Tipton v. PARTNER'S

• Decision Date: 06 June 2001
• Docket Number: No. 117,117
• Citation: 364 Md. 419,773 A.2d 488
• Parties: Robert TIPTON v. PARTNER'S MANAGEMENT CO.
• Court: Maryland Court of Appeals

773 A.2d 488

364 Md. 419

Robert TIPTON v. PARTNER'S MANAGEMENT CO.

No. 117, Sept. Term, 2000.

Court of Appeals of Maryland.

June 6, 2001.

Charles E. Kountz, Jr., Baltimore, on brief, for petitioner.

Minda F. Goldberg (Stuart L. Sagal of Wartzman, Omansky, Blibaum, Simons, Cassin & Sagal, P.A., on brief) Towson, for respondent.

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

CATHELL, Judge.

On June 24, 1999, Partner's Management Company, respondent, filed a claim in the District Court of Maryland sitting in Baltimore City for rent arrears plus interest and attorney's fees against Robert Tipton, petitioner. Respondent and petitioner had entered into a lease agreement for an apartment and respondent alleged that petitioner had violated the lease agreement. After denying petitioner's Motion to Dismiss, the District Court entered a judgment for respondent.

Petitioner appealed to the Circuit Court for Baltimore City. The Circuit Court affirmed the decision of the District Court. Petitioner then filed a Petition for Writ of Certiorari with this Court. We granted the petition. Petitioner has presented three questions:

1. Did the Circuit Court¹ err in ruling that the lease agreement was a contract under seal so as to create a specialty instrument, and thus make the applicable period of limitations twelve years, under § 5-102(a)(5) of the Courts and Judicial Proceedings Article of the Maryland Code, rather than the three-year period for simple contracts, under § 5-101 of that Article?

2. Did the Circuit Court err in failing to address whether the application of § 5-102(a)(5) of the Courts and Judicial Proceedings Article is repugnant to § 8-207 of the Real Property Article of the Maryland Annotated Code?

3. Did the Circuit Court err in failing to address whether the application of § 5-102(a)(5) of the Courts and Judicial Proceedings Article [is] repugnant to § 8-208 of the Real Property Article of the Maryland Annotated Code?

We answer yes to question one. We hold that a residential lease agreement, even if the lease agreement has the word seal affixed, is subject to the three-year limitation period enunciated in Maryland Code (1973, 1998 Repl.Vol.), section 5-101 of the Courts and Judicial Proceedings Article.²,³ Because we are answering yes to question one, we do not need to resolve questions two and three.

I. Facts

On December 12, 1991, petitioner entered into a lease agreement (hereinafter lease) with respondent⁴ to rent an apartment in Highland Village Apartments. The lease was for a period of one year and was to commence on January 1, 1992 and end on December 31, 1992. Just above the signatures of the parties on the pre-printed form lease, it stated that: "IN WITNESS WHEREOF the parties hereto have set their hands and seals the day and year first above written." Adjacent to the signatures at the end of the signature line was the word "SEAL" in parenthesis. There was no language in the lease in respect to statutes of limitation.

On November 24, 1992, petitioner was evicted from the apartment for a failure to pay rent to respondent.⁵ Respondent subsequently rented the apartment to other tenants and on August 12, 1993, respondent sent a letter to petitioner that referred to all of the expenses that respondent claimed it had incurred and the amount owed to respondent by petitioner. After not receiving a payment from petitioner, respondent turned petitioner's account over to a collection agency.

On June 24, 1999, the collection agency, on behalf of respondent, filed a claim in the District Court of Maryland sitting in Baltimore City. Petitioner filed a Motion to Dismiss with the District Court, stating that respondent had violated section 5-101⁶ because it had waited approximately seven years to file a Complaint in the District Court. Respondent stated that the three-year statute of limitations of section 5-101 did not apply because the lease was under seal, thus, according to respondent, it was a specialty that was controlled by section 5-102(a).⁷ There was no allegation that the parties specifically agreed to a twelve-year period of limitations, nor was any evidence so indicating introduced. The claim of the longer limitation period relied exclusively on the affixation to the lease of the word "Seal." The District Court denied petitioner's Motion to Dismiss, stating that:

I believe that under the current law, I must rule in favor of the Plaintiff. I personally do not think that's fair or correct. And I'm surprised that the Legislature is allowing this to happen. Now, that's this Court's interpretation of the law.

