Court Opinion

ID: 4190568
Source: CourtListenerOpinion
Date Created: 2017-07-28 15:08:32.27723+00
Date Added: 2024-06-11T07:46:40.839891
License: Public Domain

Richard and Daphne Ceccone v. Carroll Home Services, LLC
No. 85, September Term 2016

Limitations – Contracts – Shortening Statute of Limitations by Contract. With certain
exceptions specified by the General Assembly, the statutory period of limitations for tort
and contract claims in Maryland is three years. Maryland Code, Courts & Judicial
Proceedings, §5-101. A provision of a contract that purports to shorten this period of
limitations will be enforced in Maryland only if (1) there is no controlling statute to the
contrary; (2) the provision is not the result of fraud, duress, misrepresentation, or the like;
and (3) the provision is reasonable. In assessing the reasonableness of such a provision,
the court should make an explicit determination whether the provision is reasonable,
considering a variety of factors, including the subject matter of the agreement, the degree
to which the provision shortens the applicable period of limitations, the relative bargaining
position of the parties, and whether the shortened period of limitations is one-sided or
applies equally to the parties to the agreement.
Circuit Court for Anne Arundel County
Case No. C-02-CV-16-001190
Argument: June 1, 2017
                                              IN THE COURT OF APPEALS
                                                   OF MARYLAND

                                                            No. 85

                                                  September Term 2016

                                             RICHARD AND DAPHNE CECCONE

                                                              V.

                                             CARROLL HOMES SERVICES, LLC

                                        _____________________________________

                                                   Barbera, C.J.
                                                   Greene
                                                   Adkins
                                                   McDonald
                                                   Watts
                                                   Hotten
                                                   Getty,

                                                      JJ.

                                        ______________________________________

                                                Opinion by McDonald, J.

                                        ______________________________________

                                                  Filed: July 28, 2017
       In the court system, a potential plaintiff has an interest in having sufficient time to

investigate and assert a claim. A potential defendant has an interest in repose and finality

as to whether it will be necessary to mount a defense. The public has an interest in the

efficient use of public resources – what, in this context, is sometimes called judicial

economy. The Legislature, as the primary policy-making branch of government, weighs

those competing interests and establishes statutory limitations periods for bringing claims

in court.

       Maryland law, nevertheless, allows parties, in some circumstances, to further

restrict access to the courts by shortening limitations periods by contract. When will the

courts recognize such clauses as superseding the legislative policy determination as to an

appropriate period of limitations? Given the wide variety of contracts, the creativity of

lawyers in devising contract clauses, and the disparity in bargaining power that sometimes

exists, there is no simple answer.

       This case concerns the standard “General Terms and Conditions” of a residential

furnace maintenance agreement offered by Respondent Carroll Home Services, LLC

(“CHS”).1 One of those terms reduced the period for a consumer to bring a tort or contract

claim against CHS from the statutory three years to one year, although it did not limit the

time period for CHS to make a claim against a consumer. Petitioners Richard and Daphne

       1
       The Respondent has identified itself in its filings in this Court as “Petroleum Heat
and Power d/b/a Carroll Home Services.”
Ceccone, who had entered into a maintenance agreement with CHS, asserted tort and

contract claims against CHS for damage to their residence that they attributed to the

company. They filed their complaint well before the expiration of three years, but arguably

more than a year after their claims accrued. The Circuit Court for Anne Arundel County

dismissed their complaint on the basis of the shortened limitations provision in the

agreement.

       We adopt the approach previously articulated by the Court of Special Appeals and

hold that contractually-shortened limitations periods, like the one at issue here, are valid

only if (1) there is no statute to the contrary; (2) the provision is not the result of fraud,

duress, misrepresentation, or the like; and (3) the provision is reasonable in light of all

pertinent circumstances. Because the Circuit Court did not consider potential contract

defenses or make an explicit finding on reasonableness, we remand the case to that court

so that it may decide how those factors affect the validity of the limitations-shortening

provision in the first instance.

                                              I

                                        Background

A.     Facts

       The Maintenance Agreement

       At the time of the events underlying this case, the Ceccones heated their home in

Anne Arundel County by means of an oil-fueled furnace.2 They entered into a maintenance

       2
       This case reaches us as the result of the grant of a motion to dismiss the complaint.
Accordingly, we assume the truth of the facts set forth in the complaint and its attached
                                              2
agreement for that furnace with CHS. CHS offered the maintenance agreement – titled

“Carroll Home Services Ultra Oil Plan” – to customers to whom it supplied oil.

