Beka Industries, Inc. v. Worcester County Board of Education

GREENE, J. This case arises from a written contract dispute between Beka Industries, Inc. (“BEKA”) and the Board of Education of Worcester County (“the County Board”). 1 Between 2004 ²⁰⁰ and 2006, BEKA was one of twenty trade contractors to be awarded a lump sum contract to contribute to the construction of a new public school, Ocean City Elementary School, in Worcester County. Dissatisfied with the method and amounts of the County Board’s payment for its work, BEKA filed suit in the Circuit Court for Worcester County and obtained a judgment against the County Board. The County Board appealed that judgment to the Court of Special Appeals and succeeded in obtaining a reversal of the judgment and an order for a new trial. BEKA has appealed the intermediate appellate court’s judgment and before us contends that the trial court’s judgment should be fully reinstated.

We affirm the Court of Special Appeals’s judgment that a new trial is warranted because the County Board was precluded from presenting evidence on its recoupment claim and BEKA may have been awarded impermissible “delay damages” under the contract. But, we reverse the intermediate appellate court’s holding that the County Board’s governmental immunity is not waived unless and until BEKA proves that there is a funding mechanism to satisfy a judgment for money damages rendered against the Board. Accordingly, we affirm in part, reverse in part, and remand the case to the intermediate appellate court with direction to remand to the Circuit Court for a new trial. FACTUAL AND PROCEDURAL BACKGROUND On June 8, 2004, the County Board executed a written contract with BEKA. to perform site clearing, excavation, grading, site utilities, curb and gutter work, and paving for a new elementary school.

The “lump sum bid” proposed for the work by BEKA and accepted by the County Board was $1,856,000. Subsequent to execution of the contract, the parties agreed to three approved change orders, totaling $105,913, that increased the total contract price to $1,961,913. ²⁰¹ BEKA’s work on the contract began in June 2004 and was completed by May 2006. During that time, there were numerous disputes regarding BEKA’s responsibilities under the original contract as well as the monetary consequences of modifications made by the County Board. To date, the Board has paid BEKA a total of $1,421,852.

Alluded by resolution to their dispute, BEKA filed a Complaint for Money Damages and Other Relief in the Circuit Court for Worcester County. BEKA’s original complaint sought damages in the amount of $1,157,053.75, as well as prejudgment interest, post-judgment interest, costs and attorney’s fees. BEKA tabulated that figure alleging that the County Board owed it $361,991.47 under the original contract and an additional $795,062.28 for alterations made to the scope of BEKA’s work under the contract. The County Board generally denied liability, raising 12 affirmative defenses in its first Answer; a recoupment claim for “credits, backcharges, and/or setoffs” in the amount of $531,979.52 in its Amended Answer and Counter-Complaint; combining the recoupment claim and the 12 affirmative defenses in its Second Amended Answer; and adding four more defenses to its Third, and final, Amended Answer. 2 The County Board conceded at trial that it owes at least $361,991.47 on the balance of the original contract.

Numerous motions were filed during the course of the litigation and are discussed with particularity infra. Following a four day bench trial, the Circuit Court for Worcester County “compromised the claim” between what the trial judge viewed to be BEKA’s final claim for $1,215,035,80 (exclusive of prejudgment interest) and the County Board’s claim for $505,487 and entered a judgment in favor of BEKA for $1,100,000, excluding prejudgment interest and not awarding attorney’s fees or post-judgment interest. 3 The County ²⁰² Board appealed the judgment and filed a “Motion to Stay Enforcement of the Judgment,” which was denied by the trial judge, but granted on appeal on the condition that a supersedeas bond be filed in the Circuit Court for Worcester County. The County Commissioners of Worcester County fulfilled the bond requirement and the intermediate appellate court heard the case. The Court of Special Appeals reversed the judgment of the trial court and remanded the case to the Circuit Court for ²⁰³ purposes of a new trial.

Board of Ed. v. BEKA, 190 Md.App. 668 , 989 A.2d 1181 (2010). BEKA petitioned for certiorari and the County Board filed a conditional cross-petition, both of which were granted, BEKA v. Worcester County Bd. of Edua, 415 Md. 38 , 997 A.2d 789 (2010), to address the following questions, rephrased for clarity: 1. Is the doctrine of sovereign immunity applicable to a suit against a county board of education for breach of a written contract? 2. Did the Court of Special Appeals incorrectly apply the abuse of discretion standard in reviewing the trial judge’s ruling on BEKA’s “Motion in Limine to Exclude Evidence of Backcharges?” 3.

Did the Court of Special Appeals err by reversing the trial judge’s ruling on BEKA’s Motion for Partial Summary Judgment precluding the County Board from presenting evidence on its recoupment claim? 4. Did the Court of Special Appeals err as a matter of law by allowing the County Board to raise its recoupment claim when the trial judge had stricken the pleadings that raised the claim? 5. Did the Court of Special Appeals err in determining that the contract contains a broad “no-damages-for-delay” clause in light of other contract provisions allegedly providing for recovery of damages? 6. Did the Court of Special Appeals err in reversing the trial court’s judgment because of non-compliance with Md. Rule 2-522(a)?

