Credible Behavioral Health v. Johnson

466 Md. 380

• Court: Court of Appeals of Maryland
• Decided: November 20, 2019
• Docket: 19/19
• Status: Published

Opinion

Credible Behavioral Health, Inc. v. Emmanuel Johnson, No. 19, September Term 2019. Opinion by Greene, J.

APPEAL AND ERROR—JUDGE AS FACTFINDER BELOW Under Maryland Rule 7–131(f), the circuit court, when hearing an appeal on the record from the district court, reviews the district court’s factual determinations for clear error and its legal conclusions de novo.

CONTRACTS—CONSTRUCTION AND OPERATION—GENERAL RULES OF CONSTRUCTION Under the promissory note at issue, employees are required to repay the loan in accordance with the repayment schedule in Paragraph 1(a) in both situations where an employee is fired or quits. Circuit Court for Montgomery County Case No. 9858D Argued: October 8, 2019 IN THE COURT OF APPEALS

OF MARYLAND

No. 19

September Term, 2019

______________________________________

CREDIBLE BEHAVIORAL HEALTH, INC.

v. EMMANUEL JOHNSON

Barbera, C.J. McDonald Watts Hotten Getty Booth Greene, Clayton, Jr. (Senior Judge, Specially Assigned)

JJ. ______________________________________

Opinion by Greene, J. ______________________________________

Filed: November 20, 2019

Pursuant to Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic.

2019-11-20 15:09-05:00

Suzanne C. Johnson, Clerk Petitioner, Credible Behavioral Health, Inc. (“Credible”) offers a tuition loan

program to its employees aimed at incubating and furthering their professional

development. Respondent, Emmanuel Johnson, a former employee of Credible,

participated in this program from August 10, 2016 until he was fired several months later.

Under a promissory note outlining the agreement, the amount of the loan that must be

repaid is dependent upon the length of time an employee works for Credible after

completing his or her education.

This case presents two issues for our consideration: (i) the appropriate standard of

review in an appeal on the record from the district court to the circuit court; and (ii) the

interpretation of a promissory note. As to the second issue, Mr. Johnson contends that the

agreement contemplates repayment only if an employee quits within a relevant time period;

whereas, Credible argues that repayment is required upon the conclusion of employment

within that time period, regardless of whether an employee is fired or quits. We shall hold

that: (i) a circuit court, in hearing an appeal on the record from the district court, reviews

the district court’s factual determinations for clear error and its legal conclusions de novo;

and (ii) the promissory note, when read as a whole and viewed in the appropriate context,

requires repayment of the principal balance in both situations where an employee quits and

where Credible fires an employee.1

1 We note that the requirement to repay the principal balance is conditioned upon the occurrence and non-occurrence of several events. This will be explained in greater detail in the following section. FACTUAL AND PROCEDURAL BACKGROUND

Credible is a Delaware corporation that provides software solutions to behavioral

health and human service providers. To cultivate its employees’ professional development,

Credible offers a tuition loan program to them. Under the program, Credible agrees to loan

funds to employees who wish to obtain additional education—be it undergraduate,

graduate, or post-graduate certificate programs. The percentage of the loan that an

employee must repay is dependent upon the length of time he or she works for Credible

subsequent to completing his or her studies.

Mr. Johnson was an employee of Credible in 2016. On August 10, 2016, Mr.

Johnson entered into Credible’s tuition loan program, and the parties memorialized their

agreement under the terms of an unsecured promissory note. Paragraph 1(a) of the

promissory note contains a schedule which sets forth the conditions of tuition repayment

under the program:

FOR VALUE RECEIVED, Emmanuel Johnson (“Borrower”), an individual and an employee of CREDIBLE BEHAVIORAL HEALTH, INC., a Delaware corporation (“Company”), hereby unconditionally promises to pay to the order of Company in lawful money of the United States of America and in immediately available funds the aggregate principal amount set forth on Schedule A together with all accrued and unpaid interest thereon, if any (the “Loan”). It is the intent of Borrower and Company that the purpose of this Promissory Note (the “Note”) is to pay tuition expenses for undergraduate, graduate or post-graduate certificate programs in connection with the Company’s Tuition Loan program.

