Opinion ID: 1931243
Heading Depth: 3
Heading Rank: 4

Heading: Substantial Evidence as to Almony

Text: The Circuit Court reversed the Division's conclusions that Almony violated the Act and dismissed the charges against him. The court found that the Division was clearly erroneous in making a different judgment than that of the ALJ, who had dismissed the charges against Almony. The Circuit Court concluded that the evidence was not sufficient to determine that Almony violated the Act, as no pattern of deceit, as opposed to mistake or difference of opinion on his part is shown. The court ruled as follows: On the basis of the information presented in this case before the ALJ, it was clearly erroneous for the Division to pick misrepresentation over negligence. The ALJ found no basis to say a misrepresentation occurred and she observed and ruled as a matter of demeanor based credibility. The Division was clearly erroneous in making a different judgment. The Division appeals. The Division makes several arguments. The Division argues that ง 13-301(1) and (3) do not contain a scienter requirement and that the statute can be violated by the making of a false or deceptive statement that has the capacity to mislead the consumer. The Division also argues that the ALJ's proposed findings as to Almony were not demeanor-based and that the Division could properly overrule the ALJ's proposed findings and conclusions. Before this Court, Almony, as might be expected, asserts that the Circuit Court was correct. Almony argues that the ALJ's decision was demeanor-based, and, as such, the Division must give the ALJ's finding great deference. The Circuit Court erred in holding that there is a scienter requirement for ง 13-301(1) and (3). We decided this issue in Golt v. Phillips, 308 Md. 1, 517 A.2d 328 (1986), noting as follows: Furthermore, none of the applicable CPA [Consumer Protection Act] sections requires the landlord to have knowledge of the falsity or intent to deceive. Section 13-301(1) requires only a `[f]alse, falsely disparaging or misleading statement'... ง 13-301(3) prohibits a `failure to state a material fact.' Cf. ง 13-301(9) (which requires `[d]eception, fraud, false pretense, false premise, misrepresentation, or knowing concealment... with the intent that a consumer rely on the same ...'). In other words, ง 13-301(1), (2), and (3) does not require scienter on the part of the landlord; the subsections require only a false or deceptive statement that has the capacity to mislead the consumer tenant. Id. at 10-11, 517 A.2d at 332-333; cited with approval in Luskin's v. Consumer Protection, 353 Md. 335, 367, 726 A.2d 702, 718 (1999). The Circuit Court also erred in concluding that the ALJ ruled based on demeanor-based credibility assessments, and that, therefore, the Division could not overrule her proposed findings. Almony's testimony did not address the substance of the allegations; he simply denied violating the Act. The ALJ's rulings were based on documentary evidence and the testimony of the Division's expert, Mr. Hinton. There is no basis for concluding that the ALJ ruled based on demeanor. The Division concluded that Almony violated the Act with respect to two appraisalsโthe appraisal for 4106 Harris Avenue and 4230 Seidel Avenue. As to 4106 Harris Avenue, the Division found that Almony misrepresented that property's prior sale history. As to both properties, the Division concluded that Almony violated the Act based on his selection of the comparable sales he used in the appraisal report. [35] Even were we to agree with Almony with respect to his failure to list or flag the prior sale of 4106 Harris Avenue, the Division presented substantial evidence as to the violation of the Act through inappropriate use of comparable sales. Based on Hinton's testimony, the Division found significant problems in Almony's selection of comparable sales for 4106 Harris Avenue. [36] Two of Almony's comparables were a half-mile and one was one-third of a mile away from the subject property. While the distances were within the required one mile range, the properties were in a different sub-neighborhood composed of newer houses. While the subject property was a pre-World War II flat-roofed townhouse, Almony's comparables were post-World War II gable-roofed townhouses built twenty years after the subject property. According to Hinton, all three of the comparable sales were in superior condition, while Almony described them as average. The subject property was in average condition. One of Almony's comparables, located on Parkside Drive, had a view of Herring Run Park. The subject property did not overlook a park. Almony failed to consider that the sale of the property with a park view might not be indicative of the subject property's value. Almony's comparable sales had adjusted sales prices between $66,500 and $71,100, resulting in an appraisal of $67,000 for the 4106 Harris Avenue. This appraisal fit with the $68,700 sales price. Hinton located five comparable sales ranging from one block to one-quarter of a mile away from the subject property. With the exception of one property, all were built at approximately the same time as the subject property. All except for one had the same number of rooms and bathrooms. The comparables all were the same condition as the subject property, and none had park views. Hinton's comparable sales ranged in adjusted sales price from $35,300 to $45,700, resulting in a $40,000 appraisal. Hinton's appraisal is consistent with the previous listing of the property at $44,900 and Shpritz's purchase of the property for $33,100 less than three months before. The difference between Almony and Hinton's appraisals is $28,700. Almony also selected inappropriate comparable sales for 4230 Seidel Avenue. Almony's first comparable was a block away from the subject property, but it was another property flipped by Shpritz. Almony should have been alerted to the unreliability of using this property as a reference point, because he noted a prior sale of this property. The resale price of the property was 175% of the prior sale price. Almony's second comparable was two blocks away from the subject property. According to Hinton, however, this property was not comparable because it had been renovated from roof to basement. The subject property had not been renovated. [37] Almony's third comparable sale was six blocks away. Almony's selection of this property is problematic for a number of reasons. First, despite the close proximity to the subject property, this property was located outside the neighborhood boundaries Almony had noted. Second, Almony inflated the size of the property by 36.7%. Third, Almony noted a recent prior sale of the property. The property was resold for 256% of its prior price, which should have raised doubts about the sale's utility for assessing the subject property's value. Finally, Almony noted that the comparable's purchaser received $4,458 in financing concessions, but Almony did not consider that the concessions would have increased the sales price. Hinton's appraisal reveals that Almony neglected to select four comparable sales on the same block as the 4230 Seidel Avenue property. These properties were near identical in size, bedroom and bathroom count, view, and condition. There were no prior sales to raise questions about using these properties as comparables. Hinton discounted one of these properties, because it was not an FHA-financed home and was apparently under market value. The remainder had adjusted sales prices ranging from $54,101 to $56,000, resulting in an appraisal of $54,500. In comparison, Almony's comparable sales had adjusted sales prices ranging from $76,200 to $78,280, resulting in a $77,500 appraisal. The Shpritz parties sold the property for $75,500. We hold that the Division could find by substantial evidence that Almony had violated ง 13-301(1) and (3) through his misuse of comparable sales in appraising 4106 Harris Avenue and 4230 Seidel Avenue.