Tranen v. Aziz

• Decision Date: 01 September 1984
• Docket Number: No. 307,307
• Citation: 59 Md.App. 528,476 A.2d 1170
• Parties: Pearl TRANEN, et vir. v. Barbara S. AZIZ, et al. ,
• Court: Court of Special Appeals of Maryland

Page 528

59 Md.App. 528

476 A.2d 1170

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

No. 307, Sept. Term, 1984.

Court of Special Appeals of Maryland.

July 11, 1984.

Nancy E. Paige, Baltimore, with whom were Donald N. Rothman, Lawrence S. Greenwald and Gordon, Feinblatt, Rothman, Hoffberger & Hollander, Baltimore, on the brief, for appellants.

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

Argued Before LISS and BISHOP, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals (retired), Specially Assigned.

BISHOP, Judge.

Mr. and Mrs. Irving N. Tranen appeal an order of the Circuit Court for Howard County, which dismissed their medical malpractice suit against the appellee health care providers, Barbara S. Aziz, M.D. Columbia Medical Plan, Inc., and Patuxent Medical Group, P.A.

Facts

The parties agree to the accuracy of the following case history. Appellants filed a claim against appellees in the Health Claims Arbitration Office alleging negligent diagnosis of breast cancer in appellant Mrs. Tranen. The arbitration panel made its award in favor of appellee health care providers on September 14, 1983. Appellants' counsel received official notice of this award on October 3, 1983.

Eleven days later, on October 14, appellants filed a declaration against appellees in the Circuit Court for Howard County. It did not explicitly ask to nullify the arbitration award, but alleged the same acts of negligence as in appellants' claim before the Health Claims Arbitration Office. Copies of this declaration were made available to appellees' counsel. On November 9, 1983, thirty-six days after receiving official notice of the Office's decision, appellants filed their declaration with the Director of the Health Claims Arbitration Office.

Later that November, appellees filed motions in the Howard County Circuit Court raising preliminary objections that the appellants had failed to comply with section 3-2A-06 of the Courts article and Maryland Rule BY 2. Appellees maintained that the statute and rule allowed appellants 30 days after receipt of the award to file a notice of rejection of award with the Director of the Health Claims Arbitration Office and a notice of their action to nullify with the clerk of the circuit court. Even though the appellants had filed the declaration on time, appellees moved to dismiss on grounds that the other papers were not filed in a timely manner.

On about December 8, 1983, sixty-six days after receiving official notice of the award, appellants filed an amended declaration, which explicitly sought to nullify the arbitration award, as well as sue the appellees, and also filed a document entitled "Notice of Action" with the clerk of the Howard County Circuit Court. Appellees filed a motion Ne Recipiatur. Appellants' papers were served on the Director of the Health Claims Arbitration Office on January 27, 1984. The court (Nissel, J.) held a hearing that day, and later issued a memorandum and order dismissing appellants' suit for failure to comply with the statute and rule. Because the court dismissed the action, it deemed the motion Ne Recipiatur moot.

Appellants ask:

1. Did the lower court err in dismissing the Tranens' declaration for failure to timely serve notice of rejection of the arbitration award upon the Director of the Health Claims Arbitration Office?

a. Did the lower court err in holding that service of notice upon the Director is a statutory prerequisite to filing an action in court?

b. Did the lower court err in holding that dismissal was the proper sanction for failure to serve timely notice of rejection on the Director?

2. Did the lower court err in dismissing the Tranens' declaration for failure to comply with Rule BY 2?

We must accordingly decide what the statute and rule require, and what sanctions attend their violations.

Discussion

Section 3-2A-06 of the Courts article, which governs judicial review of health claims arbitration provides, in pertinent part:

"(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....

(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. [T]he procedures applicable to the action including the form and necessary allegations in the initial pleading shall be governed by the Maryland Rules." (Emphasis supplied)

Md.Cts. & Jud.Proc.Code Ann. (1984 repl.vol.). See generally Attorney General v. Johnson, 282 Md. 274, 385 A.2d 57 (1978).

The rules to which the statute refers are set forth in Chapter 1100, subtitle BY, which governs actions to nullify arbitration awards. At all times pertinent to this case, Rule BY 2 a provided:

"Filing of Notice--Content.

