Opinion ID: 1509926
Heading Depth: 1
Heading Rank: 4

Heading: Correctness of District Court Determination

Text: Whether the District Court erred in dismissing petitioner's breach of warranty claim is not before us directly, but only in the context of whether petitioner had a meritorious claim on appeal. Our answer to that, however, effectively answers the question on the merits. HABC offers in support of the District Court's conclusion the notion that (1) pursuant to the authority provided by § 1-607 of the Courts and Judicial Proceedings Article, the District Court in Baltimore City has created a Rent Court, which is a functional division of the court, (2) the authority of that functional division is limited to exercising the jurisdiction over landlord-tenant actions conferred by § 4-401(4) of that article, (3) § 4-401(4) jurisdiction does not encompass claims for breach of warranty of habitability or quiet enjoyment, and (4) although the original jurisdiction of the District Court to hear an action involving landlord and tenant granted by § 4-401(4) of the Courts and Judicial Proceedings Article is uniform throughout the State, a functional division of the District Courts of Baltimore City, such as the `Rent Court,' can effectively `cap' that jurisdiction in order to increase efficiency and to promote the overall smooth operation and effective administration of the District Court as deemed necessary. Each element of that hypothesis is flawed, beginning with the assumption that a functional division of the court exists in Baltimore City for landlord-tenant actions. For purposes of the operation and administration of the District Court, § 1-602 of the Courts and Judicial Proceedings Article divides the State into 12 districts, one of which is Baltimore City. Section 1-607, in addition to providing for an administrative judge for each district, permits a district, with the approval of the Chief Judge of the court, to be divided into civil, criminal, traffic, or other functional divisions if the work of the District Court requires. There is no indication, however, that the administrative judge in Baltimore City or the Chief Judge has ever created a functional division of the court whose jurisdiction is limited to cases arising under § 4-401(4). The court has only the three divisions provided for in the statute, and landlord-tenant cases have always been part of the civil division of the court. See ANNUAL REPORT OF THE MARYLAND JUDICIARY (1998-99) at 72-82. All that has occurred, to the best of our knowledge, is that, in Baltimore City, landlord-tenant cases are placed on separate dockets that, until recently, were heard at a different location than other civil cases. There is no Rent Court or Rent Division in Baltimore City; those terms are simply a vernacular description of the separate dockets. A further flaw is in HABC's assumption, based on language in Greenbelt Consumer v. Acme Mkts., 272 Md. 222, 322 A.2d 521 (1974), that the landlord-tenant jurisdiction conferred on the District Court by § 4-401(4) does not include jurisdiction over breach of warranty claims. HABC does not deny the court's jurisdiction over warranty claims that do not exceed $20,000 the monetary jurisdictional limit of the District Courtbut it urges that such claims do not invoke the landlord-tenant jurisdiction and thus may be excluded from dockets limited to landlord-tenant claims. Greenbelt involved a breach of contract action to recover $12,000 in past rent from the plaintiff's erstwhile tenant, which had already vacated the premises. The property was located in Virginia; the transitory action was filed in Baltimore County. The District Court entered judgment for the plaintiff, which the Circuit Court affirmed. At the time, the jurisdiction of the District Court over breach of contract claims was limited to actions where the debt or damages did not exceed $5,000, but the plaintiff argued that its action to recover the rent was an action involving landlord and tenant, over which the District Court had exclusive original jurisdiction without regard to the amount in controversy. Section 4-401(4) vests jurisdiction over [a]n action involving landlord and tenant, distraint, or forcible entry and detainer, regardless of the amount involved. The plaintiff's broad reading of the phrase action involving landlord and tenant, we observed, would not only make the separate mention of distraint, forcible entry, and detainer superfluous but would require that all actions that happen to involve a landlord and a tenant be brought in the District Court, irrespective of the nature of the action or the amount in controversy. That, we said, could not have been intended by the General Assembly. Rather, we concluded that the phrase action involving landlord and tenant was intended to be limited to those possessory in rem or quasi in rem actions that provided a means by which a landlord might rapidly and inexpensively obtain repossession of his premises situated in this State or seek security for rent due from personalty located on the leasehold. Id. at 229, 322 A.2d at 525. Our specific holding was that the landlord-tenant jurisdiction under § 4-401(4) was limited to actions by landlords under § 8-401 of the Real Property Article for nonpayment of rent, distraint actions under §§ 8-301 through 8-332 of that Article, and actions for forcible entry and detainer authorized by British statutes and § 8-402(b) of the Real Property Article, that it did not include a contract action merely to recover past rent, and that, as the amount in controversy in that action exceeded the monetary jurisdiction of the District Court, the action should have been dismissed. Greenbelt must be taken in context. As noted, it was a transitory breach of