State v. Sharafeldin

WILNER, J. In September, 1999, Ibnomer Sharafeldin sued the State Department of Public Safety and Correctional Services in U.S. District Court, claiming, among other things, breach of contract. The contract allegedly breached was a 1995 Settlement Agreement intended to resolve a discrimination claim that Sharafeldin had filed against the Department with the State Human Relations Commission (HRC) and the Federal Equal Employment Opportunity Commission (EEOC). When, in April, 2000, his Federal breach of contract action was dismissed on Eleventh Amendment sovereign immunity grounds, Sharafeldin filed a similar claim in the Circuit Court for Baltimore City, where he met with better success. The jury returned a verdict in his favor of $366,500, which, upon his acceptance of a remittitur in order to avoid a new trial, was reduced to $108,000.

Two inter-related issues are before us in this appeal from the Circuit Court judgment, both emanating from the Department’s defense of sovereign immunity. Through the enactment of what is now Maryland Code, § 12-201 of the State Government Article (SG), the Legislature has conditionally waived the State’s sovereign immunity in actions filed in Maryland courts for breach of a written contract, but in § 12-202 has provided 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.” The first question is whether § 12-202 constitutes a condition to the waiver of sovereign immunity and thus to the right of action itself against the State or is, instead, merely a statute of limitations. It is undisputed that the action in Circuit Court was not filed within the allowable one-year period. In order to save that action, Sharafeldin relies on Maryland Rule 2-101 (b), which provides, in relevant part, that, if an action is filed in U.S. District Court within “the period of limitations prescribed ¹³³ by Maryland law” and the Federal action is dismissed for lack of jurisdiction, an action filed in the State Circuit Court within 30 days after entry of the order of dismissal “shall be treated as timely filed in this State.” The second issue, as presented, depends on the answer to the first.

If SG § 12-202 is merely a statute of limitations and Sharafeldin’s action was filed in Federal court within the one-year period, the action filed in Circuit Court would be regarded as timely, as it was filed within 30 days after the Federal breach of contract claim was dismissed on jurisdictional grounds. If SG § 12-202 is a condition to suit and not a statute of limitations, however, the question arises whether Rule 2-101(b) can save the action even if it had been filed in Federal court within the one-year period; does § 12-202, in other words, bar the action if not filed in State court within the one-year period? 1 BACKGROUND Sharafeldin was employed by the Department as a chaplain at one or more of the State prisons in the Hagerstown area. He began in 1989 as a contractual employee but, after filing discrimination charges against the Department with the HRC and EEOC, he became a full-time employee in 1991. Since then, he has filed seven further complaints of discrimination.

The gist of his current unhappiness was his desire to be transferred from the Hagerstown complex to prisons in the Baltimore/Jessup area. In February, 1995, in a resolution of one of his complaints to HRC and EEOC, the Department entered into a written Settlement Agreement with Sharafeldin in which the Department made three commitments: ¹³⁴ (1) It would rescind two existing suspensions and pay lost wages of $632; (2) It would “[njotify and interview [Sharafeldin] for consideration of Chaplain position in the Baltimore/Jessup region”; and (3) It agreed that “there will be no retaliation or harassment taken against [Sharafeldin].” In October, 1995, a chaplain position opened in the Jessup area. The Department notified Sharafeldin of the vacancy, interviewed him for the position, but selected someone else for the job — a chaplain who received higher scores from three different raters selected by the Department to review the applications. In the Fall of 1997, another chaplain position opened in the Jessup area.

Believing that it had fulfilled its obligation to Sharafeldin by considering him for the 1995 vacancy, the Department filled that position without notifying or interviewing Sharafeldin. In March, 1998, the Department informed Sharafeldin of a third vacancy in a chaplain position in Jessup, interviewed him for the position, but, again, hired someone else, a person who received higher scores from five different raters. On August 21, 1998, an incident involving Sharafeldin and two correctional officers occurred at one of the Hagerstown prisons, in which Sharafeldin was allegedly shoved and mildly bruised. He filed criminal charges against the officers, which were dismissed, and another discrimination complaint with HRC and EEOC, which also was unsuccessful.

