Dakrish, LLC T/A Vineyards Elite v. Ran Raich (Ct. of Special Appeals)

Filed: November 30, 2012.

Opinion by Judge Kathryn Grill Graeff.

Held: A party to a liquor board decision in circuit court has standing to appeal that court's decision to the Court of Special Appeals.  The review of a liquor board's decision by the Court of Special Appeals is limited to determining whether substantial evidence in the record as a whole supports the board's findings.  

 

Facts: The Baltimore County Liquor Board  ("Board") denied Applicant’s liquor license application. The Board reached their decison after hearing from several experts that presented conflicting testimony on the demand for the store, it's geographic location, proximity to other stores, and other factors.  The Applicant petitioned the Circuit Court for review, which reversed the Board's denial. The Circuit Court found “the Board’s decision was flawed because it failed to balance appropriate factors to be considered by the Board pursuant to Maryland Code (2011 Repl. Vol.) Art. 2B § 10-202(a)(2)(i), and gave undue weight to the potential for impact on existing licensees”  and remanded the case to the Board with instructions to issue a liquor license. 

 

Appellant, appearing at the Board hearing through one of its licensees in opposition to Applicant’s petition for a license, appealed to the Court of Special Appeals ("Court").  The Court addressed whether appellant had standing to bring suit and whether the Board had to consider all of the factors enumerated in the liquor licensing statute in reaching a decision to deny an application.

Analysis:  Applicant first argued Appellant lacked standing to seek judicial review of the Board’s decision as it was not an aggrieved party. The Court agreed that a person appealing to the circuit court must be aggrieved but found that appellant had the right to appeal pursuant to Md. Ann. Code art. 2B, § 16-101(f) as it was a party of record to the Circuit Court case.

The Court then addressed whether the Board was required to consider each of the enumerated factors of the liquor licensing statute.  Using United Steelworkers of America v. Bethlehem Steel Corporation, 298 Md. 665 (1984), Applicant contended that the Board here did not make adequate findings on the record with respect to each of the applicable factors to support its denial of the license application.  The Court noted the liquor licensing statute does not require that the Board set forth specific findings of fact and conclusions of law.  Instead, the Court stated its role is limited to "determining whether there is substantial evidence in the record as a whole to support the Board's conclusion."  The Court found such evidence to exist and supported the Board’s decision.

The full opinion is available in PDF.

Alcoa Concrete & Masonry, Inc. v. Stalker Brothers, Inc. (Ct. of Special Appeals)

Filed: March 31, 2010

Opinion by Judge Lawrence F. Rodowsky

Holding: An unlicensed contractor is entitled to be paid under a home improvement agreement with a contractor, regardless of the requirement that contractors must be licensed under the Maryland Home Improvement Law. The statute was intended to protect the public under contractor-owner contracts, not contractors who enter into arms-length agreements with knowledge of the subcontractor’s professional qualifications.

Analysis: In deciding a dispute to determine whether a home improvement general contractor is contractually obligated to pay a subcontractor who was not licensed under the Maryland Home Improvement Law (the “Act”) at the time of entering into the subcontract, but who was licensed when the suit was brought, the Court found that it is not a reasonable construction of the statute to allow a contractor to withhold payment on the grounds that a subcontractor previously was unlicensed (but is licensed at the time payment is due). Section 8-315(a) of the Act, which prohibits payment by contractor to subcontractor “unless the person to be compensated is licensed” does not bar payment to a subcontractor licensed at time of suit.

Applying the “revenue/regulation rule,” the Court distinguished between the owner-unlicensed contractor home improvement contract (the contractual relationship covered by the Act) and the contractor-unlicensed subcontractor contract, and found that the purpose of the requirement that contractors and subcontractors be licensed is to protect the public. As such, the Act was not intended to be a shield for contractors to escape liability for the unpaid balance due to a subcontractor by asserting the illegality of the subcontract.

The full opinion is available in PDF.

Baltimore Street Builders v. Stewart (Ct. of Special Appeals)

Filed: July 7, 2009
Opinion by Judge James P. Salmon

Held: Home improvement contractor that failed to comply or "substantially comply" with the regulatory requirement to hold a home improvement license was not entitled to enforce its contract.

Facts: Affirming the Circuit Court's dismissal of a petition to establish a mechanic's lien based on construction contract where builder did not have home improvement license.

A builder entered into a contract and performed construction on a residence in Maryland. The defendant owner failed to pay in full. The builder sued to establish and enforce a mechanic's lien. The builder was not licensed as a home improvement contractor. The builder protested that a principal owner of the builder did hold a license.

The Court noted that contracts made by unlicensed persons subject to regulatory statutes designed to protect the public are illegal and unenforceable. The Court discussed the principle that strict application of the rule is not always appropriate. There may be circumstances where such contracts may be enforced. Such circumstances would include where the contractor "substantially complied" with the regulatory requirement. Factors relevant to this issue would be (1) whether the contractor had a license at the time of contracting; (2) whether the contractor readily secured a license; (3) the responsibility and competence of the contractor.

Finding that neither the contractor nor its contracting agent ever held a license, the Court rejected the notion that the contractor substantially complied.

The full opinion is available in PDF.

*The opinion contains a detailed explication of the principle of "substantial compliance."