As Cross-Petitioner, the County Board has asked: 1. Does Md.Code (2006 RepLVol.), § 5-518(c) of the Courts and Judicial Proceedings Article (“C.J.P.”) apply to contract claims against a county board of education? 4 ²⁰⁴ We answer each question above in the negative. We affirm the Court of Special Appeals’s judgment that sovereign immunity is legislatively waived in the action against the County Board based on a written contract for the construction of a public school. We reverse, however, that part of the Court of Special Appeals’s holding that requires BEKA to prove a source of funding in order to obtain a judgment at a new trial.

Additionally, as discussed infra, we affirm the intermediate appellate court’s judgment concerning the treatment of the County Board’s recoupment claim and concerning procedural defects in the trial court’s judgment. I. Public School Construction in Maryland We have recognized there exists “a carefully conceived legislative structure in which the respective powers and limitations of local school boards, the State Board of Education and county governments are delineated and balanced.” Bd. of Ed. v. Montgomery County, 237 Md. 191, 197 , 205 A.2d 202, 205 (1964). The construction of public schools exemplifies those interwoven roles; State and local governments provide funding, and, along with the county boards of education, they provide oversight for the construction of public schools in Maryland. The Maryland State Board of Education (“MSBE”) establishes standards and planning guidance for construction projects and the State Superintendent must approve of all plans for new construction and the remodeling of school buildings exceeding $350,000.

Md.Code (2008 Repl.Vol.), §§ 2-205(l), 2—303(f) of the Education Article (“E.D.”). Annually, the MSBE must submit a public school budget to the Governor including appropriations for the Department itself and for aid to “counties ... for the construction of school buildings.” E.D. § 2—205(j); see also E.D. § 5-101 (requiring county ²⁰⁵ boards to submit an annual budget including “estimated receipts” and “requested appropriations” for local school construction that has been approved by the local government). The Interagency Committee on School Construction, established by the Board of Public Works pursuant to E.D. § 5-302, provides a recommendation to the Board of Public Works on which submitted, locally approved construction projects should be funded through the Public School Construction Program. The General State School Fund, established by E.D. § 5-201, is a source of funding for school building construction aid described in E.D. § 5-301(c), which requires the State to pay the excess costs above available federal funds for approved school construction projects or improvements.

County boards of education may undertake the construction of public school buildings as long as the plans conform to the “bylaws, rules and regulations of the State Board” and to the regulations of the Board of Public Works related to alternative financing, when applicable. See E.D. §§ 4-115(b), 4-126. The procurement of bids from contractors for school construction contracts, which is addressed in § 5-112 of the Education Article, is administered by county boards. The local county governments meet the requirements of the county board’s approved annual budgets by levying and collecting taxes in their jurisdictions and appropriating revenues from other sources.

See E.D. §§ 5-104, 5-107; see generally Montgomery County, 237 Md. 191 , 205 A.2d 202 (1964). Once appropriated, county boards must keep school construction funding isolated in a separate and independent account. See E.D. § 5-305. The State, the State Superintendent, the county governments, and the county boards of education are all subject to school construction-related regulations promulgated by the Board of Public Works found in COMAR Title 23.03.02, et seq.

(2011) (“Administration of the Public School Construction Program”). See E.D. § 5-301(g)(l). Clearly, in light of the aforementioned statutory provisions, “[sjtate law provides for close supervision of county boards with regard to construction ²⁰⁶ of school buildings.” Patterson v. Ramsey, 413 F.Supp. 523, 530 (D.Md.1976), aff'd, 552 F.2d 117 (4th Cir.1977).

