0508/25•In the Matter of Ludwig, Robert v.
Gesamter Gesetzestext
Circuit Court for Montgomery County Case No. 466721V UNREPORTED* IN THE APPELLATE COURT OF MARYLAND No. 508 September Term, 2025 ______________________________________ IN THE MATTER OF ROBERT LUDWIG ______________________________________ Nazarian, Arthur, Shaw, JJ. ______________________________________ Opinion by Nazarian, J. ______________________________________ Filed: October 9, 2026 * This is an unreported opinion. This opinion may not be cited as precedent within the rule of stare decisis. It may be cited for persuasive value only if the citation conforms to Maryland Rule 1-104(a)(2)(B).
—Unreported Opinion— This appeal is the culmination of nine years of litigation over a series of landlord-tenant disputes originating in the Montgomery County Office of Landlord-Tenant Affairs (the “Office”). In June 2015, attorney-landlord Robert Ludwig leased a single-family residence in Bethesda to Dr. Thomas Hearty and Jaime Salay (the “Tenants”) for a two-year term beginning on August 1, 2015. In 2017, the Tenants filed two complaints against Mr. Ludwig with the Office. Their first complaint sought reimbursement from him for the cost of replacing the home’s sump pump, and their second requested an order for Mr. Ludwig to return portions of their security deposit that they alleged he withheld unlawfully. In response, Mr. Ludwig raised a counterclaim against the Tenants for alleged unpaid rent and late fees. In 2019, after a hearing on the parties’ claims, the Montgomery County Commission on Landlord-Tenant Affairs (the “Commission”) issued an order and opinion that granted the Tenants’ requests for relief but didn’t resolve Mr. Ludwig’s counterclaim. Mr. Ludwig petitioned for judicial review with the Circuit Court for Montgomery County, which affirmed the Commission’s decisions. He appealed, and this Court dismissed his appeal and remanded the case to the circuit court with instructions to remand to the Commission to adjudicate his counterclaim and resolve any other outstanding issues. On remand, after a hearing on Mr. Ludwig’s counterclaim, the Commission issued an order and opinion in 2024 dismissing the counterclaim and reaffirming the conclusions in its 2019 order. Mr. Ludwig again petitioned for judicial review, the circuit court affirmed, and he appeals several issues now. First, he challenges the validity of both
—Unreported Opinion— 2 Commission orders on procedural grounds. Second, he asserts that the Commission’s decisions granting the Tenants’ requests for relief and dismissing his counterclaim were arbitrary and capricious and unsupported by substantial evidence in the administrative record. Finally, he asks us to vacate the circuit court’s order that he pay the Tenants’ attorney’s fees incurred during the judicial review proceedings. We affirm the Commission’s conclusions as to all claims raised by the parties, vacate the circuit court’s order awarding the Tenants attorney’s fees, and remand to the circuit court for the limited purpose of allowing the court to explain the basis for the fee award. I. BACKGROUND In June 2015, Mr. Ludwig and the Tenants entered a two-year lease agreement that began on August 1, 2015. The lease required monthly rental payments of $3,850.00 for the first year and $3,950.00 for the second year. Under the lease, the Tenants also paid a $3,850.00 security deposit and a $3,850.00 pet deposit. Several other lease provisions are relevant to this appeal. Paragraph 2 of the lease provided that rental payments “received after the fifth day of each month shall incur a late payment fee of $100.00 which, if not included in the payments, [would] be deducted from [the] Tenants’ security deposit.” Paragraph 9 required Mr. Ludwig to “make any and all repairs over $300.00” to the leased premises. Paragraph 11 required the Tenants to waive their right to a trial by jury in any legal proceeding Mr. Ludwig brought against them for possession or rent under the lease. In March 2016, Mr. Ludwig paid to replace the property’s sump pump after it failed
—Unreported Opinion— 3 for the first time during the tenancy. In early 2017, the sump pump failed for a second time. After the second failure, Mr. Ludwig informed the Tenants that they would be responsible for the cost of another replacement. The Tenants paid Mr. Ludwig’s plumber $365.00 to replace the pump and on April 20, 2017, they asked him to deduct that amount from the rent due for May 2017. On April 27, they sent him a second email asking to deduct the amount from their May 2017 rent payment on account of the repair. Then on April 28, 2017, they filed a complaint with the Office seeking reimbursement of the sump pump replacement cost. The Commission assigned the complaint Case No. 36508. In anticipation of their lease ending on July 31, 2017, the Tenants deducted the replacement cost amount from their July 2017 rent payment. After the lease ended, on August 22, 2017, Mr. Ludwig emailed the Tenants an itemized list of deductions from their deposits for claimed damages to the property. The deductions totaled $1,930.60 and included the cost of refinishing the floors ($382.50), removing a stain from the floor by the fireplace ($150.00), repainting several walls ($1,350.00), and cleaning the gutters ($48.10), as well as a water bill ($284.92) that Mr. Ludwig labeled as “past due.” Mr. Ludwig did not send the itemized list by first-class mail. The Tenants responded two days later that they weren’t responsible for the wall repainting or gutter cleaning costs and had paid the water bill already. They asked Mr. Ludwig to send them the interest accrued on the security deposit during their lease term, which they calculated to be $221.51. On August 25, Mr. Ludwig mailed the Tenants a check for $5,769.40, the remaining balance of their deposits after his $1,930.60 in deductions.
—Unreported Opinion— 4 On September 5, the Tenants filed a second complaint with the Office, challenging Mr. Ludwig’s security deposit deductions and failure to return the interest accrued on their deposits and seeking recovery of $1,904.53. The Commission assigned this complaint Case No. 36732. After further exchanges with the Tenants, Mr. Ludwig credited their water bill payment but claimed an additional $382.50 deduction for damage to the stairs. He stated that after subtracting the $284.92 water bill from the total deductions and adding the $382.50 cost of refinishing the staircase, the Tenants owed him $97.58. He then sent the Tenants an additional check, dated October 4, 2017, for $123.53 (an amount close but not equal to the $123.93 difference between the $221.51 in interest calculated by the Tenants minus the $97.58 he claimed the Tenants still owed him). The investigator assigned to Case Nos. 36508 and 36732 notified the parties on June 20, 2018, that the Office had scheduled a conciliation conference for June 28. Mr. Ludwig objected to the conference date for lacking proper notice. The investigator rescheduled the conference for July 10, 2018, and notified the parties of the new date on June 28. Mr. Ludwig filed a motion to stay the proceedings on July 9, the day before the new conference date. The Office denied the motion and informed the parties that it would proceed with the conference as scheduled. Mr. Ludwig did not attend the July 10 conference. The Commission held a hearing on the Tenants’ complaints on November 19, 2018, with a panel of three commissioners presiding. That same day, Mr. Ludwig filed a Hearing Submission with the Commission in which he asserted a counterclaim against Tenants seeking $945.00 in unpaid rent and late fees as well as attorney’s fees. In April 2019, the
—Unreported Opinion— 5 Commission issued decisions in Case Nos. 36508 and 36732 in the Tenants’ favor. The Commission concluded that the Tenants were entitled to reimbursement for the $365.00 they paid to replace the second sump pump and that their $365.00 deduction from the July 2017 rent satisfied that reimbursement. With respect to the security deposit complaint, the Commission concluded that Mr. Ludwig had violated Maryland Code (1974, 2015 Repl. Vol.), § 8-203 of the Real Property Article (“RP”), the version of the statute in effect at that time, by failing to send the itemized damages list by first-class mail, failing to calculate the accrued interest on the security deposit correctly, and failing to return the security deposit plus accrued interest within forty-five days after the tenancy ended. The Commission found also that Mr. Ludwig’s conduct rose “to the level of bad faith and egregiousness” and imposed a penalty of $2,160.97. The Commission ordered Mr. Ludwig to pay the Tenants a total of $4,321.94 (the $7,700.00 they paid in deposits plus $230.37 in accrued interest and the $2,160.97 penalty, minus the $5,769.40 that he had refunded them already). The Commission didn’t resolve Mr. Ludwig’s counterclaim. Mr. Ludwig filed a petition in the Circuit Court for Montgomery County seeking judicial review of the Commission’s decision. The circuit court affirmed the Commission’s decision and order and Mr. Ludwig appealed to this Court. We dismissed the appeal for lack of a final judgment, vacated the circuit court’s judgment affirming the Commission’s decision, and remanded the case to the circuit court with instructions to remand the matter to the Commission to adjudicate Mr. Ludwig’s counterclaim and any other unresolved claims necessary for entry of a final judgment. Order, Ludwig v. Hearty, No. 1938, Sept.