1. Principal Repayment

(a) The principal balance of the Loan plus all accrued interest thereon shall be due and payable in accordance with the following schedule:

-2- (i) If you terminate employment with the Company within 12 months following achievement of the degree, 100% of the Loan;

(ii) If you terminate employment with the Company after the 12 month anniversary but on or before the 24 month anniversary following achievement of the degree, 75% of the Loan;

(iii) If you terminate employment with the Company after the 24 month anniversary but on or before the 36 month anniversary following achievement of the degree, 50% of the Loan; or

(iv) If you terminate employment with the Company after the 36 month anniversary following achievement of the degree, 0% of the Loan.

(Emphasis in original). The final part of Paragraph 1(a) sets forth the relevant scope

of the agreement:

The appropriate percentage of the Loan set forth above, plus all accrued interest thereon shall be due and payable (i) ninety (90) calendar days after the termination of your employment, whether by you or the Company, for any or for no reason whatsoever, or (ii) immediately or at the option of Company, as set forth in Section 4(b) below, upon the occurrence of any Event of Default (as defined by in Section 4 below). Borrower understands that taxes will be deducted from these paychecks based upon the amount that would have been paid Borrower had payments for principal and/or interest not been deducted.

Pursuant to the agreement, Credible loaned Mr. Johnson $12,529 to assist him in paying

his tuition. In December of 2017, Credible fired Mr. Johnson. At the time of his

termination, Mr. Johnson had not yet obtained a degree. Subsequently, Credible and

Johnson entered into a payment plan under which Mr. Johnson made one payment in the

amount of $325 on February 28, 2018 and made no further payments. As a result, the

balance due on the promissory note was reduced to $12,204.

-3- On April 25, 2018, attorneys for Credible sent a demand letter to Mr. Johnson, which

indicated that the principal balance of the loan was due on March 13, 2018 and requested

Mr. Johnson make payment by May 25, 2018. As a result of Mr. Johnson’s failure to make

any additional payments due under the promissory note, on June 8, 2018, Credible brought

an action against Mr. Johnson in the District Court of Maryland sitting in Montgomery

County seeking repayment of the debt.

The district court held a trial in the matter on September 12, 2018. That same day,

the district court entered a judgment in Mr. Johnson’s favor. The district court judge

reasoned that, under the language of Paragraph 1(a), the amounts set forth only became

due if Mr. Johnson quit from his employment with Credible. In its analysis, the district

court concluded that Paragraph 1(a) and the provision that follows it were inconsistent.

Particularly, the court determined that the provision following Paragraph 1(a) referenced

back to Paragraph 1(a) for the amount that would be due if an employee was terminated.

In its view, however, the schedule set forth in Paragraph 1(a) only applied in situations

where employees quit and therefore there was no basis to determine the amount Mr.

Johnson owed by reference to Paragraph 1(a), because he was fired. The trial judge

ultimately determined that “[a]t best I’m interpreting it as it exactly is written. At worse

it’s an inconsistency which goes against the person who drafted the contract.”

The following day, September 13, 2018, Credible appealed the judgment of the

district court to the Circuit Court for Montgomery County pursuant to Courts and Judicial

Proceedings Article § 12–401(a). The circuit court heard the appeal on the record under

Maryland Rule 7–102(b) and held a hearing on February 15, 2019. Before that court, -4- Credible argued that Mr. Johnson was required to repay the loan regardless of whether he

was fired or quit. In contrast, Mr. Johnson contended that the district court correctly

interpreted the note, and he was only required to repay the loan if he quit. Ultimately, in a

written opinion and order dated March 7, 2019, the circuit court found that the district court

“was [not] clearly erroneous in its interpretation of the promissory note at issue in this

case” and therefore affirmed its judgment.

Thereafter, Credible petitioned this Court for a writ of certiorari, which we granted

on June 7, 2019. Credible Behavioral Health, Inc. v. Johnson, 464 Md. 7, 210 A.3d 182

(2019). In its petition for a writ of certiorari, Credible presented three questions for this

Court’s review:

1. Did the [c]ircuit [c]ourt erroneously apply Md. Rule 7–133(f) when it reviewed the [d]istrict [c]ourt’s construction of a contract’s terms for clear error rather than de novo? 2. Did the plain terms of the parties’ promissory note (“Note”) entitle Credible to a judgment against the defendant below, respondent Emmanuel Johnson? 3. In interpreting the Note, did Maryland law require the [c]ircuit [c]ourt to choose [ ] one among two possible readings of the Note that was consistent with the parties’ intent?

