Ferguson v. Loder

JAMES R. EYLER, Judge. In this appeal we consider whether a tort action, filed within the general three year statute of limitations, may proceed against the State of Maryland (“State”) when the State is made a party to the suit after the three-year filing deadline specified by the Maryland Tort Claims Act (“MTCA”). Kathy Ferguson, appellant, filed a tort action in the Circuit Court for Baltimore City against State employee Georgia Bohlayer Loder, appellee, within three-years after the cause of action accrued. Loder moved to dismiss, arguing that she was entitled to qualified immunity.

Ferguson then amended her complaint to add the State as a defendant, but did so after the MTCA’s three year deadline for filing a tort action against the State. Consequently, the circuit court dismissed both the State and Loder, based on tort immunity. Ferguson does not dispute Loder’s immunity on appeal, rather, she contends that her suit should have proceeded against the State on three distinct grounds: (1) Maryland Code (2008 Repl. Vol.), § 9-902(d) of the Labor and Employment Article (“LE”) extends the MTCA’s filing deadline by two months; (2) an amendment substituting the State for its employee relates back to the original filing date; and (3) the action substantially complied with the MTCA because the State had notice of the claim and the Attorney General’s office answered the complaint on behalf of Loder within the three-year deadline. 1 ⁷¹¹ For the reasons that follow, we conclude that the theories suggested by Ferguson for tolling the MTCA’s three-year filing deadline lack merit, and therefore, we shall affirm the judgment.

Facts and Proceedings On March 1, 2005, Ferguson was driving northbound on Washington Boulevard when a vehicle driven by Loder allegedly ran a red light and struck Ferguson. At the time of the collision, Loder was a State employee, operating a State-owned vehicle in the course of her employment. On March 11, 2005, the State Treasurer received a letter from counsel for Ferguson giving notice of her intent to bring a personal injury claim “as a result of negligence [by a State agent, servant, and/or employee].” Before filing her negligence action, Ferguson pursued a workers’ compensation claim. Once that claim was resolved, Ferguson entered negotiations with the State on her personal injury claim, and ultimately rejected a settlement offer.

On December 13, 2007, Ferguson filed a single count negligence action against Loder. The State was not named in the complaint, and Loder was not identified as a State employee. The Attorney General’s office, acting on behalf of Loder, filed an answer on January 29, 2007, which included a defense of immunity. On March 12, 2007, the Attorney General’s office filed a motion to dismiss or for summary judgment on behalf of Loder, arguing that Loder enjoyed qualified tort immunity under Maryland Code (2004 Repl.

Vol., 2008 Supp.), § 12-101 et. seq. of the State Government Article 2 (“SG”) and Maryland ⁷¹² Code (2006 Repl. Vol., 2008 Supp.), § 5-522 of the Courts and Judicial Proceedings Article (“CJ”). The timing of this motion—approximately a week and a half after the three year anniversary of the collision—was significant because the MTCA requires that a party bringing an action against the State file suit within three years after the cause of action arises. SG § 12-106(b).

Ferguson responded by filing an amended complaint on March 14, 2007, naming the State as a defendant, specifying that Loder was acting within the scope of her employment with the State, and adding a count against the State for negligent entrustment. Ferguson also filed a “Motion to Substitute Party by Interlineation” on March 26, 2007, in which she argued that LE § 9-902(d) extended the MTCA’s three year deadline by sixty days, and that the amendment adding the State merely corrected a misnomer. The State moved to dismiss the amended complaint or for summary judgment on the ground that Ferguson failed to meet the MTCA’s three-year filing deadline. 3 At the conclusion of a hearing on May 30, 2008, the circuit court granted the motion to dismiss the amended complaint. 4 First, the court distinguished the conditions precedent for suit under the MTCA from a statute of limitations, and found that the sixty day extension under LE § 9-902(d) applied only to the latter. Second, the court found that the amended complaint did not correct a misnomer but instead added a new party and, thus, did not relate back to the original complaint.