II

Sovereign Immunity Here, the County Board has been sued for breach of contract, and lacking money (or the ability to raise money on its own) to pay a judgment, the Board contends that the doctrine of sovereign immunity bars the suit. The doctrine of sovereign immunity “prohibits suits against the State or its entities absent its consent.” Magnetti v. University of Md., 402 Md. 548, 557 , 937 A.2d 219, 224 (2007) (citing Deft of Natural Resources v. Welsh, 308 Md. 54, 58-59 , 521 A.2d 313, 315 (1986)); see also Proctor v. WMATA, 412 Md. 691, 709 , 990 A.2d 1048, 1058 (2010) (stating that sovereign immunity is applicable to the State, and its agencies and instrumentalities); Stem v. Board of Regents, 380 Md. 691, 700 , 846 A.2d 996, 1001 (2004) (“The doctrine of sovereign immunity has long been recognized as applicable in actions against the State of Maryland and its official representatives.”). In order to determine if the doctrine of sovereign immunity applies to the County Board in the underlying contract suit, we ask: “(1) whether the entity asserting immunity qualifies for the protection; and if so, (2) whether the legislature has waived immunity either directly or by necessary implication, in a manner that would render the defense of immunity unavailable.” Magnetti, 402 Md. at 557 , 937 A.2d at 224 (quoting ARA Health v. Dept. of Public Safety, 344 Md. 85, 92 , 685 A.2d 435, 438 (1996)); see also Austin v. City of Baltimore, 286 Md. 51, 69-71 , 405 A.2d 255, 264-66 (1979) (Eldridge, J., concurring in part, dissenting in part) (describing the legislative origins of sovereign immunity and the resulting deference to that body regarding waivers of the doctrine). A legislative waiver of sovereign immunity, notably, is ineffective unless “there are ‘funds available for the satisfaction of the judgment’ or the agency has been given the power ‘for the raising of funds necessary to satisfy recovery against it.’ ” Stern, 380 Md. at 701 , 846 A.2d at 1001 -02 ²⁰⁷ (quoting University of Maryland v. Maas, 173 Md. 554, 559 , 197 A. 123, 126 (1938)). 5 BEKA asserts that even if the County Board is entitled to sovereign immunity, that doctrine has been legislatively waived for its contract claim pursuant to Md.Code (2009 RepLVol.), §§ 12-201 et seq. of the State Government Article (“S.G.”). 6 Conversely, the County Board, as Cross-Petitioner, ²⁰⁸ asserts that BEKA may obtain only a limited judgment because sovereign immunity applies and has only been legislatively waived for claims of $100,000 or less, or the limits of an insurance policy, pursuant to Md.Code (2006 RepLVol.), § 5-518 of the Courts and Judicial Proceedings Article. 7 The County Board contends that when C.J.P. § 5-518 is read together with § 4-105 of the Education Article, 8 there is “little room for the applicability of any other sovereign immunity waiver provision found in State law, including S.G. § 12-201 et seq.” The Court of Special Appeals held that S.G. § 12-201 ²⁰⁹ applies; however, it also determined that S.G. § 12-203 9 does not provide a funding mechanism for a contract judgment; therefore, according to the intermediate appellate court, because no proof was offered on the County Board’s ability to pay a judgment the waiver of sovereign immunity was “ineffective.” BEKA, 190 Md.App. at 712 , 989 A.2d at 1207 .

Consequently, the intermediate appellate court held that “in the event that there is a new trial, and a judgment is entered against the Board on the contract claims, there will need to be evidence presented, and a factual finding by the Circuit Court, regarding whether there are funds available to satisfy the judgment.” BEKA, 190 Md.App. at 715 , 989 A.2d at 1208 . We shall hold that the legislative waiver of sovereign immunity in S.G. § 12-201(a) is applicable to the Board of Education of Worcester County. Additionally, we hold that S.G. § 12-203 provides a funding mechanism for judgments rendered against the County Board following a waiver of sovereign immunity under S.G. 12-201(a). Thus, suit on a written contract for construction of a public school may be brought against the County Board.

Moreover, the limited waiver of sovereign immunity contained in C.J.P. § 5-518 does not apply. A. S.G. § 12-201 Waives Sovereign Immunity for the County Board of Education Arising out of a School Construction Contract BEKA advances the contention, which was adopted by the intermediate appellate court, that “in the context of this case, the Board is a “unit” of the State pursuant to S.G. § 12-201, and this statute waives [the County Board’s] right to the defense of sovereign immunity in contract actions.” BEKA, ²¹⁰ 190 Md.App. at 709 , 989 A.2d at 1205 (footnote omitted). Conversely, the County Board asserts that “S.G. § 12-201 et seq., ... applies only to contract claims against the State, its officers, and its units” and that local boards of education, the County Board contends, are not “units” of the State. 10 We reject the County Board’s position and affirm the intermediate appellate court’s conclusion. First, we must determine “whether the entity asserting immunity qualifies for its protection.” Stern, 380 Md. at 700 , 846 A.2d at 1001-02 (citation omitted).

We affirm that a county board of education, is “a State agency entitled to governmental immunity.” BEKA, 190 Md.App. at 694 , 989 A.2d at 1196 (citing Board of Ed. v. Zimmer-Rubert, 409 Md. 200, 205-06 , 973 A.2d 233, 236-37 (2009)) (noting numerous cases in support of the proposition that the Court of Appeals has “long considered” county school boards to be State agencies); see also Chesapeake Charter v. Board of Ed., 358 Md. 129, 135-36 , 747 A.2d 625, 628-29 (2000) (holding that county school boards are ‘creatures’ of the General Assembly and principally governed by state policies, although not “units” for the purposes of the State’s General Procurement Law). If a county board of education may benefit from the sovereign immunity enjoyed by State agencies, then, necessarily, it is also subject to statutory restraint on that defense by operation of a legislative waiver. See State v. Sharafeldin, 382 Md. 129, 140 , 854 A.2d 1208, 1214 (2004) (‘We have held, ²¹¹ consistently, that immunity from suit is ‘one of the highest attributes of sovereignty,’ and that any waiver of that immunity must come from the Legislature.”); see also E.D. § 3-104(b)(2) (allowing a county board of education to “sue or be sued”); see also C.J.P. § 5-518 (discussed infra). “Title 12 of the State Government Article addresses the liability of state agencies and the scope of the doctrine of sovereign immunity ... containing] separate statutory provisions regarding tort and contract actions.” BEKA, 190 Md.App. at 695 , 989 A.2d at 1197 . Alluding briefly to the legislative history of S.G. § 12-201, the Court of Special Appeals concluded that because the Board of Education of Worcester County is a State agency, a “unit” of the State in the parlance of the statute, then the waiver of sovereign liability in contract actions set forth in S.G. § 12-201 was expressly applicable. 11 BEKA, 190 Md.App. at 708 , 989 A.2d at 1204-05 .

