Opinion ID: 2383777
Heading Depth: 1
Heading Rank: 4

Heading: The Surety Bond

Text: The Division ordered George to post a surety bond in the amount of $30,000.00 within thirty days of the date of the Final Order. [7] The Order provides that the bond shall permit any consumer who suffers any loss in connection with his or her purchase of medical equipment, devices, supplies or related services from [George] to file a claim for their loss with the surety and, if the claim is not paid, to bring an action based on the bond and recover against the surety; the bond shall also permit the [Division] to file a claim with the surety for any loss suffered by a consumer in connection with his or her purchase of medical equipment, devices, supplies or related services from [George]. According to the terms of the bond, it shall remain in effect for three years following the last claim made against it, or if no claims are made, for three years from the date that the bond is posted. In the alternative, George has the option of providing the Division with a letter of credit or cash deposit in the same amount, subject to the same rules, in lieu of posting the surety bond. Although the Division titled the bond a surety bond, it is clear that the purpose of the bond is to insure performance of any contract George entered into with consumers. [8] Thus, for the purposes of our analysis, we shall treat the three options as a performance bond. See Black's Law Dictionary 1158 (7th ed. 1999) (defining performance bond as a bond given by a surety to ensure the timely performance of a contract). The trial court concluded that the Division exceeded its statutory authority by requiring the posting of a bond. The court noted the general remedial purpose of the Act but concluded that whenever the General Assembly has intended for the posting of a bond it has expressly done so in other statutes. The Division contends that the authority to order the posting of a bond is encompassed within CL § 13-403(b)(1)'s grant of authority to take affirmative action when a person is found to have violated the Act. The Division argues that the bond will protect future customers by providing a financial incentive to George to actually deliver the ordered goods and services because he otherwise will not make a profit on the sale. The bond will also provide an efficient means of financial recovery to future customers, allowing them to purchase the necessary equipment from an alternative dealer should George fail to deliver the correct goods. It notes that in the interim between when the Division's Order was issued and when the appeal was pending in the circuit court, George continued to take money from consumers for medical-related equipment and services without providing the equipment or a refund. The term affirmative action is not defined in the statute beyond the instruction that affirmative action includes the restitution of money or property. CL § 13-403(b)(1). In Consumer Publishing, we stated that the affirmative action language authorized the Division to include affirmative disclosure provisions in future advertisements. [9] Consumer Publishing, 304 Md. at 772 n. 18, 501 A.2d at 69 n. 18. In Consumer Protection Division v. Outdoor World Corporation, 91 Md.App. 275, 603 A.2d 1376 (1992), the Court of Special Appeals applied the affirmative action language to authorize the Division to require that any future notices from an out-of-state campground sent into Maryland disclose, in meaningful terms, what would be expected of the recipients should they attempt to claim any prizes [advertised in the notice] and what the likelihood is that they will receive a prize of any significant value. Outdoor World Corporation, 91 Md.App. at 290, 603 A.2d at 1383. And in Luskin's Inc. v. Consumer Protection Division, 353 Md. 335, 726 A.2d 702 (1999), we acknowledged the Division's authority to require a violator to take affirmative action, but held that the cease and desist order in question imposed requirements that went beyond the deceptive practices engaged in by the violator in the underlying matter and was, therefore, too broad. Luskin's, 353 Md. at 380-82, 726 A.2d at 724-25. We have addressed the meaning of the term affirmative action in cases involving the Commission on Human Relations, Md. Code (1957, 1972 Repl. Vol.), Art. 49B, which contained a provision with statutory language similar to the language in question here. Section 14(e) of Art. 49B authorized the Commission to issue a cease and desist order provided that: If upon all the evidence, the Commission finds that the respondent has engaged in any discriminatory act within the scope of any of these subtitles, it shall so state its findings. The Commission thereupon shall issue and cause to be served upon the respondent an order requiring the respondent to cease and desist from the discriminatory acts and to take such affirmative action as will effectuate the purpose of the particular subtitle. (Emphasis added.) [10] Expounding upon the term affirmative action, in Bulluck v. Pelham Wood Apartments, 283 Md. 505, 520, 390 A.2d 1119, 1127 (1978), we said that the term affirmative action authorized