Magnetti v. University of Maryland

GREENE, J. This matter arises from a wrongful termination action filed in the Circuit Court for Prince George’s County by the petitioner Charles Magnetti, a state employee, against the University of Maryland, College Park, the College of Art and Humanities, and Dr. Michael Marcuse—the Director of the Professional Writing Program, a program within the College of Arts and Humanities (collectively, “the University”), the respondents. In June 2002, Dr. Marcuse informed Magnetti that his teaching contract with the Professional Writing Program would not be renewed for the upcoming Fall 2002 semester. Magnetti alleges that Dr. Marcuse did not provide him with an explanation for his termination. Magnetti’s subsequent attempts at reapplying to the Professional Writing Program were rebuffed by Dr. Marcuse.

The Circuit Court, on a motion by the University, dismissed Magnetti’s complaint as barred by the doctrine of sovereign immunity. The Circuit Court explained that Magnetti had failed to file his complaint within one year of the accrual date of his claim; therefore, he was unable to effectuate the statutory waiver of the University’s sovereign immunity. Thereafter, Magnetti filed a timely appeal to the Court of Special Appeals, which affirmed the Circuit Court’s dismissal of Magnetti’s complaint. Magnetti v. University of Maryland, 171 Md.App. 279 , 909 A.2d 1101 (2006).

On April 11, 2007, we granted certiorari, Magnetti v. University of Maryland, 398 Md. 314 , 920 A.2d 1058 (2007), to review the following question, which we have distilled from the three questions presented in Magnetti’s petition for writ of certiorari: 1 ⁵⁵¹ Did the Circuit Court err in concluding that Md.Code (1984, 2004 Repl.Vol.), § 12-202 of the State Government Article applied to bar Magnetti’s contract action against the University? We answer that question in the negative and affirm the judgment of the Court of Special Appeals. I. Factual Background Because this appeal arises from the Circuit Court’s grant of the University’s motion to dismiss, we assume “the truth of all well-pleaded relevant and material facts ... as well as all inferences which can be reasonably drawn from the plead ⁵⁵² ings.” Odyniec v. Schneider, 322 Md. 520, 525 , 588 A.2d 786, 788 (1991). It is alleged that until June 2002, Magnetti had been employed as an instructor and lecturer in the Professional Writing Program for nineteen years.

Magnetti primarily taught legal writing courses; however, during his tenure at the University, Magnetti had come to teach every professional writing course offered to students. For at least the last ten years of his employment, Magnetti usually taught at least three courses a semester. In the performance of his duties, Magnetti received high marks in both peer and student evaluations. He was nominated as teacher of the year four times during his tenure at the University, winning the honor in 1995 and 1996.

At some point during his employment with the University, Magnetti was notified that based on his longevity with the Professional Writing Program, he was classified as a member of the “Core Faculty,” the highest tier in the Professional Writing Program’s personnel system. While the Professional Writing Program did not sub scribe to the traditional tenure system used in many universities, in granting such designation, the Professional Writing Program guaranteed designated faculty members a continuous teaching load of at least three sections/classes per semester as long as they were continuously employed with the Professional Writing Program. In June 2002, allegedly without articulating the basis, Dr. Marcuse notified Magnetti that his contract with the Professional Writing Program would not be renewed for the upcoming Fall 2002 semester. Magnetti made subsequent attempts to reapply with the Professional Writing Program; however, such attempts were rebuffed by Dr. Marcuse.

More than three years later, on June 13, 2005, Magnetti filed a complaint in the Circuit Court for Prince George’s County alleging breach of contract and breach of the implied covenant of good faith and fair dealing and seeking specific performance to enforce the parties’ contract. Magnetti requested $300,000 in compensatory damages and that the Uni ⁵⁵³ versity “be ordered to hire [Magnetti] to his previous employment position” with the Professional Writing Program. Magnetti alleged that he was dismissed because of a physical handicap that affects his ability to walk—Peripheral Artery Disorder—and because of his outward appearance, as he wears a beard and a ponytail. On September 14, 2005, the University filed “Defendants’ Motion to Dismiss,” arguing that Magnetti’s complaint failed to state a claim upon which relief could be granted because sovereign immunity barred Magnetti’s suit.