We agree. Moreover, as required by the statute and cases interpreting the provision, the contract between the County Board and BEKA, irrefutably “was [ (1) ] reduced to writing; and (2) the State employee or official [the County Superintendent on behalf of ²¹² the Board] acted within the scope of his, her, [or its] authority in executing the contract,” therefore, the contract was duly executed and falls within the waiver of sovereign immunity provided by S.G. § 12-201(a). See ARA Health, 344 Md. at 92 , 685 A.2d at 440 (holding that immunity was not waived where a claim did not satisfy the formal requirements of a written contract under S.G. § 12-201(a)). The County Board contends that the legislative waiver of sovereign immunity contained in S.G. § 12-201 does not apply because a county board of education is neither a State “unit,” nor a local government entity, 12 drawing on the distinction made in Chesapeake Charter in which Judge Wilner discussed the “hybrid nature” of county boards of education, stating that: [Although the county boards are generally regarded as State agencies because they are part of the State public education system, are subject to extensive supervision and control by the State Board of Education, and exercise a State function, from a budgetary and structural perspective, they are local in character.

They are not divisions of or units within the State Department of Education. They are subject to the county, not the State, budget process and must justify their budget requests to the county government. Most of their operational funding comes from the county, not the State, government. When these factors are taken into account, it is clear that the general characterization of county boards of education as State agencies does ²¹³ not require a finding that they are entities “in the Executive Branch of the State government” for purposes of S.F.P. § ll-101(x).

Chesapeake Charter, 358 Md. at 139-40 , 747 A.2d at 630-31 . The proposition that Chesapeake Charter stands for is that a local school board is not a “unit” of State Government for purposes of the General Procurement Law because the “procurement of supplies and services by the county boards of education” in contrast to school construction, has never been subject to the general authority of the Board of Public Works, or the Department of General Services. 13 ²¹⁴ We held in Chesapeake Charter that “a county school board is not a “unit” within the meaning of [the General Procurement Law], and accordingly, that [the Maryland State] Board of Contract Appeals ha[d] no jurisdiction over disputes arising from procurement decisions made by those boards.” Chesapeake Charter, 358 Md. at 145-46 , 747 A.2d at 634 (noting that the Education Article retained, despite numerous revisions, distinct statutory procurement requirements for county boards related to the solicitation of school construction contracts); see also E.D. § 5-112 (governing the bid process for school construction). Thus, the fine distinction drawn in Chesapeake Charter for the purposes of determining whether a school bus contract (a local, operational expense) was governed by the State’s General Procurement Law, as highlighted by the County Board and the Maryland Association of Boards of Education as amicus curiae, in this case, does not proscribe the application of S.G. § 12-201(a)’s waiver of sovereign immunity to the County Board in the present contract action. 14 ²¹⁵ B. Funding the Judgment Before this Court, the parties contest the applicability of S.G. § 12-203 as a funding mechanism to satisfy BEKA’s judgment, as well as the status of the supersedeas bond filed in the Circuit Court for Worcester County as a stay of execution pending this appeal. Because S.G. § 12-201(a) waives the County Board’s sovereign immunity in an action based on a written contract for public school construction, we must ascertain whether the General Assembly intended for a judgment awarded thereunder to be satisfied by funding requested by the Governor as part of a “budget bill” pursuant to S.G. § 12-203.

Thus, the issue before us is whether § 12-203 applies to all judgments, or only certain judgments, as it appears the intermediate appellate court concluded. In the later case, it would be necessary to have some intelligible way of discerning which judgments would be the responsibility of the State and which would not. The Court of Special Appeals held that, pursuant to this Court’s decision in Stem , and notwithstanding the waiver of sovereign immunity, “the burden of proving the availability of funds to satisfy the judgment is on the party seeking to show a waiver of the defense of sovereign immunity, in this case, BEKA[,]” because “SG § 12-203 does not provide a mechanism for appropriation of State funds to satisfy a judgment against a county board of education.” BEKA, 190 Md.App. at 710, 712 , 989 A.2d at 1205, 1207 . The Court of Special Appeals reviewed the record to ascertain if facts were alleged to indicate that the County Board had the means to satisfy the judgment, through taxation or appropriation.

See BEKA, 190 Md.App. at 712-13 , 989 A.2d at 1207 . Finding none and concluding that several allegations of sources of funding made by BEKA on appeal had not been made at trial, the intermedi ²¹⁶ ate appellate court determined that a new trial would require fact-finding on the issue of availability of funding. BEKA, 190 Md.App. at 715 , 989 A.2d at 1208 . In our view, additional fact-finding is unnecessary because funding is provided by statute.