He never returned to work, although, for whatever reason, the Department kept him on the payroll until June, 1999. On September 27, 1999, Sharafeldin filed a three-count complaint against the Department in the U.S. District Court, alleging hostile-work-environment harassment on the basis of his race, color, religion, and national origin (Count I) 2 , constructive discharge arising from the hostile-work-environment harassment (Count II), and breach of the 1995 Settlement Agreement (Count III). In Count III, Sharafeldin alleged that the Department breached the 1995 agreement “by not ¹³⁵ notifying him of chaplaincy position on at least two occasions” and by “retaliating against him when the Defendant did not hire him or transfer him for the chaplaincy position for which he was well qualified” and picking, instead, “candidates who were less qualified than the Plaintiff.” The Department’s response to the complaint is not in the record before us. It appears from the court’s discussion, however, that the dispositive argument with respect to Count III, made in a motion to dismiss, was Eleventh Amendment sovereign immunity, for, on April 10, 2000, the court dismissed Count III on that ground and discussed no other.

In February, 2001, the court entered summary judgment for the Department on the other two counts, concluding that Sharafeldin had not shown that the harassment alleged by him was based on race, religion, or national origin. Indeed, the court concluded that Sharafeldin was “a contentious, disgruntled and paranoiac employee who clashed with almost everyone with whom he came into contact, including inmates, correctional officers, nurses, other chaplains, and superiors,” that he “constantly complained about his duties and work assignments,” that he “overreacted to petty slights and inconveniences,” that it was his “inability to work with others and to comply with the directions of his superiors which led to the claims asserted by him,” and that “[wjhenever disputes or conflicts arose, Sharafeldin attributed them to his race, his religion or his national origin.” Sharafeldin v. Maryland, Dept. of Public Safety, 131 F.Supp.2d 730, 740 (D.Md.2001). In an unreported opinion filed November 15, 2001, the U.S. Court of Appeals for the Fourth Circuit summarily affirmed the judgment of the District Court. On April 25, 2000 — 15 days after dismissal of Count III of his Federal complaint — Sharafeldin filed a two-count complaint against the Department in the Circuit Court for Baltimore City.

Count 1, captioned “Breach of Settlement Agreement,” alleged that, in the 1995 Settlement Agreement, a copy of which was attached to the Complaint, the Department promised that it would notify Sharafeldin “of vacant chaplain positions in the Baltimore and Jessup regions and would ¹³⁶ interview him for consideration of those positions” and that the Department breached the agreement in two respects: first, in the Fall of 1997, by appointing another person to fill a vacant position in Jessup without notifying him of the vacancy, and second, by failing to hire him to fill vacancies that occurred in October, 1995 and March, 1998, failures which Sharafeldin averred constituted retaliation against him for filing a discrimination complaint. Count 2, captioned “Breach of Implied Covenant of Good Faith and Fair Dealing,” incorporated the earlier averments and asserted that the Department “did not observe good faith and fair dealing under the agreement when it had every opportunity to do so” and that, by reason of its failure to make a good faith effort to honor the Settlement Agreement, Sharafeldin was forced to endure “years of hostile and abusive work environment and to subsequently los[e] his job.” Count 2 was thus also in the nature of a breach of contract claim, based on an alleged breach of the 1995 Settlement Agreement. The Department moved to dismiss the action on the ground of sovereign immunity. As to Count 1, the Department argued, that, because the action was not brought within one year from the date on which Sharafeldin’s claims arose, the Department retained its defense of sovereign immunity.

In presenting that defense, the Department contended, at least by implication, that the requirement imposed by SG § 12-202 of bringing suit within one year constitutes not a statute of limitations but a condition precedent to the action itself — a condition to the waiver of the State’s sovereign immunity. In taking that position, the Department neglected to plead, as an alternative and in conformance with the requirement of Maryland Rule 2-323(g), that the one year requirement stated in § 12-202, did constitute a special Statute of Limitations and that Sharafeldin’s action was barred on that ground. Count 2, the Department argued, rested on implied provisions, and the State retained its sovereign immunity with respect to implied contracts. The Department’s motion was denied without comment or explanation.

