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Landsman v. Maryland Home Improvement Commission12/22/2003
We are asked to decide in this case whether the General Assembly's 2000 amendment to the Home Improvement Guaranty Fund, increasing by a third the maximum amount a homeowner can recover for actual loss due to the unsatisfactory work of a contractor, applies retroactively to contracts entered into before the effective date of that amendment. For the reasons that follow, we hold that it does.
BACKGROUND
The underlying facts are not in dispute. Appellant, Sheldon I. Landsman, entered into a contract for a home improvement project with David Somerville, t/a Somerville Construction, on January 19, 1997. At that time, Somerville possessed a Maryland home improvement contractor's license.
Somerville completed some work on the project, but abandoned it on or about December 5, 1997, when he advised Landsman that he was moving to Arizona. Somerville refused to refund some of the monies that Landsman had paid him under the agreement, representing to Landsman that there was no money available. Somerville's contractor's license had expired on June 30, 1997.
Following enactment of Chapter 144 of the Maryland Session Laws of 2000, the maximum recovery under the Maryland Home Improvement Guaranty Fund ("Fund") was increased from $10,000.00 to $15,000.00. By express provision in the enacting legislation, the effective date was October 1, 2000. Nothing in the legislation indicated whether the statute should be applied retroactively.
On November 10, 2000, Landsman filed a claim against the Fund. The matter came on for a hearing in March 2001, before an administrative law judge ("ALJ"). Landsman represented himself at the hearing. The Fund was represented by counsel. Somerville was not present, and no representative appeared on his behalf.
The ALJ thereafter issued his written proposed decision. The ALJ found as a fact that Landsman had incurred an "actual loss" of $42,395.41, and concluded that Landsman was entitled to recover the statutory maximum of $15,000.00 from the Fund.
In a proposed order, Panel B of the Maryland Home Improvement Commission, ("Commission"), appellee, approved the ALJ's proposed decision but reduced Landsman's award from $15,000.00 to $10,000.00. The panel concluded that "the $15,000.00 claim limit applies to contracts entered into on or after October 1, 2000 and that contracts entered into prior to October 1, 2000 are subject to the $10,000.00 claim limit." The panel's proposed order further stated that "the contractor's liability to the Guaranty Fund constitutes a penalty, and that an increase in such a penalty may not be applied retroactively to contracts entered into before the amendment to the law took effect."
Landsman filed exceptions to the proposed order. Following an exceptions hearing, the Commission entered a final order on July 24, 2001, affirming the proposed order.
Landsman thereafter filed a petition for judicial review in the Circuit Court for Montgomery County. After a hearing on the merits, the court affirmed the Commission's final order.
In an opinion and order entered on March 22, 2002, the court declared "that the Legislature's intent was clear not to make the amendment to Md. Ann. Code Art. Bus. Reg. § 8-405(e)(1) retroactive." Noting that the effective date "is expressly stated to be October 1, 2000" and that " here is no express statement by the Legislature to the contrary," the court concluded that "§ 8-405(e)(1) fits neatly into the general category of statutes, which carry the strong presumption against retroactivity." The Court rejected Landsman's argument that the 2000 amendment was remedial, stating that the increase in the maximum award "clea
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