The Court of Special Appeals concluded that S.G. § 12-203 could not be used to satisfy a judgment, stating: To be sure, this provision generally would satisfy the funding requirement for State agencies. As indicated, however, school boards are “unusual,” “hybrid” agencies. See Dean [v. Board of Education of Cecil County ], 71 Md.App. [92] at 98 [ 523 A.2d 1059 (1987)]. These boards, while State agencies for most purposes, “are not normally regarded for structural or budgetary purposes, as units within the Executive Branch of the State government.” Chesapeake Charter, 358 Md. at 137 [, 747 A.2d. at 625 ].

BEKA, 190 Md.App. at 710-11 , 989 A.2d at 1206 . The Court of Special Appeals determined that S.G. § 12-203 did not apply to the present dispute relying largely upon Chesapeake Charter . In that case, we did not consider the sections of the State Government Article, at issue in the present case, because there the parties brought their procurement contract to the Maryland State Board of Contract Appeals (“MSBCA”) pursuant to § 15-205 of the State Finance and Procurement Article (“S.F.P.”). Consequently, sovereign immunity was not an issue in the case.

In Chesapeake Charter , we held that a county board of education’s school bus contracts were not subject to the General Procurement Law, because the board was not a “unit” of the Executive Branch of the State Government within the meaning of the pertinent statutory provision, S.F.P. § 11-101(x), and therefore the MSBCA had no jurisdiction over the dispute between the county board and a school bus contractor. Chesapeake Charter, 358 Md. at 145-46 , 747 A.2d at 634 . Determining that the language of the pertinent statute was ambiguous, we considered the legislative history and concluded that, other than school construction, the State Board of Public Works and the Department of General Services had ²¹⁷ never “exercised any authority over the procurement of supplies and services by the county boards of education.” Chesapeake Charter, 358 Md. at 140 , 747 A.2d at 631 (footnote omitted, quoted swpra). Accordingly, our holding in Chesapeake Charter was a narrow one.

We determined that “most of [the county board of education’s] operational funding comes from the county, not the State, government” and that “[t]hey are subject to the county, not the State budget process” therefore the school bus contract was a local, and not a State concern. Chesapeake Charter, 358 Md. at 139 , 747 A.2d at 631 . The Court of Special Appeals relied on this reasoning to conclude that, “[b]ecause county boards of education are subject to the county budget process, it does not appear that the State would be responsible for paying a judgment against a county board of education.... Accordingly, S.G. § 12-203 does not provide a mechanism for appropriation of State funds to satisfy a judgment against a county board of education.” BEKA, 190 Md.App. at 712 , 989 A.2d at 1207 .

While we do not disagree that the county board of education must submit a budget to the local government for approval, the funding that is appropriated to fulfill the budget emanates from local, State, and federal sources. This “local budgetary character,” therefore, appears insufficient to overcome the overwhelming support in our case law for the notion that county boards of education are “legally State agencies.” See Chesapeake Charter, 358 Md. at 137 , 747 A.2d at 629 . Here, the issue is one of statutory construction because we must determine whether S.G. § 12-203, by its terms, is applicable to the underlying action. We construe S.G. § 12-203 “recognizing] that ‘the cardinal rule of statutory interpretation is to ascertain and effectuate the intention of the legislature!!,]’ ” Stern, 380 Md. at 720 , 846 A.2d at 1013 , beginning with a plain meaning analysis in order to “give effect to the statute as it is written[,]” Pak v. Hoang, 378 Md. 315, 323 , 835 A.2d 1185, 1189 (2003). “[B]ut if the true legislative intent cannot readily be determined from the statutory language alone, we look to other indicia of that intent, ²¹⁸ including the title to the bill, the structure of the statute, the inter-relationship of its various provisions, its legislative history, its general purpose, and the relative rationality and legal effect of various competing constructions.” Baltimore County v. RTKL Assoc., 380 Md. 670, 678 , 846 A.2d 433, 437-38 (2004).

We also “avoid a construction of the statute that is unreasonable, illogical, or inconsistent with common sense.” Zimmer-Rubert, 409 Md. at 215 , 973 A.2d at 243 (quoting Walzer v. Osborne, 395 Md. 563, 573 , 911 A.2d 427, 432 (2006)). “We have also stated that this Court must read and ‘construe legislative dilution of governmental immunity narrowly in order to avoid weakening the doctrine of sovereign immunity by judicial fiat.’” Magnetti, 402 Md. at 565 , 937 A.2d at 229 (quoting Stern, 380 Md. at 720 , 846 A.2d at 1012-13 ). Section 12-203 of the State Government Article requires that “adequate” funds to satisfy a final judgment “rendered against the State or any of its officers or units” be made available through a “budget bill” 15 after all appellate issues have been resolved. S.G. § 12-203. The provision is intended to “carry out this subtitle,” which, as stated, addresses “Actions in Contract.” S.G. 12-203.

