Walko Corp. v. Burger Chef Systems, Inc.

• Decision Date: 24 October 1977
• Docket Number: No. 2,2
• Parties: WALKO CORPORATION v. BURGER CHEF SYSTEMS, INC., et al. Misc.
• Court: Maryland Court of Appeals

Page 207

281 Md. 207

378 A.2d 1100

WALKO CORPORATION v. BURGER CHEF SYSTEMS, INC., et al.

Misc. No. 2.

Court of Appeals of Maryland.

Oct. 24, 1977.

Elbert R. Shore, Jr., Rockville (John T. Bell, Frank S. Cornelius and Bell & Cornelius, Rockville, on the brief), for appellant.

Nancy C. Garrison, Washington, D. C. (Max O. Truitt, Jr., Wilmer, Cutler & Pickering and Robert P. Stranahan, Jr., Washington, D. C., on the brief), for Burger Chef Systems, Inc.

Harry W. Goldberg, Chevy Chase (Thomas A. Gentile, Marc R. Wagshal and Robert J. Sher, Chevy Chase, on the brief), for Robert Holtzman and William Platt.

Argued before MURPHY, C. J. and SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

LEVINE, Judge.

Pursuant to the Uniform Certification of Question of Law Act, Maryland Code (1974), § 12-601 of the Courts and Judicial Proceedings Article, the United States Court of Appeals for the District of Columbia Circuit has certified the following question for our decision: Was the statute of limitations prescribed by § 5-101 of the Courts and Judicial Proceedings Article suspended during the pendency of appellant's motion for leave to intervene, ultimately denied, in a civil action in the United States District Court for the District of Columbia? We hold that the statute of limitations was not tolled.

The events that led directly to this proceeding began in July 1972, with the institution of a breach of contract action in the United States District Court for the District of Columbia by Robert Holtzman and William Platt (Holtzman and Platt) against Burger Chef Systems, Inc. (Burger Chef), all of whom are designated as appellees here. More than 16 months later, on November 17, 1973, Walko Corporation (Walko), designated appellant here, moved to intervene in the Holtzman and Platt-Burger Chef case, seeking damages against those parties for breach of contract and fraud. The district court found Walko's allegations to be "entirely unrelated to the subject matter" of the underlying suit and denied the motion to intervene on January 15, 1974.

On February 28, 1974, Walko filed a diversity suit against appellees alleging the same cause of action on which it had relied in its unsuccessful attempt at intervention. ¹ Appellees responded with a motion for summary judgment in which they interposed the statute of limitations as a defense. The district court, finding that Walko's action had accrued on or about January 26, 1971, and that the Maryland statute of limitations, requiring such a civil action to be "filed within three years from the date it accrues," was controlling, dismissed the suit "with prejudice."

On appeal, the United States Court of Appeals concluded that unless the running of the statutory period had been arrested for the 60-day period during which the motion to intervene lay pending before the district court, the action was barred by limitations. Whether the statute had been tolled, the court held, was a question of Maryland law. Finding, however, that the law of this state was "unclear" in this regard, the court of appeals certified the question to this Court for resolution. Walko Corp. v. Burger Chef Systems, Inc., 554 F.2d 1165, 1172 (D.C. Cir. 1977).

At the outset, two preliminary observations are in order. First, we proceed from the premise, as did the federal appellate court in accepting the finding of the district court, that the cause of action in dispute accrued on or about January 26, 1971. Secondly, appellees present a threshold issue: whether the filing of both the motion to intervene and the intervenor's complaint constituted the commencement of an action under Maryland Rule 140 a for purposes of determining whether the statute of limitations was temporarily suspended. So that we may reach the question certified to us, we shall assume without deciding that the filing of those papers met that requirement. See Braxton v. Virginia Folding Box Co., 72 F.R.D. 124, 126 (E.D. Va. 1976); Farris v. Sears, Roebuck & Co., 415 F.Supp. 594, 596 (W.D. Ky. 1976); Jack v. Travelers Ins. Co., 22 F.R.D. 318, 319 (E.D. Mich. 1958), aff'd on other grounds, 277 F.2d 736 (6th Cir. 1960).

In Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628 (1945), the Supreme Court described the nature and purpose of limitations statutes in the following terms:

"Statutes of limitation find their justification in necessity and convenience rather than in logic. They represent expedients, rather than principles. They are practical and pragmatic devices to spare the courts from litigation of stale claims, and the citizen from being put to his defense after memories have faded, witnesses have died or disappeared, and evidence has been lost. . . . (citation omitted). They are by definition arbitrary, and their operation does not discriminate between the just and the unjust claim, or the voidable and unavoidable delay. They have come into the law not through the judicial process but through legislation. They represent a public policy about the privilege to litigate."