Finally, the court found that the substantial compliance argument advanced by Ferguson was insufficient “in this particular context.” This appeal followed. ⁷¹³ Standard of Review In reviewing a motion to dismiss, “our task is confined to determining whether the trial court was legally correct in its decision to dismiss.” Zimmer-Rubert v. Bd. of Educ., 179 Md.App. 589, 593 , 947 A.2d 135 (2008) (citation omitted). In doing so, “we accept all well-pled facts in the complaint, and reasonable inferences drawn from them, in a light most favorable to the non-moving party,” and “will only find that dismissal was proper if the alleged facts and permissible inferences, so viewed, would, if proven, nonetheless fail to afford relief to the plaintiff.” Id. (citations and internal quotation marks omitted). Discussion Enacted in 1981, the MTCA waived the State’s sovereign immunity from tort actions, subject to certain conditions and limitations.

SG § 12—104(a)—(b); Condon v. State, 332 Md. 481, 491 , 632 A.2d 753 (1993). These conditions and limitations include the requirements set forth in SG § 12-106(b): A claimant may not institute an action under this subtitle unless: (1) the claimant submits a written claim to the Treasurer or a designee of the Treasurer within 1 year after the injury to person or property that is the basis of the claim; (2) the Treasurer or designee denies the claim finally; and (3) the action is filed within 3 years after the cause of action arises.[ 5 ] The sole focus of this dispute is the three year deadline for filing set by SG § 12—106(b)(3). Both parties acknowledge that § 12-106(b)(3) “is not a statute of limitations,” but is instead “a condition precedent to the initiation of an action under the [MTCA].” See Johnson v. Md. State Police, 331 ⁷¹⁴ Md. 285, 290, 628 A.2d 162 (1993) (citations and quotation marks omitted). Rios v. Montgomery County, 386 Md. 104 , 872 A.2d 1 (2005), explained the distinction as follows: We have previously defined a condition precedent as a condition attached to the right to sue at all.

It operates as a limitation of the liability itself as created, and not of the remedy alone. The liability and the remedy are created by the same statutes, and the limitations of the remedy are, therefore, to be treated as limitations of the right. Conversely, a statute of limitations affects only the remedy, not the cause of action. A condition precedent cannot be waived under the common law and a failure to satisfy it can be raised at any time because the action itself is fatally flawed if the condition is not satisfied.

This requirement of strict or substantial compliance with a condition precedent is of course subject to abrogation by the General Assembly.... Id. at 127-28 , 872 A.2d 1 . As a result of this distinction, the Court of Appeals has repeatedly held that statute of limitations tolling principles are inapplicable to conditions precedent. See, e.g., State v. Sharafeldin, 382 Md. 129, 148 , 854 A.2d 1208 (2004) (holding that the State cannot waive its sovereign immunity in contract actions where the claimant fails to file within the one year deadline); Waddell v. Kirkpatrick, 331 Md. 52, 59-60 , 626 A.2d 353 (1993) (holding that a condition precedent to a wrongful death action cannot be tolled by laws directed at the general statute of limitations prescribed by CJ § 5-101); Johnson, 331 Md. at 290 , 628 A.2d 162 (holding that the tolling provision in CJ § 5-201-the general tolling provision applicable to minors-does not apply to the time period for filing a claim under the MTCA).

Ferguson concedes as much, but asserts that her theories are not grounded in statute of limitations tolling jurisprudence. We now address each of these theories in detail. 1. Labor and Émployment Article § 9-902(d) Ferguson first contends that LE § 9-902(d) extends the MTCA’s three year deadline by two months. Title 9, ⁷¹⁵ subtitle 9 of the Labor and Employment Article addresses actions against third parties for injuries covered by worker’s compensation.

