Washington Suburban Sanitary Commission v. Pride Homes, Inc.

Smith, J., delivered the opinion of the Court. We shall here hold that limitations do not run against the Washington Suburban Sanitary Commission because it is an agency of the State. Hence, we shall reverse the holding of the Court of Special Appeals in Wash. Sub.

San. Comm’n v. Pride Homes, 47 Md. App. 390 , 422 A.2d 1298 (1980). ⁵³⁸ Pride Homes, Inc., granted an easement to the Commission in 1968 "for the installation, construction, reconstruction, maintenance, repair, operation and inspection of a sanitary sewer and a water main and appurtenances thereto, including service connections within said easement,” etc. The Commission sued Pride. It alleged that "subsequent to the construction of the Plaintiffs sewer line, but prior to February, 1975, the Defendant and its agents, servants and employees, did trespass and continues [sic] to trespass upon said right of way,” that they "place[d] thereon vast quantities of earth to the depth of approximately 20 feet,” and that these "deposits of earth caused the sewer line to buckle, deflect, fracture and collapse creating a stoppage causing sewage to overflow into [certain] residences ... on or about February 1,1975.” An amended declaration was filed against Pride and certain individuals, who were officers of Pride, possibly as a result of extensive discovery. The trial court and the Court of Special Appeals held that the Commission’s claim is barred by the statute of limitations.

The Commission contends that limitations do not run against it since it is an agency of the State. The Commission was created by Chapter 122 of the Acts of 1918. It is charged with the duty of providing water and sewer service in the Washington Suburban Sanitary District, which comprises most of Prince George’s and Montgomery Counties, the Maryland counties contiguous to the District of Columbia. We have taken pains to point out that it was created by a public general law.

See, e.g., Katz v. Washington Sub. San. Comm’n, 284 Md. 503, 512 , 397 A.2d 1027 (1979); Barranca v. Prince George’s Co., 264 Md. 562, 567-68 , 287 A.2d 286 (1972) 1 and Bowie v. Wash. Sub.

San. Comm’n, 249 Md. 611, 615-16 , 241 A.2d 396 (1968). ⁵³⁹ In Katz, 284 Md. at 509-12 , we specifically held the Commission to be a State agency, likening it to its "sister agency,” the Maryland-National Capital Park and Planning Commission which we held in O & B, Inc. v. Md.-Nat’l Cap. P. & P., 279 Md. 459, 466 , 369 A.2d 553 (1977), to be "a state agency for the purpose of determining its right to invoke the doctrine of sovereign immunity.” (For the term "sister agency” see Md.-Nat’l Cap. P. & P. v. Mont.

Co., 267 Md. 82, 90 , 296 A.2d 692 (1972).) That holding was in no way inconsistent with our earlier decision in Neuenschwander v. Wash. San. Comm., 187 Md. 67 , 48 A.2d 593 (1946), which the Court of Special Appeals chided us for not having mentioned in Katz . The holding there, 187 Md. at 75 , was that the Commission had sufficient of "[t]he attributes of a municipal corporation” to bring it within the provision of a statute applicable in certain counties which, as a prerequisite to suit in certain instances, required written notice within 90 days after an injury or damage was sustained.* 2 Although now somewhat modified since passage of Chapter 450, Acts of 1976, as to contracts, the doctrine of sovereign immunity prevails in Maryland. 3 Katz, 284 Md. at 507 . ⁵⁴⁰ Chief Judge Murphy pointed out for the Court in Katz , "Although originally based on the tenet that 'the King can do no wrong,’ the doctrine is presently viewed as a rule of policy which protects the State from burdensome interference with its governmental functions and preserves its control over State agencies and funds.” Id. at 507 (citing cases).

In Central Coll. Unit v. Atl. Con. Line, 277 Md. 626, 627 , 356 A.2d 555 (1976), Judge Singley said for the Court, "The question which is squarely raised by this appeal is whether the doctrine of sovereign immunity precludes a defendant’s assertion of limitations as a defense to an action brought by the State in its sovereign capacity.” We held that it did.

We considered the matter at some length in order to distinguish Goldberg v. Howard Co. Welfare Bd., 260 Md. 351 , 272 A.2d 397 (1971), upon which Atlantic relied. We held in Goldberg that limitations were not a bar in an action growing out of the exercise of a governmental function by a political subdivision of the State. 260 Md. at 358 . A corollary to this rule was expressed by Judge McWilliams for the Court in Siejack v. City of Baltimore, 270 Md. 640, 644 , 313 A.2d 843 (1974): "Quite likely nothing is more solidly established than the rule that title to property held by a municipal corporation in its governmental capacity, for a public use, cannot be acquired by adverse possession,” citing a number of our prior- cases. See, also, Ulman v. Charles St. Ave.