STANDARD OF REVIEW

Under Maryland Rule 8–131(c), an appellate court reviews cases tried without a

jury “on both the law and the evidence. It will not set aside the judgment of the trial court

on the evidence unless clearly erroneous, and will give due regard to the opportunity of the

trial court to judge the credibility of the witnesses.” Md. Rule 8–131(c); Nesbit v. Gov’t

Emps. Ins. Co., 382 Md. 65, 72, 854 A.2d 879, 883 (2004). Although the Rule does not

explicitly state the standard of review applicable to a trial court’s determinations of legal -5- questions, this Court has indicated that the clear error standard does not apply to

“determinations of legal questions or conclusions of law.” Tribbitt v. State, 403 Md. 638,

644, 943 A.2d 1260, 1263 (2008). Instead, “[w]hen the trial court’s order ‘involves an

interpretation and application of Maryland statutory [or] case law, [the appellate] [c]ourt

must determine whether the lower court’s conclusions are legally correct under a de novo

standard of review.’” Nesbit, 382 Md. at 72, 854 A.2d at 883 (quoting Walter v. Gunter,

367 Md. 386, 392, 788 A.2d 609, 612 (2002)).

DISCUSSION

The Standard of Review under Maryland Rule 7–113(f)

First, we must determine the applicable standard of review when a circuit court

reviews a judgment of the district court under Maryland Rule 7–113(f). Ultimately, we

reaffirm this Court’s earlier position that the circuit court reviews the district court’s factual

determinations for clear error and its legal conclusions de novo. The dispute in this case

arises from language utilized in the circuit court’s order and opinion concerning the

relevant standard of review. Therein, the circuit court concluded, “[t]he standard of review

in an Appeal heard on the Record is a clearly erroneous standard. This [c]ourt does not

find that the [d]istrict [c]ourt was clearly erroneous in its interpretation of the promissory

note at issue in this case.”

Credible argues that the circuit court erred by applying the clearly erroneous

standard to the district court’s interpretation of the underlying promissory note. Credible

contends that the district court’s interpretation or construction of a contract is a legal

determination that ought to be reviewed by the circuit court de novo. Whereas, Mr. Johnson -6- argues that the district court’s ultimate conclusions stemmed from an application of its

factual findings to the contractual language. Moreover, Mr. Johnson contends that,

regardless of the applicable standard of review, he should prevail.

On its face, Rule 7–113(f) expressly contemplates only a clearly erroneous

standard:

(f) Scope of Review. The circuit court will review the case on both the law and the evidence. It will not set aside the judgment of the [d]istrict [c]ourt on the evidence unless clearly erroneous, and will give due regard to the opportunity of the [d]istrict [c]ourt to judge the credibility of the witnesses.

Md. Rule 7–113(f). Maryland Rule 1386 is the predecessor to Rule 7–113(f). Friendly

Fin. Corp. v. Orbit Plymouth Chrysler Dodge Truck, 378 Md. 337, 343 n.5, 835 A.2d 1197,

1200 n.5 (2003). It contained the same relevant provisions as Rule 7–113(f) concerning

the scope of review when a circuit court reviews decisions of the district court.2 Prior to

the enactment of Rule 8–131(c), Rule 886 governed this Court’s review of actions tried

without a jury and contained language nearly identical to that of Rule 1386.3 In Ryan v.

Thurston, Chief Judge Murphy, writing for the Court of Appeals, analogized Rules 1386

and 886 to determine the appropriate standard of review when a circuit court hears an

2 Maryland Rule 1386 provided that the circuit court “will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses.” Hous. Opportunities Comm’n of Montgomery Cty. v. Lacey, 322 Md. 56, 59, 585 A.2d 219, 221 (1991). 3 Maryland Rule 886 indicated that “[t]he Court of Appeals will not set aside the judgment of the lower court on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses.”

-7- appeal from the district court. 276 Md. 390, 391–92, 347 A.2d 834, 835–36 (1975). He

explained that, under the scheme set forth by Rule 1386, the clearly erroneous standard

applies only to the district court’s factual determinations. Id. at 392, 347 A.2d at 836.