After some discovery, Sharafeldin and the De ¹³⁷ partment filed cross-motions for summary judgment, both of which were denied. The Department’s motion rested on its view that the Settlement Agreement required it to inform Sharafeldin of a vacancy in the Baltimore/Jessup area and to intei'view him for such a position only one time, and that it complied with that requirement in October, 1995. It asserted, in that regard, that the Department “had an obligation only to notify Plaintiff of, and interview him for, a single Chaplain position.” The dispositive motions having been denied, the case was submitted to trial before a jury, which returned a verdict in Sharafeldin’s favor in the amount of $366,500. In response to the Department’s post-verdict motion, the court determined that the verdict was “excessive and shocks the Court’s conscience,” and therefore ordered a new trial unless Sharafeldin accepted a reduction to $108,000.

Sharafeldin accepted the remittitur in order to avoid a new trial and judgment was entered in that amount. The Department appealed, complaining about the denial of its motions to dismiss and for summary judgment. Sharafeldin cross-appealed; he complains only about the remittitur. We granted certiorari prior to proceedings in the Court of Special Appeals, principally to review the Department’s argument that the requirement in SG § 12-202 that an action against the State or its agencies for breach of contract be brought within one year constitutes a condition precedent to the State’s waiver of its sovereign immunity in breach of contract actions, rather than a statute of limitations, and that it is jurisdictional in nature.

Because we are reviewing the judgment of the Circuit Court, rather than one of the Court of Special Appeals, the other two issues raised by the parties are also before us, although it will not be necessary for us to address them. DISCUSSION The Nature of SG § 12-202 The nature and effect of SG § 12-202 is a matter of statutory construction which, as we have often said, depends ¹³⁸ on legislative intent: did the General Assembly intend the requirement that an action subject to § 12-201 be filed within one year to be a condition to the waiver of sovereign immunity and thus a condition to the action itself, or merely a shorter statute of limitations than would otherwise apply to a breach of contract action? As we recently observed in a case involving § 12-202, in attempting to divine legislative intent, we look first to the words of the statute, “but if the true legislative intent cannot readily be determined from the statutory language alone, we look to other indicia of that intent, including the title to the bill, the structure of the statute, the interrelationship 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 Associates, 380 Md. 670 , 846 A.2d 433 (2004). The mere wording of SG § 12-202 does not inform us clearly of what the Legislature intended in this regard.

We may, as we shall explain, draw certain inferences from that wording, but it does not directly supply an answer. As we pointed out in RTKL, the question of waiving sovereign immunity in both tort and breach of contract actions was the subject of considerable study by the Legislature in the mid-1970’s. Bills to waive immunity in breach of contract actions were passed in 1974 and 1975 but were vetoed by the Governor, who preferred to await the result of a comprehensive study of the matter by a gubernatorial Commission that had been created to examine the issue. In an interim report made in February, 1976, the Commission recommended a conditional waiver of immunity in contract actions, and that report served as the basis for the enactment of what is now codified in SG §§ 12-201 and 12-202.

See 1976 Md. Laws, ch. 450. Indeed, the Legislature made specific reference to the Commission report in the bill. In its report, the Commission noted concerns that the waiver of immunity in contract actions might have a significant fiscal impact by increasing liability on the part of the State, not only for contract damages but also for the cost of having to defend actions that then were routinely dismissed on motion. ¹³⁹ 3 Responding to those concerns, the Commission observed that, in other States that had waived immunity, the fiscal impact was negligible, in part because “when the states abrogate sovereign immunity in contract, they do so subject to a number of exceptions and limitations which act to further minimize the fiscal impact.” See Report of the Governor’s Commission to Study Sovereign Immunity, November, 1976, at 40. (Emphasis added).

Perhaps keying on the word “limitations” used by the Commission, 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, 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 Sharafeldiris 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, 329 (2000), we referred to § 12-202 as providing a “period of limitations,” again as a generally descriptive term, and in RTKL, supra, 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 ¹⁴⁰ 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 at 437, n. 1 .