the Commission to require an apartment complex to initiate a program of tenant recruitment designed to reach minorities after the apartment complex was found to have engaged in a discriminatory action in violation of § 14(e) of the Act. In Gutwein v. Easton Publishing Company, 272 Md. 563, 325 A.2d 740 (1974), however, we held that the term affirmative action did not authorize the Commission to order monetary awards for compensatory or other damages resulting from the discriminatory practices. Gutwein, 272 Md. at 575, 325 A.2d at 746. Similar to the argument of the Division here that the purpose of the surety bond is to provide financial recovery for victims and protect future customers from fraud, it was argued in Gutwein that the purpose of the monetary award was to make whole victims of discrimination as well as insure against future unlawful conduct. Gutwein, 272 Md. at 568, 325 A.2d at 743. We concluded that based on the Commission's legislative background, the failure of [§ 13(e)] to specifically authorize an award of compensatory damages, the unlikelihood of a legislative grant of unbridled power to an administrative agency to make monetary awards without guidelines or limitations, and the [state and federal cases cited in the opinion], that the Commission exceeded its statutory authority by awarding compensatory damages. [11] Gutwein, 272 Md. at 576-77, 325 A.2d at 747. Based on the cases discussed above, it is clear that the term affirmative action may be used to justify a variety of actions taken by the Division when those actions are corrective measures that address the specific violations that are the subject matter of the Division's Final Order. See Consumer Publishing, 304 Md. 731, 501 A.2d 48; Outdoor World, 91 Md.App. 275, 603 A.2d 1376; Bulluck, 283 Md. 505, 390 A.2d 1119. It is equally clear, however, that the term affirmative action will not justify all actions taken by the Division simply because they are in furtherance of the purpose of the statute. See Luskin's, 353 Md. 335, 726 A.2d 702; Gutwein, 272 Md. 563, 325 A.2d 740. When the interpretation of affirmative action sought by the Division is not supported by the relevant indicia of statutory intent, we will not uphold the Division's interpretation. See RTKL, 380 Md. at 678, 846 A.2d at 438 (noting that in interpreting ambiguous statutory language, the [language] can take its proper meaning only by reference to other relevant indicia of legislative intent, the clearest and most pertinent evidence of which lies in other provisions of the statute ...). According to the Division's own assessment, the bond is designed to ensure future compliance with the Act. We agree with the Division that the requirement of posting a bond is an action in furtherance of the purposes of the statute. The bond will assist the public in obtaining relief from [unlawful consumer] practices, and ... prevent these practices from occurring in Maryland. See CL § 13-102(b)(3). If read in isolation, the term affirmative action may indeed justify the posting of a bond. We do not, however, read ambiguous statutory language in isolation. Here, the express language of the statute provides the Division a means of enforcing future compliance of its orders. The Division may institute other civil proceedings to restrain or enjoin continuing violations of its orders when a cease and desist order proves to be ineffective in stopping the unfair and deceptive practice. CL §§ 13-403(b)(1), 13-403(c)(2), and 13-406; Outdoor World, 91 Md.App. at 289, 603 A.2d at 1383 (Sections 13-403 and 13-406 authorize the Attorney General to require violators of the Consumer Protection Act to cease their violations and upon noncompliance, to seek an injunction against continued violations.). Because the plain language of the statute specifically addresses the steps to take in the case of noncompliance with the Act, we will not strain for a reading of the statute that would permit the same result as one expressly authorized. To do so would constitute a violation of the rule of statutory construction which requires that we look first to the words of the statute.... RTKL, 380 Md. at 678, 846 A.2d at 437. The Division has broad authority to construct the roadblock necessary to close all roads to the prohibited goal, [12] it must do so, however, within the confines of the statutory authorization which in this case requires intervention of the courts. [13] The Consumer Protection Division and the Attorney General of Maryland, like the Federal Trade Commission, clearly have a mandate to protect the consumer from deceptive practices. See CL § 13-102; Consumer Publishing, 304 Md. at 765, 501 A.2d at 66. Not unlike the FTC which has wide discretion in its choice of a remedy deemed adequate to cope with the unlawful practice disclosed, ( Ruberoid, 343 U.S. at 473, 72 S.Ct. at 803, 96 L.Ed. at 1087 (internal citation omitted)), the Maryland Consumer Protection Division also has broad powers to enforce and interpret the Consumer Protection Act. Consumer Publishing, 304 Md. at 745, 501 A.2d at 55. Those broad powers, however, must fit within the statutory scheme established by the General Assembly.