Opinion ID: 2193202
Heading Depth: 2
Heading Rank: 1

Heading: This Court's Authority to Recognize American Pipe Tolling

Text: As a threshold matter, we first consider the issue of whether this Court has the authority to recognize a tolling exception to statutes of limitations akin to the American Pipe class action tolling exception. Although, as petitioners quite correctly point out, our precedents generally have been less than hospitable to the concept of judicially created tolling exceptions, this lack of hospitality is not uniform. In short, although we have on several occasions declined to recognize tolling exceptions, we have been willing to do so when the tolling exception was consistent with the purposes of statutes of limitations. Thus, because the version of American Pipe tolling we find to be preferable is consistent with the purposes of statutes of limitations, we conclude that we do have the authority to recognize this version of American Pipe tolling. In Bertonazzi v. Hillman, 241 Md. 361, 216 A.2d 723 (1966), we recognized a tolling exception to a statute of limitations, and, in the course of doing so, delineated the scope of our authority to recognize such exceptions. There, we addressed the issue of whether a statute of limitations for the filing of a claim against a decedent's estate that required such a suit to be filed within six months after the qualification of the estate's personal representative was tolled during the pendency of an action against the estate that had been filed in the wrong venue. [2] See Bertonazzi, 241 Md. at 363-64, 216 A.2d at 724-25. Appellant, mistakenly believing that appellee resided in Baltimore County rather than Baltimore City after misreading a map, filed suit in Baltimore County within the six month limitations period. Id. at 363, 216 A.2d at 724. After the suit in Baltimore County was dismissed for improper venue, appellant then filed suit in Baltimore City, the proper venue, but only after six months had passed from the time of the appointment of the personal representative. Id. at 364, 216 A.2d at 724. Appellant argued that the statute of limitations was tolled during the pendency of the suit in Baltimore County, but the Baltimore City trial court rejected this argument and dismissed the case. Id. at 364, 216 A.2d at 724-25. We reversed the judgment of the trial court, holding that the running of the statute of limitations was tolled during the pendency of the suit in Baltimore County. Id. at 365, 216 A.2d at 725. In support of our holding, we first noted that, at the time, Maryland was one of the few jurisdictions without a savings rule that permitted a suit filed prior to the expiration of the applicable limitations provision that was dismissed for a reason unrelated to the merits to be refiled within a specified time period. Id. We then examined the tolling rule urged by the plaintiff in light of the purposes statutes of limitations are intended to serve. See id. at 366-67, 216 A.2d at 726. In this vein, we noted that [s]tatutes of limitations are designed primarily to assure fairness to defendants on the theory that claims, asserted after evidence is gone, memories have faded, and witnesses disappeared, are so stale as to be unjust. Id. at 367, 216 A.2d at 726. Under the facts in Bertonazzi, we concluded that tolling the running of the limitations period during the pendency of the suit filed in the improper venue was consistent with this primary purpose because the appellee ... was as fully put on notice of the appellant's claim by suit in Baltimore County as she would have been by suit in Baltimore City. Id. (emphasis added). The rule we established in Bertonazzi may be distilled as follows: we will recognize a tolling exception to a statute of limitations if, and only if, the following two conditions are met: (1) there is persuasive authority or persuasive policy considerations supporting the recognition of the tolling exception, and (2) recognizing the tolling exception is consistent with the generally recognized purposes for the enactment of statutes of limitations. See id. at 366-67, 216 A.2d at 726 (noting that our interpretation of the statute of limitations at issue in Bertonazzi is consistent with the purposes and aims of limitation statutes generally and is supported by eminent and persuasive authority); see also Weaver v. Leiman, 52 Md. 708, 718 (1880) (observing that running of a statute of limitations may be suspended if there is a certain and well-defined exception clearly established by judicial authority (emphasis added)). The second condition ensures that our recognition of a tolling exception to a statute of limitations does not invade the prerogative of the General Assembly. See id. at 367-68, 216 A.2d at 726-27 (noting that tolling exceptions can be recognized when they gratif[y] legislative intent, and in order to prevent perversion of the policy and purpose of a statute of limitations). [3] The cases where we have refused to recognize a tolling exception to a statute of limitations are not inconsistent with this rule. For instance, in Walko Corp. v. Burger Chef, 281 Md. 207, 378 A.2d 1100 (1977), we declined to recognize a tolling exception to the default three year statute of limitations on civil actions. Walko, 281 Md. at 208, 378 A.2d at 1100. In Walko, appellant argued that the statute of limitations was tolled during the pendency of its motion to intervene in another suit involving appellee in the United States District Court for the District of Columbia, rendering its subsequent suit against appellee timely. See id. at 209, 378 A.2d at 1101. In rejecting appellant's claim that the pendency of his motion to intervene tolled the statute of limitations, we contrasted appellant's proposed tolling exception with