—Unreported Opinion— 6 Term 2019 (Md. Ct. Spec. App. Nov. 2, 2020). On remand, the Commission assigned Mr. Ludwig’s counterclaim Case No. 47763. It held a hearing on Case No. 47763 on May 10, 2023, then continued that hearing on June 28, 2023. Only one member of the 2018 panel for Case Nos. 36508 and 36732 served on the three-commissioner panel for Case No. 47763. The record reflects that one of the other two commissioners from that panel had left the Commission and that the other was in the process of vacating his position. Mr. Ludwig moved to strike the two new commissioners, arguing that § 29-14(b) of the Montgomery County Code (“MCC”) required the original panel members to hear the counterclaim. The Commission denied his motion. On January 4, 2024, the Commission dismissed Mr. Ludwig’s counterclaim and concluded that its decisions resolving Case Nos. 36508 and 36732 remained unchanged. Mr. Ludwig filed a petition for judicial review of the Commission’s decision and order in Case No. 47763 in the Circuit Court for Montgomery County. The Tenants, represented by counsel for the first time, filed a memorandum opposing Mr. Ludwig’s petition. The circuit court held a hearing on March 7, 2025, and affirmed the decision of the Commission in Case No. 47763. After the circuit court affirmed the Commission’s decision and order, the Tenants filed a post-judgment motion seeking $11,333.00 in attorney’s fees under RP § 8-203(e)(4) or, in the alternative, under Maryland Rule 1-341. On May 28, 2025, the circuit court granted the Tenants’ motion and entered judgment against Mr. Ludwig in favor of the Tenants for $11,333.00 in attorney’s fees.
—Unreported Opinion— 7 This timely appeal followed. We supply additional facts in our discussion as necessary. II. DISCUSSION Mr. Ludwig presents six questions for our review, which we consolidate into four and rephrase: 1. Did the Office satisfy its obligation under MCC § 29-41 to conciliate the Tenants’ complaints? 2. Was the three-commissioner panel that decided Mr. Ludwig’s counterclaim constituted properly under MCC § 29-14(b)? 3. Were the Commission’s decisions in Case Nos. 36508, 36732, and 47763 supported by substantial evidence in the record? 4. Did the circuit court err in awarding the Tenants $11,333.00 in attorney’s fees? 1 1 Mr. Ludwig phrased his Questions Presented as follows: 1. Did the agency’s failures to attempt conciliation of any claim within 30 days, a statutory condition precedent to administrative action, and subsequent refusals to conciliate without prejudice and in good faith, invalidate its proceedings and decisions, and require dismissal? 2. Is the remand decision by a statutorily unqualified panel and without a valid quorum void, precluding a final decision in this case, further warranting dismissal? 3. Are the agency’s forfeiture of damages and enhanced penalty in Case 36732 reversible error as “specious,” arbitrary and capricious? 4. Was the agency’s conclusion in Case 36509, ignoring Tenants’ testimony the second pump was new when installed and admission of not clearing drains through two pump failures, that Tenants were not responsible for the cost of a third, unsupported by material evidence, unreasoning, arbitrary and capricious? 5. Was the agency’s denial on remand of Landlord’s counterclaim for unpaid rent, late fees and costs, clearly erroneous arbitrary and capricious? Continued . . .
—Unreported Opinion— 8 First, we hold that the Office satisfied its obligation to conciliate the Tenants’ complaints when it held a properly noticed conciliation conference that Mr. Ludwig failed to attend. Second, we hold that the three-commissioner panel that decided Mr. Ludwig’s counterclaim on remand was constituted properly under MCC § 29-14(b) because all three commissioners attended both sessions of the hearing on Case No. 47763. Third, we hold that there was substantial evidence in the record to support the Commission’s decisions concerning the Tenants’ sump pump replacement in Case No. 36508, the security deposit in Case No. 36732, and Mr. Ludwig’s counterclaim in Case No. 47763. Fourth and finally, we vacate the attorney’s fee award and remand for the circuit court to state the basis for its decision to award the Tenants attorney’s fees, as required under Maryland Rule 2-703(g). Because the first three issues arise from administrative proceedings, we apply the standards governing judicial review of administrative agency decisions. “When reviewing an administrative agency’s decision, ‘this Court reviews the agency’s decision, not the circuit court’s decision.’” Baltimore City Police Dep’t v. Robinson, 247 Md. App. 652, 670 (2020) (quoting Belfiore v. Merch. Link, LLC, 236 Md. App. 32, 43 (2018)). The first and second issues present questions of law, which we review de novo. See Secretary, Dep't of Pub. Safety & Corr. Servs. v. Fenton, 491 Md. 305, 323 (2025) (“‘Generally, we review 6. Was the circuit court’s arbitrary fee award, unsupported by any stated basis, findings, or exercise of discretion, reversible error? The Tenants, in turn, phrased their Questions Presented as: 1. Is there substantial evidence in the record to support COLTA’s decisions? 2. Did the circuit court err in awarding attorneys’ fees to Tenants?
—Unreported Opinion— 9 legal determinations without deference to the views of the . . . administrative agency.’” (quoting McDonell v. Harford Cnty. Hous. Agency, 462 Md. 586, 605 (2019))). An appellate court “‘will not uphold an agency action that is based on an erroneous legal conclusion.’” Concerned Citizens of Cloverly v. Montgomery Cnty. Plan. Bd., 254 Md. App. 575, 598 (2022) (quoting Maryland Dep’t of the Env’t v. Cnty. Comm’rs, 465 Md. 169, 203 (2019)). As for the third issue, we review the Commission’s factual findings under the “substantial evidence” standard, “defer[ring] to the facts found and inferences drawn by the agency when the record supports those findings and inferences.” Cnty. Comm’rs, 465 Md. at 201. Under this standard, we uphold an agency’s factual findings if, after viewing the evidence in the light most favorable to it, “‘a reasoning mind reasonably could have reached the factual conclusion the agency reached.’” Miller v. City of Annapolis Hist. Pres. Comm’n, 200 Md. App. 612, 632 (2011) (quoting Montgomery Cnty. v. Longo, 187 Md. App. 25, 49 (2009)). Finally, we review the circuit court’s decision to award attorneys’ fees for abuse of discretion. Lockett v. Blue Ocean Bristol, LLC, 446 Md. 397, 414 (2016). But “‘the standard that a trial court applies in evaluating whether to award attorneys’ fees and costs is a legal decision’ that we review without deference.” Id. at 414 (quoting Ocean City Chamber of Com. Inc. v. Barufaldi, 434 Md. 381, 391 (2013)).
