Baltimore County v. RTKL ASSOCIATES INC.

• Decision Date: 09 April 2004
• Docket Number: No. 77,77
• Citation: 846 A.2d 433,380 Md. 670
• Parties: BALTIMORE COUNTY, Maryland v. RTKL ASSOCIATES INC., et al.
• Court: Maryland Court of Appeals

846 A.2d 433

380 Md. 670

BALTIMORE COUNTY, Maryland v. RTKL ASSOCIATES INC., et al.

No. 77, Sept. Term, 2003.

Court of Appeals of Maryland.

April 9, 2004.

Reconsideration Denied May 6, 2004.

Jeffrey Grant Cook, Assistant County Attorney (Edward J. Gilliss, County Attorney of Towson, on the brief), for appellant/cross-appellee.

John A. King (Brett A. Pisciotta of King & Attridge of Rockville, on the brief), for appellees/cross-appellants.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA, and GREENE, JJ.

WILNER, J.

Two issues are before us in this appeal: (1) what, if any, statute of limitations applies to an action filed by a county for breach of a written contract; and (2) whether a plaintiff who sues a corporate engineering or architectural firm for breach of contract or negligence is required to file a certificate of merit pursuant to Maryland Code, § 3-2C-02 of the Cts. & Jud. Proc. Article (CJP). We shall hold that the three-year statute of limitations set forth in CJP § 5-101, applicable generally to civil actions, applies to the county's action, and that the certificate of merit requirement of CJP § 3-2C-02 is limited to actions against licensed individuals and is not applicable to suits against corporate firms. The result of these holdings will be a reversal of the judgment entered by the Circuit Court for Baltimore County.

BACKGROUND

In April, 1996, Baltimore County and RTKL Associates, Inc. (RTKL) entered into a written contract under which RTKL agreed to provide design development, construction documents, and bid assistance for Phase I of the Dundee-Saltpeter Environmental Park, a proposed education center to be located in the northeastern part of the county. At some point, RTKL engaged Andrews, Miller & Associates (AMA) as a subcontractor to "perform engineering services associated with the grading of the property." Although the record is not entirely clear on this point, it appears that work under the contract was completed in 1998. In June, 1999, a county survey crew discovered that "benchmarks set by AMA were off by .092 feet" and that "all grading of dirt was done .092 feet too low." As a result, more dirt had to be brought to the site to correct the grading and foundation walls already installed had to be changed. That, in turn, required the "disassembly of wall panels, additional concrete and changes to the slab of the grade."

In August, 2001, the county sued both contractors, charging them with breach of contract and negligence. The defendants initially moved to dismiss the action on two grounds—that the dispute was subject to arbitration and that the action was not filed within the one-year time period allowed by Maryland Code, Art. 25A, § 1A(c). The motion to dismiss in favor of arbitration was accompanied by a petition to compel arbitration.

The court denied that petition and the motion to dismiss in favor of arbitration but did not expressly rule on the limitations issue. RTKL and AMA filed an interlocutory appeal, asking the Court of Special Appeals to rule on both issues. The appellate court declined that invitation. Holding that an immediate appeal was permissible from an order denying a petition to compel arbitration, the court considered the defendants' argument on that issue, but, finding no merit in it, affirmed the ruling of the Circuit Court. Concluding that no interlocutory appeal lay from any implied ruling on the limitations issue, however, the court refused to consider that matter. RTKL v. Baltimore County, 147 Md.App. 647, 810 A.2d 512 (2002).

When the case returned to the Circuit Court, RTKL and AMA filed joint motions to dismiss on the grounds of the one-year statute of limitations in Art. 25A, § 1A(c) and the county's failure to file a certificate of merit in accordance with CJP § 3-2C-02. The county argued in response to the limitations argument that Art. 25A, § 1A(c) applied only to persons suing a county on a written contract, not to the situation where the county was the plaintiff, and that, indeed, the county was not subject to any statute of limitations when acting as a plaintiff in a breach of contract action. In May, 2003, the court denied the motion founded on the lack of a certificate of merit, holding that the requirement applied only to suits against licensed professionals—individuals—and not to suits against corporations. It granted the motion based on limitations, however, concluding, largely on the ground of parity, that the one-year statute should apply to both parties to the contract, and not just one of them. Both sides appealed, and we granted certiorari on our own initiative, before proceedings in the Court of Special Appeals, to consider the two issues.

