Beyond Systems, Inc. v. Secure Medical, Inc.

JAMES R. EYLER, J. Maryland Rule 2-322(a) provides that the defense of lack of jurisdiction over the person shall be made by motion to dismiss filed before the answer. The question presented is (a) when a defendant fails to raise the defense by motion prior to its answer, (b) ultimately prevails on the defense on motion for summary judgment, and (c) the plaintiff argues for the first time on appeal that the defense was waived, is the issue of defendant’s waiver properly before us? We shall hold that it is or, in the alternative, that we have discretion to reach it. Factual Background On December 31, 2003, Beyond Systems, Inc., appellant, filed a complaint in the Circuit Court for Montgomery County against Secure Medical, Inc., Low Cost Pharmacy, Inc., appellees, and John Doe. 1 Appellant alleged the following.

Appellant is an “interactive computer service provider.” On “hundreds of occasions during 2002 and 2003,” appellees alleg ¹⁸⁸ edly “initiated, conspired to initiate, and assisted in the initiation of commercial electronic mail messages to recipients in Maryland,” including appellant. The messages “advertised property, goods or services for sale or lease, and resulted in sales and the delivery of goods and/or services into Maryland.” Appellant alleged that appellees violated section 14-3002 of the Commercial Law Article of the Maryland Code because the electronic mail (1) “used a third party’s internet domain name or electronic mail address without that third party’s permission,” (2) “contained false or misleading information about the origin or the transmission path,” and (3) “contained false or misleading information in the subject line.” Appellant, as a recipient of the electronic mail and as an interactive computer service provider, sought statutory and actual damages. On May 20, 2004, appellees filed an answer to the complaint, which contained several affirmative defenses, including lack of jurisdiction over the person. On October 6, 2004, appellees filed a motion for summary judgment on the following grounds: (1) there was no evidence of a violation of section 14-3002, (2) the court lacked subject matter jurisdiction and jurisdiction over the person, and (3) section 14-3002 was unconstitutional.

On November 12, 2004, appellant filed an opposition to the motion, with supporting affidavit. On January 10, 2005, appellees filed a supplemental memorandum in support of their motion. On January 13, 2005, the court held a hearing on the motion for summary judgment and, by order dated January 14, 2005, granted the motion on the ground of lack of jurisdiction over the person. Appellant moved for reconsideration, and after the court denied it, appellant noted this appeal.

Discussion On appeal, appellant contends that appellees waived the defense of lack of jurisdiction over the person because they did not raise it by motion to dismiss before filing their answer. Appellant did not make this contention in circuit court. ¹⁸⁹ Rule 2-322(a) clearly states that the defense of lack of jurisdiction over the person is waived if not made by motion to dismiss before the answer. See Chapman v. Kamara, 356 Md. 426, 438 , 739 A.2d 387 (1999)(“Once a party files an answer without raising the defense of insufficient service of process, that defense ordinarily is waived.”). The question is whether appellant forfeited its right to rely on that waiver by not raising the issue before the trial court.

The cases cited by the parties are not squarely on point. Most of the reported cases address whether a defendant can raise the defense of lack of jurisdiction over the person when it did not file a motion to dismiss on that ground prior to filing an answer. The cases hold that the defense was waived. The nature of lack of personal jurisdiction, which can be cured by waiver or consent, and the language in reported cases both suggest that, once the defense is waived, it cannot be resurrected, implying that no act by an opposing party is required in order to preserve waiver.

See Chapman, 356 Md. at 438 , 739 A.2d 387 (“Once an answer has been duly filed, a party may not subsequently raise [the] defenses [listed in Rule 2-322(a), including personal jurisdiction] as grounds to vacate a judgment.”). If that is not the case, we have the discretion to reach the waiver issue, even though it was not argued below. Rule 8-131(a). The second sentence in Rule 8-131 (a) contains the general rule, i.e., an appellate court ordinarily will not decide an issue unless raised in or decided by a trial court.

The first sentence provides that subject matter jurisdiction may