In re: Walker and Walker

248 A.3d 981, 473 Md. 68

• Court: Court of Appeals of Maryland
• Decided: March 30, 2021
• Docket: 8m/20
• Status: Published

Opinion

In re: Anthony D. Walker and Denicia P. Walker, Misc. No. 8, September Term 2020. Opinion by Hotten, J.

CERTIFIED QUESTION OF LAW – STATUTORY INTERPRETATION – LIENS

The United States Bankruptcy Court for the District of Maryland requested the Court of Appeals of Maryland to answer the following certified question:

Can a community association’s lien perfected under the Maryland Contract Lien Act, Md. Code Ann., Real Property (“Real Prop.”) §§ 14-201[–206] secure unpaid damages, costs of collection, late charges, and attorney’s fees arising under the association’s governing documents that accrue subsequent to the recordation of the lien?

Pursuant to Md. Code Ann., §§ 12-601–613 of the Courts and Judicial Proceedings Article, the Court of Appeals of Maryland answered the certified question in the negative. The Court of Appeals held that the Maryland Contract Lien Act, Real Prop. §§ 14-201–206 does not permit a lien that secures unpaid damages, costs, charges, and fees which accrue after the recordation of the lien, otherwise known as a continuing lien. The Court of Appeals determined that the Maryland Contract Lien Act’s plain text, legislative history, relevant case law, and comparison with other statutes precluded community associations from using a continuing lien to secure debts, as a matter of law. United States Bankruptcy Court for the District of Maryland Case No. 18-23752-NVA IN THE COURT OF APPEALS Argued: February 4, 2021 OF MARYLAND

Misc. No. 8

September Term, 2020

__________________________________

IN RE: ANTHONY D. WALKER AND DENICIA P. WALKER __________________________________

Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, Biran,

JJ. __________________________________

Opinion by Hotten, J. __________________________________

Filed: March 30, 2021

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

2021-03-30 11:49-04:00

Suzanne C. Johnson, Clerk The Maryland Uniform Certification of Questions of Law Act,1 Maryland Code, §§

12-601–613 of the Courts and Judicial Proceedings Article (“Cts. & Jud. Proc.”) empowers

this Court to “answer a question of law certified to it by a court of the United States . . . if

the answer may be determinative of an issue in a pending litigation in the certifying court

and there is no controlling appellate decision, constitutional provision, or statute of this

State.” Cts. & Jud. Proc. § 12-603. This Court has been asked to answer the following

certified question of law by the United States Bankruptcy Court for the District of

Maryland (“the Bankruptcy Court”):

Can a community association’s lien perfected under the Maryland Contract Lien Act, Md. Code Ann., Real Property. (“Real Prop.”) §§ 14-201[–206] secure unpaid damages, costs of collection, late charges, and attorney’s fees arising under the association’s governing documents that accrue subsequent to the recordation of the lien?

We answer this question in the negative. For reasons to be explained, we hold that

the Maryland Contract Lien Act (“MCLA”) does not permit liens that secure unpaid

damages, costs, charges, and fees which accrue after the recordation of the lien.

1 [The] Maryland [General Assembly] adopted the first version of the Uniform Certification of Questions of Law Act in 1972 as part of a uniform code promulgated by the Uniform Law Commission (also known as the National Conference of Commissioners on Uniform State Laws) and codified the Act as Article 26 §§ 161 to 172. 1972 Md. Laws, ch. 427. The following year, Article 26 was recodified as the [Cts. & Jud. Proc.] Article. 1973 Md. Laws 1st Spec. Sess., ch. 2. In 1995, the Uniform Law Commission issued a new model Certification of Questions of Law statute, which Maryland then adopted in 1996. 1996 Md. Laws, ch. 344. The Maryland Uniform Certification of Questions of Law Act is currently codified at [Cts. & Jud. Proc.] §§ 12-601 to 12-613, Maryland Code (1973, 2020 Repl. Vol.).

United Bank v. Buckingham, Misc. No. 1, Sept. Term, 2020, 2021 WL 865246, at *1 n.1 (Md. Mar. 9, 2021). FACTUAL AND PROCEDURAL BACKGROUND

In accordance with Cts. & Jud. Proc. § 12-605(a), “the court certifying a question

of law” to this Court “shall issue a certification order.” Pursuant to Cts. & Jud. Proc. § 12-

606(a)(2), the certification order must contain “[t]he facts relevant to the question, showing

fully the nature of the controversy out of which the question arose[.]” We accept the facts

provided by the certifying court, Price v. Murdy, 462 Md. 145, 147, 198 A.3d 798, 799

(2018), and supplement with additional facts as necessary.

The Underlying Incident

Appellee and debtor, Denicia P. Walker,2 purchased a unit at the Long Reach Knolls

Condominium, Inc. (“Appellant”) in Columbia, Maryland. Walker formally accepted the

deed on June 30, 2000. Appellant serves as the governing body of the condominium unit

owners. Unit owners must adhere to Appellant’s bylaws and the Maryland Condominium

Act (“MCA”), Real Prop. §§ 11-101–143.3 Appellant’s bylaws require unit owners to pay

monthly “assessments” or fees, which Appellant uses to cover common expenses,

including insurance, landscaping, property management, and improvement of common

areas.

2 Denicia Walker married co-debtor Anthony D. Walker after she purchased the property. An ownership interest was never conveyed to Anthony Walker.

“In exchange for the benefits of owning property in common, condominium 3

owners agree to be bound by the rules governing the administration, maintenance, and use of the property.” Ridgely Condominium Ass’n, Inc. v. Smyrnioudis, 343 Md. 357, 359, 681 A.2d 494, 495 (1996) (footnote omitted). Condominium rules and bylaws must conform with the MCA, which “regulates the formation, management, and termination of condominiums in Maryland.” Id. at 360, 681 A.2d at 495. 2 Walker defaulted multiple times on her monthly assessments. While Appellant has

never restricted Walker’s access to common areas, it recorded eight liens against Walker’s

unit between December 31, 2002, and April 4, 2014. The liens secured unpaid assessments,

interest, and attorney’s fees. Appellant also obtained three personal judgments against

Walker during this time span.

