Moore v. RealPage Utility Management

264 A.3d 700, 476 Md. 501
Court of Appeals of Maryland·Decided November 30, 2021·No. 1m/21·Published·Cited by 28 cases

Opinion

Paul Moore v. RealPage Utility Management, Inc., Misc. No. 1, September Term, 2021. Opinion by Getty, C.J.

PUBLIC UTILITIES — ENERGY ALLOCATION FOR APARTMENTS — PUBLIC SERVICE COMMISSION APPROVAL The Court of Appeals held that Maryland Code (1998, 2020 Repl. Vol.), Public Utilities Article § 7-304 prohibits the use of energy allocation equipment and procedures that the Public Service Commission has not approved to bill energy charges to tenants of properties built prior to 1978.

United States District Court For the District of Maryland Case No. 8:20-cv-00927 PWG

Argued: September 9, 2021 IN THE COURT OF APPEALS OF MARYLAND

Misc. No. 1

September Term, 2021

PAUL MOORE

v.

REALPAGE UTILITY MANAGEMENT, INC.

Getty, C.J.

McDonald,

Watts,

Hotten,

Booth,

Biran,

Battaglia,

(Senior Judge, Specially Assigned)

JJ.

Opinion by Getty, C.J.

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

Filed: November 30, 2021

2021-11-30 10:28-05:00

Suzanne C. Johnson, Clerk

In Maryland, the Public Service Commission (“PSC”) is charged with regulating public utilities such as gas, electricity, telephone, water, and sewage disposal companies, in order to ensure safe, reliable, and economical utility services to the citizens of Maryland. For residential electric and gas service in buildings constructed since July 1, 1978, the statutorily required method for determining an apartment tenant’s utility bill is to measure the actual amount of gas and electricity consumed by that tenant using an individual meter or submeter. This method rests on the principle that a tenant should only pay for gas and electricity consumed by the tenant’s unit over the course of a billing period, which ensures fairness in the measurement and billing process.

When the Maryland General Assembly required the installation of individual meters in new construction as of July 1, 1978, it did not retroactively apply this requirement to existing apartment buildings. Apartment buildings constructed prior to 1978 that only have a master meter allocated energy costs to tenants by two methods: (1) square footage computation and pro rata assessments; or (2) added rental components.1 While the PSC has regulatory responsibility over some types of metering, such as individual meters and submetering, from the PSC’s perspective, the above-referenced methods of allocating a tenant’s energy costs for apartment buildings constructed prior to 1978 are not, and have never been, within the PSC’s purview. See Letter from Frank Heintz, Public Service

1 We use the term “added rental components” to refer to utility charges that are established in a lease agreement that would be included in the monthly rental payment.

Commission Chairman, to the Honorable Wayne A. Cawley, Jr., Department of Agriculture Secretary in legislative bill file for Senate Bill 899 (1987).

A new system of calculating a tenant’s monthly gas and electric bill was introduced in the mid-1980s for apartments having a master meter instead of individual meters or submeters. This system did not calculate the actual use of a tenant’s gas and electricity consumption, nor did it allocate energy charges solely on the basis of square footage computations and pro rata assessments. Instead, the system relied upon various components of measurement, such as the number of seconds a valve was open on a furnace (“furnace runtime”) to compute a tenant’s utility charges. Therefore, this system was not within the PSC’s definition of a submeter and resulted in a wholly unregulated method of allocating rental utility charges. Tenants of landlords that utilized these new energy allocation systems expressed concern over a system that had no regulatory oversight. Accordingly, the General Assembly attempted to remedy these concerns by considering legislation in the 1987 and 1988 Legislative Sessions.

As such, today, if a property owner or residential utility billing service company uses an energy allocation system to calculate the amount of gas or electricity consumed by an individual apartment unit, they must confirm that the method has been approved by the PSC. In the approval process, the PSC ensures that the energy allocation system results in a reasonable determination of the cost of the energy consumed by an individual apartment unit. See COMAR 20.26.02.01(A). Accordingly, this approval provides residential apartment tenants with a safeguard against arbitrary and unreliable energy allocation equipment and procedures calculating their gas and electricity bills.

Before this Court is a certified question of law from the United States District Court for the District of Maryland (“federal district court”) that arises in the context of a putative class action lawsuit brought by Appellant Paul Moore, on behalf of residential apartment tenants, against Appellee RealPage Utility Management, Inc., a residential utility billing services company working on behalf of landlords in Maryland. The federal district court asked this Court to determine whether, for apartment houses built prior to 1978, methods of energy allocation that determine the billable amount of gas or electricity by means other than by the actual measurement of consumption of the individual unit are subject to the PSC’s approval as set forth in Maryland Code (“Md. Code”) (1998, 2020 Repl. Vol.), Public Utilities Article (“PU”) § 7-304.

Based upon a plain language analysis of PU § 7-304, its corresponding Code of Maryland Regulations (“COMAR”) provisions, and a review of the General Assembly’s intent in enacting the statute as evidenced by the legislative history, we hold that the approval requirements stated in PU § 7-304 are applicable to all energy allocation systems in apartment houses, regardless of the construction date of the building. Under the PSC’s interpretation of the definition set forth in PU § 7-304, energy allocation systems are systems that determine the approximate energy use consumed in an individual dwelling unit with a device that measures a furnace operating or running time, baseboard pipe temperature, or other characteristics. See PU § 7-304(a)(4); COMAR 20.26.01.02. It has been a longstanding position of the PSC that the allocation of energy costs solely computed on the basis of square footage computations and pro rata assessments is governed by lease agreements under the Real Property Article and are not within the purview of the PSC.

Therefore, the allocation of energy costs solely computed on the basis of square footage computations and pro rata assessments, as well as added rental components, are exempt from the approval requirements set forth in PU § 7-304.

BACKGROUND

The Maryland Uniform Certification of Questions of Law Act,2 Md. Code (1996, 2020 Repl. Vol.), Courts & Judicial Proceedings (“CJ”) §§ 12-601 et seq., empowers this Court to certify questions of law to another court and answer questions of law presented to it. As such, this Court may “answer a question of law certified to it by a court of the United States or by an appellate court of another state or of a tribe, if the answer may be determinative of an issue in pending litigation in the certifying court and there is no controlling appellate decision, constitutional provision, or statute of this State.” CJ § 12-603. When answering a certified question of law, this Court is statutorily prescribed to resolve questions of Maryland law; it may not determine questions of fact. Fangman v. Genuine Title, LLC, 447 Md. 681, 690–91 (2016) (quoting Parler & Wobber v. Miles & Stockbridge, 359 Md. 671, 681 (2000)).

The following information is presented from the federal district court’s Certification Order.3 Appellant Paul Moore (“Mr. Moore”) is a residential apartment tenant of the

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Moore v. RealPage Utility Management, 264 A.3d 700, 476 Md. 501 (Md. 2021).

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