—Unreported Opinion— 10 A. The Office Satisfied The Conciliation Requirement Under MCC § 29-41 By Holding A Properly Noticed Conciliation Conference That Mr. Ludwig Failed To Attend. First, Mr. Ludwig argues that the Office failed to satisfy its obligation under MCC § 29-41 to hold a properly noticed conciliation conference before the Commission could act on the Tenants’ complaints. He contends that the Commission lacked jurisdiction to hear the Tenants’ complaints as a result and asks us to dismiss the administrative claims and vacate the Commission’s attorney’s fees award. The Tenants respond that Mr. Ludwig received proper notice of the July 10, 2018 conciliation conference but chose not to attend, and that his failure to attend the conference resulted in the satisfaction of the conciliation requirement under the plain language of MCC § 29-41(c). We agree with the Tenants. If the Director of the Department of Housing and Community Affairs, after investigating a landlord-tenant complaint, finds reasonable grounds to believe that a party has violated the MCC’s provisions on landlord-tenant relations, the Director or their designee must “attempt to conciliate the matter by initial conference and persuasion with all interested parties and their representatives” within thirty days of the complaint’s filing. MCC § 29-41(a)–(b); see also MCC § 29-1 (defining “Director” as “[t]he Director of the Department of Housing and Community Affairs or the Director’s designee”). Section 29-41(c) of the MCC provides that “[t]he Director’s obligation to conciliate a complaint . . . is satisfied if either party does not appear at a scheduled conference after receiving at least 10 days’ notice.” Id. If conciliation efforts fail, the Director or their
—Unreported Opinion— 11 designee must notify the Commission immediately. MCC § 29-43. From there, the Commission may schedule a hearing to determine whether a violation has occurred. Id. The conciliation requirement was satisfied in this case. After Mr. Ludwig objected to the first conciliation conference date, the Office’s investigator rescheduled the conference for July 10, 2018 and notified the parties of the new date on June 28, 2018, more than ten days in advance. Although Mr. Ludwig filed a motion to stay proceedings with the Office on the evening before the conference, the Commission informed the parties that it would hold the conference on July 10 as scheduled. The Tenants attended the conference and Mr. Ludwig didn’t. That was his choice. Because Mr. Ludwig failed to attend the scheduled conference after receiving the required notice, his failure to appear satisfied the Office’s obligation to conciliate the Tenants’ complaints under the plain language of MCC § 29-41(c). B. The Panel That Decided Mr. Ludwig’s Counterclaim, Case No. 47763, Was Constituted Properly Under MCC § 29-14 Because The Same Three Commissioners Attended Each Hearing Session. Second, Mr. Ludwig argues that the Commission panel that decided his counterclaim was improper because two of the three commissioners hadn’t participated in the 2018 hearing on the Tenants’ complaints in Case Nos. 36508 and 36732. He contends that MCC § 29-14(b) required the same commissioners who heard the Tenants’ complaints to hear his counterclaim in Case No. 47763 and asks this Court to remand the case with directions to dismiss all charges. The Tenants respond that the three commissioners who decided Mr. Ludwig’s counterclaim in Case No. 47763 attended each session of the hearing
—Unreported Opinion— 12 on that case and had full authority under MCC § 29-14(b) to participate in the Commission’s final decision. The Tenants are correct. Section 29-14(b) of the MCC provides that “any panel member must not participate in the [panel’s] final decision” on a complaint “if the member has not attended each session of the hearing” on that complaint and that the vote of at least two panel members is required for a panel to take any official action on behalf of the Commission. MCC § 29-14(b). The panel that decided Mr. Ludwig’s counterclaim satisfied these requirements. On remand from this Court, the Commission assigned Mr. Ludwig’s counterclaim Case No. 47763 and adjudicated that matter. The remand panel didn’t reopen or alter the Commission’s decisions in Case Nos. 36508 and 36732. Instead, it admitted the record from the 2018 proceedings into evidence, without objection from Mr. Ludwig, and adjudicated his unresolved counterclaim. The same three commissioners attended both hearing sessions for Case No. 47763 on May 10, 2023 and June 28, 2023 before participating in the Commission’s January 4, 2024 decision. Mr. Ludwig argues that the Commission should have included at least one additional member of the 2018 panel that heard Case Nos. 36508 and 36732, one of whom was still with the Commission despite being “in the process of vacating his position.” His argument fails, though, because it asks us to read a requirement into MCC § 29-14(b) that the statute doesn’t contain. The statute requires only that every commissioner who participates in the panel’s final decision on a complaint attend each session of the hearing on that matter. MCC § 29-14(b). Because the same three commissioners attended every hearing session
—Unreported Opinion— 13 for Case No. 47763—a matter related to but separate from those resolved by the Commission in Case Nos. 36508 and 36732—before participating in the Commission’s January 4, 2024 decision, the Commission complied with MCC § 29-14(b). C. There Was Substantial Evidence In The Record To Support The Commission’s Decisions In Case Nos. 36508, 36732, And 47763. Third, Mr. Ludwig challenges the Commission’s decisions on the merits in Case Nos. 36508, 36732, and 47763. He contends first that the Commission’s forfeiture ruling and enhanced penalty in Case No. 36732 were arbitrary and capricious and constitute reversible error. He argues next that the Commission’s findings in Case No. 36508 concerning the sump pump issue were unsupported by substantial evidence and must be reversed as well. Finally, he contends that the Commission erred in dismissing his counterclaim in Case No. 47763. The Tenants respond that there was substantial evidence in the record to support each of the Commission’s decisions. We address each decision in turn and agree with the Tenants on all three counts. 1. The Commission’s decision in Case No. 36508 concerning the sump pump is supported by substantial evidence. In April 2017, the Tenants filed a complaint with the Office seeking reimbursement for the $365.00 cost of replacing the sump pump in the home’s garage. They alleged that the pump wasn’t working properly, that they’d needed to operate it manually during four storms, and that they’d needed to replace it to prevent the basement from flooding. At the November 2018 hearing on the Tenants’ complaints, Dr. Hearty testified that Mr. Ludwig replaced the sump pump once during their first year in the home after the float switch malfunctioned. According to Dr. Hearty, the new pump began to malfunction
—Unreported Opinion— 14 similarly in 2017, and he and Ms. Salay emailed Mr. Ludwig to inform him of the malfunction. Dr. Hearty stated that they sent Mr. Ludwig several more emails about the sump pump issues and a video of the problem, but that Mr. Ludwig had refused to take responsibility for the repair. He played the video for the Commission and explained that the sump pump malfunctioned even though the drains were clear of debris. He stated further that although Mr. Ludwig had never shown him how to clear the driveway drains properly, he blew debris out of them with a leaf blower “on a regular basis.” Eventually, Dr. Hearty said, he and Ms. Salay were forced to replace the pump at their own expense to prevent the basement from flooding and they deducted $365.00 from their July 2017 rent check to cover the cost of the repair after Mr. Ludwig refused to reimburse them. Finally, he testified that on the sales receipt for the replacement service, the plumber noted that the pump Mr. Ludwig had installed in 2016 after the first malfunction was manufactured in 2008, “that the float was sticking and the sump pump was clear of all debris,” and that there was “no obstruction to the flow switch.” During questioning by one of the commissioners, Dr. Hearty explained that the pump installed in 2016 was a “back-up” sump pump that Mr. Ludwig had in the house already but was “in good condition” and “in a box,” and that the pump installed by the plumber in 2017 was “brand new.” All emails referenced by Dr. Hearty and the plumber’s sales receipt were included in the administrative record. Mr. Ludwig testified that the sump pump he had installed in 2016 was “new in the box.” Referring to an email Ms. Salay sent him in April 2017 after she spoke to a customer service representative for the pump’s manufacturer, Mr. Ludwig stated that even though