On October 6, 2015, Appellant notified Walker of its intent to record a ninth lien

against her unit to secure unpaid assessments, interest, and attorney’s fees arising on or

after January 1, 2015. The lien notice stated that it would secure $4,702.80 in unpaid

damages owed as of October 6, 2015, “plus all sums becoming due thereafter[.]” Walker

neither paid the owed amount nor challenged the intended lien. Appellant recorded its

ninth lien on December 22, 2015 and obtained a fourth personal judgment against Walker

in the District Court of Maryland for Howard County on August 9, 2016. The court entered

a judgment of $13,933.99 against Walker, which included unpaid assessments from

January 1, 2014 through December 31, 2016.

Legal Proceedings

Walker filed for Chapter 13 bankruptcy relief on January 12, 2017. The Bankruptcy

Court denied Walker’s Chapter 13 plan without leave to amend on August 17, 2017 and

dismissed Walker’s case on September 8, 2017. Walker paid four monthly assessments

between January and September 2017. Walker filed a second petition for Chapter 13

bankruptcy on September 11, 2017. The Bankruptcy Court denied Walker’s Chapter 13

plan without leave to amend on September 24, 2018. The Bankruptcy Court dismissed the

3 second petition on October 16, 2018. Walker paid three monthly assessments during the

pendency of the second petition.

Walker filed a third petition for Chapter 13 relief on October 16, 2018. Appellant

filed proof of a secured claim for $42,298.89 on October 31, 2018.4 This amount partly

consisted of assessments, interest, and other costs that did not accrue until after Appellant

recorded its ninth lien.

Walker objected to Appellant’s proof of secured claim on August 5, 2019. Walker

asserted that the MCLA does not permit a lien to secure assessments, costs of collection,

and attorney’s fees that accrue following the recordation of the lien. Appellant filed a

response on August 29, 2019. The parties agreed to petition the Bankruptcy Court to certify

the instant question to this Court. The parties also agreed to a joint stipulation of facts and

documents on February 19, 2020. At the time of the joint stipulation, Walker had not paid

a monthly assessment since August 29, 2019. According to Appellant, Walker resumed

making monthly payments beginning April 28, 2020, but remains in default of her post-

bankruptcy petition assessments. The Bankruptcy Court ordered certification on

September 23, 2020.

4 A proof of secured claim indicates the amount of secured debt that the debtor owed a creditor on the date of the bankruptcy filing. When calculating the total debt owed, the United States Bankruptcy Court, Official Form 410, part 2:7, permits creditors to include “in addition to [the] principal amount, . . . interest, fees, expenses, or other charges[.]” Fed. R. Bankr. P. 3001(c)(2)(A). Walker owed Appellant a principal judgment balance of $24,205.89 at the time of bankruptcy filing. Appellant added $18,093.00 to this claim, reflecting subsequent delinquent assessments, interest, attorney’s fees and costs that accrued subsequently to the lien’s recordation, for a total secured claim of $42,298.89. 4 DISCUSSION

Standard of Review

This Court may answer a question of law certified by a federal court if “the answer

may be determinative of an issue . . . in the certifying court and there is no controlling

appellate decision, constitutional provision, or statute of this State.” Fangman v. Genuine

Title, LLC, 447 Md. 681, 690, 136 A.3d 772, 777 (2016) (citing Cts. & Jud. Proc. § 12-

603). This Court cabins its review of certified questions to issues of Maryland law, not to

issues of fact. Parler & Wobber v. Miles & Stockbridge, 359 Md. 671, 681, 756 A.2d 526,

531 (2000). This Court “may go no further than the question certified.” Price, 462 Md. at

147, 198 A.3d at 799 (quoting AGV Sports Grp., Inc. v. Protus IP Solutions, Inc., 417 Md.

386, 389 n.1, 10 A.3d 745, 746 n.1 (2010)).

The certified question of law concerns the interpretation of the MCLA. Statutory

interpretation requires ascertaining and effectuating the intent of the General Assembly.

Montgomery County v. Phillips, 445 Md. 55, 62, 124 A.3d 188, 192 (2015). We review

questions of statutory interpretation under a de novo standard of review without deference

to other courts’ interpretation of the statute. Harvey v. Marshall, 389 Md. 243, 257, 884

A.2d 1171, 1179 (2005) (citing Mohan v. Norris, 386 Md. 63, 66-67, 871 A.2d 575, 577

(2005)).

Parties Contentions

According to Appellant, as long as a lien complies with the procedural requirement

for creation under the MCLA, a lien can secure unpaid damages that arise after the

5 recordation of the lien.5 In short, Appellant argues that the MCLA permits continuing

liens.6

For Appellant, the strongest support for continuing liens comes from the plain text

of the statute, which neither prohibits continuing liens, nor requires a lienholder to impose

a new lien to secure additional unpaid damages that arise after a lien’s recordation.

According to Appellant, finding a prohibition against continuing liens in the MCLA would

impermissibly require the insertion of new language “as to reflect an intent not evidenced

in the plain and unambiguous language of the statute[.]” Woznicki v. GEICO Gen. Ins.

Co., 443 Md. 93, 108, 115 A.3d 152, 161 (2015) (quoting Stickley v. State Farm Fire &

Cas. Co., 431 Md. 347, 358-59, 65 A.3d 141, 148 (2013)).