       Under the maintenance agreement, CHS agreed to provide 24-hour-a-day service

for no-heat emergencies, to repair specified boiler parts if they became defective due to

normal wear and tear, and to conduct a yearly “tune-up” of the heating system. The

customer agreed to properly vent the heating system, to maintain clean air filters, and to

replace batteries as needed, among other things.3

       The “General Terms and Conditions” of the agreement appear in 18 numbered

paragraphs on the back of the pre-printed form that comprises the agreement. Among the

items set forth in those paragraphs are the duration of the agreement, procedures for

cancellation, conditions for coverage under the agreement, exclusions from coverage,

disclaimers of warranties, notices of costs a customer will incur for late payment or non-

payment, and limitations of CHS’s liability, among other things. Pertinent to this case,

Paragraphs 9 and 10 provide as follows4:

exhibits. See RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md. 638, 643 (2010). In
any event, there does not appear to be any dispute concerning the terms of the maintenance
agreement, which is the operative legal document pertaining to the issue before us.
       3
         The record does not disclose how much the Ceccones paid CHS for the agreement,
but the pre-printed terms indicate that a customer would “receive an invoice ... with [the]
Agreement,” which must be paid “in full upon receipt” or be subject to late fees and
collection costs.
       4
         The agreement defines the pronouns “we,” “us,” “our,” and “ours” to refer to the
Seller – i.e., CHS. The pronouns “you,” “your,” and “yours” are defined to refer to the
Buyer – i.e., the Ceccones. It is perhaps also notable that the quoted paragraphs, as well
                                            3
       9. IRREGULAR PAYMENT AND DELAY IN ENFORCEMENT – We
       can accept late payments, partial payments or payments marked “payment in
       full” without losing any of our rights under this Agreement. We can also
       delay enforcing any of our rights under this Agreement without losing any of
       our rights under this Agreement.

       10. LIMITS OF LIABILITY – We will not be responsible for loss or
       damages due to or resulting from: changes in oil consumption; improper
       operation of an attic fan or alternate fuel device; your failure to schedule
       service and or tune-ups; acts of God; terrorism; strikes; riots; material or
       labor shortages; fire; flood; hurricane; power interruption or loss; accidents;
       governmental acts; abuse or misuse of equipment; spontaneous part failure;
       insufficient water; frozen or jelled oil lines; or any other conditions beyond
       our reasonable control, including a vacant, unattended or unoccupied
       premises (in this Agreement, the term “vacant or unattended premises” shall
       mean premises at which no adult occupant is present for at least twenty-four
       (24) consecutive hours). TO THE MAXIMUM EXTENT PERMITTED BY
       LAW, we will have no liability for direct or indirect, special or consequential
       damages of any kind. We are not responsible for secondary damage as a
       result of a delay in rendering service. To the extent any warranty exists, our
       liability for any warranty claim will be limited, as permitted by law, to the
       repair or replacement of defective parts or service provided under this
       Agreement. Any and all actions, whether based in contract or tort, whether
       for personal injury or property damage, and whether brought by Buyer or
       Buyer’s insurance company, must be commenced within one year of the
       cause of action or shall be barred as a matter of law. IN NO EVENT
       SHALL OUR LIABILITY TO YOU OR OTHERS UNDER THIS
       AGREEMENT OR OTHERWISE EXCEED $1,000, INCLUDING ANY
       LIABIILTY UNDER SECTION 11.

(capitalized emphasis in original; italicized emphasis added). As is evident, Paragraph 10

provides that any actions brought by the Buyer – i.e., the Ceccones – including tort or

contract claims must be brought within one year of accrual of the cause of action. This

provision was apparently intended to shorten the three-year period of limitations that would

as the other terms and conditions, appear in a considerably smaller font than they do in this
opinion.

                                             4
otherwise apply to such claims pursuant to Maryland Code, Courts & Judicial Proceedings

Article (“CJ”), §5-101. There is no corresponding provision that shortens the period of

limitations for CHS or that requires it to bring a claim within one year. Rather, Paragraph

9 purported to permit CHS to delay enforcing its rights under the agreement “without losing

any of [its] rights under the agreement.”