Although the Ryan Court did not explicitly state that the circuit court reviews the

district court’s legal conclusions de novo, this Court held that the applicable standard of

review under Rule 1386 is the same as that governing the Court of Appeals’ review of

actions tried without a jury under Rule 886 and “that the cases applying these rules are

controlling authority governing the interpretation of the scope of appellate review[.]”4 Id.

Within the context of Rule 886, this Court has held that “it is equally obvious that the

‘clearly erroneous’ portion of Rule 886 does not apply to a trial court’s determinations of

legal questions or conclusions of law based upon findings of fact.” Davis v. Davis, 280

Md. 119, 124, 372 A.2d 231, 233 (1977) (quoting Clemson v. Butler Aviation, 266 Md.

666, 671, 296 A.2d 419, 422 (1972)). Accordingly, under Rules 886 and 1386 a lower

court’s legal conclusions have historically been reviewed for legal correctness. See Davis,

280 Md. at 124–26, 372 A.2d at 233–34.

Subsequent to reorganization of the Maryland Rules, this Court affirmed the

analogical approach advanced earlier in Ryan, by indicating that the clearly erroneous

4 The Court also drew a comparison between Rule 1386 and Rule 1086 which, at the time, governed the scope of appellate review in cases before the Court of Special Appeals. Ryan, 276 Md. at 391, 347 A.2d at 835. Subsequently, the language of Rules 886 and 1086 was incorporated into that of Rule 8–131(c). See Md. Rule 8–131; State Sec. Check Cashing, Inc. v. Am. Gen. Fin. Servs. (DE), 409 Md. 81, 109–10, 972 A.2d 882, 899 (2009).

-8- standard applies to the district court’s factual determinations and its legal conclusions are

reviewed de novo:

These are the same standards of review that [c]ircuit [c]ourts, following Maryland Rule 7–113(f) in cases such as the present one, should apply when they review [d]istrict [c]ourt judgments . . . . Maryland Rule 8–131(c) has nearly identical language to Rule 7–113(f) regarding the scope of appellate review, and cases interpreting Rule 8–131(c) are persuasive regarding Rule 7–113(f). Under Rule 8–131(c), clear error is the proper standard for review of the evidence, but it is not the proper standard for questions of law, which are reviewed de novo.

Friendly Fin. Corp., 378 Md. at 343 n.5, 835 A.2d at 1200 n.5 (emphasis added) (citations

omitted).5 Further, this Court has consistently interpreted Rule 8–131(c) to require de novo

review of a circuit court’s legal conclusions. Tribbit, 403 Md. at 644, 943 A.2d at 1263

(2008); Goff v. State, 387 Md. 327, 337–38, 875 A.2d 132, 138 (2005); Friendly Fin. Corp.,

378 Md. at 342–43, 835 A.2d at 1200.

Ultimately, our precedent on this issue and a comparison between Rule 7–113(f)

with its appellate analog Rule 8–131(c) and their predecessors, make clear that the circuit

5 The facts of Friendly Fin. Corp., concerning the circuit court’s application of the clearly erroneous standard, are strikingly similar to those of the instant appeal. The Court commented, “[t]he [c]ircuit [c]ourt in this case, however, may have applied a ‘clearly erroneous’ standard to its review of the [d]istrict [c]ourt’s legal analysis. We glean this from the fact that, in its written opinion, the [c]ircuit [c]ourt made reference only to the deferential clearly erroneous standard.” 378 Md. at 343 n.5, 835 A.2d at 1200 n.5.

Similarly, the express language of the circuit court’s order in the instant appeal evinces a blanket application of the clearly erroneous standard to both the district court’s factual and legal conclusions. In Friendly Fin. Corp., however, the Court held that the circuit court’s erroneous application of Rule 7–113(f) was ultimately harmless. Id. (“Because we agree that the [d]istrict [c]ourt’s legal analysis was correct, the [c]ircuit [c]ourt’s possible applications of the incorrect standard of review was harmless error if it was error at all.”) -9- court reviews the district court’s legal conclusions de novo. Our interpretation of Rule 7–

113(f) is entirely consistent with the uncontroverted proposition that, under Rule 8–131(c),

this Court reviews a lower court’s factual determinations for clear error and its legal

conclusions de novo. Accordingly, we hold that, in an appeal on the record under Rule 7–

113(f), the circuit court reviews the district court’s factual determinations for clear error

and its legal conclusions de novo.