Appellant also notes that this Court has never held that the MCLA requires multiple

liens to secure unpaid sums arising from a single contract. Instead, the past cases of this

Court have focused on the purpose of the MCLA in creating a framework for recording

and enforcing liens that accord with the minimum requirements of due process. See, e.g.,

Golden Sands Club Condo., Inc. v. Waller, 313 Md. 484, 495, 545 A.2d 1332, 1337-38

5 These subsequent damages must also be provided by contract, governing bylaws, or statute.

The Supreme Court defined a continuing lien as one “cover[ing] property or rights 6

to property in the delinquent’s hands at any time prior to expiration.” Glass City Bank of Jeanette, Pa. v. United States, 326 U.S. 265, 267, 66 S. Ct. 108, 110 (1945). A continuing lien, in the context of a condominium association lien, constitutes not only the amount claimed in the lien, but the aggregate of unpaid charges, fees, and interest that have accrued since its recordation. See Bd. of Mgrs. of Netherlands Condo. v. Trencher, 128 A.D.3d 452, 453, 9 N.Y.S.3d 213, 214 (1st Dept. 2015) (“plaintiff is entitled to not only the amount claimed in the lien, but also the amount of unpaid common charges and fees that have accrued since the filing of the lien[.]”) (emphasis added). 6 (1988) (“We hold that procedural due process does not prevent the approach to hearing

which the [General Assembly] has taken [under the MCLA]. In balancing the interests of

the parties, the General Assembly has looked to economy, efficiency, and minimal

involvement of the judiciary. At the same time, it has given the unit owner a reasonably

simple and not unduly expensive way to secure a hearing and judicial action as prerequisites

to the creation of a lien on the unit.”) (emphasis added).

Appellant contends that a continuing lien satisfies the minimum requirements of due

process outlined by this Court in Golden Sands because continuing liens conserve time and

expense for unit owners, condominiums, and the judiciary without increasing the risk of

erroneous deprivation of the unit owner’s property. See id. at 495, 545 A.2d at 1338 (citing

Matthews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903 (1976)) (“[D]ue process

generally requires consideration of three distinct factors: [f]irst, the private interest that will

be affected . . . second, the risk of an erroneous deprivation . . . and the probable value, if

any, of additional or substitute procedural safeguards; and finally, . . . the fiscal and

administrative burdens that the additional or substitute procedural requirement would

entail.”). The interest of a council of unit owners would be furthered by conserving time

and expense in filing multiple liens. A continuing lien also protects the interests of the

entire condominium because it ensures that accruing costs and interests from a delinquent

unit owner are covered by a single lien. Unit owners meanwhile would still receive prior

notice and an opportunity to challenge putative charges in a formal proceeding before the

lien is recorded. Requiring successive liens would not in any meaningful way decrease the

7 risk of erroneous deprivation of a unit owner’s property interests compared to a continuing

lien.

Appellant argues that prohibiting continuing liens could produce absurd results and

deleterious consequences for both condominium associations as a whole and individual

unit owners. See Blue v. Prince George’s County, 434 Md. 681, 689, 76 A.3d 1129, 1133

(2013) (“An examination of interpretive consequences, either as a comparison of the results

of each proffered construction, or as a principle of avoidance of an absurd or unreasonable

reading, grounds the court’s interpretation in reality.”). The prohibition of continuing liens

would subject the lienholder and property owner to unnecessary time and expense of

additional proceedings. These proceedings could lead to contradictory results. Less

sophisticated parties, or those with financial constraints, may incur greater hardship when

trying to comply with the multiple lien requirement. According to Appellant, prohibiting

continuing liens would increase the fiscal and administrative burdens on the council of unit

owners, and any other party subject to the MCLA’s lien procedures.

Appellant also urges this Court to rely on non-Maryland authority to resolve this

undecided question of Maryland law. Appellant cites Archie v. Nagle & Zaller, P.C., No.

GJH-17-2524, 2018 WL 3475429 (D. Md. Jul. 19, 2018), in which the United States

District Court for the District of Maryland stated in an unreported memorandum opinion

that prohibiting continuing liens, under the MCLA, “would be bizarre [and] idiosyncratic

and not tenable[]” because it would require a creditor to file a new lien every time an

additional cost accrued. Id. at *6 (internal quotation and citation omitted).

8 Appellant also cites to a line of cases from New York, culminating in a 2015

intermediate appellate court decision, that concluded the equivalent New York

condominium association lien statute permits continuing liens. Trencher, 128 A.D.3d at

453, 9 N.Y.S.3d at 214; see also Bd. of Managers of Soho Greene Condo. v. Clear, Bright

& Famous LLC, 2012 N.Y. slip op. 33273(U) (Trial Order), 2012 WL 5877658 (N.Y. Sup.

Ct. Nov. 5, 2012) (“To read into this statute, as has been suggested, a requirement that the

board of managers update its liens monthly in order to protect additional amounts accruing

each month would be an interpretation which would be costly, burdensome and contrary

to the . . . legislative objective.”).

Walker argues that the MCLA prohibits any sum from being secured by a statutory

lien before the property owner has an opportunity to contest the sum prior to attachment.

According to Walker, continuing liens are prohibited by the plain language, legislative

history, and due process requirements previously recognized by this Court.

Walker contends that the plain language of the MCLA excludes continuing liens

because it enumerates an exhaustive and bounded list of payment categories that may be

secured by a lien, namely damages, costs, late charges, and attorney’s fees. According to

Walker, the plain language of the statute only covers these payment categories when they

are actually due. A continuing lien impermissibly stretches the meaning of the statutory

language because it would cover payments that are not actually due. As future sums, they

have not yet, nor may ever, become due.

According to Walker, continuing liens would contravene the purpose of the MCLA,

which was amended by the General Assembly to conform with due process and ensure

9 debtors have the right to contest amounts allegedly owed. The Senate hearings indicated

that debtors must have an opportunity to challenge a debt before the lien attaches. A

continuing lien would circumvent the purpose of the statute because it would deny debtors

the opportunity to challenge the precise amounts owed before the recordation of the lien.