DISCUSSION

Statute of Limitations

Art. 25A, § 1A(c)

CJP § 5-101 provides that "[a] civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced." Everyone agrees that the county's action was filed within that three year period, but neither side believes that § 5-101 is the applicable provision. The defendants contend that the applicable statute of limitations is the one-year provision contained in Art. 25A, § 1A(c). The county, asserting the ancient common law doctrine of nullum tempus occurrit regi (time does not run against the King), argues that, when acting as a plaintiff, it is not subject to any statute of limitations. We shall begin with the statute.

Art. 25A, § 1A was part of a law first enacted in 1976 (1976 Md. Laws, ch. 450) that, subject to certain conditions and limitations, waived the sovereign immunity of the State and purported to waive sovereign immunity of the counties and municipalities of the State in actions against them for breach of a written contract. Until the enactment of that law, the State and its agencies enjoyed a common law sovereign immunity from suits in both contract and tort: "neither a contract nor a tort action [could] be maintained against the State unless specific legislative consent has been given and funds (or the means to raise them) are available to satisfy the judgment." Dep't of Natural Resources v. Welsh, 308 Md. 54, 58-59, 521 A.2d 313, 315 (1986).

Although the immunity enjoyed by the State, in both contract and tort actions, was a general one that had long been recognized, we noted in American Structures v. City of Balto., 278 Md. 356, 359, 364 A.2d 55, 57 (1976), that "[a]s regards counties and municipalities, however, the rule is different." Municipalities and counties enjoyed a limited immunity in tort actions. As we confirmed in DiPino v. Davis, 354 Md. 18, 47, 729 A.2d 354, 369-70 (1999), "[a] local governmental entity is liable for its torts if the tortious conduct occurs while the entity is acting in a private or proprietary capacity, but, unless its immunity is legislatively waived, it is immune from liability for tortious conduct committed while the entity is acting in a governmental capacity." We recounted in American Structures, however, that counties and municipalities "have been regularly subject to suit in contract actions, whether the contracts were made in performance of a governmental or proprietary function, as long as the execution of the contract was within the power of the governmental unit." Id. at 359-60, 364 A.2d at 57, citing cases dating back to 1862 (Emphasis added). In Montgomery County v. Revere, 341 Md. 366, 671 A.2d 1 (1996), we confirmed that "under Maryland law counties and municipalities are normally bound by their contracts to the same extent as private entities" and that "Maryland law has never recognized the defense of governmental immunity in contract actions against counties and municipalities." Id. at 384, 671 A.2d at 10. See also Harford Co. v. Bel Air, 348 Md. 363, 372, 704 A.2d 421, 425 (1998)

; Fraternal Order of Police v. Balto. Co., 340 Md. 157, 173, 665 A.2d 1029, 1037 (1995).

That distinction—that the immunity from contract actions enjoyed by the State did not apply to the counties and municipalities—appears to have been missed by the General Assembly when it enacted ch. 450 in 1976, for, in one of the "Whereas" clauses that introduced the bill, the Legislature stated that this Court had held that, "as a result of the common law doctrine of sovereign immunity, a suit cannot be maintained against the State or its political subdivisions, unless authorized by the Legislature, and funds are available to satisfy any judgment rendered." (Emphasis added). Under that assumption, and desiring to modify the effect of this common law doctrine in the belief that "there exists a moral obligation on the part of any contracting party, including the State or its political subdivisions, to fulfill the obligations of a contract," the Legislature proceeded, subject to certain conditions and limitations, to waive the immunity it knew was enjoyed by the State and the immunity it apparently thought was enjoyed by the counties and municipalities in actions for breach of a written contract.

The Legislature achieved that result by enacting, in the one bill, five sets of nearly identical provisions: one, now found in §§ 12-201 through 12-204 of the State Government Article, applicable to actions against the State or units of the State government; a second, codified in Art. 23A, § 1A, applicable to actions against incorporated municipalities; a third, codified in Art. 25, § 1A, applicable to actions against non-chartered, non-code counties; a fourth, codified in Art. 25A, § 1A, applicable to actions against chartered counties, such as Baltimore County; and the fifth, codified in Art. 25B, § 13A, applicable to actions against code counties.

Each set contained four subsections. The most relevant set here—Art. 25A, § 1A—began in subsection (a) with the statement that, unless otherwise specifically provided by the Laws of Maryland, neither a chartered county nor...