Accord, Feldman v. Granger, 255 Md. 288, 296-97, 257 A.2d 421 (1969); Burket v. Aldridge, Adm'r, 241 Md. 423, 428, 216 A.2d 910 (1966); see Burnett v. New York Central R. Co., 380 U.S. 424, 428, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965).

This policy of repose has fostered a traditional rule concerning the tolling of statutes of limitation that can be fairly termed one of strict construction. Early on we adopted this rigorous stance: "The principle of law is indisputable, that when the Statute of Limitations once begins to run, nothing will stop or impede its operation." Ruff v. Bull, 7 H. & J. 14, 16, 16 Am.Dec. 290 (1825); accord, Gibbons v. Heiskell, 90 Md. 6, 9, 44 A. 996 (1899); Young v. Mackall, 4 Md. 362, 374 (1853). The rule has lost little of its vitality. As we said far more recently in Burket v. Aldridge, Adm'r, 241 Md. at 429, 216 A.2d at 913, the principle enunciated in Ruff, "while not immutable under all circumstances, . . . is still the general legal approach." In Weaver v. Leimam, 52 Md. 708, 718 (1879), where the question presented was whether suit had been filed within three years after removal of the disability of infancy, the Court said:

"Apart from the savings and disabilities expressed in the Statute (of Limitations) itself, there must, in order to defeat its operation, be some insuperable barrier, or some certain and well-defined exception clearly established by judicial authority."

Accord, Jolivet v. Elkins, 386 F.Supp. 261, 272 (D. Md. 1974); see McMahan v. Dorchester Fert. Co., 184 Md. 155, 160, 40 A.2d 313 (1944) ("where the Legislature has not made an exception in express words in the Statute of Limitations, the Court cannot allow any implied and equitable exception to be engrafted upon the statute merely on the ground that such exception would be within the spirit or reason of the statute.").

This venerable rule, which defers to the legislative intent expressed in the statute of limitations itself, and avoids implied exceptions or strained constructions, is also applicable in cases such as the one at bar where an action filed initially within the required period fails for some technical, procedural defect falling short of a full decision on the merits. Absent a statutory provision saving the plaintiff's rights, ² the remedy is barred where limitations has run during the pendency of the defective suit. See Weaver v. Leiman, 52 Md. at 718; Cromwell v. Ripley, 11 Md.App. 173, 182, 273 A.2d 218 (1971). Cf. McQuaid v. United Whole. Alum. Supp., 31 Md.App. 580, 588 n. 8, 358 A.2d 922 (1976) (where the court indicated that statute of limitations would continue to run without tolling against plaintiff whose action had been dismissed under Rule 310 for lack of prosecution). The Supreme Court stated the applicable rule in Willard v. Wood, 164 U.S. 502, 523, 17 S.Ct. 176, 181, 41 L.Ed. 531 (1896):

"The general rule in respect of limitations must also be borne in mind, that if a plaintiff mistakes his remedy, in the absence of any statutory provision saving his rights, or where from any cause a plaintiff becomes nonsuit or the action abates or is dismissed, and, during the pendency of the action, the limitation runs, the remedy is barred. . . . " (Citations omitted.)

Walko argues that two federal decisions support its position. In United States v. MacKenzie-Foster Co., 207 F.Supp. 210 (D. Mass. 1962), a timely filed intervenor's petition for recovery of the price of materials furnished a subcontractor was unaccompanied by a motion to intervene, although the motion was ultimately filed after the expiration of the period of limitations under the Miller Act. The court held that the claim was barred by limitations and denied the motion. Equally inapposite is Securities & Exch. Com'n v. Keller Bros. Securities Co., 30 F.R.D. 532 (D. Mass. 1962), decided on the same day as MacKenzie-Foster. There, motions to intervene in proper form were filed timely, but were challenged on the ground that the statute of limitations had expired before the court could act on the motions. In rejecting that challenge, the court held that the determinative date for purposes of limitations was that on which the motions had been filed, not that on which the court had scheduled the motions for hearing. This decision is readily distinguishable from the present case for the simple reason that the motion to intervene in Keller was properly filed in all respects and, when granted, was held to relate back to the time of the original filing. Walko's motion, on the other hand, which was ultimately denied, was, in effect, a procedural nullity with respect to the tolling of the limitations period. Clearly, then, the Keller case and related decisions provide absolutely no authority for interrupting the operation of the statute here.

Nor does Little v. Price, 1 Md.Ch. 182 (1847), afford support for Walko's position. There, the chancellor merely...