In neither case was the issue now before us presented. Two considerations militate against inferring an intent to regard SG § 12-202 as a mere statute of limitations, waivable at will by State agencies or their respective attorneys. We have held, 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 Katz v. Washington Sub.

San. Com’n, 284 Md. 503, 512-13 , 397 A.2d 1027, 1032 (1979); Dep’t of Natural Resources v. Welsh, 308 Md. 54, 59-60 , 521 A.2d 313, 315-16 (1986). State agencies may not, on their own, waive sovereign immunity “either affirmatively or by failure to plead it.” Welsh, 308 Md. at 60 , 521 A.2d at 316 . See also Board v. John K. Ruff, Inc., 278 Md. 580, 583 , 366 A.2d 360, 362 (1976); Bd. of Education v. Alcrymat Corp., 258 Md. 508, 516 , 266 A.2d 349, 353 (1970).

Moreover, unlike the situation in some States, we have made clear that the origin of the doctrine of sovereign immunity in Maryland did not stem from judicial fiat but was statutory in nature, and “[w]e have consistently declined to abrogate sovereign immunity by judicial fiat.” Dep’t of Natural Resources v. Welsh, supra, 308 Md. at 59 , 521 A.2d at 315 , and cases cited there. SG § 12-202 is not worded like the traditional statutes of limitations, which normally state only that an action “shall be filed within” the allowable period. See, for example, Maryland Code, Courts & Jud. Proc.

Article, § 5-101 (general three-year statute of limitations for civil actions), § 5-102 (twelve year statute of limitations for actions on specialties), § 5-104 (five year statute of limitations for action on public officer’s bond); § 5-105 (one year statute of limitations for action for assault, libel, or slander); § 5-106 (statute of limitations for prosecution of misdemeanor); § 5-109 (statute of limitations for actions against health care providers); § 5-110 (action to ¹⁴¹ enforce liability under Public Information Act); § 5-111 (action for contempt for failure to pay child or spousal support); § 5-113 (action for damages arising out of occupational disease). Those statutes say nothing about an untimely action being “barred.” Thus, we have regarded limitations as not “denying] the plaintiffs right of action, but only the exercise of the right,” Foos v. Steinberg, 247 Md. 35, 38 , 230 A.2d 79, 80 (1967). Accordingly, we have held that limitations is an affirmative defense that can be waived and that is waived unless raised in the defendant’s answer. See Maryland Rule 2-323(g); Foos, supra; Brooks v. State, 85 Md.App. 355, 365 , 584 A.2d 82, 87 (1991) (Opinion by Bell, J.).

In contrast, SG § 12-202 states that a claim under the subtitle “is barred” unless suit is filed within one year. That, we believe, was intended to preserve the effect of sovereign immunity itself, which barred the action entirely. In using that language, the Legislature could not have intended to permit subordinate agencies, or counsel for those agencies, to be able to permit an action that the Legislature expressly declared “barred” to proceed nonetheless, by simply omitting to raise the defense. That would effectively allow sovereign immunity to be waived by subordinate agencies or the attorneys who represent them which, as noted, we have consistently held they are not empowered to do.

When the predecessor to § 12-202 was first enacted in 1976, and even when the statute was re-enacted as part of the State Government Article in 1984, through the code revision process, the Federal courts had almost unanimously construed similarly worded Federal statutes as jurisdictional in nature and not as statutes of limitations that could be tolled or waived. Title 28 U.S.C. § 2401 sets time limits on the bringing of actions against the United States. Section 2401(a) provides that “every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.” (Emphasis added). Subsection (b), applicable specifically to tort claims, provides that a ¹⁴² tort claim against the United States “shall be forever barred” unless the claim is presented to the appropriate Federal agency within two years after it accrues and an action in court is filed within six months after denial of the claim by the agency.

Until 1990, the Federal courts had construed those provisions as meaning that, if an action under § 2401(a) was not brought within the prescribed