Murphy v. Liberty Mut. Ins. Co.

Decision Date27 April 2022
Docket Number5-2021
PartiesJesse J. Murphy, et al. v. Liberty Mutual Insurance Co.
CourtMaryland Court of Appeals

Jesse J. Murphy, et al.
v.
Liberty Mutual Insurance Co.

No. 5-2021

Court of Appeals of Maryland

April 27, 2022


Argument: December 3, 3021

United States District Court for the District of Maryland Case No. 1:20-cv-01961-SAG

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Getty, C.J., [*] McDonald, Watts, Hotten, Booth, Biran, Gould, JJ.

OPINION

McDonald, J.

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On April 24, 2020, then-Chief Judge Mary Ellen Barbera issued an administrative order that temporarily tolled statutes of limitations in civil cases for a period of time during the state of emergency occasioned by the Covid-19 pandemic. A commercial dispute is pending in the United States District Court for the District of Maryland between Appellants J.M. Murphy Enterprises, Inc., and its president Jesse J. Murphy (collectively, "Murphy Enterprises") and Appellee Liberty Mutual Insurance Company ("Liberty Mutual"). The timeliness of certain claims alleged in that case, as well as the diversity jurisdiction of the federal court over that action, may depend on the validity of the Chief Judge's administrative tolling order. Pursuant to statute and rule, [1] the federal district court has certified to this Court a question of law as to whether that administrative order exceeded the powers of the Chief Judge under the Maryland Constitution. As framed by the parties, the answer to that question turns on whether the Chief Judge's administrative tolling order violated the Maryland Declaration of Rights - in particular, Article 8, which guarantees the separation of powers of the branches of Maryland State government, and Article 9, which prohibits the "suspension" of laws.

For the reasons set forth in this opinion, we conclude that the Chief Judge acted within her authority when, in her capacity as administrative head of the Maryland Judiciary, she issued the administrative tolling order concerning the timeliness of complaints filed in Maryland courts during the pandemic. Specifically, the administrative order was based on

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the authority of the Chief Judge under the Maryland Constitution, the Maryland Code, and the Maryland Rules. In issuing that order, the Chief Judge did not, under the circumstances that existed at that time, unduly take upon herself - or, in the language of the case law concerning separation of powers, "usurp" - core functions belonging to either the Executive or the Legislative branches of State government. Nor did the emergency rules on which the administrative tolling order was based usurp another branch's core function. Finally, the tolling order did not violate the prohibition against the suspension of laws.

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Background

A. Administrative Authority and Rulemaking in the Maryland Judiciary

The question posed by the federal district court relates to the administrative authority of the Chief Judge of the Court of Appeals and the rulemaking authority of the Court. Those powers are simply stated in Article IV, §18 of the Maryland Constitution and elaborated to some extent in the Maryland Code and Maryland Rules.

1. Administrative Authority

The State Constitution provides that the "Chief Judge … shall be the administrative head of the Judicial system of the State." Article IV, §18(b)(1). Subsection (b) sets forth certain aspects of that authority with respect to the assignment of judges. §18(b)(2)-(5). It further provides that, in the absence of the Chief Judge, the administrative authority devolves upon the judge of the Court with the most seniority. §18(b)(5). Finally, it states that "[t]he powers of the Chief Judge set forth in [§18] shall be subject to any rule or regulation adopted by the Court of Appeals." Id.

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The Maryland Rules acknowledge this constitutional delegation of power to the Chief Judge. See Maryland Rules 16-101 (general administrative structure of the Judiciary), 16-102 (noting the Chief Judge's "overall responsibility for the administration of the courts of this State").

2. Rulemaking

The State Constitution also confers rulemaking authority on the Court of Appeals with respect to (1) practice and procedure in the courts and (2) the administration of the courts. It states that "[t]he Court of Appeals from time to time shall adopt rules and regulations concerning the practice and procedure in and the administration of the appellate courts and in the other courts of this State…." Article IV, §18(a). The rules adopted by the Court "shall have the force of law until rescinded, changed or modified by the Court of Appeals or otherwise by law." Id.[2]

The General Assembly has acknowledged the rulemaking power of the Court of Appeals with respect to both practice and procedure and judicial administration. In particular, it has directed that "[t]he power of the Court of Appeals to make rules and regulations to govern the practice and procedure and judicial administration … shall be liberally construed." CJ §1-201(a). That statute further provides that "[w]ithout intending to limit the comprehensive application of the term 'practice and procedure,' the term

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includes the forms of process; writs; pleadings; motions; parties; depositions; discovery; trials; judgments; new trials; provisional and final remedies; appeals; unification of practice and procedure in actions at law and suits in equity, so as to secure one form of civil action and procedure for both; and regulation of the form and method of taking and the admissibility of evidence in all cases, including criminal cases." Id.