The statute gives parties paying a worker compensation claim the exclusive right to sue a responsible third party for a period of two months after an award of compensation. LE § 9-902(c). Accordingly, LE § 9-902(d) suspends the limitations period applicable to the injured worker’s cause of action during the time when the payor has the exclusive right to sue: “The period of limitations for the right of action of a covered employee or the dependents of the covered employee against the third party does not begin to run until 2 months after the first award of compensation made to the covered employee or the dependents under this title.” Ferguson argues that this provision should be read broadly as applying to all time-restricted rights, not just statutes of limitations. Specifically, Ferguson asserts that the use of the more general term “limitations” (as opposed to “statute of limitations”), and the preceding phrase “for the right of action,” demonstrates a legislative intent to extend both time restricted remedies and rights.

Ferguson notes that this reading is consistent with the legislature’s mandate that MTCA “be construed broadly, to ensure that injured parties have a remedy.” SG § 12-102; Condon, 332 Md. at 496 , 632 A.2d 753 . Ferguson also observes that the Court of Appeals has referred to the MTCA’s conditions precedent as “limitations,” thus suggesting a correlation between the “limitations” on an MTCA action and the limitations tolled by LE § 9-902(d). See Magnetti v. Univ. of Md., 402 Md. 548, 563 , 937 A.2d 219 (2007); Sharafeldin, 382 Md. at 139 , 854 A.2d 1208 . The State responds with two points.

First, the State argues that reading LE § 9-902(d) in conjunction with the preceding subsection “makes clear [an intent] to ensure that the employer, the insurer, or the fund of self-insured employer retain the exclusive right to sue a responsible third party for the first two months after the claimant’s first award of compensation,” and does not provide a mechanism for claimants to “circumvent” the MTCA’s filing deadline. Second, the State argues that the tolling provision in LE § 9-902(d) applies only to the ⁷¹⁶ general three-year statute of limitations on civil actions set forth in CJ § 5-101, and not the three-year condition precedent in the MTCA. The State supports the latter argument by citing Hayes v. Wang, 107 Md.App. 598 , 669 A.2d 771 (1996), where we stated that LE § 9-902(d) operates “[a]s an exception to the general three-year statute of limitations involving a tort complaint.” Id. at 599, 669 A.2d 771 . Whether the legislature intended LE § 9-902(d) to apply to conditions precedent is not clear from the plain language of the statute. “Where a statute is plainly susceptible of more than one meaning and thus contains an ambiguity, courts consider not only the literal or usual meaning of the words, but their meaning and effect in light of the setting, the objectives and purpose of the enactment.” Tucker v. Fireman’s Fund Ins.

Co., 308 Md. 69, 75 , 517 A.2d 730 (1986) (citations omitted). We also “may consider the consequences resulting from one meaning rather than another, and adopt that construction which avoids an illogical or unreasonable result, or one which is inconsistent with common sense.” Id. The interpretive aids offered by Ferguson are of little assistance. The legislative mandate to construe the MTCA broadly has no application to our interpretation of LE § 9-902(d), which is contained in an entirely different act.

We also give no weight to Court of Appeals’ references to conditions precedent as “limitations.” Sharafeldin , which Ferguson cites for this proposition, explained the use of this term while addressing the counterpart , statute to the MTCA for contract actions against the State: Perhaps keying on the word “limitátions” used by the [Report of the Governor’s Commission to Study Sovereign Immunity], but without any documented critical analysis, the Legislature used that word in the title to the bill. The descriptive title stated the purpose of the bill to be to provide that the State and its various units may not raise the defense of sovereign immunity in the courts of this State in an action in contract based on certain written contracts, ⁷¹⁷ and “to set forth certain exclusions and limitations applicable to such actions.” Several “exclusions and limitations” were provided in the bill: the waiver applied only to breaches of written contracts executed by an official or employee acting within the scope of his/her authority; there would be no liability for punitive damages; and the action was barred if not filed within the one-year period. The best that can be said for this, from Sharafeldin’s point of view, is that the Legislature used the word “limitations” as a generally descriptive term that probably included the requirement of bringing suit within one year, but not in the technical sense of a true statute of limitations. In Frankel v. Board of Regents, 361 Md. 298, 308 , 761 A.2d 324 (2000), we referred to § 12-202 as providing a “period of limitations,” again as a generally descriptive term, and in [Baltimore County v. RTKL Associates, 380 Md. 670 , 846 A.2d 433 , (2004) ], we referred to a similar statute, applicable to actions against chartered counties, as a statute of limitations but noted that we did so as a matter of convenience and expressed no view whether it, or its counterparts, such as § 12-202, ‘are true statutes of limitations or conditions on the right to sue.’ RTKL, supra, 380 Md. at 677, n. 1 , 846 A.2d 433 .

