GREENE TREE HO ASSOC. INC. v. Greene Tree Assoc.

• Citation: 749 A.2d 806,358 Md. 453
• Decision Date: 17 April 2000
• Docket Number: No. 95,95
• Parties: The GREENE TREE HOME OWNERS ASSOCIATION, INC. v. GREENE TREE ASSOCIATES et al.
• Court: Court of Appeals of Maryland

749 A.2d 806

358 Md. 453

The GREENE TREE HOME OWNERS ASSOCIATION, INC. v. GREENE TREE ASSOCIATES et al.

No. 95, Sept. Term, 1999.

Court of Appeals of Maryland.

April 17, 2000.

Raymond Daniel Burke (David Freishtat and William Michael Mullen, Jeffrey S. Rosenfeld of Freishtat & Sandler, on brief), Baltimore, for Petitioner.

Richard S. Hoffman (Paul Mogin of Williams & Connolly, on brief), Washington, DC; Philip M. Andrews, John F. Dougherty of Kramon & Graham, P.A., Baltimore; J. Mitchell Kearney of Brown, Diffenderffer & Kearney, LP, Towson; Douglas W. Biser and James R. Andersen of Mudd, Harrison & Burch, Towson, all on brief, for Respondents.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, WILNER, CATHELL, HARRELL and THEODORE J. BLOOM (retired, specially assigned), JJ.

RODOWSKY, Judge.

The question presented here is whether limitations on certain claims in the petitioner's first amended complaint are governed by Maryland Code (1974, 1998 Repl. Vol.), § 5-102 of the Courts and Judicial Proceedings Article (CJ). It provides:

"(a) Twelve-year limitation.—An action on one of the following specialties shall be filed within 12 years after the cause of action accrues, or within 12 years from the date of the death of the last to die of the principal debtor or creditor, whichever is sooner:

"(1) Promissory note or other instrument under seal;

"(2) Bond except a public officer's bond;

"(3) Judgment;

"(4) Recognizance;

"(5) Contract under seal; or

"(6) Any other specialty.

"(b) Suspension of time.—A payment of principal or interest on a specialty suspends the operation of this section as to the specialty for three years after the date of payment.

"(c) Exception.—This section does not apply to a specialty taken for the use of the State."

Petitioner contends that its claims are based on statutory specialties because they allege violations of Maryland's Consumer Protection Act (CPA), Maryland Code (1975, 1990 Repl.Vol.), §§ 13-101 through 13-501 of the Commercial Law Article (CL). We reject that contention for the reasons set forth below.

I

The petitioner, The Greene Tree Home Owners Association, Inc. (the HOA), is a non-stock corporation organized pursuant to the Maryland Homeowners Association Act, Maryland Code (1974, 1996 Repl.Vol.), §§ 11B-101 through 11B-114 of the Real Property Article (RP). The residential community, known as Greene Tree, is located in Baltimore County and consists of forty-five buildings containing a total of 200 residential units. On May 1, 1998, in the Circuit Court for Baltimore County, the HOA sued Greene Tree Associates, a partnership that developed and sold the lots, as well as the latter's partners, Berngar Development Co., Inc. and River Oaks Construction Corporation. The HOA also sued Talles Construction Co., Inc., the general contractor on the project. These defendants impleaded Columbia Roofing, Inc., a subcontractor of Talles. The defendants and third-party defendant are appellees in this appeal and collectively shall be referred to as Respondents.

On July 8, the HOA filed an amended complaint, alleging design and construction defects in the roofs of the Greene Tree units. The amended complaint contained twenty-one common law counts, such as "negligent design" and "breach of express warranty," one allegation of breach of statutory warranty pursuant to RP § 10-203, and six counts under the CPA. Each of the CPA counts of the amended complaint sought $8,500,000 in compensatory damages because of

"substantial injury and damage to the structure of Greene Tree, damage to the units, damage to the value of Greene Tree and the owners' units, damage from exposure to life/safety hazards, loss and/or diminishment of the peaceful use, occupancy and enjoyment of Greene Tree, damage from lost sales and/or rentals, and damage from the expenditure of funds for repairs, corrections and maintenance."

The HOA's complaint admitted that individual purchasers of units at Greene Tree reported defective roof conditions to the Respondents as early as 1986. Furthermore, in December 1992, the HOA presented an expert's report to the Respondents on the alleged roof defects. In February 1993, Respondents presented their expert's report on the condition of the roofs to the HOA. In September 1994, the parties settled concerning other alleged building defects, exclusive of the roofs. The HOA's 1998 suit concerning the roofs was filed short of twelve years after initial complaints of roof defects.