Next, we must determine whether the district court’s interpretation of the

promissory note is a legal conclusion. Regarding this issue, we have consistently held that

“the interpretation of a contract, including the question of whether the language of a

contract is ambiguous, is a question of law subject to de novo review.” Myers v. Kayhoe,

391 Md. 188, 198, 892 A.2d 520, 526 (2006) (citing Towson v. Conte, 384 Md. 68, 78, 862

A.2d 941, 946 (2004)); Ocean Petroleum, Co. v. Yanek, 416 Md. 74, 86, 5 A.3d 683, 690

(2010) (citing Clancy v. King, 405 Md. 541, 556–57, 954 A.2d 1092, 1101 (2008)); Dennis

v. Fire & Police Emp.’s’ Ret. Sys., 390 Md. 639, 656, 890 A.2d 737, 747 (2006); Walton

v. Mariner Health of Md., Inc., 391 Md. 643, 660, 894 A.2d 584, 660 (2006) (quoting

Myers, 391 Md. at 197–99, 892 A.2d at 526–27); Sy-Lene of Washington, Inc. v. Starwood

Urban Retail II, LLC, 376 Md. 157, 163, 829 A.2d 540, 544 (2003); Lema v. Bank of Am.,

N.A., 375 Md. 625, 641, 826 A.2d 504, 513 (2003).

Clearly, the interpretation or construction of a contract is a legal determination

subject to de novo review. As evident from the language utilized in the circuit court’s order

and opinion, the district court engaged in contract interpretation—a legal determination.

Therefore, the circuit court’s broad application of the clearly erroneous standard and its - 10 - conclusion “that the [d]istrict [c]ourt was [not] clearly erroneous in its interpretation of the

promissory note” were made in error.

Interpretation of the Promissory Note

Having clarified the appropriate standard of review under Rule 7–113(f), regarding

a circuit court’s review of the district court’s legal determinations and demonstrated that a

court’s engagement in contract interpretation is a legal determination, we must now

interpret the promissory note at issue in the appeal sub judice.

The dispute over the promissory note in the instant appeal concerns the requirement

to repay the loan and the classes of employees to which the repayment obligation applies.

Mr. Johnson contends that, based on the promissory note’s plain language, the circuit court

correctly interpreted the note to require repayment of the underlying loan only in situations

where an employee quits his or her job with Credible. In contrast, Credible argues that the

terms of the promissory note, taken as a whole, reveal that the parties intended the loan to

be repaid upon termination of employment within the relevant time period—regardless of

whether an employee is fired or quits. Moreover, neither party contends that the provisions

of the promissory note are ambiguous.

Generally, Maryland courts subscribe to the objective theory of contract

interpretation. Myers, 391 Md. at 198, 892 A.2d at 526. Under this approach, the primary

goal of contract interpretation is to ascertain the intent of the parties in entering the

agreement and to interpret “the contract in a manner consistent with [that] intent.” Ocean

Petroleum, Co., 416 Md. at 88, 5 A.3d at 691 (citing Pac. Indem. Co. v. Interstate Fire &

Cas. Co., 302 Md. 383, 388, 488 A.2d 486, 488 (1985)). An inquiry into the intent of the - 11 - parties, where contractual language is unambiguous, is based on what a reasonable person

in the position of the parties would have understood the language to mean and not “the

subjective intent of the parties at the time of formation.” Ocean Petroleum, Co., 416 Md.

at 86, 5 A.3d at 690 (citing Cochran v. Norkunas, 398 Md. 1, 17, 919 A.2d. 700, 709

(2007)); Auction & Estate Representatives, Inc. v. Ashton, 354 Md. 333, 340, 731 A.2d

441, 444 (1999) (“the clear and unambiguous language of an agreement will not give away

to what the parties thought that the agreement meant or intended it to mean.” (quoting

Calomiris v. Woods, 353 Md. 425, 436, 727 A.2d 358, 363 (1999)).

Ascertaining the parties’ intentions requires us to consider the plain language of the

disputed contractual provisions “in context, which includes not only the text of the entire

contract but also the contract’s character, purpose, and ‘the facts and circumstances of the

parties at the time of execution.’” Ocean Petroleum, Co., 416 Md. at 88, 5 A.3d at 691

(quoting Pac. Indem. Co., 302 Md. at 388, 488 A.2d at 488). Throughout this review, we

interpret a contract’s plain language in accord with its “ordinary and accepted meaning[.]”