the exception we recognized in Bertonazzi, effectively concluding that appellant's proposed tolling rule did not meet either of the Bertonazzi requirements. See id. at 214-15, 378 A.2d at 1104 ([w]hatever facts may have been present in Bertonazzi ... that moved us ... do not exist here). We did not find that the first requirement, that the proposed tolling exception needs to be supported by persuasive authority or argument, was met, because appellant's proposed tolling rule would permit a plaintiff to effectively postpone the running of the statute [of limitations] for an indefinite period of time. Id. at 215, 378 A.2d at 1104. Nor did we find that the second Bertonazzi requirement, consistency with the purposes of statutes of limitations, had been met. We found that appellant's actions did not rise to a level of ordinary diligence in pursuing a cause of action, and thus concluded that permitting tolling under these circumstances would be inconsistent with the legislative intent behind statutes of limitations, which embody a legislative judgment of what is deemed an adequate period of time in which `a person of ordinary diligence' should bring his action. Id. (quoting Ferrucci v. Jack, 255 Md. 523, 526, 258 A.2d 414, 415 (1969)). In other cases in which we have declined to recognize a tolling exception to a statute of limitations, we have also found, as we did in Walko, that the tolling exception under examination failed to meet one or both of the Bertonazzi requirements. See, e.g., Booth Glass Co. v. Huntingfield Corp., 304 Md. 615, 624-25, 500 A.2d 641, 645-46 (1985) (declining to recognize a tolling exception that would suspend the running of the statute of limitations applicable to a claim based on negligent installation of a product during the time that the installer of the product attempted to repair the product because there was authority only for the proposition that the initiation of repairs suspends the running of the statute of limitations on a theory of equitable estoppel, and, under Maryland law, equitable estoppel can suspend the running of a statute of limitations only if the defendant holds out an inducement not to file suit or indicates that limitations will not be plead, neither of which is accomplished by undertaking repairs of a product alleged to have been negligently installed); Burket v. Aldridge, Adm'r, 241 Md. 423, 428, 216 A.2d 910, 912 (1966) (declining to recognize a tolling exception that would toll the general three-year statute of limitations applicable to tort actions upon the alleged tortfeasor's death because the absence of an express statutory provision providing for such tolling was understandable in the light of the purposes of Statutes of Limitations); McMahan v. Dorchester Fert. Co., 184 Md. 155, 159-60, 40 A.2d 313, 315-16 (1944) (declining to recognize a tolling exception to a twelve-year statute of limitations for initiation of an action to collect on a note that would suspend the running of the statute upon a payment of principal on grounds that the statute expressly provided for a three-year suspension upon each payment of interest, indicating the legislature had expressly considered when and how payments on the note should suspend the running of the limitations period and decided that payments of principal should not suspend the running of the limitations period). In assessing whether we have authority to recognize a version of the American Pipe class action tolling rule, it is also significant that the principal justification for recognition of such a rule is that it is necessary to preserve the integrity of the class action procedures set out in Md. Rule 2-231. The Rules of Procedure established by this Court in its exercise of its rulemaking power have the force of law. See Dotson v. State, 321 Md. 515, 523, 583 A.2d 710, 714 (1991). Thus, insofar as our recognition of an American Pipe class action tolling rule is grounded in Rule 2-231, it differs from those situations where we have declined to recognize a tolling exception in part because there was no provision in existing law that supported the tolling exception. Compare Booth, 304 Md. at 624, 500 A.2d at 645 (declining to recognize a tolling exception because the legislature... made no such provision that would toll the statute in accordance with the proposed tolling exception) with Walko, 281 Md. at 211-12, 378 A.2d at 1102 (concluding that the statute of limitations would not be tolled during pendency of a motion to intervene [a]bsent a statutory provision saving the plaintiff's rights to bring suit upon denial of the motion to intervene). Indeed, this Court not only has the authority to adopt rules that alter the operation of existing statutes of limitations, it has exercised its rulemaking authority to adopt such a rule. Maryland Rule 2-101(b), added to the Maryland Rules in 1992, provides as follows: Except as otherwise provided by statute, if an action is filed in a United States District Court or a court of another state within the period of limitations prescribed by Maryland law and that court enters an order of dismissal (1) for lack of jurisdiction, (2) because the court declines to exercise jurisdiction, or (3) because the action is barred by the statute of limitations required to be applied by that court, an action filed in a circuit court within 30 days after the entry of the order of dismissal shall be treated as timely filed in this State. Thus, to the extent that Rule 2-231 provides authority for our recognition of a version of the American Pipe class action tolling rule, our adoption of Rule 2-101(b) provides support for our recognition of such a rule, because our adoption of Rule 2-101(b) provides precedent for alteration of existing statutes of limitations by a Maryland Rule.