According to the plain language of the statute, and its surrounding provisions relating to governmental immunity in contract suits, there is no indication that § 12-203 differentiates between those judgments that the State must pay and those it must not as long as the legislative waiver of sovereign immunity enshrined in S.G. ²¹⁹ § 12-201(a) is applicable to the dispute. 16 See e.g., Coastal Holding & Leas. v. Maryland Environmental, 420 F.Supp.2d 441, 444-46 (2006) (holding that the Maryland Environmental Service was immune from suit in federal court based on the “state treasury” factor of the Fourth Circuit’s sovereign immunity analysis because the agency successfully argued that S.G. § 12-203 means that the “State of Maryland is ultimately liable for any judgments entered against it in a contract” and likewise for a tort action). The amount of money that the Governor would be required to include in the budget bill “to satisfy a final judgment” is a factual inquiry and must be determined at trial by reference to the contract provisions and an accounting of payments and reimbursements between the parties. Thus, there is no other burden on BEKA in the instant case to prove the availability of funds, as there was in Ruff, and the Court of Special Appeals erred in concluding that BEKA bore that burden. ²²⁰ Moreover, we have previously noted that S.G. § 12-203 was enacted by the General Assembly for the particular purpose of addressing the funding requirement that must precede a waiver of sovereign immunity under S.G. § 12-201(a). In Stem , we concluded that the General Assembly enacted S.G. § 12-203 upon an acknowledgment of our reasoning in Maas, 173 Md. at 558-60 , 197 A. at 125 -26 and Ruff, 278 Md. at 590-91, 366 A.2d at 366, that sovereign immunity is a valid defense unless funds have been appropriated to pay a judgment or funds may be raised for that purpose, stating: The General Assembly is cognizant of how to specifically authorize the power to raise funds in satisfaction of the second prong of the Maas and Ruff test, as it has enacted a power to appropriate funds for the purpose of paying judgments arising from an express legislative waiver of immunity in Md.Code (1984, 1999 RepLVol.), § 12-203 of the State Government Article.

Stern, 380 Md. at 715 , 846 A.2d at 1010. Therefore, in Stem , we considered S.G. § 12-203 to be an explicit funding mechanism for judgments based upon written contracts against the State, its officers, or units. Judge Wilner, dissenting in Stem with respect to the majority’s analysis of S.G. § 12-201 and concluding that the Board of Regents had in fact breached written contracts with the students by executing a mid-year tuition increase, nevertheless echoed the majority’s view of the function and purpose of S.G. § 12-203 stating: Section 12-203 of the State Government Article requires the Governor to place sufficient funds in the State budget to discharge the University’s obligation. All of the necessary pieces, even under a [Maas ] analysis, are thus in place.

Stern, 380 Md. at 732 , 846 A.2d at 1019 (Wilner, J., dissenting). Judge Wilner noted that “ § 12-203 requires the Governor to include in the budget bill money that is adequate to satisfy final judgments,” citing § 52(4) and (12) of Article III of the Maryland Constitution. Stern, 380 Md. at 732 , 846 A.2d ²²¹ at 1019, fn. 4. 17 Section 12-203 applies to the instant case because this Court has determined, supra, that its statutory companion, S.G. § 12—201(a), waives the County Board’s governmental immunity and the language of S.G. § 12-203 requires that all judgments rendered against the State, its officers or units, upon breach of a written contract shall be requested by the Governor as part of a budget bill. Furthermore, the application of S.G. § 12-203 to written contract disputes between a State entity and a private party is consistent with the purpose of providing a waiver to immunity in contract actions involving written agreements.

It gives effect to “the moral obligation on the part of any contracting party, including the State or its political subdivisions, to fulfill the obligations of a contract.” Magnetti, 402 Md. at 560 , 937 A.2d at 227 , fn. 6 (quoting 1976 Md. Laws, Ch. 450). 18 C. Section 5-518(b) of the Courts and Judicial Proceedings Article does not apply The County Board has asserted that the only applicable legislative waiver of its sovereign immunity is exclusively found in C.J.P. § 5-518 because § 4-105 of the Education Article states “a county board of education shall have the immunity from liability described under § 5-518” and this is the only provision in the Education Article that addresses sovereign immunity for county boards of education. E.D. § 4-105(d). Therefore, the Board contends in its cross-peti ²²² tion that it is insulated from paying damages to BEKA over $100,000 (or the amount of its insurance policy) pursuant to C.J.P. § 5-518(b) and pursuant to this Court’s opinion in Zimmer-Rubert, 409 Md. 200 , 973 A.2d 233 (2009). In Zimmer-Rubert , in the context of what we perceived to be a claim for personal injury resulting from an alleged age discrimination violation, we commented that the term “ ‘any claim’ [under § 5-518(c) ] cannot reasonably be read to exclude certain categories of claims.” Zimmer-Rubert, 409 Md. at 215 , 973 A.2d at 242 (quoting Zimmer-Rubert v. Board of Ed., 179 Md.App. 589, 612 , 947 A.2d 135, 149 (2008)).

