Tranen v. Aziz

• Decision Date: 02 December 1985
• Citation: 500 A.2d 636,304 Md. 605
• Parties: Pearl TRANEN et vir. v. Barbara AZIZ et al. 120 Sept. Term 1984.
• Court: Maryland Court of Appeals

Page 605

304 Md. 605

500 A.2d 636

Pearl TRANEN et vir. v. Barbara AZIZ et al.

120 Sept. Term 1984.

Court of Appeals of Maryland.

Dec. 2, 1985.

Lawrence S. Greenwald (Donald N. Rothman, Nancy E. Paige and Gordon, Feinblatt, Rothman, Hoffberger & Hollander, on brief), Baltimore, for appellants.

Jeanette A. Plante, Baltimore, and Mark D. Siegel, Washington, D.C. (John F. King, Anderson, Coe & King, Baltimore, and Michaels & Wishner, Washington, D.C., on brief) for appellees.

Argued before MURPHY, C.J., SMITH, ELDRIDGE, COLE, RODOWSKY and McAULIFFE, JJ. and JAMES C. MORTON, Jr., Associate Judge of the Court of Special Appeals of Maryland (retired, Specially Assigned).

COLE, Judge.

We shall here determine the procedures an aggrieved party must follow to obtain judicial review ¹ of an arbitration award under the Health Care Malpractice Claims Act.

The facts are not in dispute. Mrs. Pearl Tranen and her husband, appellants, filed a claim in the Health Claims Arbitration Office against Barbara S. Aziz, M.D., Patuxent Medical Group, P.A. and Columbia Medical Plan, Inc., appellees, for Dr. Aziz's alleged negligent failure to diagnose breast cancer in Mrs. Tranen. After hearing the Tranens' claim, the Health Claims Arbitration Panel made an award in favor of Dr. Aziz on September 14, 1983. Mr. and Mrs. Tranen received official notice of the award on October 3, 1983.

On October 14, 1983, the Tranens filed a declaration and Election of Jury Trial in the Circuit Court for Howard County. The declaration alleged the same acts of negligence as had been alleged in the arbitration proceeding. The declaration was silent, however, as to the prior arbitration of the claim. On November 9, 1983, thirty-seven days after the receipt of notice of the award, appellants mailed a copy of the declaration to the Director of the Health Claims Arbitration Office.

Soon after the declaration was filed, appellees filed Motions Raising Preliminary Objection which alleged that the circuit court lacked subject matter jurisdiction because the Tranens failed to comply with the judicial review requirements set forth by the Act and by the Maryland Rules. On December 8, 1983, the Tranens filed a pleading entitled Notice of Action and an amended declaration with the Clerk of the Court.

Judge J. Thomas Nissel granted appellees' Motions Raising Preliminary Objection and reasoned, in a Memorandum and Order dated March 14, 1984, that the judicial review requirements of the Act were mandatory, and that the Tranens' noncompliance with the Act required dismissal of their action. The Court of Special Appeals affirmed in Tranen v. Aziz, 59 Md.App. 528, 476 A.2d 1170 (1984). We granted the Tranens' Petition for Writ of Certiorari.

The legislature in 1976 enacted this State's Health Care Malpractice Claims Statute, Md.Code (1974, 1977 Cum.Supp.), §§ 3-2A-01 to 3-2A-09 of the Courts Article (The Act), ² which requires that certain claims be submitted to arbitration for initial determination of liability and damages before being submitted to a court of law. The Act provides that all claims against health care providers seeking damages in excess of $5,000 must be filed with the Health Claims Arbitration Office. That office, acting through its director, refers all issues to be resolved to a three member arbitration panel consisting of an attorney, a health care provider, and a member of the general public (all members chosen at random). The panel conducts a hearing, determines the liability, if any, of the health care provider, and expresses its decision in an award. If no party rejects the award, it becomes final and binding and is filed by the Director in the appropriate circuit court. When confirmed by that court, the award becomes a final judgment. See §§ 3-2A-02 through 3-2A-05(h).

The issues in this case revolve around what a party aggrieved at the award must do to invoke judicial review. We turn then to § 3-2A-06 of the Act which provides, in part, as follows:

(a) Rejection of award.--A party may reject an award for any reason. A notice of rejection must be filed with the Director and the arbitration panel and served on the other parties or their counsel within 30 days after the award is served upon the rejecting party, or, if a timely application for modification or correction has been filed within 10 days after a disposition of the application by the panel, whichever is greater.