—Unreported Opinion— 15 that pump was manufactured in 2008, it had “a life expectancy of seven to ten years” and had been in use for only eight months before it malfunctioned. He stated that he had shown the tenants how to remove the drain covers to clear out the driveway drains properly, that they “hadn’t cleared the drains once” between August 2015 and December 2016, and that he learned via an email from the Tenants in December 2016 that they had been clearing debris from the opening of the drain pipe with a leaf blower instead of clearing inside the pipes as he’d instructed them to do. He testified that his plumber noted on the receipt for the 2016 pump replacement that he’d needed to “[c]lear [the] trench drain in the driveway.” Mr. Ludwig suspected that a buildup of leaves in the drain lines caused the sump pump to malfunction. All emails referenced by Mr. Ludwig and the receipt for the 2016 sump pump replacement were included in the administrative record. The Commission, in its April 2019 opinion resolving the Tenants’ complaints, found as a matter of fact that the home’s sump pump malfunctioned in 2016 and that Mr. Ludwig replaced that pump with one “that he had stored in the basement.” The Commission didn’t find credible Mr. Ludwig’s testimony “that the replacement sump pump was brand new when it was installed.” It did find credible the plumber’s statements in the 2017 sales receipt that the pump installed in 2016 was manufactured in 2008, that the sump pit was clear of debris when he installed the new pump in 2017, and that the float switch was unobstructed. Finally, it found that the Tenants had deducted $365.00 from their July 2017 rent payment to cover the cost of the pump replacement and that Mr. Ludwig had refused to reimburse them. Based on its findings, the Commission concluded that Mr. Ludwig had
—Unreported Opinion— 16 replaced the sump pump after it malfunctioned in 2016 as required by RP § 8-208(c)(2) (requiring a residential lease to include “[t]he landlord’s and the tenant’s specific obligations as to . . . repair of the premises”), and MCC § 29-30(a)(3) (requiring a landlord to “[m]ake all repairs and arrangements necessary to put and keep the dwelling unit and the appurtenances in as good a condition as they were, or should by law or agreement have been, when the tenancy began”), but that “he replaced the defective sump pump with an old sump pump which failed less than a year later.” The Commission concluded that the failure of the second sump pump wasn’t the Tenants’ responsibility and that they were entitled to deduct the cost of the replacement from their rent payment. After we remanded this case for the Commission to adjudicate any unresolved claims, the panel that adjudicated Mr. Ludwig’s counterclaim concluded that the previous panel had resolved Case No. 36508 and stated that that panel’s decision “remain[ed] unchanged.” On appeal, Mr. Ludwig challenges the 2018 panel’s credibility determinations. He challenges the panel’s finding discrediting his testimony that the sump pump installed in 2016 was “new” as arbitrary and capricious, asserting that it was “immaterial” when the pump was manufactured because both he and the Tenants testified at the hearing that it was “new in a box” and was rated for seven to ten years of “normal wear and tear.” He argues as well that the plumber’s statement that the drain lines were clear and unobstructed when he replaced the replacement pump in 2017 was “immaterial” because “the pump malfunctioned months before.” Finally, Mr. Ludwig asserts that the panel disregarded “undisputed evidence” that the Tenants had failed to clear the driveway drains properly
—Unreported Opinion— 17 until after the replacement pump malfunctioned. We hold that the Commission’s conclusions regarding the sump pump issue were supported by substantial evidence in the record. “Administrative credibility findings are . . . entitled to great deference on judicial review.” Kim v. Md. State Bd. of Physicians, 196 Md. App. 362, 370 (2010). In fact, the “[c]redibility findings of hearing officers who themselves have personally observed the witnesses ‘have almost conclusive force.’” Id. (quoting Anderson v. Dep’t of Pub. Safety, 330 Md. 187, 217 (1993)). Here, after hearing testimony from Dr. Hearty and Mr. Ludwig and reviewing the email communications, receipts, and other evidence put forward by both parties, the 2018 panel discredited Mr. Ludwig’s testimony that the sump pump he installed in 2016 was “new” and any evidence that the pump malfunctioned because of the Tenants’ failure to clear the driveway drains. The panel concluded instead that the pump wasn’t new, that it malfunctioned due to age, and that the Tenants weren’t responsible for the malfunction. Those conclusions were supported by Dr. Hearty’s testimony that the pump installed in 2016, while “in good condition” and “in a box,” was a “back-up” sump pump Mr. Ludwig had been storing in the home. The Commission’s conclusions were supported also by the plumber’s written statements—about which Mr. Hearty testified and which it found credible—that the pump installed in 2016 was manufactured in 2008 and that when he replaced that pump, it was clear of debris and the float switch was unobstructed. Deferring, as we must, “to the facts found and inferences drawn by the [Commission],” Cnty. Comm’rs, 465 Md. at 201, and to its credibility determinations, Kim, 196 Md. App.
—Unreported Opinion— 18 at 370, we hold that “‘a reasoning mind reasonably could have reached the factual conclusion the [Commission] reached’” regarding the cause of the sump pump’s malfunction. Miller, 200 Md. App. at 632 (quoting Longo, 187 Md. App. 25, 49 (2009)). 2. The Commission’s decision in Case No. 36732 concerning the security deposit is supported by substantial evidence. In its April 2019 order and opinion resolving the Tenants’ security deposit claims, the Commission found Mr. Ludwig in violation of several provisions of Maryland Code (1974, 2015 Repl. Vol.), § 8-203, as amended by 2016 Md. Laws, Chap. 643 (“RP 2016”), the version of the statute in effect at that time. Before addressing Mr. Ludwig’s claims of error on appeal, we explain the relevant sections of the statute, the events leading up to the Tenants’ filing of their security deposit complaint, and the proceedings before the Commission in Case No. 36732. At the time of the administrative proceedings, a landlord who collected a security deposit was required by law to return the deposit and the “simple interest” that had accrued on it to the tenant within forty-five days after the end of the tenancy. RP 2016 § 8-203(e)(1). The landlord was entitled to withhold from the deposit any unpaid rent or damage to the leased property caused by the tenant “in excess of ordinary wear and tear.” Id. § 8-203(f)(1)(i). If the landlord withheld any portion of the security deposit, though, they needed to send to the tenant, within forty-five days of the end of the tenancy and by first-class mail, “a written list of the damages claimed . . . [and] a statement of the cost
—Unreported Opinion— 19 actually incurred” to repair the claimed damages. Id. § 8-203(g)(1). 2 If the landlord failed to return the deposit plus the accrued interest to the tenant within the forty-five-day period “without a reasonable basis,” the tenant had “an action of up to threefold the withheld amount, plus reasonable attorney’s fees. Id. § 8-203(e)(4). If the landlord failed to mail a list of claimed damages to the tenant within the forty-five-day period, the landlord “forfeit[ed] the right to withhold any part of the security deposit for damages.” Id. § 8-203(f)(2). The statute provided that no provision of § 8-203 could “be waived in any lease.” Id. § 8-203(j). In addition, a landlord who collected a security deposit had to provide the tenant with a receipt for the deposit. Id. § 8-203(c)(1). The receipt had to notify the tenant of their rights under RP 2016 § 8-203(f)(1). Id. § 8-203.1(a). The receipt needed to notify the tenant to be present for (1) a pre-occupancy inspection to create a written list of existing damages and (2) a post-occupancy inspection to determine if the tenant caused any damage to the leased property; the landlord’s obligations to (3) conduct the post-occupancy inspection within five days before or after the tenant’s stated move out date and (4) notify the tenant in writing of the inspection date; (5) the tenant’s right to receive a written list of charges claimed by the landlord against their security deposit within forty-five days after the 2 In 2022, the General Assembly amended RP § 8-203 to remove the requirement for a landlord to provide a statement of “costs actually incurred” to repair claimed damages and replacing it with a requirement that the landlord provide “an itemized statement of the costs incurred” to repair claimed damages. 2022 Md. Laws, Chap. 34; see RP § 8-203(j)(1) (1974, 2023 Repl. Vol.). The amended statute allows a landlord to satisfy the statement of costs requirement by providing an “estimate” of the cost to be incurred to repair claimed damages. RP § 8-203(j)(2) (1974, 2023 Repl. Vol.).