contract action filed in Baltimore County against a former tenant for money damages in an amount exceeding the monetary jurisdiction of the court. The thrust of the holding was to limit the landlord-tenant jurisdiction to actions in rem or quasi in rem to actions that affect specific property and that must be brought in the county where the property is located. Unfortunately, the list that we gave was incomplete. For one thing, it took no account of the rent escrow law then in effect in Baltimore City (§ 9.9 of the Public Local Laws of Baltimore City); nor could it have taken account of the State-wide rent escrow law first enacted in 1975a year after the case was decided. A rent escrow action under the Public Local Law, whether or not technically in rem or quasi in rem, is property-specific and must be brought in the District Court in the city. See Public Local Laws of Baltimore City, § 9.9(c)(1) and Real Property Article, § 8-211( o ). Such an action, which may be filed as a defense in answer to a landlord's action to recover possession, to recover rent, or distress for rent and may lead to abatement of rent, and payment of rent into escrow, necessarily constitutes [a]n action involving landlord and tenant. [5] Much the same nexus is present in claims for breach of the implied warranty of habitability under § 9-14.1 of the Public Local Laws of Baltimore City. The warranty arises from the lease of dwelling property in Baltimore City. It is that dwelling that the landlord warrants is fit for human habitation, and it is the lease, with the implied warranty, that the action seeks to enforce. The damages, moreover, are not general damages but are limited to the difference between the amount of rent paid or owed and the reasonable rental value of the dwelling in its deteriorated condition, commencing from the time that landlord acquired actual knowledge of the breach. The whole action is thus tied to the property and the lease and provides a remedy not dissimilar to that available in a rent escrow action. Breach of warranty claims under § 9-14.1, therefore, also fall within the § 4-401(4) jurisdiction of the court, without regard to amount. In this case, of course, it makes no difference whether the warranty claim falls within § 4-401(4) jurisdiction, for, unlike the situation in Greenbelt, petitioner's claim was well within the monetary jurisdiction of the District Court. Maryland Rule 3-303(a) requires that, [a]s far as practicable, all pleadings [filed in the District Court] shall be prepared on District Court forms prescribed by the Chief Judge of the District Court. Rule 3-303(c) permits a plaintiff to state as many separate claims as the party has, regardless of consistency, and section (e) of the rule provides that all pleadings shall be so construed as to do substantial justice. As noted, petitioner's claim was filed on the pre-printed District Court form, which expressly allows an action for breach of warranty of habitability or quiet enjoyment to be joined with a rent escrow action. That suggests, as strongly as anything could, that the District Court does not regard warranty of habitability or quiet enjoyment claims as having to be filed separately from other landlord-tenant actions. Nor would it do substantial justice to require a tenant to split his or her claim in that manner. HABC expresses concern that the trial of warranty claims together with rent escrow actions would hamper the court's efficiency in handling the landlord-tenant dockets. It offers no data to support that concern, only speculation. The fact is that over 96% of the landlord-tenant cases, both Statewide and in Baltimore City, are uncontested, so, although the dockets in some of the metropolitan districts tend to be large, few of the cases on those dockets present an evidentiary conflict that requires an actual adjudication of disputed facts or law. [6] In a rent escrow action, the court must hear evidence regarding the condition of the property, notice to the landlord, responsibility for the conditions complained of, and the reasonable rental value of the property. Those same factors are involved in a warranty of habitability claim. Except for the period of time involvedthe rent escrow case focusing on the current situation and the breach of warranty action looking back for some periodthe evidence necessary to establish a rent escrow claim will usually be the same evidence necessary to establish the warranty claim. We fail to see how a joinder of the claims for trial will cause any significant slow-down in the District Court. Indeed, splitting the claims for trial could cause serious disruption and inefficiency. The court would have to conduct two trials, which would not only force two appearances by the parties and their witnesses but could well lead either to inconsistent findings or to collateral estoppel issues that are best avoided. In summary, there is no legal, factual, or practical basis for the District Court judge's conclusion that a claim for breach of warranty of habitability under § 9-14.1 of the Public Local Laws of Baltimore City or of quiet enjoyment under Real Property Article, § 2-115 cannot be joined and tried with a rent escrow action. The court erred in dismissing the warranty claim. Accordingly, petitioner's appeal to the Circuit Court was meritorious, a fact which cements our conclusion that the Circuit Court erred in dismissing the appeal and abused its discretion in not granting the motion to reinstate it. JUDGMENT OF CIRCUIT COURT FOR BALTIMORE CITY REVERSED; CASE REMANDED TO THAT COURT FOR ENTRY OF ORDER REVERSING JUDGMENT OF DISTRICT COURT DISMISSING BREACH OF WARRANTY CLAIM AND REMANDING CASE TO DISTRICT COURT FOR FURTHER PROCEEDINGS ON THAT CLAIM; RESPONDENT TO PAY THE COSTS.