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Landsman v. Maryland Home Improvement Commission12/22/2003
s that the Fund payment sought to compensate." 114 Md. App. at 629. " f the Commission pays any amount from the Fund on account of a contractor's conduct, the Commission may suspend the contractor's license if he fails to reimburse the Fund in full." Id. This, naturally, "can have dire consequences for a contractor," since " person may not act as contractor in this state without a contractor's license." Id. And, once the Commission pays a claim against the Fund, the rights of the claimant against the contractor are subrogated to the Commission to the extent of the amount paid to the claimant from the Fund; consequently, the Commission may sue any contractor on whose account a claim was paid, if the contractor does not reimburse the Fund in full, including interest. Id. at 630.
Yet, nothing in the legislative history of the Home Improvement Law evidences an intent by the General Assembly to treat the Fund as a penalty to contractors. The Senate Economic and Environmental Affairs Committee construed an actual loss to mean, simply, "`the amounts paid or payable for the cost of "making good."'" Id. at 639 (quoting Senate Economic and Environmental Affairs Committee, Bill Analysis for Senate Bill 507 at 3 (1985)).
Moreover, there are safeguards in the Home Improvement Law to insure that the Commission does not treat the Fund as a means of penalizing contractors. As we explained in Brzowski,
Section 8-409[ ] of the Act serves as a check on the Commission's ability to use the Fund as a club to punish contractors who are on the losing end of arbitration awards or judicial decisions. To this end, the section specifies the requirements that must be met before the Commission may order payment of a claim against the Fund.
Id. We went on to state:
When the Commission conducts its own hearing on whether a claimant should be compensated from the Fund, it is presumed that the Commission is aware of the Fund's limited purpose, to compensate for actual loss as defined by section 8-401. Thus, any award the Commission makes from the Fund must be for actual loss, because the Commission is presumed to know the scope of its authority, and act within those bounds.
Id. at 631.
In short, the potential for a license suspension does not create "a penalty" for contractors. Cf. State v. Jones, 340 Md. 235, 251-54 (1995) (explaining that professional license suspensions and revocations generally serve remedial, not punitive, purposes).
The Commission also argues that the award of a license creates a substantive right, presumably in retention of that license. The Commission cites a treatise, which states that
nce the state issues a license, the continued possession of and the right to operate under the authority of the license may be essential to the livelihood of the licensee. Suspension or revocation of a license by the state necessarily involves state action that affects an important interest of the licensee.
William Otis Morris, Revocation Of Professional Licenses By Governmental Agencies, § 2-1, at 15-16 (1984) (emphasis added).
We, however, draw a distinction between "an important interest" and "a substantive right." The Administrative Procedure Act defines a license as "all or any part of permission that: (1) is required by law to be obtained from an agency; (2) is not required only for revenue purposes; and (3) is in any form, including: (i) an approval; (ii) a certificate; (iii) a charter; (iv) a permit; or (v) a registration." Md. Code (1984, 1999 Repl. Vol.), § 10-202(f) of the State Government Article. See
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