Md. Code Regs. 09.08.03.03

Current through Register Vol. 51, No. 12, June 14, 2024

Section 09.08.03.03 - Adjudication of Claims

A. Claim Hearings.

(1) Parties.

(a) The claimant who brought the claim, and the contractor alleged to be responsible for the monetary loss of the claimant, shall be parties in all claim hearings.

(b) Assistant Attorneys General. Assistant attorneys general assigned to either represent the Fund on a claim, or present regulatory charges, shall participate as a party in the hearing and receive all appropriate notices.

(c) The same assistant attorney general assigned to present the regulatory case may be assigned to represent the Fund.

(2) Notice.

(a) The Commission shall notify all parties to a claim hearing of the date, time, and place of the hearing.

(b) This notice shall contain a statement of any regulatory charges brought against the contractor which will be heard at the claim hearing.

(c) The notice shall be mailed so as to give at least 10 days notice of the claim hearing.

(3) The burden of proof shall be on the claimant to establish the validity of the claim.

(4) Conduct of the Hearing.

(a) If a hearing does not involve regulatory charges, the order of presentation shall be as follows:

(i) The claimant shall present the case for the claim;

(ii) The contractor may submit any evidence against the claim;

(iii) An assistant attorney general representing the Fund may submit evidence concerning the claim; and

(iv) Any party in the hearing may cross-examine any witnesses and submit rebuttal evidence and closing arguments.

(b) If a hearing involves regulatory charges and a claim arising from the same event or transaction, the order of presentation shall be as follows:

(i) The assistant attorney general representing the State shall present the case for the regulatory charges against the contractor;

(ii) The claimant shall present the case for the claim;

(iii) The contractor may submit evidence against the charges and the claim;

(iv) An assistant attorney general representing the Fund may submit evidence concerning the claim; and

(v) Any party in the hearing may cross-examine any witnesses and submit rebuttal evidence and closing arguments.

(c) When a hearing involves regulatory charges and a claim arising from the same event or transaction, all evidence submitted at the hearing concerning that event or transaction shall be considered in determining the validity of the charges and the claim.

B. Measure of Awards from Guaranty Fund.

(1) The Commission may not award from the Fund any amount for:

(a) Consequential or punitive damages;

(b) Personal injury;

(c) Attorney's fees;

(d) Court costs; or

(e) Interest.

(2) The Fund may only compensate claimants for actual losses they incurred as a result of misconduct by a licensed contractor.

(3) Unless it determines that a particular claim requires a unique measurement, the Commission shall measure actual loss as follows:

(a) If the contractor abandoned the contract without doing any work, the claimant's actual loss shall be the amount which the claimant paid to the contractor under the contract.

(b) If the contractor did work according to the contract and the claimant is not soliciting another contractor to complete the contract, the claimant's actual loss shall be the amount which the claimant paid to the original contractor less the value of any materials or services provided by the contractor.

(c) If the contractor did work according to the contract and the claimant has solicited or is soliciting another contractor to complete the contract, the claimant's actual loss shall be the amounts the claimant has paid to or on behalf of the contractor under the original contract, added to any reasonable amounts the claimant has paid or will be required to pay another contractor to repair poor work done by the original contractor under the original contract and complete the original contract, less the original contract price. If the Commission determines that the original contract price is too unrealistically low or high to provide a proper basis for measuring actual loss, the Commission may adjust its measurement accordingly.

(4) The Commission may not award from the Fund an amount in excess of the amount paid by or on behalf of the claimant to the contractor against whom the claim is filed

C. Determinations.

(1) Hearing Officers.

(a) If the claim hearing is held before a hearing officer, the provisions of COMAR 09.01.03 shall be applicable.

(b) A hearing board comprised of commissioners other than commissioners who initially reviewed the claim shall adopt, reject, or modify the hearing officer's recommendations pursuant to COMAR 09.01.03.

(2) Unless the Commission or any of its members determines within 15 days of its issuance that a full hearing by the Commission is required, a hearing board's decision on a claim shall be a Final Order of the Commission which may be appealable by any aggrieved party to the circuit court where any party resides or has a principal place of business.

(3) If the claim hearing is held before the full Commission, the Commission shall issue a decision on the claim which shall be a Final Order which may be appealed by an aggrieved party to the circuit court where any party resides or has a principal place of business.

D. Payments.

(1) Upon the issuance of a Final Order that a claim is valid, with all appeals to court exhausted, the Commission shall pay the claim from the Fund subject to the limitations in §§B(1) and D(2) of this regulation.

(2) The Commission may not award from the Fund:

(a) To any one claimant more than $20,000 for acts or omissions of one contractor; or

(b) More than $100,000 to claimants on account of the conduct of any one licensee, unless, after the Commission has paid out $100,000 on account of the conduct of one licensed contractor, that contractor has repaid the full $100,000.

(3) If the aggregate amount of the approved claims to be paid from the Fund involving one contractor exceeds $100,000, the Commission may either:

(a) Pay the approved claims in the order filed until the $100,000 maximum is reached; or

(b) Prorate the approved claims by awarding each claimant the same percent of their approved claim which $100,000 is of the total amount of the approved claims.

(4) For purposes of this regulation, the term "approved claim" means the amount which the Commission has approved to be paid from the Fund which cannot exceed [$15,000] $20,000 per claim.

Md. Code Regs. 09.08.03.03

Regulations .03, Bonding, adopted as an emergency provision effective June 1, 1979 (6:14 Md. R. 1200); adopted permanently effective November 16, 1979 (6:23 Md. R. 1839)
Regulations .03 adopted effective August 26, 1985 (12:17 Md. R. 1704)
Regulations .03, Financial Responsibility, repealed effective September 5, 1988 (15:18 Md. R. 2145)
Regulations .03, Claims Against the Home Improvement Guaranty Fund, adopted effective September 5, 1988 (15:18 Md. R. 2145)
Regulation .03A amended effective July 7, 1993 (20:13 Md. R. 1046)
Regulation .03D amended effective April 3, 2000 (27:6 Md. R. 641); September 7, 2001 (28:17 Md. R. 1555)
Regulation .03 amended effective 42:1 Md. R. 17, eff.1/19/2015