Walker also asserts that a continuing lien conflicts with the precedent of this Court. In

Golden Sands, this Court upheld the constitutionality of the MCLA because “no lien

attaches until after the unit owner has an opportunity to be heard . . . the lien claimant has

the burden of proof . . . these provisions give the necessary opportunity for hearing and

provide a reasonable procedure for testing the validity of the lien prior to its creation[.]”

313 Md. at 493, 545 A.2d at 1337 (emphasis added). Walker maintains that this Court

underscored again, in Select Portfolio Servicing, Inc. v. Saddlebrook West Utility

Company, LLC, 455 Md. 313, 167 A.3d 606 (2017), the importance of unit owner’s ability

to challenge putative costs before the lien is imposed. Id. at 336, 167 A.3d at 619 (“Under

the [MCLA], . . . no lien attaches until after the [property] owner has an opportunity to be

heard.”). A continuing lien contradicts this Court’s previous decisions that upheld a

debtor’s due process right in being able to challenge the amount of debt putatively owed

before the governing body of a condominium records a lien.

Analysis of the MCLA

A. Overview of Maryland Statutory Liens and the MCLA

Legislatures have the power, subject to due process constraints, to authorize liens

that secure payments, debts, or other obligations—like unit owner assessments—by statute.

Hon. William Houston Brown & Lawrence R. Ahern, III, The Law of Debtors and

10 Creditors: Bankruptcy, Security Interests, Collection § 9:7 (Nov. 2020). The creation and

enforcement of a statutory lien is entirely limited to and governed by its statutory terms.

MacBride v. Gulbro, 247 Md. 727, 729, 234 A.2d 586, 588 (1967) (noting that when a

statute “creates a cause of action which did not exist at common law, [it is] in derogation

of the common law [and thus] is to be strictly construed.”). Maryland courts construe

statutory liens “strictly” in favor of the debtor to protect a debtor’s common law rights.

Patapsco Trailer Serv. & Sales, Inc. v. Eastern Freightways, Inc., 271 Md. 558, 564, 318

A.2d 817, 820 (1974); T.R. Ltd. v. Lee, 55 Md. App. 629, 635, 465 A.2d 1186, 1191 (1983)

(“Consent being an important element of a common law lien, any statutory attempt to create

such lien without the element of consent would have to be strictly construed in derogation

of the common law.”).

A corollary of this Court’s strict interpretation of statutory liens is that a court cannot

create or impose a lien itself based on what it considers just in a particular case. See

Equitable Trust Co. v. Imbesi, 287 Md. 249, 271, 412 A.2d 96, 107 (1980) (“[t]he creation

of a lien is an affirmative act, and the intention to do such act [cannot] be implied from an

express negative.”).

The General Assembly enacted the MCLA, in part, for condominiums and their

council of unit owners to secure the payment of assessments with a lien. Real Prop. § 14-

202(a)(1) (“A lien on property may be created by a contract and enforced under this subtitle

if: [] The contract expressly provides for the creation of a lien[.]”). The MCLA gives

condominium associations “limited senior priority” over first recorded mortgage liens to

ensure condominium associations receive some financial recoupment after a unit owner

11 defaults. Grahame K. Wells, The Use of Super-Liens to Promote Cooperation Between

Condominium Associations and Lenders, 13 Ann. Rev. Banking L. 477, 479 (1994).

Prior to the MCLA, when a condominium unit owner defaulted, the mortgage lender

would ordinarily have first priority in a foreclosure and would acquire all of the debtor’s

assets—leaving nothing for the condominium association. In response, Maryland, along

with most states, created a statutory lien (sometimes called a “super lien”) that enabled

condominium associations to jump the foreclosure line and deduct some delinquent

assessments and related costs from the sale proceeds. Real Prop. § 11B-117(c) (creating a

super lien for a portion of unpaid unit owner assessments). In sum, the MCLA created a

shortcut for condominium associations to recover delinquent unit owner assessments by

placing a lien on the unit owner’s unit.

The parties dispute whether the MCLA grants a different type of legislative shortcut

for condominium associations: whether the MCLA permits continuing liens—i.e., the

securing of damages, fees, and interest that arise after the recordation of the lien. As we

shall explain, the MCLA does not permit continuing liens. The plain text and legislative

history of the statute, as well as relevant case law of the statute, both from Maryland and

our sister jurisdictions, support our conclusion.

B. Statutory Interpretation of the MCLA

The first indication that the MCLA prohibits continuing liens comes from the

statutory text itself. “The cardinal rule of statutory interpretation is to ascertain and

effectuate the real and actual intent of the [General Assembly]. . . . To ascertain the intent

of the General Assembly, we begin with the normal, plain meaning of the statute.” State

12 v. Bey, 452 Md. 255, 265, 156 A.3d 873, 878 (2017). “[T]he plain language must be viewed

within the context of the statutory scheme to which it belongs, considering the purpose,

aim, or policy of the [General Assembly] in enacting the statute.” Id. at 266, 156 A.3d at

878. “Where the words of a statute are ambiguous and subject to more than one reasonable

interpretation, or where the words are clear and unambiguous when viewed in isolation,

but become ambiguous when read as part of a larger statutory scheme, a court must resolve

the ambiguity by searching for legislative intent in other indicia, including the history of

the legislation or other relevant sources intrinsic and extrinsic to the legislative process.”

Id., 156 A.3d at 879.7

Real Prop. § 14-202(b) provides the four types of payments that may be secured by

a lien provided for by contract:

A lien may only secure the payment of: (1) Damages; (2) Cost of collection; (3) Late charges permitted by law; and (4) Attorney’s fees provided for in a contract or awarded by a court for breach of contract.