Ocean Petroleum, Co., 416 Md. at 88, 5 A.3d at 691 (quoting Fister v. Allstate Life Ins.

Co., 366 Md. 201, 210, 783 A.2d 194, 199 (2001)).

Contractual language is ambiguous where a reasonably prudent person could ascribe

more than one reasonable meaning to it. Calomiris, 353 Md. at 436, 727 A.2d at 363.

Where a court determines contractual language to be ambiguous, the narrow bounds of the

objective approach give way, and the court is entitled to consider extrinsic or parol

evidence to ascertain the parties’ intentions. Sullins v. Allstate Ins. Co., 340 Md. 503, 508,

667 A.2d 617, 619 (1995). Additionally, we have previously noted that “a term which is - 12 - clear in one context may be ambiguous in another.” Id. (citing Tucker v. Fireman’s Fund

Ins. Co., 308 Md. 69, 74, 517 A.2d 730, 732 (1986)).

The disputed term in this appeal is the word “terminate” as utilized in Paragraph

1(a) of the promissory note.6 Traditionally, to supply contractual language with its

“ordinary and accepted meanings[,]” this Court consults the dictionary definition of such

terms. Pac. Indem. Co., 302 Md. at 388, 488 A.2d at 489 (commenting that we have

“consulted Webster’s Dictionary, Random House Dictionary, or, less often, Black’s Law

Dictionary” for this purpose). Webster’s Dictionary defines the word “terminate” as “1.

[t]o bring to an end or a halt. 2. To occur at or form the end of : conclude.” Webster’s II

New College Dictionary 1166 (3rd ed. 2005).

At its most basic, viewed relative to this definition, the repayment obligation is

conditioned upon an employee concluding his or her employment with Credible. As

evident from the parties’ arguments, this language could be interpreted in two different

ways. Further, we are faced with two contrary interpretations of the promissory note: (i)

employees are obligated to repay the loan in both situations where the employee is fired or

quits; and (ii) an employee is obligated to repay the loan only in situations where he or she

quits. As we will demonstrate, the former interpretation, advanced by Credible, is

reasonable. Whereas, the latter, advanced by Mr. Johnson, is not. On this basis, the

promissory note is not ambiguous.

6 The primary thrust of Mr. Johnson’s argument on this point focuses on the subject of the sentence—“you”—rather than the term “terminate.” - 13 - We have previously explained that our journey into the interpretation of a contract

commences with “[d]etermin[ing] from the language of the agreement itself what a

reasonable person in the position of the parties would have meant at the time it was

effectuated[.]” Dumbarton Improvement Ass’n v. Druid Ridge Cemetery Co., 434 Md. 37,

53–54, 73 A.3d 224, 233 (2013) (quoting Calomiris, 353 Md. at 436, 727 A.2d at 363)

(internal quotation marks omitted). We begin our inquiry into the intent of the parties by

examining the preamble of the promissory note.

The preamble indicates that Mr. Johnson “unconditionally promises to pay to the

order of [Credible] . . . the aggregate principal amount set forth on Schedule A together

with all accrued and unpaid interest thereon.” (emphasis in original). Additionally, the

preamble notes that “the intent of [Mr. Johnson] and [Credible] that the purpose of this

Promissory Note . . . is to pay tuition expenses for undergraduate, graduate or post-graduate

certificate programs in connection with [Credible’s] Tuition Loan program.” The intent of

the parties becomes increasingly clear in the context of the paragraph that follows

Paragraph 1(a).

The final part of Paragraph 1(a) provides context to the application of Paragraph

1(a) and clearly constitutes an obligation to repay the loan. It reads,

[t]he appropriate percentage of the Loan set forth above, plus all accrued interest thereon shall be due and payable (i) ninety (90) calendar days after the termination of your employment, whether by you or the Company, for any or for no reason whatsoever, or (ii) immediately or at the option of Company, as set forth in Section 4(b) below, upon the occurrence of any Event of Default (as defined by in Section 4 below). Borrower understands that taxes will be deducted from these paychecks based upon the amount that would have been paid [by] Borrower had payments for principal and/or interest not been deducted. - 14 - (Emphasis added). In other words, regardless of the specific language used in Paragraph

1(a), the provision that follows it requires employees to repay the loan in situations where

he or she is fired. This independent obligation merely references the previous four

subparagraphs to determine the amount due on the loan based upon how long an employee

maintains employment with Credible after attaining a degree or certificate. Furthermore,

the provision substantially uncloaks the intent underlying the promissory note. It makes

clear that the parties intended the loan to be repaid in accordance with the framework

established in Paragraph 1(a) in situations where Credible fires an employee.