Specifically, the University argued that Magnetti filed his lawsuit some three years after his termination, well beyond the one-year period set forth in Md.Code (1984, 2004 Repl.Vol.), § 12-202 of the State Government Article (“S.G.”) as the condition precedent for the waiver of the University’s sovereign immunity. The Circuit Court held a hearing on the motion on December 28, 2005. At that hearing, Magnetti argued that the University’s sovereign immunity had been waived pursuant to Md.Code (1978, 2006 Repl.Vol.), §§ 12-104(a) and (b)(3) of the Education Article (“Ed.”). Specifically, Magnetti argued that a recent amendment to Ed. § 12-104(a), which added the language “by specific reference,” clarified the General Assembly’s intent that statutory restrictions on powers granted to the Board of Regents must specifically reference the University System to be operable.

According to Magnetti, S.G. § 12-202 could not then apply to the University because it served as a restriction on the ability of the Board of Regents to be sued under S.G. § 12-201 and the statutory language used in S.G. § 12-202 did not specifically reference the University System. Magnetti contended that because the provisions of Ed. § 12-104 applied to waive the University’s sovereign immunity, only the three-year statute of limitations for general contract claims was relevant to the proceedings. The Circuit Court dismissed the complaint with prejudice, stating: ⁵⁵⁴ Well, I believe the Stem[ 2 ] case is dispositive of the issue, and Stem does provide expressly, we hold the Board has sovereign immunity. There was an analysis as to whether the language sued and be sued was sufficient to enact a waiver of immunity.

The [C]ourt concluded it was not. I believe the same is true here. I disagree with Mr. Wein [Magnetti’s counsel] that the 2004 amendments were a response to Stem. In fact, to the contrary, the Stem decision was issued [on] April 12, 2004.

The legislation which ultimately was enacted was introduced in February of 2004 ... for the purpose of providing that the authority of the Board of Regents of the University System of Maryland [sic] may not be superceded by any state agency or office in certain management affairs except by a provision of law that specifically references the University System of Maryland. In addition, it deleted a requirement as to the number of positions that may be created in the University System. If you look at it, it is expressly what it does. It was dealing with a different issue, that is the relationship between the University and other state agencies.

It was an issue that predated the Stem decision. It doesn’t at all respond to the issue of Stem. Similarly, Conte[ 3 ] ... also deals with this issue. Conte, they clearly say, okay, you may be able to proceed because—in Stem, there was no written contract.

So the provisions of the State Government Article that have been cited did not apply. In Conte there was a written contract and the issue of timeliness, they said, well, there is no confusion but that he did file within the year required. That certainly was not the case here, that is ultimately the issue. I find that there has been no broad waiver of immunity by the University of Maryland as analyzed by Stem, and no ⁵⁵⁵ broad waiver from the general powers and duties that are explicated in 12-104 of the Education Article, for the reasons stated in Stem.

I find there may be—there is a limited waiver for claims based on a breach of a written contract, which might permit such a common law contract claim to be filed, and that is in the State Government Article at 12-201, et seq., but specifically 12-202 provides that such a claim need to be filed within one year after later of date [sic] in which the claim arose, or the completion of the contract. Under any interpretation that would be May or June 2002. Thus the claim must have been filed no later than June of 2003 under any interpretation of that. It wasn’t in fact filed until 2005.

Therefore, because it wasn’t timely filed it is barred by the limitations of sovereign immunity. Magnetti filed a timely appeal to the Court of Special Appeals. On October 27, 2006, the Court of Special Appeals, in a reported opinion, affirmed the Circuit Court’s dismissal of Magnetti’s claims, holding that sovereign immunity barred the continuation of the action. Magnetti, 171 Md.App. at 297 , 909 A.2d at 1111-12 .

The intermediate appellate court held that Ed. § 12-104(b)(3) did not alone waive the University’s sovereign immunity for Magnetti’s claim because, under this Court’s analysis in Stern v. Bd. of Regents, 380 Md. 691, 701 , 846 A.2d 996 (2004), the General Assembly had not appropriated specific funds to satisfy judgments awarded in suits brought pursuant to that particular subsection. Magnetti, 171 Md.App. at 288-89 , 909 A.2d at 1106-07 . The Court of Special Appeals also held that the amended language of Ed. § 12-104(a), requiring specific references to the University System in statutory restrictions on powers given to the Board of Regents, did not render the one-year limitations period of S.G. § 12-202 inoperable in contractual cases involving the University, because S.G. § 12-202 was not a restriction on the powers of the Board of Regents. Magnetti, 171 Md.App. at 295-96 , 909 A.2d at 1111 .