       An Incident with the Furnace

       During April 2014, there was an incident involving the Ceccones’ furnace that

caused some damage to their home. For purposes of this opinion, the details of that incident

and the damages are not important. It suffices to say that the Ceccones suspected that

faulty maintenance by CHS was responsible. According to the Ceccones, they consulted

with an engineer and insurance adjuster, as well as another furnace maintenance company,

all of which confirmed their belief that CHS was at fault.          After conducting that

investigation, they asked CHS to pay the cost of remedying the damage. Some negotiations

ensued during 2015, but the parties ultimately did not agree on a resolution.

B.     Legal Proceedings

       Proceedings in the District Court

       On December 24, 2015, the Ceccones filed a pro se small claims action in the

District Court of Maryland sitting in Anne Arundel County. See CJ §4-405; Maryland Rule

3-701. The Ceccones sought damages in the amount of $3,694.39, as well as costs. The

complaint alleged that CHS had improperly maintained their heating system, and that this

improper maintenance was both fraudulent and a breach of the parties’ contract. CHS filed

a Notice of Intend to Defend on January 19, 2016. On January 29, 2016, the Ceccones

                                             5
filed an amended complaint that added documentation concerning the requested damages

and increased the amount requested by about $70. The amended complaint also added an

allegation that CHS had not complied with certain licensing requirements.5

       On March 17, 2016, the District Court dismissed the case, apparently on the basis

of the shortened limitations period set forth in the maintenance agreement, and entered

judgment in favor of CHS. The Ceccones then pursued a de novo appeal in the Circuit

Court for Anne Arundel County. See CJ §12-401(f) (providing for de novo appeal in a

circuit court when the amount in controversy does not exceed $5,000); Maryland Rule 7-

102.

       Proceedings in the Circuit Court

       The Circuit Court conducted a brief hearing on the matter on July 8, 2016. At the

outset, counsel for CHS noted that CHS denied liability, but advised the court that he

wished to raise a limitations defense as a “preliminary matter.” He directed the court’s

attention to the limitations-shortening provision in the maintenance agreement and asserted

       5
          In that regard, the Ceccones asserted that CHS did not employ a heating,
ventilation, air-conditioning, and refrigeration (“HVAC-R”) master technician as required
by law, that CHS had falsely represented that it did properly employ an HVAC-R
technician at the time the parties entered into the contract, and that this allegedly false
representation was fraudulent. Although not entirely clear from the complaint, it appears
that the Ceccones asserted that the alleged fraud was both (1) an independent tort and
therefore a basis of recovery and (2) a basis on which to rescind the contract.

                                            6
that the Ceccones were “on notice” of a potential claim as of October 2014,6 more than a

year before they filed suit in December 2015.

       The Circuit Court then turned to Mr. Ceccone, who argued that the shortened

limitations period should not be enforced and proceeded to relate some of the reasons why

the Ceccones believed that CHS had made misrepresentations that affected the

enforceability of the contract. After hearing briefly from counsel for CHS concerning some

of those allegations, the Circuit Court engaged in the following discussion with Mr.

Ceccone concerning whether the shortened limitations provision should supersede the

statutory three-year period for tort and contract claims:

           THE COURT:         Well, sir, I don’t think I can get around the language
                              of the contract. The contract is very clear that the
                              action must be filed within one year. And that’s clear.
                              You contracted that way and that’s part of the
                              contract.

           MR. CECCONE: But I entered into the contract, Your Honor, as a result
                        of believing that they were properly licensed.

           THE COURT:         Well, you – but you may have some action with the –
                              whoever regulates that company, bringing it to their
                              attention. But so far as the Court is concerned you
                              entered into a contract. You know what a contract is
                              because you’re in the real estate business. The terms
                              are very clear. It says it must be filed within one year
                              regardless of all of the background.

           MR. CECCONE: Well, Your Honor, I discovered on January of this
                        year that, in fact, they did not provide – they were not
                        properly insured to perform that work.

       6
        It is not entirely clear from the record why CHS believed that the claim accrued in
October 2014. In its filings and argument in this Court, CHS appears to argue that any
claim accrued in April 2014.

                                              7
          THE COURT:         Well, and maybe that’s something you can take up
                             with the regulatory agency. But that’s not anything I
                             can do – handle. I’m only here on the contract. The
                             contract is clear that you must file the action within
                             one year.

                             And so I have no other –

          MR. CECCONE: But the statute of limitations is three years. That’s the
                       statutory –

          THE COURT:         That’s the general. But you can contract it out. You
                             can contract and make it six months, three – 30 days.