—Unreported Opinion— 20 termination of the tenancy; (6) the landlord’s obligation to return “any unused portion of the security deposit” by first-class mail within forty-five days after the termination of the tenancy; and (7) a statement that the landlord’s failure to comply with the security deposit law “may result in the landlord being liable to the tenant for a penalty of up to [three] times the security deposit withheld, plus reasonable attorney’s fees.” Id. The Tenants’ lease ended on July 31, 2017. The parties conducted a joint inspection of the home on August 6, and on August 22, Mr. Ludwig sent the Tenants, by email, a list of damages that he intended to withhold from their security deposit and estimates of the cost to repair those damages. The damages included an estimated $382.50 for refinishing the floors in the living room and on the first and second floor landings; an estimated $150.00 for “correcting [a] deep stain by [the] fireplace”; an estimated $1,350.00 for repainting several walls and removing bolts and screws from those walls; $284.92 for an allegedly past due water bill; and $48.18 for a “[p]artial gutter cleaning” that Mr. Ludwig had paid for and for which he provided an invoice. Mr. Ludwig stated in his email that he would not withhold from the security deposit the cost of refinishing the staircase. He calculated the total damages to be $1,930.60 and stated that he would return $5,769.40 of the Tenants’ $7,700.00 security deposit “[i]f acceptable.” The Tenants responded the next day. They accepted responsibility for the cost of refinishing the floors and correcting the stain by the fireplace but did not accept responsibility for the cost of the wall repainting, asserting that the walls were not “newly painted” prior to their tenancy and exhibited nail holes and minor marks and scratches
—Unreported Opinion— 21 when they moved in. They asserted that they had pointed the existing marks out to Mr. Ludwig in an August 2015 email and that, regardless, the marks constituted “[o]rdinary wear and tear” for which they weren’t responsible. “[A]s a compromise,” they offered Mr. Ludwig $100.00 for the cost of removing drywall anchors they had installed. The Tenants stated also that they’d paid the alleged outstanding water bill already and that the Office had resolved the dispute over the gutter cleaning cost in a prior case and concluded that it was not the Tenants’ responsibility. They attached confirmation of the water bill payment to their email. Finally, they noted that Mr. Ludwig was required by law to return to them the interest accrued on their security deposit during their lease term. They calculated the total damages for which they were responsible to be $632.50, estimated the total accrued interest to be $221.51, and requested a return of $7,289.01 from their security deposit. Mr. Ludwig did not respond to the Tenants’ email and on August 25, sent them a check for $5,769.40. On September 3, 2017, The Tenants filed a second landlord-tenant complaint with the Office contesting the withholdings for the wall repainting, gutter cleaning, and water bill. They requested an additional return of $1,904.53 from Mr. Ludwig. On October 3, 2017, a month after the Tenants informed him of their complaint, Mr. Ludwig responded to their August 23 email. He acknowledged that they had paid the water bill and stated that, accordingly, he would “not continue to withhold [the $284.92] amount from the deposit.” He maintained that all other costs were withheld properly, asserted that the Office’s decision regarding the gutter costs was invalid, and claimed an additional $382.50 in
—Unreported Opinion— 22 estimated damages after “withdraw[ing] his offer” not to withhold the cost of refinishing the staircase. He concluded that the Tenants owed him an additional $97.58 (the difference between the $382.50 estimate for refinishing the stairs and the “credit” for the $284.92 water bill). The next day, he sent the Tenants an additional check for $123.53, which he claimed in a later email to “represent[] the $221.51 security deposit interest less [the] $97.58 owed per [his] [October 3] email.” At the November 2018 hearing, Dr. Hearty testified that he and Ms. Salay had paid Mr. Ludwig a $7,700.00 combined security and pet deposit. He stated that they “never actually received a written receipt of the security deposit separate from the lease” that advised them of their rights, that Mr. Ludwig hadn’t provided “accurate accounting of [the] interest accrued” on the deposit, and that Mr. Ludwig hadn’t returned the full amount of the interest accrued on the deposit. Dr. Hearty testified further that Mr. Ludwig sent the second check more than forty-five days after the end of the lease and that, accordingly, neither the security deposit nor the interest was returned to he and Ms. Salay within the legally mandated timeframe. According to Dr. Hearty, Mr. Ludwig never sent them a list of damages by first-class mail as required, and the list he sent them by email included only estimates of the cost to repair the claimed damages rather than costs actually incurred for repairs. Finally, Dr. Hearty testified that Mr. Ludwig had charged costs against their security deposit “not in excess of normal wear and tear.” He informed the Commission of Mr. Ludwig’s August 22, 2017 email listing the claimed damages, their August 23, 2017 response, Mr. Ludwig’s October 3, 2017 reply to their response, the checks Mr. Ludwig
—Unreported Opinion— 23 sent them on August 25 and October 4, 2017, and their August 2015 email to Mr. Ludwig about existing damage to the walls, all of which were included in the administrative record along with a copy of the lease. Also included in the record was a copy of the Office’s letter to Mr. Ludwig regarding the gutter case, which stated that the Tenants weren’t responsible for the cost of the cleaning. Mr. Ludwig stated at the hearing that he had been a landlord for forty years. During questioning by the commissioners, he testified that he had been using the same standard form lease, without any updates, since the 1980s and since 2008 for the property leased by the Tenants. He admitted that he didn’t follow the law requiring him to send the statement of damages claimed by first-class mail because he “wasn’t aware of that requirement” and that, aside from the invoice for the gutter cleaning, he had provided estimates of the cost to repair the claimed damages to the home rather than the costs actually incurred to repair them. The Commission, in its April 2019 opinion and order, found as fact that the Tenants paid Mr. Ludwig a $7,700.00 security deposit; that Mr. Ludwig had acknowledged receipt of the deposit in an August 2017 email; and that neither the lease agreement nor Mr. Ludwig’s email confirming receipt of the deposit contained any of the disclosures required under RP 2016 §§ 8-203(f)(1) and 8-203.1 except the Tenants’ right to be present at the post-occupancy inspection. The Commission found as well that the Tenants vacated the home on July 31, 2017, and that Mr. Ludwig sent them an itemized list of damages by email on August 22, 2017, which he later amended “to account for $221.31 [in] interest
—Unreported Opinion— 24 and deducted additional costs.” Based on its findings, the panel concluded that Mr. Ludwig had violated RP 2016 § 8-203(g)(1)–(2) by failing to send the tenants, by first-class mail within forty-five days of the end of their tenancy, an itemized list of damages claimed against their security deposit and a statement of the costs actually incurred to repair those damages. Thus, under RP 2016 § 8-203(g)(2), the panel decided, Mr. Ludwig had forfeited his right to withhold any part of the Tenants’ security deposit. The panel concluded also that Mr. Ludwig had failed to return the security deposit plus the accrued interest (which the panel calculated to be $230.37) within forty-five days of the end of the tenancy as required under RP 2016 § 8-203(e)(1). Because the Commission determined that Mr. Ludwig’s conduct in wrongfully withholding a portion of the Tenants’ security deposit “[rose] to the level of bad faith and egregiousness,” it awarded the Tenants a onefold penalty under RP 2016 § 8-203(e)(4) in the amount of $2,160.97. The Commission ordered Mr. Ludwig to pay the Tenants a total of $4,321.94 (the $7,700.00 security deposit plus the $230.37 in interest accrued on the deposit and the $2,160.97 penalty, minus the $5,769.40 that Mr. Ludwig had refunded the Tenants already). On appeal, Mr. Ludwig argues first that the Commission’s conclusion that he had forfeited the right to withhold any portion of the Tenants’ security deposit under RP 2016 § 8-203(g)(2) was arbitrary and capricious. He concedes, as he did at the administrative hearing, that he sent the Tenants a written list of damages claimed by email rather than by first-class mail as RP 2016 § 8-203(g)(1) requires, and he doesn’t challenge the