The Court reasoned that the prescribed limitations period in S.G. § 12-202 acted as a restriction on Magnetti as it required him to file his claim ⁵⁵⁶ within the one-year period in order to effectuate a waiver of the University’s sovereign immunity. Id. The Court concluded that because Magnetti filed his complaint outside the one-year period prescribed by S.G. § 12-202, he had failed to satisfy the condition precedent for the waiver of sovereign immunity under S.G. § 12-201. Magnetti, 171 Md.App. at 297 , 909 A.2d at 1111-12 .

The Court held that Magnetti’s claim could not go forward. Magnetti, 171 Md.App. at 297 , 909 A.2d at 1112 . Magnetti filed a Motion for Reconsideration, which the Court of Special Appeals denied. Shortly thereafter, Magnetti filed a petition for writ of certiorari.

On April 11, 2007, we granted certiorari. Magnetti v. University of Maryland, 398 Md. 314 , 920 A.2d 1058 (2007).

II

DISCUSSION The doctrine of sovereign immunity is firmly embedded in Maryland law, long recognized as applicable in actions—contract, tort, or otherwise—against the State of Maryland, its officers, and its units. Stern 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.”); Maryland State Highway Admin, v. Kim, 353 Md. 313, 333 , 726 A.2d 238, 248 (1999) (“We have recognized, and continue to note that, in Maryland, the doctrine of sovereign immunity is applicable not only to the State itself, but also to its agencies and instrumentalities, unless the General Assembly has waived the immunity either directly or by necessary implication.”); ARA Health Servs. v. Dep’t of Pub. Safety & Corr. Servs., 344 Md. 85, 91 , 685 A.2d 435, 438 (1996) (“Maryland courts have long applied the doctrine of sovereign immunity in actions against the State.”); Condon v. State, 332 Md. 481, 492 , 632 A.2d 753, 758 (1993) (“The doctrine [of sovereign immunity] is applicable to the State’s agencies and instrumen ⁵⁵⁷ talities, unless the legislature has explicitly or by implication waived governmental immunity.”).

This doctrine prohibits suits against the State or its entities absent its consent. Dep’t of Natural Resources v. Welsh, 308 Md. 54, 58-59 , 521 A.2d 313, 315 (1986). As we stated in Stern , “when a governmental agency or actor can, and does, avail itself of the doctrine of sovereign immunity, no contract or tort suit can be maintained thereafter against it unless the General Assembly has specifically waived the doctrine.” Ste rn, 380 Md. at 701 , 846 A.2d at 1001 . Generally, we leave the questions of the general applicability and the scope of the doctrine to the General Assembly.

See Stern, 380 Md. at 700 , 846 A.2d at 1001 (“We have emphasized that ‘the dilution of the doctrine’ of sovereign immunity should not be accomplished by the judiciary, and that any direct or implied diminution of the doctrine falls within the authority of the General Assembly.”); Welsh, 308 Md. at 59 , 521 A.2d at 315 (“The General Assembly must waive immunity ‘either directly or by necessary implication.’ ”). See also Austin v. City of Baltimore, 286 Md. 51, 69-71 , 405 A.2d 255, 264-266 (1979) (Eldridge, J., concurring in part, dissenting in part) (explaining the legislative origins of sovereign immunity in Maryland as a rationale for the Court’s continual treatment of the doctrine “as a matter exclusively for the Legislature”). It is within our prerogative, however, to determine whether the doctrine applies in a specific case, which we do by asking two questions: “(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.” ARA Health Services, 344 Md. at 92 , 685 A.2d at 438 . It is well established that the University is considered to be an arm of the State Government for the purposes of the sovereign immunity doctrine.

See Ed. § 12-102(a) 4 ; see also ⁵⁵⁸ Stern, 380 Md. at 702 , 846 A.2d at 1002 ; Frankel v. Board of Regents, 361 Md. 298, 301 , 761 A.2d 324, 325 (2000); Maas, 173 Md. at 557, 197 A. at 124; Pearson v. Murray, 169 Md. 478, 482 , 182 A. 590, 592 (1936). Because the University qualifies as a “unit” of the State for the purposes of sovereign immunity, we must discern the extent of the University’s statutory waiver of that immunity. Without a statutory waiver of the University’s sovereign immunity, Magnetti may not maintain his action against the University. The University acknowledges the waiver found in S.G. §§ 12-201 and 12-202, but asserts that Magnetti is barred from utilizing the waiver because he failed to satisfy the condition precedent of filing his contract claim within the prescribed one-year period.

