Court Opinion

ID: 9645116
Source: CourtListenerOpinion
Date Created: 2023-08-22 21:13:04.151942+00
Date Added: 2024-06-11T18:11:23.244287
License: Public Domain

Davidson, J.,

dissenting:

The Maryland Home-Improvement Law, Md. Code (1957, 1979 Repl. Vol. & 1981 Cum. Supp.), Art. 56, § 245 through *459§ 269A is a regulatory statute designed to protect the public. Harry Berenter, Inc. v. Berman, 258 Md. 290, 294, 265 A.2d 759, 762 (1970). Section 255 requires persons engaged in the home improvement business to be licensed. Section 261 (a) prohibits certain acts, including "the demand for or the receipt of any payments prior to the signing of a home-improvement contract,” and §§ 246 and 261 (b) provide administrative and criminal penalties for the willful performance of any prohibited acts. Section 265 establishes minimum requirements applicable to a limited class of home improvement contracts, including the requirement that this class of contracts be written and signed by the parties.
In Berenter, this Court considered whether a home improvement contract entered into by an unlicensed contractor was enforceable. It held that
"contracts made by unlicensed persons subject to the statute [Maryland Home-Improvement Law] are illegal as against public policy and will not be enforced.” Berenter, 258 Md. at 298, 265 A.2d at 764.
In reaching this conclusion, this Court specifically addressed a contention that § 265 (a) indicated a legislative intent that contracts of unlicensed persons under the Maryland Home-Improvement Law were enforceable. The Court there said:
"The legislative intent disclosed by § 265 was, in our opinion, that a contract should not be invalidated solely by noncompliance with the rather detailed, but in many instances, rather minor requirements set out in § 265 itself. It will be observed that the 'saving clause’ is limited to noncompliance with 'the requirements of this section’, i.e., § 265. (Emphasis supplied.) It was thus intended by the General Assembly to limit the saving clause in subsection (a) to the matters of form and content set out in the following subsections and not to extend it to the whole *460subtitle. This intention is also indicated by the use of the phrase 'shall not be deemed to be invalid solely because of noncompliance.’ (Emphasis supplied.) The clear implication is that a contract may well be invalid for reasons other than for noncompliance with the provisions of § 265, including the failure to obtain a license as required by other provisions of the subtitle.
"We must assume, in seeking to discover the legislative intent, that the General Assembly was cognizant of the existing law and legislated with the existing law in mind. See Giant Food, Inc. v. Gooch, 245 Md. 160, 165, 225 A.2d 431, 434 (1967) and prior cases therein cited.
"The General Assembly would, therefore, be aware of our decision in Goldsmith, decided on February 23, 1918, when it enacted the original Maryland Home Improvement Law by the Laws of 1962, Chap. 133, effective June 1, 1962. The original statute has been substantially amended since its original passage in 1962. It was amended in 1965 by the Laws of that year, Chapters 719, 720, 721 and 850, all effective June 1, 1965, so that the General Assembly was aware of our decision in Snodgrass, decided October 9, 1963, when it passed those amendments. The original statute was further amended by the Laws of 1966, Chapters 634 and 647, both effective June 1, 1966, so that the Legislature was cognizant of our decision in Smirlock, decided June 8,1964. Finally, the statute was further amended by the Laws of 1969, Chap. 292, effective July 1, 1969, so that the General Assembly was aware of our decision in Thorpe, decided March 5,1969. As we have set forth above, all of these decisions indicate that when a statute is regulatory in nature, this Court will assume, if the legislature does not indicate otherwise, that contracts made by unlicensed persons subject to the statute are illegal as against public policy and *461will not be enforced. If the legislature had intended to change this established rule of law it would doubtless have provided in the original statute or in the subsequent amendments that such contracts would be legal and enforceable. We conclude that the General Assembly intended no change in thé existing law in this regard.” Berenter, 258 Md. at 297-99, 265 A.2d at 763-64 [emphasis added],
I recognize that Berenter involved a violation of § 255, prohibiting persons from engaging in the home improvement business unless licensed, while this case involves a violation of § 261 (a) prohibiting the receipt of any payments prior to the signing of a home improvement contract. In my view, however, the Berenter rationale is dispositive in establishing that the Legislature did not intend a contract to be enforceable if performed in violation of statutory prohibitions.
Applying the Berenter rationale, I assume that the Legislature is cognizant of the existing law and legislates with the existing law in mind. When the Legislature amended the statute by enacting chapters 129 and 289 of the 1980 Laws of Maryland, effective 1 July 1980, it was aware of the legal principle established by this Court’s decisions in a series of cases that held that when a statute is regulatory in nature, if the Legislature does not indicate otherwise, contracts made or performed in violation of its prohibitions are illegal as against public policy and will not be enforced. See, e.g., Queen v. Agger, 287 Md. 342, 346, 412 A.2d 733, 735 (1980) (contract for fee for health care service greater than that approved by Workmen’s Compensation Commission); Downing Dev. Corp. v. Brazelton, 253 Md. 390, 398-400, 252 A.2d 849, 854-55 (1969) (contract for sale of corporate assets); Thorpe v. Carte, 252 Md. 523, 528-30, 250 A.2d 618, 621-22 (1969) (contract for division of commission between licensed real estate broker and unlicensed individual); Van Meter v. Wilkinson, 187 Md. 492, 496-99, 50 A.2d 557, 559-60 (1947) (contract by retired army officer to assist in prosecuting a claim against United *462States); Webb v. Haeffer, 53 Md. 187, 190 (1880) (agreement to hold mortgage sale outside county where mortgaged property situated). See also Restatement (Second) of Contracts §§ 580, 598, Comment a (1932); 3 Pomeroy, Equity Jurisprudence § 940 at 728 (5th ed. 1941). Again, applying the Berenter rationale, I assume that if the Legislature had intended to change this established rule of law it would doubtless have provided in the original statute or in the subsequent amendments that contracts would be legal and enforceable even though performed in violation of express statutory prohibitions. I can only conclude, as did this Court in Berenter, that the Legislature intended no change in the existing law in this regard.
The majority here recognizes that under Berenter a contract that violates § 255 is unenforceable, but nevertheless holds that a contract that violates not only § 265 but also § 261 (a) (15) is enforceable. In my view, the majority has ignored the plain language of the statute and this Court’s previous decision in Berenter, and has engaged instead in an unnecessary, convoluted, and tortured examination of legislative history in its effort to reach a result directly contrary to the purpose of the law. The purpose of the Maryland Home-Improvement Law is to protect the homeowner. I cannot conceive how that purpose can be achieved by requiring a victimized homeowner to pay for a contractor’s performance of a criminal act, warranting suspension or revocation of the contractor’s license. Accordingly, I respectfully dissent.
Judge Eldridge authorizes me to say that he concurs in the views herein expressed.