Our interpretation of § 5-518(e) was clearly in the context of a tort or insurable claim, such as “those for personal injury,” and for claims arising from “alleged employment law violations.” Zimmer-Rubert, 409 Md. at 216 , 973 A.2d at 242 . We did not imply in that case that C.J.P. § 5-518(c) applies to contract claims, nor did we address, by association, the meaning of C.J.P. § 5-518(b), to which Respondent looks in the present case. Thus, Respondent’s contention that Zimmer-Rubert interpreted C.J.P. § 5-518 to be applicable to contract claims is incorrect. Moreover, we have found no eases to support the contention that C.J.P. § 5-518(b) applies to contract claims filed against a county board of education.

Therefore, we affirm, without the need for further discussion, the Court of Special Appeals’s conclusion that C.J.P. § 5-518 does not place limitations on the waiver of sovereign immunity under S.G. § 12-201(a). See BEKA, 190 Md.App. at 707 , 989 A.2d at 1204 (holding “[t]hus, the language of § 5-518, limiting the liability of a self-insured board of education to $100,000, does not apply to BEKA’s contract claims.”).

III

The Propriety of the Trial Court’s Treatment of the County Board’s Recoupment Claim At trial, the County Board sought to reduce the amount of money damages awarded to BEKA by asserting its entitlement to “credits, backcharges, and/or set-offs” totaling $531,079.52 arising from PCOs (proposed change orders) num ²²³ bering 1, 2, 3, 4, 14, 15, 17, 18, 19, 40. 19 The County Board alleged in pleadings, discussed infra, that BEKA “refused or failed to perform certain work in accordance with the [Contract], and [the County Board] had to have that work performed by other contractors[,]” and that BEKA “had certain work removed from its scope of work by the construction manager in accordance with the Contract.” The County Board’s claim is a “recoupment” claim because it seeks to adjust the amount awarded to BEKA in light of its own losses arising out of the same transaction from which BEKA seeks a legal remedy. BEKA, 190 Md.App. at 727 , 989 A.2d at 1215 -16 (citing Imbesi v. Carpenter Realty, 357 Md. 375, 380 , 744 A.2d 549, 552 (2000) (where recoupment was described as “a diminution or a complete counterbalancing of the adversary’s claim based upon circumstances arising out of the same transaction on which the adversary’s claim is based”)); see The Impervious Products Co. v. Gray, 127 Md. 64, 68 , 96 A. 1, 2 (1915) (“In recoupment a defendant may show damages equal to some part of the whole of the plaintiffs claim and have it deducted from that claim, but can recover no affirmative judgment.”). The Court of Special Appeals highlighted the equitable nature of a recoupment claim stating, “[Recoupment exists in equity as well as at common law, and has been said to be equitable in nature. It reduces the claim affirmatively urged so far as in reason and conscience it ought.” BEKA, 190 Md.App. at 727 , 989 A.2d at 1216 (quoting Smith v. Smith, 79 Md.App. 650, 662 , 558 A.2d ²²⁴ 798, 804 (1989) (quoting 20 Am.Jr.2d Counterclaim, Recoupment and Setoff § 6 (1965))).

On appeal before this Court, BEKA poses three questions relating to the treatment of the County Board’s recoupment claim at trial and before the Court of Special Appeals. Because the questions are factually and procedurally intertwined, we address them together. BEKA first contends that the intermediate appellate court erred by not affirming the portion of the trial court’s ruling on BEKA’s Motion for Partial Summary Judgment, by which the trial court barred the County Board from “raising the issue.” Secondly, BEKA contends that the County Board’s use of the defense of recoupment is barred as a matter of law. Finally, BEKA asserts that the intermediate appellate court applied incorrectly the abuse of discretion standard of review to ultimately reverse the trial court’s grant of BEKA’s “Motion in Limine to Exclude Evidence of Backcharges.” BEKA’s three questions arise in response to the intermediate appellate court’s consideration of a single question posed to it by the County Board, which asked “[d]id the trial court err in prohibiting the County Board from submitting evidence regarding its [$531,079.52] recoupment claim[.]” In finding that the trial judge abused his discretion, the Court of Special Appeals analyzed this question wholly in the context of the trial judge’s ruling on BEKA’s Motion in Limine concluding that it was “unable to determine the basis for the court’s ruling excluding the Board’s evidence of recoupment^]” and that “[t]he inherent contradictions in the trial court’s statements indicate that there was not a sound exercise of discretion in excluding this evidence.” BEKA, 190 Md.App. at 729 , 989 A.2d at 1216 .