           MR. CECCONE: But who’s –

          THE COURT:         That’s between you and [CHS].

          MR. CECCONE: Yeah. But would a reasonable person determine that
                       that’s a reasonable amount of one year?

          THE COURT:        Well, I’ve seen it before.

          MR. CECCONE: Well, that’s – I understand that’s the case. You’ve seen
                       it before. But what’s basically happened is, is the
                       contractor is setting an arbitrary amount of time for
                       someone –

          THE COURT:        Well, you could have, when you entered into the
                            contract, said, look, I’m not going to agree to one year.
                            It’s got to be three years. You could have said that and
                            then put that in the agreement. But you know what a
                            contract is being in the real estate business. Whatever
                            it’s contracted for, you’re stuck with.

After further discussion with Mr. Ceccone about whether the allegedly false

representations by CHS could be a basis for rescinding the contract, including the one-year

limitations period, the Circuit Court rendered judgment in favor of CHS based on

limitations.

                                             8
       After judgment was entered in CHS’s favor, the Ceccones appealed to the Court of

Special Appeals. Because any further appellate review in this case properly belongs in this

Court,7 the Court of Special Appeals transferred the appeal to this Court pursuant to

Maryland Rule 8-132. We treated the Notice of Appeal as a petition for a writ of certiorari,

which we granted.

                                             II

                                         Discussion

       There is a single issue presented for our review:8 In dismissing the complaint, did

the Circuit Court properly determine that the shortened one-year period of limitations set

forth in the maintenance agreement superseded the three-year statutory period of

limitations?

A.     Standard of Review

       When deciding whether to grant a motion to dismiss a complaint as a matter of law,

a trial court is to assume the truth of factual allegations made in the complaint and draw all

reasonable inferences from those allegations in favor of the plaintiff. When an appellate

court reviews a trial court’s grant of a motion to dismiss, the appellate court applies the

same standard to assess whether the trial court’s decision was legally correct. Heavenly

       7
           CJ §12-305.
       8
          The Ceccones initially attempted to raise a number of other issues pertaining to
the proceedings in the District Court and the Circuit Court, but have properly focused their
brief in this Court on the basis of the Circuit Court’s dismissal of their action. That is the
issue that we address.

                                              9
Days Crematorium, LLC v. Harris, Smariga and Associates, Inc., 433 Md. 558, 568 (2013).

Because this review concerns resolution of a question of law, an appellate court does not

accord any special deference to the trial court.

B.     Enforcement of Contractual Limitations Clauses

       Statutes of limitations are designed to balance the competing interests of plaintiffs,

defendants, and the public. A statutory period of limitations represents a policy judgment

by the Legislature that serves the interest of a plaintiff in having adequate time to

investigate a cause of action and file suit, the interest of a defendant in having certainty

that there will not be a need to respond to a potential claim that has been unreasonably

delayed, and the general interest of society in judicial economy. Pennwalt Corp. v. Nasios,

314 Md. 433, 437-38 (1988); Pierce v. Johns-Manville Sales Corp., 296 Md. 656, 665

(1983). In enacting the three-year statute of limitations that governs most tort and contract

actions, the General Assembly thus made a policy decision as to an appropriate deadline

for the filing of such a claim by a reasonably diligent plaintiff. See CJ §5-101.9

       9
         With respect to some specific types of claims, the General Assembly has made a
different policy decision and determined that a longer or shorter period of limitations is
more appropriate. See, e.g., CJ §5-102 (12-year period of limitations for suits on
“specialties”); CJ §5-105 (one-year period of limitations for assault, libel, and slander
actions); CJ §5-109 (establishing limitations period for medical malpractice actions of
either five years or three years after discovery, whichever is earlier); Maryland Code,
Commercial Law Article, §2-725 (establishing four-year period of limitations for sales
contracts, but allowing parties to reduce the limitations period to one year by agreement);
Maryland Code, Corporations & Associations Article, §11-703(f)(2) (one-year period of
limitations for certain securities actions).

                                             10
       This is not to say that a period of limitations is immutable. Statutes of limitation

are not ordinarily jurisdictional, and parties may essentially lengthen them by waiving

limitations10 or by agreeing to toll the period of limitations for a particular claim that might

otherwise become barred.11 Similarly, parties may, in some circumstances, agree to

shorten the period of limitations in a way that the courts will recognize.

