Opinion ID: 2318562
Heading Depth: 3
Heading Rank: 3

Heading: The Claim's Dependence Upon the Statutory Scheme

Text: We consider next the dependence of Carter's claims, as framed by him, upon the Insurance Article. Although Carter says that he is pursuing simply his common law right to retrieve money that was paid improperly, he justifies the basis for recovery by alleging a violation of a statute. The causes of action in Zappone and Mardirossian were treated as common law in nature because they existed without an essential underpinning found in the Insurance Article. See Zappone (stating that the Insurance [Article violation] was not the only recognizable cause of action; [i]nstead ... the plaintiff[ ] set forth recognized common law causes of action sounding in deceit and negligence); Mardirossian, 376 Md. at 648, 831 A.2d at 65 (establishing, as a necessary predicate in the analysis, that an oral contract to provide insurance was enforceable by specific performance under Maryland common law )(emphasis added). In its substantive entirety, Carter's complaint alleged that: 49. As set forth above, [Huntington] assessed and collected premiums for title insurance in amounts exceeding the rates that the principal of Huntington ... [( i.e., Stewart)] had filed with the [MIA]. 47. By doing so, [Huntington] violated Maryland Insurance [Article] § 27-216 and has come into the possession of money in the form of premium payments for title insurance that it had, and has[,] no right to at law or in equity. 48. It would be inequitable for [Huntington] to retain any such monies that it had no legal right to charge and [Carter] seeks to recover that portion of the excessive premium that [Huntington] retained for itself in its contract with Stewart. 49. As a consequence, [Carter] and the members of the [c]lass have been damaged. In its purest form, Carter's cause of action alleges a statutory violation, not a fully independent common law claim. Nonetheless, Carter avers that his cause of action is independent of the statute, based on a legal fiction recognized in Dua (2002), Williar v. Baltimore Butchers' Loan & Annuity Ass'n, 45 Md. 546 (1877), and Scott v. Leary, 34 Md. 389 (1871). In Dua, we stated, in a footnote, that: Our cases have made it clear that an action to recover excess interest, even when the applicable legal interest rate is set by statute, is a common law action. Williar [45 Md. at 559] ([A] suit ... to recover money which had been paid by the plaintiff upon a usurious contract, in excess of the legal rate of interest .... was not conferred by the Code, ... but existed at common law); Scott [34 Md. at 394] (It is undeniable that at common law a party who has paid excessive interest may recover it back in an action for money had and received[.]). In addition, the proper legal rate of interest [in the present case] was not set by statute but was set by Article III, § 57, of the Maryland Constitution[, which states that [t]he Legal Rate of Interest shall be Six per cent per annum, unless otherwise provided by the General Assembly.]. In Maryland, an action to enforce state constitutional rights is a recognized common law cause of action. Widgeon v. Eastern Shore Hosp. [ Ctr. ], 300 Md. 520, 479 A.2d 921 (1984). 370 Md. at 632 n. 11, 805 A.2d at 1077 n. 11 (emphasis added). Read in context, it is evident that the Dua footnote is dicta. At the time, we were responding to the suggestion that a certain cause of action was statutory and, therefore, unprotected by the Maryland Constitution as a vested right. We dispatched this argument with a clear statement that a vested rights analysis applies to both common law and statutory causes of action. Dua, 370 Md. at 632, 805 A.2d at 1077. We then addressed in the footnote, and superfluously at that, whether the plaintiff's cause of action was statutory actually. There are multiple reasons why this footnote's persuasive value, for present purposes, is doubtful. First, the cases cited there, Williar and Leary, concerned statutory rates of interest for purposes of commercial law, not premiums and jurisdictional issues in the context of insurance law, like the present case. Second, Williar and Leary both involved a six percent interest rate that was set by statute and Article III, § 57 of the Maryland Constitution. Thus, our conclusion that a claim to recover excess statutory interest existed at common law was unnecessary. Finally, in Dua, we did not hang our hat actually on the hundred-year-old opinions in Williar and Leary. Rather, we underscored that the proper legal rate of interest, in fact, was established by the Maryland Constitution, and an independent action to enforce a constitutional right was recognized at common law. Dua, 370 Md. at 632 n. 11, 805 A.2d at 1077 n. 11. Aside from these cases, there is little support for the general, unnuanced proposition that allegations based solely on a statutory violation are separate, distinct, and fully independent of the assertedly violated statute. More consistent over time has been our oft-repeated sentiment that, for certain kinds of wrongs, the Legislature established a statutory procedure and remedy, through which claimants ordinarily must seek to redress the wrong.... Agrarian, Inc. v. Zoning Inspector of Harford County, 262 Md. 329, 332, 277 A.2d 591, 592 (1971). Such is the case here. Carter points to our overruling in Zappone of Vicente v. Prudential Insurance Co. of America, 105 Md.App. 13, 658 A.2d 1106 (1995), to support his position that claims reliant upon a statute may co-exist independently at common law. In Vicente, the agent of a health insurer told a potential customer that the health-insurer principal was licensed to sell insurance in Maryland and ... met [certain statutory] capitalization requirements.... Zappone, 349 Md. at 57, 706 A.2d at 1066. After realizing that these were not accurate representations, the customer sued the health insurer agent for fraud and negligent misrepresentation. See Vicente, 105 Md.App. at 15, 658 A.2d at 1107. The Court of Special Appeals held that the customer had to proceed initially through the MIA. See id. After conducting our analysis in Zappone and articulating the distinction among exclusive, primary, and concurrent jurisdiction, we stated, without further discussion, that the above-summarized principles .... [make] it ... clear that the Court of Special Appeals erred in Vicente ..., and that case is overruled. Zappone, 349 Md. at 66, 706 A.2d at 1070-71. By overruling Vicente, we did not mean to suggest that claims based on the violation of a statute somehow may thrive outside the statute in all instances. Indeed, in Vicente, the customer was concerned not that the Insurance Article required the health insurer to be licensed and capitalized, but that the agent lied to the customer about these details. The Insurance Article, in other words, was not the grounding of the customer's grievances. The same cannot be said in the present case. Carter does not allege that Huntington promised (in either an oral or written contract) to charge a specified amount, but failed to do so. Rather, he complains, clearly and solely, that Huntington charged a rate in excess of the MIA-approved schedule, irrespective of whether that schedule became part of some unspecified oral or written contract. This is a statutory, not contractual, claim. See Arthur, 569 F.3d at 161 ([P]laintiffs have suggested no reason other than a violation of the Insurance [Article] that [the insurer] would be liable to them under a claim for money had and received.)