—Unreported Opinion— 25 Commission’s finding that he provided estimates of the cost of repairing the majority of the claimed damages rather than the required “statement of the cost actually incurred” to repair those damages. Rather, he seems to assert that the Tenants somehow waived the requirement that he send the list of damages claimed by first-class mail by “acting upon” the emailed list “without claiming a notice defect” and “insist[ing]” that he respond to their August 23, 2017 email addressing the emailed list. We can dispense with this issue quickly. As the Tenants point out correctly, none of the security deposit provisions under RP 2016 § 8-203 were waivable, see id. § 8-203(j), and Mr. Ludwig’s admissions constituted substantial evidence supporting the Commission’s conclusion that he had violated the provisions of RP 2016 § 8-203(g)(1) and forfeited his right to withhold any part of the Tenants’ security deposit under RP 2016 § 8-203(g)(2). Mr. Ludwig challenges next the Commission’s conclusion that he violated RP 2016 § 8-203(e)(1) by failing to return the security deposit and the proper amount of accrued interest within forty-five days of the termination of the tenancy. He doesn’t contest the Commission’s finding that he “incorrectly credited” the Tenants’ estimation of the accrued interest, and he concedes that he sent the portion of the interest that he did return to them “two weeks later” than the statutory deadline. Rather, he describes the approximately $9.00 difference between the interest he returned and the interest calculated by the Commission as “paltry” and the two-week delay in returning it as “insignificant.” We hold again that the Commission’s conclusion was supported by substantial evidence in the administrative record. The lease agreement, which was included in the record, listed the termination date
—Unreported Opinion— 26 as July 31, 2017. Dr. Hearty testified at the hearing that Mr. Ludwig did not return any of the interest accrued on the security deposit to the Tenants until October 4, 2017, more than forty-five days after the lease terminated. A copy of the October 4 check and of Mr. Ludwig’s email explaining that he intended that check to serve as his return of the interest accrued on the security deposit were both included in the administrative record. Mr. Ludwig’s email about the check indicated also that he had credited the Tenants’ $221.51 interest estimate. This evidence supported the Commission’s conclusion that Mr. Ludwig violated RP 2016 § 8-203(e)(1) both by returning insufficient interest and by sending the interest he did return late. Finally, Mr. Ludwig challenges the Commission’s decision to award the Tenants a onefold penalty under RP 2016 § 8-203(e)(4) based on its conclusion that his failure to return timely the deposit and interest was “without a reasonable basis.” Relying on our Supreme Court’s decision in Rohrbaugh v. Estate of Stern, 305 Md. 443 (1986), he argues that the Commission failed to make prerequisite factual findings before awarding the Tenants the onefold penalty. We disagree. Before awarding a penalty for a violation of the security deposit statute, the trier of fact “must make two distinct determinations: whether the landlord withheld more of the security deposit than that to which he was entitled; and, if so, whether any part of this excess was withheld without a reasonable basis.” Rohrbaugh, 305 Md. at 451. The punitive damages awarded based on a landlord’s unlawful withholding of a security deposit “may not exceed threefold the amount of the security deposit withheld [by the landlord] without
—Unreported Opinion— 27 a reasonable basis.” Id. at 450. In this case, the Commission made both prerequisite findings before awarding the onefold penalty. First, the Commission concluded that Mr. Ludwig wasn’t entitled to withhold any of the $2,160.97 that he had withheld from the Tenants’ security deposit because he’d forfeited the right to do so under RP 2016 § 8-203(g)(2) by failing to comply with RP 2016 § 8-203(g)(1). Second, although the Commission didn’t use the exact language of Rohrbaugh and RP 2016 § 8-203(e)(4), its conclusion that his actions in withholding $2,160.97 from the security deposit after forfeiting his right to do so “[rose] to the level of bad faith in egregious conduct” was equivalent to a finding that he withheld that entire amount “without a reasonable basis.” Rohrbaugh, 305 Md. at 450–51. “‘[A] reasoning mind reasonably could have reached the factual conclusion[s] the [Commission] reached’” regarding its decision to assess a onefold penalty against Mr. Ludwig for withholding all $2,160.97 he withheld from the Tenants’ security deposit improperly. Miller, 200 Md. App. at 632 (quoting Longo, 187 Md. App. at 49). 3. The Commission’s decision to dismiss Case No. 47763, Mr. Ludwig’s counterclaim, was supported by substantial evidence. Lastly, Mr. Ludwig challenges the Commission’s dismissal of his counterclaim on remand. In his hearing submission, filed with the Commission the day of the November 2018 hearing, Mr. Ludwig included a counterclaim against the Tenants for alleged unpaid rent and late fees. He sought an order from the Commission requiring the Tenants to pay him the $365.00 cost of replacing the sump pump, which they withheld from their July
—Unreported Opinion— 28 2017 rent; a $100.00 late fee for the withheld portion of their July 2017 rent; $100.00 to correct an “underpayment” of their August 2016 rent; and a $100.00 late fee for the Tenants’ failure to pay that $100.00 timely—a total of $665.00—plus costs and legal fees. 3 To support his request for the $200.00 in late fees, he relied on Paragraph 2 of the lease, which provided that Tenants would pay rent on time “without demand or deduction” and that “[p]ayments received after the fifth day of each month [would] incur a late payment charge of $100.00.” As stated above, the Commission didn’t resolve Mr. Ludwig’s counterclaim in its April 2019 opinion and order, and upon dismissal of Mr. Ludwig’s appeal from the circuit court’s decision affirming that order, we remanded the case to the circuit court with instructions to remand to the Commission so that it could adjudicate the counterclaim “and any other outstanding and unresolved claims necessary for entry of a final judgment.” Order, Ludwig v. Hearty, No. 1938, Sept. Term 2019 (Md. Ct. Spec. App. Nov. 2, 2020) The Commission held a hearing on the counterclaim on May 10, 2023 and June 28, 2023. On the first day of the hearing, the Commission entered the materials in the record from Case Nos. 36508 and 36732 into the record for Case No. 47763 without any objection from either party. Mr. Ludwig testified about the payments he requested in his counterclaim. He directed the Commission’s attention to Dr. Hearty’s testimony at the 3 In his counterclaim and at the 2023 hearings on that claim, Mr. Ludwig requested an additional $280.00 reimbursement: $180.00 for rent withheld to treat a pest infestation and an associated $100.00 late fee. However, on appeal, he doesn’t challenge the Commission’s dismissal of that part of his counterclaim.
—Unreported Opinion— 29 November 2018 hearing, in which he accepted responsibility for missing the $100.00 rent increase for the second year of the lease that kicked in beginning in August 2016 and expressed his willingness to pay that $100.00 and the associated late fee. He testified about the Tenants’ withholding of rent for the cost of the sump pump replacement and challenged the Commission’s April 2019 decision on the sump pump issue as erroneous and about an instance in which the Tenants had “threatened” to withhold $100.00 from their rent to pay for electrical work. Finally, Mr. Ludwig asked the panel to resolve a “new claim” for costs he stated were recoverable as “additional rent” under Paragraph 10 of the lease, which reads: “Payment of such reasonable sums, or expenses of prosecuting or defending any matter or action, by reason of Tenants’ default . . . shall be deemed additional rent and due from Tenants to Landlord.” He asked the panel to order the Tenants to pay him a total of “roughly $2,018.58” in “additional rent,” to include $152.21 in transcription costs, a $90.00 bank fee for and official check to pay an appeal bond, and $1,733.88 in additional costs, such as filing fees. Dr. Hearty presented his case on the second day of the hearing. In January 2024, the Commission issued its decision and order resolving Case No. 47763. As relevant to the counterclaim, the panel noted the lease’s late fee provision and its provision requiring the Tenants to reimburse Mr. Ludwig for all costs and attorney’s fees he incurred in the event that he instituted legal proceedings against them for a default under the lease. It found as well that the Tenants withheld $100.00 from their August 2016 rent, “a payment they made
—Unreported Opinion— 30 directly to a contractor for electrical work,” and that they had done so after reaching a “verbal agreement” with Mr. Ludwig. The panel noted also the Tenants’ withholding of the $365.00 sump pump replacement cost from their July 2017 rent. The Commission concluded that the lease’s late fee provision, which kicked in only five days after the payment deadline, violated MCC § 29-27’s requirement for a residential lease to “[r]equire a minimum of [ten] days before late fees may be charged.” MCC § 29-27(l). Accordingly, it concluded that the late fee provision was unenforceable and that Mr. Ludwig wasn’t entitled to any payments under that provision. The Commission concluded that not only had the parties agreed verbally to the withholding of the $100.00 from their August 2016 rent, but also that Mr. Ludwig’s attempts to collect that money were retaliatory. Specifically, the Commission concluded that Mr. Ludwig “made no effort to collect the [$100.00] until after the tenancy was terminated and the [Tenants’] previous complaints against [him] had been filed, thereby raising the specter of retaliation.” Thus, the Commission determined that Mr. Ludwig had forfeited the right to collect that money. For the reasons stated above, the Commission dismissed Mr. Ludwig’s counterclaim. In this Court, Mr. Ludwig challenges first the Commission’s findings that the parties agreed to the $100.00 deduction from the Tenants’ August 2016 rent payment and that the Tenants withheld that money to cover the cost of electrical work. He contends that there was no evidence in the record to support either finding and directs our attention to Dr. Hearty’s testimony at the November 2018 hearing about the missed rent increase and the Tenants’ willingness to pay it.