We have previously indicated that, when interpreting contracts, “[w]e also attempt

to construe contracts as a whole, to interpret their separate provisions harmoniously, so

that, if possible, all of them may be given effect.” Walker v. Dep’t of Human Res., 379

Md. 407, 421, 842 A.2d 53, 61 (2004) (citing Jones v. Hubbard, 356 Md. 513, 534–35, 740

A.2d 1004, 1016 (1999)). More specifically, contract interpretation requires that “[e]ffect

. . . be given to each clause” to avoid “an interpretation which casts out or disregards a

meaningful part of the language of the writing unless no other course can be sensibly and

reasonably followed.” Clancy, 405 Md. at 557, 954 A.2d at 1101 (quoting Sagner v.

Glenangus Farms, Inc., 234 Md. 156, 167, 198 A.2d 277, 283 (1964)) (internal quotation

marks omitted). Under the interpretation of the promissory note adopted by the district

court and affirmed by the circuit court, the substance of this provision is jettisoned absent

any reasonable justification.

- 15 - As evident, the conditions of this provision are indeed meaningful, and we can “find

no sound reason to read the [provision] out of the contract.” Sanger, 234 Md. at 167, 198

A.2d at 283. This is especially true where the intent of the parties is readily ascertainable,

and the substance of Paragraph 1(a) can be reconciled with the remaining provisions in the

promissory note. Based on the ordinary and accepted meaning of the term “terminate,”

Paragraph 1(a) employs somewhat awkward language that indicates the amount due on the

loan if the employee concludes his or her employment. The paragraph contains no

substantive indication that the amount becomes due only if an employee unilaterally

concludes his or her employment. The final part of Paragraph 1(a) reveals that the

repayment schedule applies both in situations where an employee is fired or quits. Our

conclusion is further buttressed by several other aspects of the promissory note.

As a bedrock principle of contract interpretation, Maryland courts consistently

“strive to interpret contracts in accordance with common sense.” Brethren Mut. Ins. Co.

v. Buckley, 437 Md. 332, 348, 86 A.3d 665, 674 (2014) (citing Fister, 366 Md. at 219, 783

A.2d at 205). For two reasons, interpreting the promissory note to require repayment only

when an employee of Credible quits defies such a common sense approach.

First, the circuit court’s and district court’s interpretation of the promissory note

runs contrary to common sense and strains credulity, because it results in the disparate

treatment of employees based upon whether they are fired or quit. Particularly, under the

lower courts’ interpretation of the language in Paragraph 1(a), employees fired by Credible

would not be required to repay any amount of the loan, whereas, an employee who quits

his or her job at Credible would be required to repay the loan in accordance with the - 16 - percentages listed in Paragraph 1(a). We see no reason why, under the promissory note,

an employee who is fired should be treated more favorably than one who quits.

Accordingly, the lower courts’ interpretation of the promissory note engenders disparate

treatment of Credible’s employees by treating employees who are fired more favorably.

As demonstrated, the resulting distinction is untenable and runs contrary to common sense.

Second, Paragraph 4(c) of the promissory note contains a “Drop/Fail Repayment”

clause. Pursuant to this provision, if a borrower drops or fails a class, it is construed as an

event of default under the promissory note, and the borrower is required to pay the portion

of the loan attributable to that class within thirty days. It is contrary to our common sense

approach that, under the promissory note, an employee would be required to pay back funds

for a class he or she dropped or failed but would not be required to repay any portion of

the loan if he or she was fired. Essentially, if Mr. Johnson’s interpretation of Paragraph

1(a) controlled, then any employee who expected he or she may fail his or her classes could

simply act in a manner that would compel Credible to fire the employee. Accordingly,

under this interpretation, an employee could act unilaterally to circumvent the “Drop/Fail

Repayment” provision of the promissory note. In summation, given the context of the

promissory note and the overarching intent of the parties in entering into the agreement, it

is clear that the lower courts’ and Mr. Johnson’s interpretation of the promissory note runs

contrary to common sense. Although two interpretations can be given to the language of

Paragraph 1(a), only one of those—that advanced by Credible—is reasonable in our view.