In neither case was the issue now before us presented. 382 Md. at 139-40 , 854 A.2d 1208 . Sharafeldin went on to hold that the “limitations” in SG § 12-202 were in fact conditions precedent to the right of action. Id. at 148, 854 A.2d 1208 . Likewise here, the use of the generally descriptive term “limitations” in reference to the MTCA’s filing deadline does not change the undisputed fact that SG 12-106(b)(3) is a condition precedent to bringing suit and not a statute of limitations, nor does it indicate an intentional correlation with the “limitations” described in LE § 9-902(d).

Nonetheless, Ferguson’s argument that the phrase “limitations for the right of action” makes LE § 9-902(d)’s tolling provision applicable to all time restricted rights has some ⁷¹⁸ facial appeal. The two month tolling provision now contained in LE § 9-902(d) was added to the Workers’ Compensation Act in 1955 as a second paragraph to Maryland Code (1951), § 59 of Article 101. Smith v. Bethlehem Steel Corp., 303 Md. 213, 219 , 492 A.2d 1286 (1985). The original language also referred to “limitations” on “rights of action”: When any employee has a right of action under this section against a third party, the period of limitations for such action, as to such employee, shall not begin to run until two months after the first award of compensation made to such employee under this article, and this section shall apply to past and future rights of action under this section. 6 Id. at 216 , 492 A.2d 1286 .

Prior to the enactment of this provision, the Court of Appeals held in State use of Stasciewicz v. Parks, 148 Md. 477 , 129 A. 793 (1925), that the twelve month time limit for bringing a wrongful death action was a condition precedent to the right to bring suit. Id. at 482 , 129 A. 793 . Quoting The Harrisburg, 119 U.S. 199 , 7 S.Ct. 140 , 30 L.Ed. 358 (1886), the Court wrote that “[t]ime has been made of the essence of the right and the right is lost if the time is disregarded. The liability and the remedy are created by the same statutes, and the limitations of the remedy are, therefore, to be treated as limitations of the right.” Id. at 480, 129 A. 793 .

Though there is no legislative history associated with the 1955 enactment of the tolling provision, Smith, 303 Md. at 219 , 492 A.2d 1286 , the legislature was presumably aware of the Court’s earlier decision in Parks , and therefore, it could have used the phrase “right of action,” intending it to apply the two month tolling period to statutory causes of action such as the wrongful death statute. Even if we assume, however, that the legislature intended to apply this tolling provision to the ⁷¹⁹ wrongful death statute, it does not follow that the legislature also intended this provision to apply to the MTCA. For one, the MTCA was not enacted until 1981—nearly 30 years after the addition of the tolling provision to the Workers’ Compensation Act. Thus in order to apply LE § 9—902(d) to the MTCA, we would have to conclude that the legislature used the phrase “right of action” with the intent to apply the two month tolling period prospectively to any causes of action later created, including not-yet-enacted statutes waiving the State’s sovereign immunity.

Given the Court of Appeals’ insistence that “[t]he General Assembly must waive immunity either directly or by necessary implication,” and its corresponding refusal to expand the State’s waiver of its immunity by “judicial fiat,” we decline to adopt such a sweeping interpretation. Sharafeldin, 382 Md. at 140 , 854 A.2d 1208 ; Dept. of Nat. Res. v. Welsh, 308 Md. 54, 58 , 521 A.2d 313 (1986). The characterization of LE § 9-902(d) as an exception to the general statute of limitations set by CJ § 5-101 also precludes its application to the MTCA.