—Unreported Opinion— 31 We agree that these findings by the Commission about the $100.00 rent deduction weren’t supported by substantial evidence in the record. The record did contain an October 28, 2016 email from the Tenants stating that they intended to withhold $100.00 from their November rent to cover the cost of electrical repairs, but this would have been well after the Tenants paid their August 2016 rent and there was no evidence to show that they ever actually withheld that amount from their November 2016 rent. Although the Tenants testified that they reached a verbal agreement with Mr. Ludwig to withhold certain pest control costs from their November 2016 rent, they never testified to having reached any such agreement for the electrical costs. Finally, the 2023 record contained the transcript from the 2018 hearing, at which Dr. Hearty testified that the $100.00 deduction from the Tenants’ August 2016 rent was due to a second-year rent increase that he missed in the lease and would be willing to pay. Nevertheless, the Commission’s conclusion that Mr. Ludwig wasn’t entitled to recover that $100.00 rested on independent grounds unrelated to these erroneous factual findings. The Commission concluded as well that Mr. Ludwig’s attempt to recover that money only after the Tenants filed their complaints against him in 2017 constituted retaliation and that by taking impermissible retaliatory action against the Tenants, he had forfeited his right to recover the $100.00 August 2016 rent deduction. Mr. Ludwig doesn’t challenge the panel’s finding of retaliation, which is prohibited under the Montgomery County Code. See MMC § 29-32(b) (“A landlord must not . . . take any . . . retaliatory action against any tenant who exercises any rights conferred upon the tenant by [Chapter
—Unreported Opinion— 32 29]” of the Montgomery County Code.). The record reveals that Mr. Ludwig first requested that the tenants pay him $100.00 for the “underpayment of rent in [their] August 2016 rent payment” in an October 2017 email, after the Tenants filed their complaints against him in April and September of that same year. We affirm. Next, Mr. Ludwig contests the Commission’s finding that the late fee provision in the lease violated MCC § 29-27(l). However, he both concedes that the lease imposed late fees for rent payments made as early as five days late and acknowledges that MCC § 29-27(l) requires “[ten] days before late fees may be charged.” We affirm the Commission’s conclusion that Mr. Ludwig wasn’t entitled to the $200.00 he claimed in late fees. Third, Mr. Ludwig challenges the Commission’s decision not to order the Tenants to pay him the $365.00 they withheld from their July 2017 rent to cover the cost of the sump pump replacement. We can dispense quickly with this issue too. Because we affirm the Commission’s conclusion in Case No. 36508 that the Tenants’ withholding of the sump pump replacement cost was proper, we affirm as well its decision not to order the Tenants to pay Mr. Ludwig that cost in Case No. 47763. Finally, Mr. Ludwig argues that the Commission failed to resolve his claim that he was entitled to the payment of certain court costs that qualified as “additional rent” under Paragraph 10 of the lease. To the extent that this “new claim,” raised by Mr. Ludwig for the first time on remand, qualified as one of the “other outstanding and unresolved claims necessary for final judgment” that we instructed the agency to resolve in our 2020 order,
—Unreported Opinion— 33 we hold that it has been resolved. By its terms, Paragraph 10 required the Tenants to reimburse Mr. Ludwig for expenses incurred in prosecuting or defending any action “by reason of the Tenants’ default.” Because the Commission made no determination that the Tenants were in default of any of their obligations under the lease, Paragraph 10 did not apply, and Mr. Ludwig wasn’t entitled to recover any of his claimed court costs as “additional rent” under that paragraph. D. The Circuit Court Failed To Identify The Basis For Its Award Of Attorney’s Fees As Required Under Maryland Rule 2-703(g). Fourth and finally, Mr. Ludwig challenges the circuit court’s May 28, 2025 order awarding the Tenants $11,333.00 in attorneys’ fees. 4 On February 2, 2024, Mr. Ludwig filed a petition with the circuit court seeking judicial review of the Commission’s order dismissing his counterclaim and reaffirming its decisions in Case Nos. 36508 and 36732. The Tenants, now represented by counsel, responded to the petition on May 30 and expressed their intent to participate in the judicial review proceedings. Mr. Ludwig filed a memorandum in support of his petition for judicial review on July 27, and the Tenants filed an opposing memorandum on August 26. In their memorandum, the Tenants asked the court to award them reasonable attorney’s fees 4 The Tenants ask us to dismiss Mr. Ludwig’s appeal as it pertains to the attorney’s fee award on the ground that Mr. Ludwig failed to include their motion for attorney’s fees or his opposition to that motion in his record extract. Although the Tenants are correct that Maryland Rule 8-501 grants us the discretion to dismiss an appeal for failure to file a record extract that contains “all parts of the record that are reasonably necessary for the determination of the questions presented by the appeal,” Md. Rule 8-501(a), (c), (m), we decline to exercise our discretion in that manner here.