Moreover, even if we were to adhere to Mr. Johnson’s interpretation, i.e., that

Paragraph 1(a) only applies in situations where an employee quits, we would construe - 17 - conflicting contractual provisions “to effectuate the intention of the parties as collected

from the whole instrument, the subject matter of the agreement, the circumstances

surrounding its execution, and its purpose and design.” Canaras v. Lift Truck Servs., Inc.,

272 Md. 337, 351–52, 332 A.2d 866, 874 (1974) (citing Lumber Co. v. Bldg. & Sav. Ass’n,

176 Md. 403, 407, 5 A.2d 458, 460 (1939)). Further, “if reconciliation can be effected by

a reasonable interpretation, such interpretation should be given to the apparently repugnant

provisions, rather than nullify any.” Id. at 352, 332 A.2d at 874. Mr. Johnson urges this

Court to nullify the substance of the final part of Paragraph 1(a) rather than effectuate a

reasonable interpretation that harmonizes the two provisions—a result that runs contrary

to our tenets of contract interpretation.

In sum, Credible’s interpretation of the promissory note is the only reasonable

interpretation of the two competing interpretations advanced. Indeed, Credible’s

interpretation of the note is in accord with our common sense approach to contract

interpretation. Further, out of the two interpretations, Credible’s is the only interpretation

of the promissory note that harmonizes the substance of Paragraph 1(a) with the remaining

provisions of the note. Moreover, our review of the promissory note, as a whole, including

its context and the underlying intent of the parties, evinces that the parties intended the loan

to be repaid regardless of whether the employee quits or is fired by Credible. Any contrary

construction is ill-founded based on the promissory note’s context and the practical

consequences of such a construction.

Additionally, Mr. Johnson contends that this Court must construe any inconsistency

in the promissory note against Credible, its drafter. This argument is misapplied in two - 18 - respects. First, a contract will be “most strongly construed against” its drafter when a court

finds the contractual terms at issue to be ambiguous. Prima Paint Corp. v. Ammerman,

264 Md. 392, 395, 287 A.2d 27, 28 (1972) (citing Kelley Const. Co. v. Washington

Suburban Sanitary Comm’n, 247 Md. 241, 250, 230 A.2d 672, 678 (1967)).

Here, neither party contends that the language of Paragraph 1(a) or the promissory

note in general is ambiguous. We were able to ascertain the parties’ intentions by

reviewing the promissory note as a whole in its appropriate context. As demonstrated

supra, out of the two interpretations advanced, Credible’s interpretation is reasonable and

Mr. Johnson’s is not. Therefore, the promissory note is not ambiguous. As evident, the

prerequisite for the application of this tenet—ambiguity—is absent in the instant appeal.

Therefore, we need not construe the promissory note against Credible.

Lastly, Credible argues that Mr. Johnson waived any right to challenge the

promissory note by entering into a payment plan under which he would repay the principal

balance of the loan and by making only one payment under the plan.7 In response, Mr.

Johnson argues that Credible should be precluded from raising this argument by virtue of

Md. Rule 8–131(a), because Credible did not present this argument before the courts

below. Although this Court has the discretion to entertain issues for the first time on appeal

in certain instances, we need not consider this dispute because we hold that, under the terms

of the promissory note, Mr. Johnson was required to repay the principal balance.

7 In its opening brief, Credible provides the Court with a fourth question presented, “[d]id [Mr.] Johnson waive his right to contest the Note’s enforceability by paying the first installment in the parties’ agreed payment plan?” This question, however, was absent from Credible’s petition for writ of certiorari. We do not reach it. - 19 - CONCLUSION

In summation, pursuant to Rule 7–113(f), on appeal from the district court, a circuit

court reviews the district court’s legal conclusions de novo. The interpretation of a contract

is a legal conclusion, and the circuit court erred by applying the clearly erroneous standard

to the district court’s interpretation of the promissory note. Based on the plain language

of the promissory note, supplemented by contextual indicators and common sense, the

circuit court also erred in construing the promissory note to require repayment only in

situations where an employee quits. Therefore, we reverse the judgment of the Circuit

Court for Montgomery County.

JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY IS REVERSED. COSTS TO BE PAID BY RESPONDENT.

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