(Emphasis added).

While the plain text of Real Prop. § 14-202 does not prohibit continuing liens,

Archie v. Nagle & Zaller, P.C., 790 F. App’x 502, 505 (4th Cir. 2019) (per curiam), the

term “only” clearly limits the four types of payments that may be secured by a lien: “(1)

7 This Court also will construe a statute so “as to avoid a conflict with the Constitution whenever that course is reasonably possible.” Koshko v. Haining, 398 Md. 404, 425-26, 921 A.2d 171, 183 (2007) (quoting In re James D., 295 Md. 314, 327, 455 A.2d 966, 972 (1983)).

13 Damages; (2) Cost of collection; (3) Late charges permitted by law; and (4) Attorney’s fees

provided for in a contract or awarded by a court for breach of contract.” Real Prop. § 14-

202(b). The circumscribed list demonstrates the legislature’s intent in restricting the scope

of payments secured by liens. Within this bounded list, Real Prop. § 14-202(b) notably

omits mention of payments that accrue subsequent to the lien’s recordation. Construing

Real Prop. § 14-202(b) to authorize a continuing lien would cut against the limiting

language used by the General Assembly and impermissibly require the insertion of

additional statutory language. Woznicki, 443 Md. at 108, 115 A.3d at 161.

A continuing lien also contradicts the time-limited definition of “Damages”

provided in the statute. Real Prop. § 14-201(c)(1) defines “Damages” as “unpaid sums due

under contract, plus interest accruing on the unpaid sums due under a contract or as

provided by law, including fines levied under the Maryland Condominium Act or the

Maryland Real Estate Time-Sharing Act.” (Emphasis added). The definition of damages

plainly limits payments that may be secured by the lien to those that are “due.” A

continuing lien would allow a condominium association to place liens on future damages

that have not accumulated yet. Future, unaccumulated damages cannot logically be “due”

at the time of the lien’s recording.

For example, when Appellant recorded its ninth lien against Walker on December

22, 2015, it cannot be said, contrary to Appellant’s assertion, that Walker’s future

assessments were due under contract. A continuing lien does not comport with a common

sense reading of the plain text of the statute, and we decline to interpret the MCLA to allow

a lien that is not grounded in the specific language chosen by the legislature. Kushell v.

14 Dep’t of Nat. Res., 385 Md. 563, 576-77, 870 A.2d 186, 193 (2005) (“A court may . . .

[not] construe the statute with forced or subtle interpretations that limit or extend its

application.”); 5500 Coastal Highway Ltd. P’ship v. Elec. Equip. Co., Inc., 305 Md. 532,

536, 505 A.2d 533, 535 (1986) (“It follows, therefore, that there can be no lien for anything

which does not fall within the statutory provision.”).

Reading Real Prop. § 14-202 in context with the broader statute lends additional

support to our interpretation. “[W]e analyze the statutory scheme as a whole and attempt

to harmonize provisions dealing with the same subject so that each may be given effect.”

Kushell, 385 Md. at 577, 870 A.2d at 193. Real Prop. § 14-204(d)(2) provides in pertinent

part:

[A] governing body [i.e., council of unit owners] may foreclose on a lien against a unit owner or lot owner only if the damages secured by the lien:

(i) Consist of:

1. Delinquent periodic assessments or special assessments and any interest; and

2. Reasonable costs and attorney’s fees directly related to the filing of the lien that do not exceed the amount of the delinquent assessments, excluding any interest; and

(ii) Do not include fines imposed by the governing body or attorney’s fees or costs related to recovering the fines.

The language “directly related to the filing of the lien” suggests that recoverable

costs and fees must cover the cost of creating and enforcing the lien, not future costs and

fees that may eventually spring from the lien. It would untenably stretch the meaning of

15 “directly related to” if the lien could encompass costs and fees that accumulate years after

the lien is recorded.8 While the statute does not expressly prohibit continuing liens, its

language read in its entirety, restricts damages only to those accrued at the time of recording

the lien.

We are not persuaded by Appellant’s argument that because the plain text does not

prohibit continuing liens, condominium associations may secure costs and fees that arise

after a lien is recorded with proper notice.9 Appellant finds support of its argument in

Archie v. Nagle & Zaller, P.C., 790 F. App’x 502 (4th Cir. 2019), an unreported per curiam

8 The General Assembly could have used different language if it had intended to permit reasonable costs and attorney’s fees that accumulate subsequent to the lien’s recordation. The equivalent condominium association statute in Oregon, for example, omits any limiting language and permits the lien to continue indefinitely. Or. Rev. Stat. Ann. § 100.450(1) (“Whenever an association of unit owners levies any assessment against a unit, the association of unit owners shall have a lien upon the individual unit. . . . The lien includes interest, late charges, attorney fees, costs or other amounts levied under the declaration or bylaws.”) & (2)(d) (“as long as the original or any subsequent unpaid assessment remains unpaid, the unpaid amount of assessments automatically continue to accumulate with interest without the necessity of further recording”) (emphasis added). 9 Appellant notes that this argument, also known as the negative implication canon of construction, has been used many times before by this Court in aid of its statutory interpretation. Walzer v. Osborne, 395 Md. 563, 574 n.6, 911 A.2d 427, 433 n.6 (2006) (acknowledging that this Court has extensively employed the negative implication canon in its case law, embodied in the maxim expression unius est exclusion alterius—“to express or include one thing implies the exclusion of the other, or of the alternative”). For the reasons we have previously stated, we decline to apply the negative implication canon to the interpretation of the MCLA in this case. See S.E.C. v. C.M. Joiner Leasing Corp., 320 U.S. 344, 350, 64 S. Ct. 120, 123 (1943) (“However well these rules [of statutory construction] may serve at times to aid in deciphering legislative intent, they long have been subordinated to the doctrine that courts will construe the details of an act in conformity with its dominating general purpose, will read text in light of context and will interpret the text so far as the meaning of the words fairly permits so as to carry out in particular cases the generally expressed legislative policy.”) (footnote omitted). 16 decision from the Fourth Circuit. In Archie, the Fourth Circuit affirmed the United States

District Court for the District of Maryland that held a condominium association’s

continuing lien was not prohibited under Maryland law, or at the very least, was not a

violation of the Fair Debt Collection Practices Act—the relevant federal statute in the case.