Magnetti claims, to the contrary, that a general waiver of the University’s sovereign immunity exists in Ed. § 12—104(b). We agree with the University that S.G. §§ 12-201 and 12-202 apply as a waiver of the University’s sovereign immunity and hold that sovereign immunity was not waived under the circumstances of this case. Therefore, Magnetti is not entitled to the claimed relief. A. The Application of S.G. §§ 12-201, 12-202 and Ed. § 12-104(a) Magnetti contends that the Circuit Court erred in relying on S.G. §§ 12-201 and 12-202 in dismissing his complaint with prejudice.

Specifically, Magnetti contends that the 2004 amendment to Ed. § 12-104(a) rendered the sovereign immunity provisions of S.G. §§ 12-201 and 12-202 inoperable to the University. Magnetti explains the 2004 amendment to Ed. § 12-104(a) “plainly stated what has readily existed since the ⁵⁵⁹ creation of the Board of Regents in the Autonomy Act, that barring specific reference to the University System of Maryland, that matters that conflict with or restrict the Board of Regents’ powers and duties, are not applicable” to the University. He then reasons that S.G. § 12-202 is a restriction on the powers given under Ed. § 12—104(b), specifically, the ability to ‘sue or be sued’ and the ability to ‘enter into contracts of any kind’ because (1) despite this Court’s labeling S.G. § 12-202 as a condition precedent to the waiver of sovereign immunity, S.G. § 12-202 has been “commonly thought of and referred to as a statute of limitations,” which is a synonym for restriction; and, (2) the one-year period detailed in S.G. § 12-202 “conflicts] with and ‘restrict^]’ the regular three years corporate statute of limitations.” Thus, Magnetti asserts that, for S.G. § 12-202 to be applicable to the University, the statutory language of S.G. § 12-202 has to specifically reference the University System of Maryland. Furthermore, Magnetti argues that “nowhere in the [Ed. § ] 12-104 did the Board of Regents and the Maryland legislature choose to create a limitation to contract claims through a sovereign immunity defense.” Magnetti explains that the “comprehensive nature of [Ed. § ] 12-104” shows that the General Assembly did not intend to give the University sovereign immunity in contract claims.

Specifically, Magnetti points to the express incorporation of the Maryland Tort Claim Act 5 into Ed. § 12-104(i), while noting that “there exists no [such] incorporation of the provisions of Title 12, Subtitle 2 of the State Government Article.” Magnetti suggests that the General Assembly purposefully excluded the incorporation of S.G. §§ 12-201 and 12-202 to the Education Article because it “intended in the plain text of [Ed. § ] 12-104(b) that there should be no such limitations [against the University], [so] that common law contract causes of action do not fall under the restriction of [S.G.] § 12-202 when the offending actor is the University System of Maryland.” Mag ⁵⁶⁰ netti asserts that the general, three year statute of limitations period applies to his complaint. The University counters that the 2004 amendment to Ed. § 12-104(a) does not render S.G. § 12-202 inapplicable to the University. The University asserts that “as the [Cjircuit [C]ourt correctly concluded, nothing in the language of the Education Article § 12-104(a) suggests that the legislature intended to override the common law principles of sovereign immunity that are preserved in State Government § 12-202.” Rather, the University argues that both the Circuit Court and the Court of Special Appeals found that “ ‘the stated purpose’ of the legislation w as to define ‘the relationship between the Board of Regents and other state agencies.’ ” Therefore, the University contends, Ed. § 12-104(a) does not affect the applicability of S.G. § 12-202 to the University, and, as such, Magnetti was required to file his complaint against the University within the prescribed one-year period. The University maintains that Magnetti’s complaint is thus barred by sovereign immunity because he failed to file within that one-year period.