An action to nullify an award rendered by an arbitration panel determining a health care malpractice claim shall be commenced by filing notice of the action with the clerk of a court within 90 days after the award is served upon the party rejecting the award."

This rule, which took effect along with the rest of the subtitle on January 1, 1979, conformed to section 3-2A-06(b) as originally enacted. 1976 Md. Laws, ch. 235. In 1981 the statute was amended to reduce the time for filing the nullification action from 90 to 30 days. 1981 Md. Laws, ch. 588. To establish consistency with this statutory change, the Court of Appeals adopted an emergency rule change on February 17, 1984, requiring that a notice of action to nullify be filed with the clerk of court within 30 days of receiving the arbitration award. 11 Md. Register 447 (3/2/84).

In the interim before the rule was rewritten, the statutory change superseded the rule. Md. Const. Art. IV, § 18. Funger v. Mayor of Somerset, 244 Md. 141, 150, 223 A.2d 168 (1966). Both the statute and the rule relate to the same subject: an action to nullify an arbitral award. The statute explicitly refers to the rules. The applicable rule provides that such an action "shall be commenced by filing notice of the action with the clerk of a court...." (Emphasis added.) If the action must be brought within 30 days, and must be commenced by filing notice with the clerk of court, then the notice must be filed within that 30-day time period.

Taken together, the statute and rules require that within 30 days of receiving the arbitral award, the party rejecting it must file: (a) a notice of rejection with the Director and arbitration panel, and serve copies thereof on the other parties, Md.Cts. & Jud.Proc.Code Ann. § 3-2A-06(a) (1984 repl.vol.); and (b) a notice of action to nullify the arbitration award, filed with the clerk of the appropriate circuit court. Md. Rule BY 2 (a); Md.Cts. & Jud.Proc.Code Ann., § 3-2A-06(b) (1984 repl.vol.).

This notice of action suffices to commence the action to nullify; no additional paper entitled "action to nullify" is required. Copies of the notice shall be filed with the Director and served on all other parties to the arbitration proceeding. Md.Cts. & Jud.Proc.Code Ann., § 3-2A-06(b); (1984 repl.vol.). Md. Rule BY 2(b).

Within 30 days after the filing of the notice of action to nullify, the claimant must file a declaration (now labeled a "complaint" Rule 2-302), suing the health care provider. If the complaint is timely filed, the award is nullified. If the award is in favor of the claimant and he rejects the award and files a notice of action to nullify and thereafter fails to file the complaint within the allotted time, the arbitral award becomes final. If the award is in favor of the claimant and the health care provider rejects the award and files a notice of action to nullify, and thereafter the claimant fails to file a complaint within the allotted time, the arbitral award is nullified and the case is concluded. If the award is in favor of the health care provider and the claimant rejects the award and files a notice of action to nullifyand thereafter fails to file the declaration within the allotted time, the award becomes final.

Appellants did not timely file (a) the notice of rejection or (b) the notice of action to nullify. They maintain, however, that their timely filing of the declaration (complaint) and service of copies on the Director and the other parties, substantially complied with the notice requirements, obviating any harm from their dereliction. Thus, they argue, the court's dismissal is, in effect, an unwarranted elevation of form over substance. Appellees respond that the appellants' failure to comply with the above notice requirements is either a jurisdictional defect, necessitating automatic dismissal, or a sufficient basis for dismissal at the trial court's discretion.

The statute and rule require that the notice of rejection "must" be filed and the notice of action "shall" be filed within the prescribed time period.

The term "shall" is presumed mandatory on the parties, denoting "an imperative obligation inconsistent with the exercise of discretion." Johnson v. State, 282 Md. 314, 321, 384 A.2d 709 (1978) citing Bright v. Unsat. C. & J. Fund Bd., 275 Md. 165, 169, 338 A.2d 248 (1975). Accord In re DeWayne H., 290 Md. 401, 404, 430 A.2d 76 (1981); In re James S., 286 Md. 702, 706-08, 410 A.2d 586 (1980) quoting State v. Hicks, 285 Md. 310, 334, 403 A.2d 356 (1979); People's Counsel v. Pub. Serv. Comm'n, 52 Md.App. 715, 719-20, 451 A.2d 945 (1982).

"Shall" and "must" have been employed synonymously to foreclose discretion. Resnick v....