Carven v. Hickman

KRAUSER, Judge. The issue presented by this case is whether the statute of repose, Courts and Judicial Proceedings § 5-108 of the Maryland Code Annotated (1973, 1998 Repl.Vol.), bars a claim against an owner developer who, after allegedly removing the headstones from his family graveyard, sold it, as part of a residential lot, without notifying the purchasers of its existence or removing the graves or their occupants. The ultimate and unwitting purchasers of that lot were appellants, Thomas and Deborah Carven. ⁶⁴⁸ In 1986, appellants built their home on the lot in question, and in 1995 they discovered that they were not the only ones who occupied it. In approving the plans for appellants’ home in accordance with the property’s restrictive covenants, the owner developer, Louis J. Hickman, and his wife and alleged partner, Vivian M. Hickman, 1 had failed to mention the graveyard or that Mr. Hickman had left no headstone unturned in preparing their property for sale.

In 1997, Mr. Hickman passed away. On December 16, 1997, appellants filed suit in the Circuit Court for Worcester County against Vivian M. Hickman, individually and as personal representative of the estate of her deceased husband, Louis J. Hickman, appellees, for deceit, breach of covenant of special warranties, and negligence. In response, appellees filed an answer and later an amended answer and a motion for summary judgment. From the granting of that motion, appellants appeal.

BACKGROUND On February 29, 1944, Louis J. Hickman acquired the “Warrington Farm”, a 200-acre farm near Bishopville, Maryland. From that raw parcel of farmland, Hickman and his wife and alleged partner, Vivian M. Hickman, developed a 200-acre residential subdivision with over 150 lots now known as Holiday Harbor. Pursuant to a development plan, the Hickmans dug canals, built roads, installed underground electric service, granted rights of way for utilities and roads, and subdivided the property through a series of plats to create lots that could be conveyed separately. Those plats were recorded among the land records of Worcester County.

Restrictive covenants were placed on the lots of the development by deed. One such covenant prohibited a “graveyard” from being “erected, permitted, maintained or operated” upon ⁶⁴⁹ any portion of the subdivision. Another required that the Hickmans first approve the construction plans of a lot owner before he or she could proceed with construction. In 1964, appellants claim, Mr. Hickman “removed the tombstones, markers, and other surface evidence of the graveyard with the use of a bulldozer, while leaving the graves underground.” On June 80, 1964, Plat No. 2 was recorded among the land records of Worcester County.

That plat created Lot No. 96, but gave no indication of the presence of a graveyard on that property. Moreover, the Hickmans, according to appellants, failed to advise the county of its existence when they sought county approval of their plat. The Hickmans later conveyed Lot No. 96 to Preston L. Tubbs, Louis P. Tubbs, and Louise T. Lynch by deed dated August 25, 1975. They, in turn, conveyed it by deed dated June 11, 1984 to Edward J. Bryant and Betty B. Bryant, who thereafter conveyed it to their son-in-law and daughter, Thomas and Deborah Carven (“Carvens”), by deed dated April 2, 1986.

The Hickmans had had no contact with the Bryants or the Carvens before the Carvens acquired title to Lot No. 96. After acquiring title to that lot, however, the Carvens met with the Hickmans to obtain the Hickmans’ approval of their home construction plans as they were required to do by the covenants. At that meeting, Mr. Hickman reviewed and approved the Carvens’ plans. At no time, however, did either Hickman inform the Carvens of the existence of a graveyard on their lot.

That same year, the Carvens began constructing their family residence. They did not discover the graveyard on their property during construction, but, nine years later, on January 11, 1995, they did. On September 29, 1997, Mr. Hickman died. Several months, later, on December 16, 1997, the Carvens filed their complaint in the Circuit Court for Worcester County against appellees, alleging deceit, breach of covenant of special warranty, and negligence.

In response, appellees filed an answer ⁶⁵⁰ and then later an amended answer and a motion for summary judgment. On June 30, 1999, the circuit court granted appellees’ motion for summary judgment as to the breach of covenant of special warranties claim on the ground that the special warranty in question did not extend to subsequent owners, but denied it as to the remaining claims, stating that § 5-108 (the statute of repose) did not apply to the conduct alleged in the complaint. Appellees filed a motion for reconsideration of that ruling. Upon reconsideration, the circuit court, in a written opinion dated September 27, 1999, granted summary judgment as to the remaining counts of the complaint on the ground that they were barred by the statute of repose.

Appellants then noted this appeal. DISCUSSION I Appellants contend that the trial court erred in'granting appellees’ motion for summary judgment on the ground that appellants’ claims were time barred by the statute of repose. That statute, § 5-108, provides, in part: (a) Injury occurring more than 20 years later:—Except as provided by this section, no cause of action for damages accrues and a person may not seek contribution or indemnity for damages incurred when wrongful death, personal injury, or injury to real or personal property resulting from the defective and unsafe condition of an improvement to real property occurs more than 20 years after the date the entire improvement first becomes available for its intended use. Citing that statute, the circuit court found that the creation of the subdivision and preparation of lots for sale constituted an “improvement to real property” and that “the injury [to appellant] accrued more than 20 years after the date the improvement first became available for its intended use,” which, according to that court, was the date on which Plat No. ⁶⁵¹ 2 was recorded.