—Unreported Opinion— 34 “pursuant to RP § 8-203.” The circuit court held a judicial review hearing on March 7, 2025 but didn’t address the Tenants’ request for attorney’s fees at that hearing. That same day, the court entered an order affirming the order of the Commission. Mr. Ludwig filed two subsequent motions to reconsider, both of which the court denied. On May 8, 2025, the Tenants filed a motion for attorney’s fees, asserting their entitlement under RP § 8-203(e)(4) to their “reasonable attorney’s fees” incurred while litigating the judicial review action. To support their assertion, they relied on our Supreme Court’s holding in Pak v. Hoang, 378 Md. 315 (2003), that the “reasonable attorney’s fees” recoverable under RP § 8-203(e)(4) in an action to recover a security deposit wrongfully withheld by a landlord include “fees for post-judgment motions necessitated by the landlord’s refusal to satisfy [a] judgment” against them. Id. at 329. In Pak, after the circuit court entered judgment in favor of the tenants on their RP § 8-203(e) claim for the return of their security deposit, the tenants filed post-judgment discovery motions to aid in their recovery of the judgment against the landlord. Id. at 318– 19. The landlord failed to respond to their motions, and the circuit court granted their subsequent motion to compel. Id. at 319. The landlord failed to comply with the court’s order granting the motion to compel, and the tenants filed a petition for contempt. Id. Eventually, the circuit court found the landlord in civil contempt. Id. The tenants then filed a motion seeking to recover the attorney’s fees they incurred during the post-judgment proceedings under RP § 8-203(e)(4). Id. The circuit court denied the motion and the
—Unreported Opinion— 35 Supreme Court reversed. Id. at 320, 336. The Supreme Court noted that “in many cases . . . a landlord could delay, impede and actively thwart the collection of the judgment until it is no longer cost effective for the tenant to pursue collection of a judgment.” Id. at 329. In addition, the Court reasoned that RP § 8-203(e) “allows for ‘reasonable attorney’s fees’ incurred in an action for a return, i.e., actual collection, of security deposits” and that “[u]ntil a security deposit, including attorney’s fees, is actually returned it is still in the process of being collected.” Id. The Court concluded that “[c]onsidering the costs of the appellate process, precluding, categorically, the recovery of [post-judgment] attorney’s fees” under RP § 8-203(e)(4) “might effectively render meaningless the remedy created by the Legislature.” Id. In their motion, the Tenants explained that Mr. Ludwig still had not returned their security deposit. They argued that the litigation in connection with Mr. Ludwig’s petition for judicial review and his post-judgment motions for reconsideration of the circuit court’s order affirming the Commission’s January 2024 order “are the types of proceedings that the Supreme Court confirmed [in Pak] are appropriate for an award of attorney’s fees” under RP § 8-203(e)(4). In the alternative, they argued that Mr. Ludwig had litigated the judicial review proceedings in bad faith and without substantial justification and that an award of attorney’s fees under Maryland Rule 1-341 was thus appropriate. They asked the circuit court to award them $11,333.00 in attorney’s fees. On May 28, 2025, the circuit court entered an order granting the Tenants’ motion: UPON CONSIDERATION of [the Tenants’] Motion for Award of Attorneys’ Fees, any Opposition thereto, and the
—Unreported Opinion— 36 record as a whole, it is this day of 05/28/2025, by the Circuit Court for Montgomery County, Maryland, ORDERED, that [the Tenants’] Motion for Award of Attorney’s Fees be, and same is hereby, GRANTED; and it is further, ORDERED, that [Mr.] Ludwig shall pay $11,333.00 to [the Tenants]; and it is further, ORDERED, that JUDGMENT in the amount of $11,333.00 is entered against [Mr.] Ludwig and in favor of [the Tenants]. On appeal, Mr. Ludwig challenges the circuit court’s fee award on two grounds. He argues that the Tenants waived any statutory fee claim under RP § 8-203 by failing to plead it and that the circuit court’s order failed to state any basis or make the findings required to support a fee award under either RP § 8-203 or Maryland Rule 1-341. We hold first that the Tenants didn’t waive their claim for attorney’s fees. Second, we vacate the circuit court’s order awarding attorney’s fees to the Tenants and remand for limited purpose of allowing the court to explain the basis for the fee award as Maryland Rule 2-703 requires. We turn first to Mr. Ludwig’s argument that the Tenants waived their attorney’s fees claim under RP § 8-203 by failing to raise it in a pleading. He relies on Maryland Rule 2-703, which requires a party seeking attorney’s fees allowable by law in the circuit court to “include a claim for such fees in the party’s initial pleading or, if the grounds for such a claim arise after the initial pleading is filed, in an amended pleading filed promptly after the grounds for the claim arose.” Md. Rule 2-703(a)–(b). In essence, Mr. Ludwig seems to argue that the Tenants, who were not represented by counsel when they filed their security deposit complaint with the Office in 2017, waived their right to claim attorney’s fees under RP § 8-203 by failing to make a fee request in that complaint. We disagree. To explain the basis for our disagreement, we must provide a brief explanation of
—Unreported Opinion— 37 the initial stages of the judicial review process. A person seeking judicial review of an agency action must file a petition with the circuit court that (A) requests judicial review, (B) identifies the order or action that they are asking the court to review, and (C) states whether the petitioner was a party to the administrative proceeding or, if not, the basis for their standing to seek judicial review of the agency action. Md. Rule 7-202(a), (c)(1). If any party files a timely petition, any other person may file a petition within ten days after the agency mails notice of the first petition. Md. Rule 7-203(b). After the party seeking judicial review files their petition, “[a]ny person . . . who is entitled by law to be a party and who wishes to participate as a party” in the judicial review proceedings must file a response to the petition that states their intent to participate as a party. Md. Rule 7-204(a) “No other allegations are necessary.” Id. After the administrative record is filed with the circuit court, the parties then file memoranda “setting forth a concise statement of the questions presented for review, a statement of facts material to those questions, and argument on each question.” Md. Rule 7-207(a). The Tenants included a request for attorney’s fees under RP § 8-203 in their memorandum opposing Mr. Ludwig’s petition for judicial review—their first substantive filing after retaining counsel. True, that filing wasn’t a “pleading” in the most basic sense, but the Tenants did make their fee request “promptly after the grounds for the claim arose.” Md. Rule 2-703(b). In any case, the purpose of a pleading is to provide notice to a party of the claims against them, see Ledvinka v. Ledvinka, 154 Md. App. 420, 429 (2003), and the Tenants’ memorandum put Mr. Ludwig on notice of their request for attorney’s fees.
—Unreported Opinion— 38 We turn next to Mr. Ludwig’s contention that the circuit court’s award of attorney’s fees to the Tenants must be reversed because the court failed to state the basis for its award. RP § 8-203 provides that “[i]f [a] landlord, without a reasonable basis, fails to return any part of the [tenant’s] security deposit, plus accrued interest, within [forty-five] days after the termination of the tenancy, the tenant has an action of up to threefold of the withheld amount, plus reasonable attorney’s fees.” RP § 8-203(e)(4). Under Maryland Rule 1-341, “[i]n any civil action, if the court finds that the conduct of any party in maintaining or defending the proceeding was in bad faith or without substantial justification,” the court may, on an adverse party’s motion, require the offending party to pay the costs and reasonable expenses incurred by the adverse party during the litigation, “including reasonable attorney[’s] fees.” Md. Rule 1-341(a). Maryland Rule 2-703 requires the circuit court, either on the record or in a separate memorandum, to “state . . . the basis for its grant or denial of an award” of attorney’s fees. Md. Rule 2-703(g). Otherwise, it is impossible for an appellate court to review the reasons for its grant or denial. See Lockett, 446 Md. at 425–26. Here, the circuit court didn’t address the Tenants’ request for attorney’s fees at the March 2025 judicial review hearing, nor did it hold a separate hearing on the motion. The circuit court’s order granting the Tenants’ motion for attorney’s fees, for which it entered no accompanying memorandum, contains the entirety of the court’s reasoning. The order doesn’t state any basis for the fee award or indicate if the circuit court awarded fees under RP § 8-203(e)(4), Maryland Rule 1-341, or both. Each of these alternative grounds relied
—Unreported Opinion— 39 on by the Tenants to support their attorney’s fees request imposes different requirements, each of which the circuit court could plausibly have found to be met here. To enter an award of attorney’s fees under RP § 8-203(e)(4), the circuit court would need to conclude (1) that the Tenants’ security deposit complaint with the Office was an “action” for the return of their security deposit under the statute and (2) that the judicial review proceedings on the Commission’s 2024 order—which reaffirmed its 2019 security deposit decision— were, in effect, post-judgment proceedings “necessitated by [Mr. Ludwig’s] refusal to satisfy [a] judgment” requiring him to return the Tenants’ security deposit. Pak, 378 Md. at 329. To enter an award of attorney’s fees under Rule 1-341, the circuit court would need to find, as the Tenants alleged in their post-judgment motion, that Mr. Ludwig’s actions in maintaining the judicial review proceedings were “in bad faith or without substantial justification.” Md. Rule 1-341(a). Without knowing the authority on which the circuit court relied, however, we aren’t able to determine whether it applied the correct legal framework or abused its discretion in granting the Tenants’ fee request.
—Unreported Opinion— 40 We vacate the attorneys’ fee award and order a narrow remand solely for the purpose of allowing the circuit court to identify the legal authority supporting its grant of the award and to state the basis for its decision as Maryland Rule 2-703(g) requires. DECISION OF THE MONTGOMERY COUNTY COMMISSION ON LANDLORD- TENANT AFFAIRS AFFIRMED. ATTORNEY’S FEE AWARD OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY VACATED AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. APPELLANT TO PAY 90% OF COSTS. APPELLEES TO PAY 10% OF COSTS.
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