Id. at 505-06 (“[The condominium association’s] conduct – ‘pursuing its clients’

contractual rights in a way that was not proscribed’ under state law – did not amount to a

violation of the [Fair Debt Collection Practices Act].”). The district court reasoned that

because the unit owner signed the condominium association’s governing documents, the

unit owner was “on notice that the amount of the lien may change, and also on notice as to

exactly what those costs may be.” Id. at 505 (internal quotations omitted). The Fourth

Circuit approved of the district court’s reasoning that the MCLA must tolerate continuing

liens otherwise the statute “would lead to an impractical and costly result, with creditors

obliged to file a new lien every time an additional cost accrued or a partial payment was

made.” Id.

The Archie opinion has minimal persuasive weight in the determination of this

certified question. The opinion is unreported and comes from a different jurisdiction. The

Fourth Circuit mostly repeats the district court’s decision, which did not analyze the

language of the MCLA, did not consult the legislative history of the statute, and did not

cite any of the Maryland cases on the statute. The Fourth Circuit, in affirming the district

court on appeal, explained that the district court’s dismissal of state law claims left the

issue of MCLA interpretation open for Maryland courts to resolve. Id. at 506 n.3

17 (“allowing state courts to decide any remaining state law claims in this case would ‘best

accommodate the values of economy, convenience, fairness, and comity.’”).10

We are also not persuaded by Appellant’s argument that interpreting the MCLA to

prohibit continuing liens would lead to impractical results. This Court explained in Select

Portfolio that the MCLA’s lien procedure did not harm the condominium association’s or

future creditors’ interests. By recording a lien, the condominium association has already

put future creditors on notice that the property is encumbered. 455 Md. at 327, 167 A.3d

at 614 (“Discovery of a recording . . . might prompt further inquiry into whether payment

of the assessment was current.”). The MCLA also established a quick and formulaic way

to record liens under the statute, so requiring additional liens to secure future costs and fees

(after they become due) would not impose an undue burden on condominium associations.

The statute includes a short template for creditors to fill in the blanks and quickly file. Real

Prop. § 14-203.11 It only asks for (1) the unit address, (2) the name of the unit owner, (3)

10 Even if it was necessary to examine Archie’s discussion of the MCLA on the merits, we do not find the district court’s reasoning persuasive here. As we have previously noted, the district court did not directly address the MCLA in its analysis, rather framing its brief discussion of the statute in the context of the Federal Debt Collection Practices Act (“FDCPA”). According to the district court, the defendant’s continuing lien did not violate the FDCPA because it “was not proscribed by the MCLA.” Archie, 2018 WL 3475429, at *6. We offer no opinion as to whether the continuing lien in Archie may have violated the FDCPA, but as we have explained in the context of the mechanic’s lien statute, “there can be no lien for anything which does not fall within the statutory provision[]” and “[t]his Court has no power to extend the mechanic’s lien law to cases beyond its obvious design and plain requirements.” 5500 Costal Highway, 305 Md. at 536, 505 A.2d at 535. A condominium association may not secure future debts through a lien merely because the MCLA is silent on the issue. 11 The “Statement of Lien” included in the statute provides, in its entirety: (continued…) 18 the signature of the creditor, and (4) the amount of debt owed at the time of recording.

After recording the short document within the land records, the condominium association

has established a valid lien.

Admittedly, a continuing lien would make the process for securing delinquent

payments more expedient for condominium associations. In this case, Appellant would

have been able to secure, by operation of statute, delinquent assessments that had accrued

since the last recorded lien. The countervailing interest of expediency does not withstand

practical experience or judicial scrutiny. Appellant’s own actions reveal that routinely

recording liens is not too burdensome. Appellant has already recorded nine different liens

against Walker. Our case law has also recognized the preference of the General Assembly

for protecting a unit owner’s constitutional rights over expedience. Id. at 335-36, 167 A.3d

at 619; Golden Sands, 313 Md. at 493, 545 A.2d at 1337 (“no lien attaches until after the

unit owner has an opportunity to be heard. . . . The court may not order a lien imposed

unless it finds that probable cause exists to establish a lien[.]”) (internal citation omitted).

(…continued) This is to certify that the property described as _______________ is subject to a lien under Title 14, Subtitle 2 of the Real Property Article, Maryland Annotated Code, in the amount of $______. The property is owned by ____________________.

I hereby affirm under the penalty of perjury that notice was given under § 14-203(a) of the Real Property Article, and that the information contained in the foregoing statement of lien is true and correct to the best of my knowledge, information, and belief. _________________________ (name of party claiming lien)

Real Prop. § 14-203(j)(1). 19 The plain language of Real Prop. § 14-202 limits sums that can be secured by the

lien to unpaid damages, costs, and fees due under contract. A continuing lien would sweep

future damages, costs and fees that have yet, and may never materialize into the lien’s

scope. Such an outcome is not supported by the plain text of the statute.

C. Legislative History

The prohibition of continuing liens by the MCLA garners further support from the

statute’s legislative history. “Enacted in 1985, the MCLA was established as a direct result,

and in response to, the 1985 Court of Special Appeals unreported opinion in Surfside 84

Condominium Council of Unit Owners v. Mullen, No. 495, Sept. Term 1984 (Md. Ct. Spec.