See Hayes, 107 Md. App. at 599 , 669 A.2d 771 (stating that LE § 9-902(d) operates “[a]s an exception to the general three-year statute of limitations involving a tort complaint”); Smith, 303 Md. at 229 , 492 A.2d 1286 (1985) (construing the predecessor to LE § 9-902 as “tolling ... the otherwise applicable statute of limitations [set by C & JP § 5-101]”). As Waddell and Johnson make clear, tolling provisions aimed at CJ § 5-101 are inapplicable to conditions precedent. Waddell addressed the question of whether CJ § 5-201, which tolls the general period of limitations in CJ § 5-101, also tolls the time limitation in the Wrongful Death Statute, CJ § 3-904(g). 331 Md. at 53-54, 626 A.2d 353 . The Court noted its previous determination that the time limitation on a wrongful death action was a condition precedent rather than a statute of limitations, and concluded: “Once it has been established that section 3-904(g) is a condition precedent, as opposed to a statute of limitations, it follows inexorably that it does not fit within the prescription of section 5-101.

Conse ⁷²⁰ quently, section 5-201 does not save a cause of action for wrongful death.... ” Id. at 60, 626 A.2d 353 . In Johnson, the Court cited Waddell to hold that CJ § 5-201 did not extend the MTCA’s then 180-day administrative claim requirement. 7 331 Md. at 290, 628 A.2d 162 . The court again noted that “the tolling provision in [CJ] § 5-201 is inapplicable to a condition precedent, as opposed to a statute of limitations,” and observed that “[t]he Maryland Legislature has not, in any way, indicated that the Maryland general tolling statute should be applicable to the [MTCA’s] 180-day claim requirement.” Id. (quotation marks omitted).

We similarly lack sufficient indication, “either directly or by necessary implication,” of an intent by the Legislature to apply LE § 9-902(d) to the MTCA’s three year filing deadline, and thus we refuse to give it such an application by “judicial fiat.” 2. Relation Back Ferguson next contends that her amended complaint should relate back to the filing date of her original complaint because it merely corrected a misnomer of the proper defendant. Indeed, an amendment that corrects the name of a party relates back to the original filing date. Williams v. Hofmann Balancing Techniques, Ltd., 139 Md.App. 339, 364-65 , 776 A.2d 4 (2001); see Rule 2-341(c) (“An amendment [to a complaint] may seek to ... correct misnomer of a party[.]”).

The addition of a new party, however, does not relate back. Williams, 139 Md.App. at 365 , 776 A.2d 4 . “The critical factors [for determining whether an amendment corrects a misnomer, and therefore relates back,] are (1) who was the appropriate defendant, and (2) whether that party had timely notice of its intended status as defendant.” Id. at 365 , 116 A. 570 . Stated another way, whether an amended complaint relates back “ordinarily depends upon whether the ‘correct’ defendant was intended to be sued originally and whether the ⁷²¹ ‘correct’ defendant would be unfairly prejudiced by allowing the amendment to relate back to the time of the filing of the original complaint.” Greentree v. Fertitta, 338 Md. 621, 625 , 659 A.2d 1325 (1995). Under Ferguson’s theory, “[tjhe corrected misnomer relates back to the original filing, because all parties—plaintiff and defendant—knew prior to the running of the statutory deadline that the correct defendant had been misnamed.” The State counters by arguing that the relation back doctrine does not apply to a condition precedent, and that the amended complaint did not correct a misnomer, but instead, it added a new party.

The parties have not cited any case law as to whether the relation back doctrine applies to a condition precedent, nor are we aware of any decision by a Maryland court that directly addresses this question. See Knauer v. Johns-Manville Corp., 638 F.Supp. 1369, 1379 (D.Md.1986) (stating that the relation back rule “appears not