but they were advised once more, in an addendum, that T.B. Passyn & Sons, Inc. MHBR 455 is the Builder of [their] house.... Un-mistakenly, the buyers were on notice of the identity of their registered home builder. The Division appears to have ignored this, thus rendering these material clauses nugatory, in violation of basic contract interpretation principles. Moreover, the Division offered no rationale for why the structure of the contractual arrangement presented hidden dangers for consumers, a matter that might have implicated agency expertise. As a result, we hold that the Division's presumption that Bayly held itself out as a home builder, within the meaning of the HBRA, is unsupported by competent, material, and substantial evidence in light of the entire record as submitted. Accordingly, the Division's determination of a violation by Bayly regarding the HBRA's registration requirement (and concomitant related CPA provisions) cannot stand.