Co., 83 Md. 130, 144-45 , 34 A. 366 (1896), and Hall v. Gittings, 2 H. & J. 112, 114 (1807), as to the State. Pride has seized upon certain of our language in Goldberg . We there said, "We have no intention in this opinion of ⁵⁴¹ reviewing all possible contingencies which may arise wherein limitations may or may not validly be interposed as a defense in a suit brought by a governmental agency or municipality.” 260 Md. at 358 . We quoted from 51 Am.

Jur. 2d Limitation of Actions § 412 (1970) to the effect that where a distinction is recognized in actions by political subdivisions between those based upon "private” or "proprietary” rights and those based upon "public” or "governmental” rights, "the inquiry is whether the state, or its agency or subdivision, is asserting public rights on behalf of all the people of the state or merely private rights on behalf of a limited group.” Pride regards this language as controlling here, claiming, "There is no question but that the plaintiff in Goldberg was a state agency and that the court was squarely presented with the question as to whether the proprietary-governmental distinction should be recognized.” They fail to recognize the changes wrought by Chapter 148 of the Acts of 1967. That act rescinded the former provisions of Code (1957) Art. 88A, § 13 (a) which specified that each county welfare board was to "be an administrative department of the local government.” It follows, accordingly, that Pride is in error in its reference to "the aforementioned state agency” as having been involved in Donnally v. Welfare Board, 200 Md. 534 , 92 A.2d 354 (1952) (emphasis added). The holding of the Court there and in the predecessor case of Montgomery Co., etc. v. Donnally, 195 Md. 442 , 73 A.2d 505 (1950), was that the provision of Maryland Code (1939) Art. 93, § 112 stating that "the creditor shall be forever barred” if suit were not filed against a personal representative within nine months after rejection of a claim by the personal representative "create[s] a statutory bar, as distinguished from a mere period of limitations, which may be waived. . . . Hence, it extinguishes the right to sue and not merely the remedy.” 200 Md. at 540 -41 (citing cases).

It was pointed out in the course of the second opinion that where claims for reimbursement for such public assistance advanced had formerly been "accorded priority ..., second only to funeral expenses,” by Chapter 700 of the Acts of 1947, this was changed and such claims were "relegated to the ⁵⁴² status of a common debt.” 200 Md. at 541-42 . The Court there rejected a contention "that the State can assert its right through the county board on the ground that the Board is exercising governmental powers of the State,” and the attempt to "invoke[] the general rule that Statutes of Limitation do not run against the State unless the statutes expressly so provide.” Id. at 542 . It is suggested that Central Collection "does not aid [the Commission] because this Court later held in Katz ... that the ... Commission had waived sovereign immunity.” We did not hold that the Commission had waived sovereign immunity.

In fact, it is doubtful whether the Commission as such could waive such immunity. See, e.g., Bd. of Education v. Alcrymat Corp., 258 Md. 508, 513-16 , 266 A.2d 349 (1970). We referred in Katz to Washington Suburban Sanitary District Code (1970) § 1-3 which provided that "[i]n the event of a judgment at law or in equity being recovered against said commission,” then that Commission, "at the annual tax levying period of the county council of Montgomery County and the county commissioners of Prince George’s County next succeeding the rendition of said judgment... [was to] certify to said county council of Montgomery County and county commissioners of Prince George’s County, a tax rate, in addition to that required for its interest, serial bonds and sinking fund requirements, that will, when levied and collected under the provisions of [that Code], produce an amount sufficient to satisfy said judgment ... including costs and counsel fees____” 4 284 Md. at 514 . We said, "[A] ⁵⁴³ legislative waiver of sovereign immunity is ineffective unless specific legislative authority to sue the agency has been given, and unless there are funds available for the satisfaction of the judgment, or power reposed in the agency for the raising of funds necessary to satisfy a recovery against it.” 284 Md. at 513 (citing cases).

We pointed out that this provision of § 1-3 was not a part of the section as it was originally enacted, but was added by Chapter 506 of the Acts of 1927 in apparent response to the decision in Washington Suburban Sanitary Commission v. Magruder, 12 F.2d 832 (D.C. Cir. 1926), which held that although the Commission could "sue and be sued,” it was nevertheless