(b) Action to nullify award.--At or before the time specified in subsection (a) for filing and serving a notice of rejection, the party rejecting the award shall file an action in court to nullify the award and shall file a copy of the action with the Director. Failure to file this action timely in court shall constitute a withdrawal of the notice of rejection. Subject to the provisions of subsection (c), the procedure applicable to the action including the form and necessary allegations in the initial pleading shall be governed by the Maryland Rules. If any party to the proceeding elects to have the case tried by a jury in accordance with the Maryland Rules, it shall be tried by a jury. Otherwise, the case shall be tried by a judge. The trial date for each rejection of a panel determination shall have precedence over all cases except criminal matters and workmen's compensation appeals.

It is clear that the statute requires two ³ separate undertakings to obtain judicial review : first, § 3-2A-06(a) calls for a notice of rejection to be "filed with the Director and the arbitration panel and served on the other parties or their counsel within 30 days after the award is served upon the rejecting party ..."; second, § 3-2A-06(b) requires that, within the time limits for rejecting the award, the aggrieved party "shall file an action in court to nullify the award and shall file a copy of the action with the Director."

Because an action to nullify is wholly an action in the circuit court, § 3-2A-06(b) provides that the procedures applicable are to be governed by the Maryland Rules. Maryland Rules BY1--BY6 are applicable to an action to nullify an arbitration award, and Rule BY2 a provides that such an action "shall be commenced by filing notice of the action with the clerk of the court.... The notice shall identify the award and state that it is being rejected by the party filing the notice." Rule BY4 provides that "[w]ithin 30 days after the filing of the notice of action, the plaintiff shall file and serve a declaration."

In the instant case, the Tranens did not file a notice of rejection pursuant to § 3-2A-06(a) or a notice to nullify action pursuant to Rule BY2. Nevertheless, they maintain that the court should not have dismissed their action. They argue first that filing a notice of rejection is not a prerequisite to filing a court action under the Act, and second that their filing a declaration and sending a copy of the declaration to the Director constituted substantial compliance with § 3-2A-06 and Rule BY2. We disagree.

The legislature has fashioned through the Health Care Malpractice Claims Act a mandatory framework for the resolution of health claims. See Attorney General v. Johnson, 282 Md. 274, 385 A.2d 57, appeal dismissed, 439 U.S. 805, 99 S.Ct. 60, 58 L.Ed.2d 97 (1978). The Act unequivocally provides for the exclusiveness of its procedures. Section 3-2A-02(a) proclaims that a health claims action "may not be brought or pursued in any court of this State except in accordance with this subtitle." (Emphasis added). Although by this mandate the Act does not divest the circuit court of subject matter jurisdiction to hear a dispute involving a health claim, it "creates a condition precedent to the institution of a court action...." Oxtoby v. McGowan, 294 Md. 83, 91, 447 A.2d 860, 864-65 (1982) (quoting Attorney General v. Johnson, supra, 282 Md. at 283-84, 385 A.2d at 63).

Submission of the malpractice dispute to arbitration does not in itself satisfy the condition precedent to court action; the litigants must follow the special statutory procedures prescribed by the Act. See Oxtoby v. McGowan, supra, 294 Md. at 91, 447 A.2d at 864. Both the notice of rejection provision ("notice of rejection must be filed" § 3-2A-06(a) (emphasis supplied)) as well as the action to nullify provision ("the party rejecting the award shall file an action in court to nullify the award" § 3-2A-06(b) (emphasis supplied)) are posed in imperative terms. More important, the statutory context of these directives plainly shows that compliance with them is mandatory and that noncompliance mandates dismissal.

The purpose of the legislative scheme is clear upon careful analysis. The notice of rejection serves as the final step in the arbitration procedure by which the award may be held non-binding and the claim held open for judicial resolution. The action to nullify, on the other hand, is the exclusive step by which the aggrieved party may initiate proceedings in court.

Appellants contend that § 3-2A-06 does not require the filing of a notice of rejection as a prerequisite to a court action because, under § 3-2A-06(b), an action to nullify may be commenced in court before the notice of rejection is filed. Although the action to nullify may...