Lawyers for distressed homeowners are pressing Maryland’s top court to reconsider and permit rehearing on its ruling last month that entities seeking to collect defaulted mortgage loans need not be licensed by the state — and are suggesting that Judge Joseph M. Getty, the decision’s author, should have recused himself.
In papers filed with the Court of Appeals this week, the attorneys argue the high court improperly considered an executive branch document that was not part of the record in concluding that the Maryland Collection Agency Licensing Act does not apply to mortgages.
The 5-2 majority cited the 2006 letter — from the Department of Labor, Licensing and Regulation to then-Gov. Robert L. Ehrlich Jr. requesting a potential amendment — in its decision that a 2007 expansion of the statute did not add mortgages. The high court also held the General Assembly has shown no intent to include these home loan collectors in the state’s licensure requirement for collection agencies.
In 2006, Getty was serving as Ehrlich’s policy and legislative director and was presumably privy to the 2006 exchange, the lawyers stated in their request for reconsideration.
“Under the circumstances Judge Getty was arguably disqualified from even hearing these matters,” wrote attorneys Phillip R. Robinson and Scott C. Borison. “His involvement in the preparation of the draft bill that would become 2007 Maryland Laws Ch. 472 before he left the Ehrlich administration was not disclosed to the parties.”
In their filing, the attorneys cite Maryland rules on judicial conduct that say a judge “shall” recuse when his or her impartiality might reasonably be questioned, when he or she has personal knowledge of the facts in dispute, is likely to be a material witness in the proceeding or served in governmental employment concerning the matters at issue in the proceeding.
The Maryland Judiciary issued a statement on Getty’s behalf Thursday afternoon stating that “it is Judiciary policy that judges cannot comment on active cases.”
Robinson, who signed the motion for reconsideration and rehearing, declined to comment beyond what is written in that filing.
The specific document at issue was a “bill request form” DLLR submitted to Ehrlich’s office in seeking the governor’s endorsement of an amendment that would expand the law’s definition of collection agencies.
The General Assembly passed that amendment in 2007 — Martin O’Malley’s first year as governor – to further define “collection agency” as a person who engages directly or indirectly in the business of “collecting a consumer claim the person owns, if the claim was in default when the person acquired it.”
Getty cited the bill request in his majority opinion last month.
“The department did not request, and the General Assembly did not intend, to expand the scope of MCALA’s licensing requirement to other industries beyond the collection agency industry,” Getty wrote. “There is nothing in the department’s bill request form, the fiscal and policy note, or the written testimonies that suggest DLLR was proposing to license and regulate the mortgage industry by revising the definition of collection agency under MCALA. Overall, the legislative history of the 2007 departmental bill reveals that the changes did not intend to expand the scope of MCALA beyond the collection industry.”
The homeowners’ attorneys said neither party addressed the department’s bill request form during any of the court proceedings leading up to the high court’s decision. Thus, neither party had a chance to address the form’s potential significance to the case, Robinson and Borison stated in their request for reconsideration and reargument.
Robinson is with Consumer Law Center LLC in Silver Spring; Borison is with Legg Law Firm LLP in Frederick.
Getty was joined in the majority opinion by Judges Clayton Greene Jr., Shirley M. Watts, Michele D. Hotten and Glenn T. Harrell Jr., a retired jurist who sat by special assignment in place of Chief Judge Mary Ellen Barbera who had recused herself for reasons not publicly disclosed.
Judge Robert N. McDonald wrote a dissenting opinion that Judge Sally D. Adkins joined.
The Court of Appeals rendered its decision in four consolidated cases: Kyle Blackstone v. Dinesh Sharma and Terrance Shanahan v. Seyed Marvastian, No. 40; Laura O’Sullivan v. Jeffrey Altenburg, No. 45; and Martin S. Goldberg v. Martha Lynn Neviaser, No. 47, September Term 2017.