On that basis, it granted summary judgment in favor of appellees. In evaluating appellants’ contention that the trial court erred in so ruling, we observe that summary judgment is appropriate only when, after viewing the motion and response in favor of the non-moving party, there is no genuine issue of material fact, and the party in whose favor judgment is entered is entitled to judgment as a matter of law. Pittman v. Atlantic Realty Co., 127 Md.App. 255, 269 , 732 A.2d 912 , rev’d on other grounds, 359 Md. 513 , 754 A.2d 1030 (2000); Md. Rule 2-501(e). The standard of review we are to apply “is whether the trial court was legally correct.” Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 591 , 578 A.2d 1202 (1990).

In making that determination, “we do not accord deference to the trial court’s legal conclusions.” Lopata v. Miller, 122 Md.App. 76, 83 , 712 A.2d 24 , cert. denied, 351 Md. 286 , 718 A.2d 234 (1998). As the facts pertinent to the motion for summary judgment are not in dispute, we turn to the question of whether the circuit court was “legally correct” in applying § 5-108 to these facts. In deciding that question, we shall consider the purpose and intent of the Legislature in enacting that statute. “The cardinal rule of statutory construction is to effectuate and cany out legislative intent.” Rose v. Fox Pool Corp., 335 Md. 351, 358 , 643 A.2d 906 (1994). Because every statute furthers some underlying purpose, we must construe a statute according to its general purposes and policies.

Id. at 358-59 , 643 A.2d 906 . In interpreting a statute such as the one before us, we look first to the words of the statute, giving them their “natural and ordinary signification, bearing in mind the statutory aim and objective.” Richmond v. State, 326 Md. 257, 262 , 604 A.2d 483 (1992). “If the words of the statute, construed according to their common and everyday meaning, are clear and unambiguous and express a plain meaning, we will give effect to the statute as it is written.” Jones v. State, 336 Md. 255, 261 , 647 A.2d 1204 (1994). ⁶⁵² Even if the statute is clear and unambiguous, however, “we are not ‘precluded from consulting legislative history as part of the process of determining the legislative purpose or goal’ of the law.” Morris v. Prince George’s County, 319 Md. 597, 604 , 573 A.2d 1346 (1990). Moreover, “the legislative history of a statute, including amendments that were considered and/or enacted as the statute passed through the Legislature, and the statute’s relationship to earlier and subsequent legislation are ‘external manifestations’ or ‘persuasive evidence’ of legislative purpose that may be taken into consideration.” Rose, 335 Md. at 360 , 643 A.2d 906 . We next address the question of what is a statute of repose and then what purpose does it serve?

Generally, a “statute of repose creates a substantive right in those protected to be free from liability after a legislatively-determined period of time,” which is “typically an absolute time limit beyond which liability no longer exists and is not tolled for any reason.” First United Methodist Church of Hyattsville v. United States Gypsum Co., 882 F.2d 862, 866 (4th Cir.1989). It is a substantive grant of immunity derived from a legislative balance of economic considerations affecting the general public and the respective rights of potential plaintiffs and defendants. Id. A statute of repose is different from a statute of limitations, which is “a procedural device that operates as a defense to limit the remedy available from an existing cause of action.” Id. at 865 .

Unlike a statute of limitations, a statute of repose is not triggered by the discovery rule. Id. at 865-66 . Nor is it tolled by a defendant’s fraudulent concealment of the cause of a plaintiffs injury. Id. at 866 .

Instead, it “shelter[s] legislatively designated groups from property and personal injury actions after a period of time has elapsed ... and is unrelated to when an accident or discovery of damages occurs.” See Susan C. Randall, Comment, Due Process Challenge to Statutes of Repose, 40 Sw.L.J. 997, 998 (1986). The catalyst for.enacting such statutes in many jurisdictions, including Maryland, was the dramatic expansion in the ⁶⁵³ liability of builders, contractors, architects, engineers, and developers resulting from three developments: 1) the elimination of the “privity of contract” doctrine 2 as a defense, see Rose, 335 Md. at 362 , 643 A.2d 906 ; Whiting-Turner Contracting Co. v. Coupard, 304 Md. 340, 349 , 499 A.2d 178 (1985); and Randall, supra, at 1000; 2) the declining acceptability of “the completed and excepted rule,” 3 see Randall, supra, at 1000-01; and 3) the application of the “discovery rule” 4 to state statutes of limitations. See Rose, 335 Md. at 362 , 643 A.2d 906 ; Whiting-Turner, 304 Md. at 349 , 499 A.2d 178 ; and Randall, supra, at 1001. “Taken together these three legal developments meant that architects, engineers, contractors, and others involved in construction could be held liable indefinitely for property damage and personal injury caused by their work.” See Randall, supra, at 1001. Thus, “[ajrchitects and engineers, particularly concerned by these developments, turned to state legislatures for protection from this expanded liability.” Rose, 335 Md. at 362 , 643 A.2d 906 .