...

But at this point, I believe that the law in the State of Maryland is that if a contract is under seal—and of course my personal feelings cannot dictate what I do in a case, I took an oath to follow the law, and I will do that today—and I believe that the law states that if a contract is under seal, that there is a twelve year Statute of Limitations as opposed to a three year Statute of Limitations. That being the law, the motion to dismiss based on the Statute of Limitations is denied.

After the hearing on the Motion to Dismiss, a trial was held. The District Court, after receiving evidence and hearing witness testimony,⁸ entered a judgment in favor of respondent for $3,828.59 plus attorney's fees of $574.29.

Petitioner filed an appeal with the Circuit Court for Baltimore City. On October 23, 2000, the Circuit Court issued a Memorandum Opinion and Order in which it affirmed the decision of the District Court. The Circuit Court held that the lease was a contract under seal, thereby making the lease a specialty controlled by section 5-102, the twelve-year statute of limitation. Petitioner then filed in this Court a Petition for Writ of Certiorari.

II. Discussion

We hold that actions for rent arrears under any kind of residential lease must be filed in compliance with section 5-101.⁹ We are first going to examine the history of the use of the word seal in real property and other contract contexts. Then we will examine the legislative history of section 5-101 and analyze whether the legislative intent is for residential leases to which the word seal is affixed to be controlled by section 5-101, the three-year limitation period, or section 5-102, the twelve-year limitation period.

A. Seal

The use of the word seal on documents involving the conveyance of interests in real property (whether fee simple or lessor interests), has historically had a separate purpose from that involving contracts of a different nature. While the use of the word seal, in an appropriate context, could also create a specialty, historically its primary use in the conveyancing of property interests, even including leasehold interests, was to create a presumption of adequate consideration and a presumption of validity. As long ago as 1863, we stated in Colvin v. Warford, 20 Md. 357, 395-96 (1863), a case involving the validity of a prior conveyance in a testamentary context, that:

It also appears that the testatrix, as only surviving child and legal representative of her father, having become entitled to, and taken possession of this property at his decease, afterwards, in 1823, purchased the reversion from Lloyd N. Rogers, the sole heir at law of Nicholas, and ceased to pay the rent reserved from that time, but the written paper purporting to be a deed and duly recorded as such, by which the conveyance of the reversion to the testatrix was sought to be made, was not sealed by the grantor.

The appellant claiming this property as leasehold under the will of 1848, which by probate had become conclusive as to personal estate, objected to this prayer on the ground that these facts were sufficient to explain the possession of the testatrix, and bar the legal presumption of a grant in fee.

... In this case the testatrix entered into the possession of the property in question under a leasehold title, and although she afterwards became the purchaser of the reversion from Rogers, she appears not to have obtained an actual conveyance of it by a valid deed [the absence of a seal making it defective]. On the contrary, the instrument that was intended to effect the transfer was wholly inoperative for that purpose, and whatever effect it had in establishing an equitable claim to the property, it clearly shows the legal title to be still outstanding [because the deed of the reversion to her was defective because of the absence of a seal]. We must therefore assume, on the authority of the cases cited, that the possession of the testatrix was maintained, as it was taken, under her leasehold title, and that it was not adverse to the outstanding legal title to the reversion. [Emphasis added.]

In other words, the absence of the use of the word seal in the deed of the reversion caused the conveyance of the reversion to fail, and legal title to the reversion still remained with the original owner.

The Law of Contracts, John William Smith (Fourth American—Second London

Edition—1856), recognized that matters relating to the conveyancing of title interests in real property, were not normally covered by the general law of contracts.

The whole practice of our English Courts of Common Law, if we except their criminal jurisdiction and their administration of the law of real property, of which it is not my intention to speak, to which may possibly be added those cases which fall within the fiscal jurisdiction peculiar to the Court of Exchequer, if we except these, the whole of the remaining subjects with which the jurisdiction of a Court of Common Law is conversant may be distributed into two classes, Contracts and Torts.

Id. at 49 (some emphasis added). After excluding the law of real property from his discussion, he went on to discuss, generally, the differences between special and simple contracts, using language, i.e., "deeds," that we have come to associate with conveyances of title to real...