In the Maryland Rules, the Court has established a Standing Committee on Rules of Practice and Procedure ("Rules Committee")[3] and a process for the Court's consideration and adoption of rules. See Maryland Rule 16-802.

B. Statutes of Limitations

The timeliness of a claim in a civil action is generally measured against the pertinent statute of limitations or under the doctrine of laches.[4] As the label itself indicates, a statute

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of limitations is a product of legislation enacted by a legislative body[5] - in this case, the General Assembly. A statute of limitations represents "a policy judgment by the Legislature that serves the interest of a plaintiff in having adequate time to investigate a cause of action and file suit, the interest of a defendant in having certainty that there will not be a need to respond to a potential claim that has been unreasonably delayed, and the general interest of society in judicial economy." Ceccone v. Carroll Home Services, LLC, 454 Md. 680, 691 (2017). In being faithful to that legislative judgment, the courts typically construe such statutes strictly. Cain v. Midland Funding, LLC, 475 Md. 4, 38 (2021). However, a statute of limitations is not immutable. Ceccone, 454 Md. at 692. This Court has recognized, in both rule and case law, that the deadline for filing an action seemingly set forth in a statute of limitations may be extended and, in some cases, shortened.

Because a statute of limitations sets a deadline for filing an action in court, it falls to the courts to interpret and administer that deadline. Some of that work is done by rule. For example, a court rule details how "any period of time" prescribed by rule or "any applicable statute" is to be computed. Maryland Rule 1-203.[6] Accordingly, that rule

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governs the computation of time for purposes of a statute of limitations. Excluded from those computations of filing deadlines are, among others, days on which the pertinent clerk's office is not open for regular hours. Maryland Rule 1-203(a)(2).

Another court rule provides an additional 30 days for a plaintiff to file suit in a Maryland court, if the lawsuit was initially filed within the Maryland statute of limitations in another jurisdiction and dismissed by the court in the other jurisdiction for certain reasons specified in the rule. Maryland Rule 2-101(b).

Like other statutes, the application of a statute of limitations is also construed in case law. For example, the question of when a cause of action accrues - and thereby triggers the start of the limitations period - "is one left to judicial determination." Cain, 475 Md. at 35. Under that rubric, this Court developed a "discovery rule" that delays accrual of a cause of action, for purposes of computing the statute of limitations, until the plaintiff is aware, or reasonably should be aware, of the wrong done by the defendant. See Poffenberger v. Risser, 290 Md. 631, 634-38 (1981); Hahn v. Claybrook, 130 Md. 179 (1917).[7]

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In addition, the Court has applied "judicial tolling" to a statute of limitations when the tolling would "gratify legislative intent" - in other words, "prevent perversion of the [legislative] policy and purpose" underlying the statute of limitations. Philip Morris USA, Inc. v. Christensen, 394 Md. 227, 238-39 (2006), abrogated on other grounds, Mummert v. Alizadeh, 435 Md. 207 (2013). Judicial tolling is appropriate in a particular case if a two-part test is met: "(1) there is persuasive authority or persuasive policy considerations supporting the recognition of the tolling exception, and (2) recognizing the tolling exception is consistent with the generally recognized purposes for the enactment of statutes of limitations." Id.; see also Cain, 475 Md. at 53-69.

Finally, because a statute of limitations does not affect a court's jurisdiction over a claim, parties may generally toll or lengthen a period of limitations by agreement or waiver. Ceccone, 454 Md. at 692. In some circumstances, they may agree to shorten a statutory period of limitations in a way that courts will recognize. The courts have, by case law, established criteria as to when a private alteration of a limitations period will be given effect. Id. at 692-95.

The bottom line is that a statute of limitations is an expression of legislative policy to be implemented by and in the courts. In giving effect to a statute of limitations, as in

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construing other statutes and acts of the Legislature, the courts must...

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