The possibility that seemingly endless liability would deter such professionals from experimenting with new materials, designs, or procedures spurred the state legislatures into action. See Randall, supra, at 1000-02; Josephine Herring Hicks, The Constitutionality of Statutes of Repose: Federalism Reigns, 38 Vand.L.Rev. 627, 633 (1985); Whiting-Turner, 304 Md. at 354 , 499 A.2d 178 (agreeing with the Supreme Court of Michigan that legislation was needed to “ ‘reduce the potential liability’ ” of professionals to “ ‘encourage experimentation’ ”) (quoting ⁶⁵⁴ O’Brien v. Hazelet & Erdal, 410 Mich. 1 , 299 N.W.2d 336, 342 (1980)). In Maryland, the Legislature responded by enacting Ch. 666 of the 1970 Laws of Maryland, formally codified in Article 57, § 20 of the Maryland Code, the precursor to § 5-108. 5 The Revisor’s Note to § 5-108 indicates that the purpose of this statute was to impose a limit on the expansion of liability for professionals involved in making improvements to real property. It states: This section is new language derived from Art. 57, § 20.

It is believed that this is an attempt to relieve builders, contractors, landlords, and realtors of the risk of latent defects in design, construction, or maintenance of an improvement to realty manifesting themselves more than 20 years after the improvement is first put in use. The section is drafted in the form of a statute of limitation, but, in reality, it grants immunity from suit in certain instances. According to that note, therefore, the purpose of § 5-108 was to protect builders, contractors, realtors, and landlords from suits for latent defects in design, construction, or maintenance of an improvement to real property that are brought more than twenty years after the improvement is first put to use. In granting immunity from such suits after ⁶⁵⁵ twenty years has elapsed, the Legislature appeared to be striking a balance between encouraging innovation in the construction industry and ensuring public safety.

One thing, however, is abundantly clear: the Legislature did not intend for § 5-108 to encompass a developer’s desecration of a graveyard and his subsequent concealment of its existence to facilitate its sale as part of a residential lot. The purpose and intent of the statute of repose was considered by the Court of Appeals in Rose, 335 Md. at 361-74 , 643 A.2d 906 . In that case, the principal issue before the Court was “whether § 5-108(a) applies to a cause of action brought against the manufacturer of a residential, in-ground swimming pool for injuries caused by an alleged defect in the pool’s design.” Id. at 354, 643 A.2d 906 . The trial court held that it did and granted summary judgment in favor of the defendant manufacturer on the ground that § 5-108(a) barred the plaintiffs suit.

Id. at 358, 643 A.2d 906 . The Court of Appeals agreed with the trial court that the statute of repose applied to the facts of that case but nonetheless reversed the judgment of that court on the ground that “there [was] a genuine issue of material fact as to whether the plaintiffs injury occurred more than 20 years after the date the entire improvement first became available for its intended use.” Id. at 354-55 , 643 A.2d 906 . In reaching that conclusion, the Court of Appeals stated that “[t]he specific statutory language of § 5-108(a) precludes all actions which meet two requirements: (1) the plaintiffs injuries must have resulted from the alleged defective and unsafe condition of ‘an improvement to real property’; and (2) 20 years must have passed since the ‘entire improvement first bec[ame] available for its intended use.’ ” Id. at 360, 643 A.2d 906 . II The first requirement—that “the plaintiffs injuries must have resulted from the alleged defective and unsafe condition of ‘an improvement to real property’ ”—has three components: ⁶⁵⁶ 1) an improvement to real property, 2) a defective and unsafe condition of that improvement, and 3) injuries resulting from the defective and unsafe condition.

Unfortunately, neither the language of the statute nor its legislative history provides much assistance in defining these three components. Indeed, as to the first component, the Court of Appeals observed that “Section 5-108 itself does not define ‘improvement to real property’ and there is no clear indication in the legislative history of the statute as to what the term was meant to encompass.” Id. at 375 , 643 A.2d 906 . In defining that term, the Court of Appeals then prescribed a “common sense approach” and adopted the Black’s Law Dictionary definition of “an improvement to real property.” Id. at 376 , 643 A.2d 906 . That text defines such an improvement as: A valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes.

Generally has reference to buildings, but may also include any permanent structure or other development, such as a street, sidewalks, sewers, utilities, etc. An expenditure to extend the useful life of an asset or to improve its performance over that of the original asset. Such expenditures are capitalized as part of the asset’s cost. Black’s Law Dictionary 757 (6th ed.1990). The Court then set forth the factors that should be considered in