App. Jan. 28, 1985).[12] The purpose of the MCLA was to ‘establish procedural rules that

comported with due process for establishing, enforcing, or denying a lien based on a

contract.’” In re Stein Props., Inc., 598 B.R. 213, 218 (Bankr. D. Md. 2019) (quoting Select

Portfolio, 455 Md. at 332, 167 A.3d at 617). The MCLA’s predecessor had allowed the

statement of the lien to be recorded within two years after the assessment came due. Select

Portfolio, 455 Md. at 332, 167 A.3d at 616 (citing Real Prop. § 11-110(d)). The General

Assembly amended the MCLA to prevent a lien’s recordation until the unit owner received

both prior notice and an opportunity to be heard. Id. at 336, 167 A.3d at 619 (“Under the

[MCLA], . . . no lien attaches until after the [property] owner has had an opportunity to be

heard. It would be completely at odds with that purpose to provide for the creation of a

12 Even though the Surfside 84 decision was unreported, the General Assembly moved quickly to address the procedural due process deficiencies identified by the Court of Special Appeals. Select Portfolio, 455 Md. at 332, 167 A.3d at 617 (citing Report of Senate Judicial Proceedings Committee concerning Senate Bill 625 (March 20, 1985)). 20 lien by virtue of a contract alone and exempt it from the procedures the statute created.”)

(internal citation omitted).

A continuing lien appears similarly at odds with the legislative purpose of the

MCLA because it deprives debtors of the opportunity to challenge the accrual of a finite

amount of debt in a proceeding before the condominium association records the lien. In

Select Portfolio, this Court dismissed the creditor’s reading of the MCLA that it permitted

“creation of a lien simply by virtue of the existence of a contract[,]” in part, because

“[n]othing in the legislative history of the statute supports such a reading.” Id. at 335, 336,

167 A.3d at 619 (emphasis added and footnote omitted). Similar to Select Portfolio,

nothing in the legislative history of the MCLA demonstrates the intent of the General

Assembly to permit continuing liens. The General Assembly amended the MCLA to better

protect the due process rights of the debtor. Whether a continuing lien may also satisfy the

minimum due process concerns expressed by the legislature in 1985 is irrelevant. The

legislative history demonstrates that the General Assembly did not contemplate or evaluate

continuing liens in amending the MCLA. When a continuing lien “is not only inconsistent

with the structure and language of the [MCLA], but it is also at odds with the legislative

history[,]” it is not permitted. Id. at 335, 167 A.3d at 619.

The desire of the General Assembly to model the MCLA on the mechanic’s lien

statute further demonstrates the MCLA’s prohibition of continuing liens. Id. at 332, 167

A.3d at 617; see also Golden Sands, 313 Md. at 491 n.5, 545 A.2d at 1336 n.5 (“Although

the 1985 enactment . . . is not a clone of the 1976 Mechanic’s Lien Law, there is enough

similarity to suggest cousinship even if not parentage.”). Like a condominium association

21 lien, a mechanic’s lien is created by and limited to its statutory terms. Southern Mgmt.

Corp. v. Kevin Willes Const. Co., Inc., 382 Md. 524, 543, 856 A.2d 626, 637 (2004). The

mechanic’s lien statute requires prior notice before the lien’s recordation, which should

specify the kind of work or materials furnished, the expected date of completion and the

amount or sum due.13 Welch v. Humphrey, 200 Md. 410, 414, 90 A.2d 686, 687 (1952)

(“It has always been held in Maryland that if notice is given to the owner of the property

before the lien claim is filed, it should definitely state the intention of the claimant to claim

the lien, and also fully and specifically state the particulars of the claim . . . and the amount

of the claim.”) (emphasis added). This Court has construed the mechanic’s lien statute to

prohibit a mechanic’s lien from attaching to future indebtedness. Dickerson Lumber Co.

v. Herson, 230 Md. 487, 493, 187 A.2d 689, 692 (1963). It follows that the MCLA would

similarly require advanced notice to challenge the proposed amount or sum due before

recordation of the lien.

The conscious omission of continuing liens in the MCLA by the General Assembly

becomes more apparent when juxtaposed against other titles within the Maryland Code.

The General Assembly has authorized liens that are “continuing” in different kinds of

commercial transactions. See, e.g., Md. Code Ann., Commercial Law (“Com. Law”) § 15-

602(a) (“When an attachment is levied against the wages of a judgment debtor, it shall

13 Similar to the boilerplate “Statement of Lien” provided in Real Prop. § 14-203, see supra note 11, the mechanic’s lien statute also provides a boilerplate “Intention to Claim a Lien” form that states in pertinent part: “The total amount earned under the subcontractor’s undertaking to the date hereof is $___ of which $___ is due and unpaid as of the date hereof.” Real Prop. § 9-104. This form indicates that the lien covers only a fixed, ascertainable amount due before the lien is created. 22 constitute a lien on all attachable wages that are payable at the time attachment is served

or which become payable until the judgment, interest, and costs, as specified in the

attachment, are satisfied.”) (emphasis added). Unlike with the MCLA, the plain text of

Com. Law § 15-602(a) explains that the lien covers payments both at the time of attachment

and in the future. If the General Assembly had intended for the MCLA to permit continuing

liens, as an expedient mechanism for securing future condominium association costs and

fees, it could have said so in the statute.14

D. Other Authority

We find further support in our interpretation of the MCLA by turning to how other

jurisdictions have treated the issue of continuing liens. While appellate courts across the

country have reached different conclusions as to the validity of continuing liens, each case

confirms that the outcome depends on the particular text, legislative purpose and history,

and case law of the respective jurisdiction. A United States Bankruptcy Appellate Panel

of the Ninth Circuit exemplified this kind of jurisdiction-specific analysis of continuing

liens in In re Basave De Guillen, 604 B.R. 826 (B.A.P. 9th Cir. 2019). In De Guillen, a

condominium association attempted to secure a continuing lien under a California state

14 Other states have expressly permitted “continuing liens” in their statutory language as well. See N.D. Cent. Code Ann. § 32-09.1-21 (West 2020) (Continuing lien on wages); Wash. Rev. Code Ann. § 6.27.330 (2020) (Continuing lien on earnings— Authorized); S.D. Codified Laws § 9-43-100 (2020) (“Any special assessment lawfully levied upon real property assessed pursuant to this chapter is a continuing lien on the property as against all persons except the United States and this state. The lien continues for fifteen years from the due date of the last installment.”).