Respondents moved for partial summary judgment, arguing that, except for a single building containing six recently sold units, all of the HOA's claims were barred by limitations. With respect to the CPA claims, Respondents asserted the applicable bar to be three years under the general statute of limitations, CJ § 5-101. It reads:

"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."

In response, the HOA pointed to its allegations of CPA violations and to CL § 13-408(a) which reads:

"In addition to any action by the [Consumer Protection] Division or Attorney General authorized by this title and any other action otherwise authorized by law, any person may bring an action to recover for injury or loss sustained by him as the result of a practice prohibited by this title."

The HOA argued that its private cause of action under the CPA is based on a statutory specialty and that statutory specialties fall within the language, "[a]ny other specialty" in CJ § 5-102(a)(6).

The circuit court granted summary judgment in favor of the Respondents on the CPA claims, saying:

"In passing the CPA the legislative intent was to liberalize the ability of consumers to bring claims by addressing certain elements of existing causes of action that already apply to the relationship between a buyer and a seller of goods, thus relaxing the burden for consumers. However, in doing so, the Legislature did not create a new relationship between the parties, create a new cause of action, or eliminate an existing cause of action. With the exception of making actionable `fraudulent omissions,' the CPA merely expanded the existing remedies available to the buyers of new homes under traditional contract law theories. The case at issue is simply a case which alleges faulty/defective construction. Merely because the relationship is that of buyer and seller (a relationship not created by the CPA) and the CPA concerns itself with the sale of real estate, does not create a specialty."

Thereafter, the HOA filed a voluntary dismissal without prejudice of its claims on behalf of recent purchasers, resulting in a final judgment, and the HOA appealed to the Court of Special Appeals. We granted the HOA's petition for a writ of certiorari before the Court of Special Appeals considered the appeal. In its brief on appeal the HOA presents only the issue of which period of limitations applies to its claims under the CPA.

II

In its brief in chief the HOA argues that the General Assembly created a new cause of action by enacting the CPA. In support the HOA cites, inter alia, Citaramanis v. Hallowell, 328 Md. 142, 613 A.2d 964 (1992),

where we said:

"Section 13-408(a) [of the CPA] provides a remedy to the consumer for many forms of misrepresentation not covered by the traditional theories of tort liability for deceit, contract actions for breach of express and implied warranties and warranties provided for under the Real Property Article and the Commercial Law Article."

Id. at 154, 613 A.2d at 970. The HOA further contends that this Court "has long recognized that causes of action and remedies created by statute are `specialties' for limitations purposes." Relying principally on a test for determining whether a statute creates a specialty debt that was quoted from 1 H.G. Wood, A Treatise on the Limitation of Actions § 39 (4th ed. 1916) (Wood on Limitation), in Mattare v. Cunningham, 148 Md. 309, 129 A. 654 (1925), the HOA submits that a cause of action under the CPA is new and thus a statutory specialty. Citing Sterling v. Reecher, 176 Md. 567, 569, 6 A.2d 237, 238 (1939), the HOA says that the principle whereby causes of action and remedies created by statutes are specialties "dates back to the original enactment of a statute of limitations by Parliament." The HOA also has furnished us with the opinions or rulings by six different circuit court judges from four different counties who concluded on the above reasoning that limitations on an action under the CPA are twelve years.

The Respondents take the position that Mattare and Sterling, supra, the only decisions of this Court holding that the actions involved were based on statutory specialties, "were based on statutes providing exclusive remedies, and like a bond or a judgment the actions did not require inquiry into the underlying facts and circumstances concerning liability." The Respondents also contend that the instant claims are essentially based on a contractual relationship, and not the CPA, that applying the twelve year statute here would create an unwarranted disparity with the three year limitations period, that applying the three year statute is consistent with the purposes of statutes of limitations generally, and that the General Assembly did not intend the twelve year statute to apply when enacting the CPA.

The statutory construction question presented here cannot be answered by looking exclusively to the words of the statute. Appropriately, both parties look to the relevant statutes of limitations as they were in effect prior to the enactment, as part of the code revision program, of the Courts and Judicial Proceedings Article by Chapter 2 of the Acts of 1973, First Special Session.

The predecessor to CJ § 5-101 was Maryland Code (1957), Article 57, § 1. It read in relevant part as follows:

"§ 1. Actions other than those upon...