       States have taken different approaches as to whether, and the extent to which, parties

to a contract may agree in advance to shorten a statutory limitations period. Among the

states that prohibit such provisions, some have enacted laws containing such a

prohibition,12 while others have imposed that prohibition judicially on the basis of public

policy.13 In other states, courts appear to allow for contractually-shortened limitations

periods, absent a defense to contract formation.14        Many courts have assessed such

       10
            Kim v. Comptroller of Treasury, 350 Md. 527, 536 (1998).
       11
         Milton Co. v. Council of Unit Owners of Bentley Place Condominium, 354 Md.
264, 274-76 (1999).
       12
          See, e.g., Code of Alabama, §6-2-15 (holding such agreements “void”); Florida
Statutes §95.03 (same); cf. Texas Statutes, Civil Practice and Remedies Code, §16.070
(same, unless the contract “relat[es] to the sale or purchase of a business entity” where
there is an exchange of consideration and the contract is worth at least $500,000).

        Dunlop Tire & Rubber Corp. v. Ryan, 108 N.W.2d 84 (Neb. 1961) (holding such
       13

agreements void as “against public policy”).
       14
          Rory v. Continental Ins. Co., 703 N.W.2d 23, 31 (Mich. 2005) (“[A]n
unambiguous contractual provision providing for a shortened period of limitations is to be
enforced as written . . . A mere judicial assessment of ‘reasonableness’ is an invalid basis
upon which to refuse to enforce contractual provisions.”)

                                              11
provisions according to a criterion of reasonableness.15 In any event, it seems safe to say

that “where a limitations period is imposed by a contract rather than by a statute, the public

policy considerations that typically weigh in favor of strict enforcement of the limitations

period do not apply.”16

       Maryland law has combined these approaches. There are some provisions in the

Maryland Code that explicitly bar any effort to shorten a statute of limitations. See, e.g.,

Maryland Code, Insurance Article (“IN”), §12-104 (provision in insurance or surety

contract that purports to shorten period of limitations is “against State public policy, illegal,

and void”);17 see also St. Paul Travelers v. Millstone, 412 Md. 424 (2010) (applying IN

§12-104 to hold a contractually-shortened limitations period void). Otherwise, the validity

of a contractual provision that purports to shorten a statutory limitations period is measured

by its reasonableness and by whether certain defenses to contract formation can be

       15
         See, e.g., Order of United Commercial Travelers of America v. Wolfe, 331 U.S.
586, 608 (1947) (“in the absence of a controlling statute to the contrary, a provision in a
contract may validly limit . . . the time for bringing an action . . . to a period less than that
prescribed in the general statute of limitations, provided that the shorter period itself shall
be a reasonable period”); Nuhome Investments, LLC v. Weller, 81 Pd.3d 940, 947 (Wy.
2003) (contractually-shortened limitations periods “are prima facie valid and will be
enforced absent a demonstration by the party opposing enforcement that the clause is
unreasonable . . .”);
       16
            Gallegos v. Mount Sinai Medical Center, 210 F.3d 803, 810 (7th Cir. 2000).
       17
         IN §12-104 was enacted in reaction to a decision of this Court enforcing a
provision in an automobile insurance contract shortening the period of limitations. See
Amalgamated Cas. Ins. Co. v. Helms, 239 Md. 529, 540 (1965); Chapter 487, Laws of
Maryland 1966; see also Harvey v. Northern Ins. Co. of New York, 153 Md. App. 436
(2003) (holding that IN §12-104 did not apply to a marine insurance policy).

                                               12
established. The Court of Special Appeals aptly summarized the Maryland approach:

“[P]arties may agree to a provision that modifies the limitations result that would otherwise

pertain provided (1) there is no controlling statute to the contrary, (2) it is reasonable, and

(3) it is not subject to other defenses such as fraud, duress, or misrepresentation.” College

of Notre Dame of Maryland, Inc. v. Morabito Consultants, Inc., 132 Md. App. 158, 174

(2000).