23 statute15 with requirements substantially similar to the MCLA. Id. at 830. The court held

that the statute authorizing a lien on unit owner assessments “does not provide for a

continuing lien, and case law is scant regarding whether the Act may be fairly interpreted

as so providing.” Id. at 833. “To hold otherwise would offend the comprehensive notice

scheme and homeowners’ rights to contest delinquent assessments as established in the

[statute].” Id. at 834.

The De Guillen court’s analysis appears particularly persuasive in this case because

the text and legislative history of Cal. Civ. Code § 5675 parallels the text and legislative

history of Real Prop. § 14-204. Both statutes permit liens on uncollected assessments, late

charges and fees, but omit reference to continuing liens. The legislative history underlying

each statute reflects that both were intended to protect the due process rights of unit owners

and limit what condominium associations can secure in a recorded lien. The De Guillen

court similarly found no California case law that authorized continuing liens. In sum, the

15 Cal. Civ. Code § 5675 provides in pertinent part:

(a) The amount of the assessment, plus any costs of collection, late charges, and interest assessed in accordance with subdivision (b) of Section 5650, shall be a lien on the owner’s separate interest in the common interest development from and after the time the association causes to be recorded with the county recorder of the county in which the separate interest is located, a notice of delinquent assessment, which shall state the amount of the assessment and other sums imposed in accordance with subdivision (b) of Section 5650, a legal description of the owner’s separate interest in the common interest development against which the assessment and other sums are levied, and the name of the record owner of the separate interest in the common interest development against which the lien is imposed.

(Emphasis added). 24 court declined to read continuing liens into the statute when its plain text, legislative history

and purpose, and relevant case law provided no basis to do so.

The jurisdiction-specific approach to analyzing the validity of condominium

association liens also explains why the cases cited by Appellant are not persuasive. Some

state legislatures intended to permit continuing liens,16 while others, like Maryland, did

not. Appellant cites to a line of cases in New York that most recently culminated in a state

intermediate appellate court’s ruling that permitted continuing liens. The New York

appellate court reached an opposite conclusion than this Court because of notable

differences in the respective statutory texts, legislative histories, and case law. Trencher,

128 A.D.3d at 453, 9 N.Y.S.3d at 214 (citing a line of cases dating back to 1978 that

expressly approved of continuing liens in New York). Unlike the MCLA, which limits

damages to those due under contract and directly relating to filing, the New York statute

used broader language that supported a recognition of continuing liens:

The board of managers, on behalf of the unit owners, shall have a lien on each unit for the unpaid common charges thereof, together with interest thereon. . . . Any grantor or grantee of a unit shall be entitled to a statement from the manager or board of managers, setting forth the amount of the unpaid common charges accrued against the unit, and neither such grantor

16 Missouri’s intermediate appellate court, for example, interpreted its equivalent condominium association statute to permit continuing liens. Carroll v. Oak Hall Assocs., L.P., 898 S.W.2d 603, 607 (Mo. Ct. App. 1995) (“The Association’s lien, then, arose when the common expense assessments became due and were unpaid. The first of the delinquent assessments was due January 1, 1988, and each month’s assessment since that date has remained unpaid and constitutes a lien on the respective units.”) (emphasis added). Other jurisdictions, such as Connecticut, permit continuing liens subject to parameters specified in the statute. Lakeridge Ass’n, Inc. v. Lynch, 51 Conn. L. Rptr. 530, 2011 WL 1087513, at *2 (Conn. Super. Ct. Feb. 23, 2011) (noting Connecticut’s statute limits a condominium association’s priority lien to six months of common charges plus fees and costs). 25 nor grantee shall be liable for . . . any unpaid common charges against such unit accrued prior to such conveyance[.]

N.Y. Real Prop. Law § 339-z (McKinney 2004) (emphasis added).

The New York legislature also articulated a different legislative purpose than the

Maryland General Assembly when enacting the MCLA. In the New York legislature, the

“overriding concern” was “that of ensuring the continued viability of the entire

condominium project and protecting those who have invested substantial sums of their life

savings from unit owners who have failed to pay their common charges.” Washington Fed.

Sav. & Loan Ass’n v. Schneider, 95 Misc. 2d 924, 929 (N.Y. Sup. Ct. 1978). The Maryland

General Assembly presumably had this goal in mind too, but it was not the “overriding

concern.” Maryland’s General Assembly weighed the rights of the condominium against

a debtor’s constitutional due process rights and achieved a different balance of interests

than the New York legislature by requiring that Maryland debtors have an opportunity to

challenge fixed sums in a lien before it is recorded.

CONCLUSION

The plain text, legislative history, and case law relevant to the MCLA collectively

demonstrate the intent of the General Assembly to prohibit continuing liens. We

accordingly answer the certified question in the negative: Real Prop. §§ 14-201–206 does

not secure unpaid damages, costs of collection, late charges, and attorney’s fees that accrue

subsequent to the recordation of the lien.

CERTIFIED QUESTION OF LAW ANSWERED AS SET FORTH ABOVE. COSTS TO BE EQUALLY DIVIDED BY THE PARTIES.