The Court of Special Appeals held that in its view of the record the trial court’s ruling may have been based on a finding that the recoupment issue was not timely asserted and, to that extent, the decision was erroneous because the Board’s “initial answer preserved the defense.” BEKA, 190 Md.App. at 729-30 , 989 A.2d at 1216-17 . We shall affirm the Court of Special Appeals’s resolution of the issues regarding the trial court’s treatment of the County Board’s ²²⁵ recoupment claim issue because the Board should have been permitted to present evidence of the claim at trial. A. Procedural History The County Board first pleaded its “entitlement” to recoup money owed to BEKA under the contract by way of a Counter-Complaint and Amended Answer filed July 14, 2008. The same “entitlement” claim was presented in four subsequent pleadings: (1) the Second Amended Answer filed July 18, 2008; (2) the response to BEKA’s “Motion in Limine to Exclude Evidence of Backcharges” filed August 5, 2008; (3) the Third Amended Answer filed August 12, 2008; and (4) the Board’s “Response to BEKA’s Motion for Partial Summary” Judgment filed August 18, 2008, wherein the Board maintained that no judgment should be entered until the court received evidence concerning certain proposed “amounts, credits, backcharges and setoffs totaling $531,080.” At a motions hearing on September 18, 2008, less than a month before trial, the trial judge struck the County Board’s Counter-Complaint and Amended Answer as untimely, stating: “The fact that discovery closed just four days before the County Board’s filing of its Countercomplaint unfairly prejudiced BEKA, and the County Board’s Countercomplaint and Amended Answer are stricken.” 20 Secondly, the trial judge barred the defense of recoupment by granting that portion of BEKA’s Motion for Partial Summary Judgment, in which BEKA argued that the County Board “did not comply with the contract provisions governing changes to BEKA’s work under the contract.” BEKA assert ²²⁶ ed that there was no dispute of material fact about the failure of the County Board’s claim for back-charges, credits or setoffs because: (1) § 4.7.1 of the contract defined a “claim,” which BEKA argued clearly included the County Board’s recoupment claim; (2) claims must be filed within 7 days and must be substantiated; and (3) claims must be submitted to the Architect for resolution.

Therefore, BEKA contended, because the County Board did not submit its “back-charges, credits or setoffs” through this process, it waived its claim. The County Board asserted that there were genuine disputes of the facts related to its claims for recoupment and that the trial court should not enter a money judgment without receiving evidence on the recoupment amounts. The trial judge ruled in BEKA’s favor, stating: “As to Beka’s Request for Summary Judgment on the issue of credits, back-charges and setoffs, the County Board failed to address Beka’s argument that it did not adhere to the contract provisions for asserting a claim and the County Board should be precluded from raising the issue at this time.” Prior to commencement of trial, on October 6, 2008, the trial judge struck the County Board’s Second and Third Amended Answers, which each raised recoupment, and the court ruled explicitly on BEKA’s Motion in Limine, stating that: “I’m going to bar any evidence of recoupment as an affirmative answer.” B. Summary Judgment BEKA asks us to determine whether it was error for the Court of Special Appeals to, in effect, reverse the trial court’s grant of BEKA’s Motion for Partial Summary Judgment. Because the Court of Special Appeals did not consider expressly the trial court’s ruling on BEKA’s Motion for Partial Summary Judgment, but rather limited its discussion of the County Board’s recoupment claim to the context of the trial court’s ruling on BEKA’s Motion in Limine, BEKA, 190 Md.App. at 727 , 989 A.2d at 1216 , there is no analysis stated in the intermediate appellate court’s opinion regarding the trial court’s ruling on summary judgment for this Court to review. ²²⁷ The intermediate appellate court did not engage in de novo review, which would have inquired into whether the trial judge’s ruling pertaining to the recoupment claim was legally correct.

See e.g., Dashiell v. Meeks, 396 Md. 149, 163 , 913 A.2d 10, 18 (2006) (“With respect to the trial court’s grant of a motion for summary judgment, the standard of review is de novo.”) (citing Rockwood Cas. Ins. Co. v. Uninsured Employers’ Fund, 385 Md. 99, 106 , 867 A.2d 1026, 1030 (2005)). Upon our review of the grant of the summary judgment motion, however, we conclude that the trial judge was legally incorrect to have granted BEKA’s motion as to the County Board’s recoupment claim. “Prior to determining whether the trial court was legally correct, an appellate court must first determine whether there is any genuine dispute of material facts....

Any factual dispute is resolved in favor of the nonmoving party.... Only when there is an absence of a genuine dispute of material fact will the appellate court determine whether the trial court was correct as a matter of law.” Dashiell, 396 Md. at 163 , 913 A.2d at 18 (citations omitted). The facts relevant to the recoupment claim were disputed and therefore the issue should not have been resolved by summary judgment. The County Board claimed it was owed back-charges for ten proposed change orders (“PCOs”), presented to the trial court as Exhibit 2 in BEKA’s Motion for Partial Summary Judgment, restated in the County Board’s “Response to Motion for Partial Summary Judgment,” and in its “Supplement to Defendant’s Response to Motion for Partial Summary Judgment.” BEKA asserted that the contract required certain claims procedures, namely provisions 4.7.1, 4.7.2 and 4.7.3, to be followed to pursue such credits, but that the County Board did not follow those procedures.

The County Board claimed that it was not required to submit the credits through the claims procedure in the contract. Moreover, it argued that the two contract provisions, 4.7.4 and 5.7.1. permitted the withholding of payment on uncontested amounts until all unsettled claims were determined. The trial