Opinion ID: 2294280
Heading Depth: 1
Heading Rank: 9

Heading: Whether The Owners' Claims Are Time-Barred

Text: The County argues that the Owners' action to obtain impact fee refunds for fees collected in fiscal years 1988 through 1991 is barred by the statute of limitations set forth in Maryland Code (1974, 2006 Repl. Vol., 2008 Supp.), Section 5-101 of the Courts and Judicial Proceedings Article (CJP). This Section states that [a] civil action at law shall be filed within three years from the date it accrues[.] CJP § 5-101. In Poffenberger v. Risser, 290 Md. 631, 636, 431 A.2d 677, 680 (1981), we held the discovery rule to be applicable generally in all actions and under this rule, a cause of action accrues when the claimant in fact knew or reasonably should have known of the wrong. The discovery rule does not contemplate constructive notice, a `creature of positive law, resting upon strictly legal presumptions which are not allowed to be controverted[.]' Id. at 637, 431 A.2d at 680-81 (citation omitted). The rule, instead, contemplates actual knowledgethat is express cognition, or awareness implied from knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry [thus, charging the individual] with notice of all facts which such an investigation would in all probability have disclosed if it had been properly pursued. Id. at 637, 431 A.2d at 681 (citation omitted). `Under the discovery rule as stated in Poffenberger limitations begin to run when a claimant gains knowledge sufficient to put her on inquiry.' Lumsden v. Design Tech Builders, Inc., 358 Md. 435, 445, 749 A.2d 796, 801 (2000) (citation omitted). Being on inquiry notice means having knowledge of circumstances which would cause a reasonable person in the position of the plaintiffs to undertake an investigation which, if pursued with reasonable diligence, would have led to knowledge of the alleged [cause of action]. O'Hara v. Kovens, 305 Md. 280, 302, 503 A.2d 1313, 1324 (1986). The County asserts, citing Moreland v. Aetna U.S. Healthcare, Inc., 152 Md.App. 288, 297, 831 A.2d 1091, 1096-97 (2003), that the discovery rule applies to the discovery of facts, not the discovery of law, and that knowledge of the law is presumed. Thus, the County argues, the Owners must be presumed to know the dates under Section 17-11-210 of the impact fee ordinance by which the County PZO and FO were required to make the challenged administrative decisions. [10] In Moreland, 152 Md.App. at 291-94, 831 A.2d at 1092-94, the COSA considered whether the plaintiffs, members of an HMO, were barred by limitations from recovering funds received by a health maintenance organization (HMO) from a tortfeasor's insurance carrier in settlement of the HMO's subrogation claim. The agreement at issue contained a clause which purported to subrogate [the HMO] to Moreland's rights of recovery against the tortfeasor and entitle it to reimbursement... of medical and hospital expenses it had paid for Moreland plus the cost of suit and attorneys' fees. Id. at 292, 831 A.2d at 1093. More than eight years after the HMO received its subrogation recovery, we held in Riemer v. Columbia Medical Plan, Inc., 358 Md. 222, 233, 747 A.2d 677 (2000) that an HMO may not pursue its members for subrogation after the members have received a financial settlement from a third-party tortfeasor, notwithstanding any contractual provision to the contrary. Moreland, 152 Md.App. at 292-92, 831 A.2d at 1093. Believing this decision entitled them to recover funds the HMO had collected in its subrogation action against a tortfeasor, the members filed their action approximately a year later. Id. at 293, 831 A.2d at 1093-94. The Circuit Court dismissed the Moreland plaintiffs' claims because their causes of action, if any, accrued on the settlement date and they did not file suit until more than three years later. The members argued to the COSA that they were not on inquiry notice of their causes of action until our decision in Riemer was issued and that their suit was timely because it had been filed within three years of that date. In asserting that they were not on inquiry notice as of the settlement date, the appellants maintained that they were not aware of their legal remedies against [the HMO], even though they were aware of all of the facts that would support the remedies[.] Id. at 297, 831 A.2d at 1096. The COSA rejected this argument, and held that the members had actual knowledge of the facts necessary to assert a claim against [the HMO] for wrongfully exercising a subrogation lien. Id. at 298, 831 A.2d at 1096-97. As it explained, `[k]nowledge of facts, ... not actual knowledge of their legal significance, starts the statute of limitations running. The discovery rule ... applies to discovery of facts, not to discovery of law. Knowledge of the law is presumed.' Id. at 297-98, 831 A.2d at 1096 (quoting Miller v. Pac. Shore Funding, 224 F.Supp.2d 977, 986-87 (D.Md.2002)) (citations omitted). The COSA rejected the members' accrual theory because it was premised entirely on notice of the law, not notice of facts. Id. at 298, 831 A.2d at 1097. We agree that notice of facts, and not the law, is the trigger for commencement of the limitations period. The Owners were, indeed, presumed to have had knowledge of the County impact fee ordinance. But it does not follow that the Owners' presumed knowledge of the ordinance alone would prompt them to undertake an investigation that would reveal the alleged entitlement to a refund. When the County did not publish notice within the time prescribed in Section 17-10-210(b), the Owners were entitled to draw the reasonable conclusion that there were no available refunds because either (1) the collected fees had been expended or encumbered or (2) the County PZO validly extended the time for expending or encumbering fees. There is a strong presumption that public officers properly perform their duties. Lerch v. Maryland Port Auth., 240 Md. 438, 457, 214 A.2d 761, 771 (1965). See also, e.g., In re Bennett, 301 Md. 517, 526, 483 A.2d 1242, 1246 (1984)(applying the presumption). Because the Owners reasonably could draw this conclusion, there was no reason for them to file a Public Information Act request seeking the precise documents and information that they requested in discovery in the present case, as the County contends they should have. [11] The County had the burden of proving both discovery rule componentsthe Owners' knowledge of facts sufficient to prompt investigation and that a diligent investigation would have revealed their cause of action. See Pennwalt Corp. v. Nasios, 314 Md. 433, 449, 550 A.2d 1155, 1163-64 (1988). The County did not, however, offer any evidence, other than a presumed knowledge of the impact fee ordinance, that the Owners were aware of facts that would prompt an earlier inquiry. [12] Accordingly, we conclude that the Circuit Court did not err in ordering that refunds are due for fees collected in 1988 through 1991.