We agree with the University. Title 12 of the State Government Article governs the liability of governmental entities, defining the scope and general applicability of the doctrine of sovereign immunity. Of particular interest to the case sub judice, Subtitle 2, entitled “Actions in Contract,” defines the extent to which the State and/or its covered officers and units waive sovereign immunity in contract actions. 6 S.G. § 12-201, entitled “Sovereign immunity defense barred,” reads in pertinent part: ⁵⁶¹ (a) Except as otherwise expressly provided by a law of the State, the State, its officers, and its units may not raise the defense of sovereign immunity in a contract action, in a ⁵⁶² court of the State, based on a written contract that an official or employee executed for the State or 1 of its units while the official or employee was acting within the scope of the authority of the official or employee. S.G. § 12-202 provides that: A claim under this subtitle is barred unless the claimant files suit within 1 year after the later of: (1) the date on which the claim arose; or (2) the completion of the contract that gives rise to the claim.

Magnetti does not contest that S.G. § 12-201 applies to the University. Indeed, it is without question that the waiver of sovereign immunity applies and includes the University. In Stem, we held that S.G. § 12-201 was applicable to the University in the dispute over a tuition increase on the theory of a breach of contract, stating: There is no doubt ... that the Board is considered to be an arm of the State Government for the purposes of asserting the defense of sovereign immunity. See Md.Code (1978, 2001 Repl.Vol.), § 12-102 of the Education Article; see also Frankel v. Board of Regents of University of Maryland System, 361 Md. 298, 301 , 761 A.2d 324, 325 (2000) (recognizing that the University of Maryland, which is a part of the University System of Maryland, is an independent unit of the Maryland State government); Maas, 173 Md. at 557, 197 A. at 124 (recognizing that the University of Maryland was a State actor for the purposes of sovereign immunity); Pearson v. Murray, 169 Md. 478, 482 , 182 A. 590 (1936) (holding that the University of Maryland Law School was a State agency). [T]he Board is clearly considered a State actor — Stern, 380 Md. at 702 , 846 A.2d at 1002 (footnote omitted).

See also Towson Univ. v. Conte, 384 Md. 68, 96 , 862 A.2d 941, 957 (2004) (recognizing that claims over state employment contracts are subject to the one-year condition precedent set forth in S.G. § 12-202); Frankel, 361 Md. at 308 , 761 A.2d at 329 (noting that Frankel’s claim of a tuition overcharge ⁵⁶³ against the University of Maryland was not barred by S.G. §§ 12-201 and 12-202 because Frankel filed with the one-year prescribed period). As explained above, Magnetti disputes the applicability of S.G. § 12-202 to the University on the basis of the 2004 amendment to Ed. § 12-104(a). Ed. § 12-104(a), as amended in 2004, now reads as follows: In addition to any other powers granted and duties imposed by this title, and subject to the provisions of Title 11 of this article and any other restriction imposed by law by specific reference to the University System of Maryland, or by any trust agreement involving a pledge of property or money, the Board of Regents has the powers and duties set forth in this section. We find this argument without merit.

First, in State v. Sharafeldin, 382 Md. 129, 148, 149 , 854 A.2d 1208, 1219 (2004), Judge Wilner, writing for this Court, explained that S.G. §§ 12-201 and 12-202 were “intended as a conditional waiver of the State’s sovereign immunity in contract actions,” and “must be read together.” (Emphasis added). Specifically, “Section 12-201 precludes the State and its agencies from raising the defense of sovereign immunity in a contract action “in a court of the State,” meaning a court that is part of the Maryland judiciary. Sharafeldin, 382 Md. at 149 , 854 A.2d at 1219 . We ultimately held that “[S.G.] § 12-202 is not a mere statute of limitations but sets forth a condition to the action itself.” As Judge Wilner pointed out, “[t]he waiver of the State’s immunity vanishes at the end of the one-year period [specified in S.G. § 12-202], and an action filed thereafter is ... [barred].” Sharafeldin, 382 Md. at 148-49 , 854 A.2d at 1219 .

Therefore, it is clear that S.G. §§ 12-201 and 12-202 must be read together in order to understand the limitation and/or condition of the University’s waiver of sovereign immunity in contract actions. In addition, a plain reading of the statutory provisions suggests that Ed. § 12-104(a) does not affect the applicability of S.G. § 12-202 to the instant matter. By its plain terms, ⁵⁶⁴ Ed. § 12-104(a) is applicable only to those restrictions affecting the powers and duties of the Board of Regents. S.G. § 12-202, however, places upon the claimant, not the University System of