       The requirement of a showing of reasonableness is consistent with this Court’s

general approach to contractual provisions that purport to override otherwise governing

law.   In particular, in assessing provisions concerning liquidated damages,18 forum

selection,19 and choice of law,20 this Court has held that the validity of the particular

provision turned on its reasonableness. Among the factors to be considered in assessing

reasonableness are the subject matter of the contract, the duration of the shortened

limitations period compared to the period that would otherwise govern,21 the relative

       18
           Barrie School v. Patch, 401 Md. 497 (2007) (liquidated damages clauses upheld
if the stipulated amount is a “reasonable forecast of just compensation”).
       19
         Gilman v. Wheat, First Securities, Inc., 345 Md. 361, 378 (1997) (forum selection
clauses would be upheld unless “enforcement would be unreasonable”).
       20
         National Glass, Inc. v. J.C. Penney Properties, Inc., 336 Md. 606, 610 (1994)
(choice-of-law provisions upheld unless, among other things, “there is no ... reasonable
basis for the parties’ choice”) (citing Restatement (Second) Conflict of Laws §187(2)
(1971)).
       21
          See, e.g., Henning Nelson Const. Co. v. Fireman’s Fund American Life Ins. Co.,
383 N.W.2d 645, 651 (Minn. 1986) (holding that a one year contractual limitations period
was “unreasonably short”). But see, e.g., Capitol Fixture & Supply Co. v. National Fire
Ins. Co. of Hartford, 279 P.2d 435, 437 (Colo.1955) (holding that a one year contractual
limitations period was “not unreasonable”).

                                              13
bargaining power of the parties to the contract,22 and whether the shortened limitations

period is a one-sided provision that applies to one party but not the other.

       This Court has recognized that the principle of freedom of contract “serves the

public interest in having individuals exercise broad powers to structure their own affairs

by making legally enforceable promises.” Maryland-National Capital Park and Planning

Commission v. Washington Nat. Arena, 282 Md. 588, 606 (1978). On the other hand, the

Court has also noted that the principle loses force and its public policy foundation when a

contractual provision that purports to supersede existing law is exacted as a result of

superior bargaining power. Id. at 612 (“In such cases, a court might well elect to refuse

implementation”); cf. Wolf v. Ford, 335 Md. 525, 531-32 (1994) (exculpatory clauses

upheld unless, among other things, there is an “obvious disadvantage in bargaining power”

between the parties or if they appear in “transactions affecting the public interest”); Walther

v. Sovereign Bank, 386 Md. 412, 426 (2005) (arbitration clauses upheld unless

unconscionable).    Indeed, it is notable that many of the cases upholding shortened

limitations periods involve sophisticated contracts between parties with roughly similar

bargaining power. See, e.g., College of Notre Dame of Maryland, Inc. v. Morabito

       22
          Compare International Business Machines Corp. v. Catamore Enterprises, Inc.,
548 F.2d 1065, 1073 (5th Cir. 1976) (upholding contractually-shortened limitations period
contained in a “facially comprehensive written agreement[] between sophisticated
corporate entities”) with Long v. Holland America Line Westours, Inc., 26 P.3d 430, 435
(Alaska 2001) (refusing to enforce a contractually-shortened limitations period because,
inter alia, one party “possessed disproportionate bargaining power in setting the terms of
the tour contract”); McKee v. AT&T Corp., 191 P.2d 845, 859 (Wash. 2008) (refusing to
enforce such contractually shortened limitations provision “when imposed on a consumer
in a contract of adhesion for a basic consumer service”).

                                              14
Consultants, Inc., 132 Md. App. 158, 174 (2000) (construction contract between college

and contractor); Harbor Court Associates v. Leo A. Daly Co., 179 F.3d 147 (4th Cir. 1999)

(contract between developer and architectural firm described as “sophisticated business

actors”).23

C.     Application to this Case

       In this case we must assess whether the Circuit Court considered the relevant criteria

to decide whether to enforce the provision in Paragraph 10 of the General Terms and

Conditions that purported to shorten the statute of limitations for the Ceccones to file a tort

or contract claim. As outlined by the Court of Special Appeals in Morabito, the relevant

questions are:

       (1) Is there a controlling statute to the contrary?

       (2) Is the provision subject to defenses such as fraud, duress, or misrepresentation?

       (3) Is the provision reasonable?

       In this case, no statute has been cited to us – or to the Circuit Court – that, like IN

§12-104, would categorically bar a home services maintenance agreement from including

a provision that shortens the period of limitations. Nor are we aware of one.

       23
          An amicus brief filed by the Public Justice Center argues that such a provision in
a “contract of adhesion” – essentially a “take it or leave it” contract provided to a consumer
without the opportunity to negotiate a modification -– should not be enforced. While this
suggestion has some force, it is important for a court to focus on the underlying issues –
e.g., inequality of bargaining power, one-sidedness of a provision – as opposed to the label
that might be attached to the contract.

                                              15
       With respect to the second question, the Ceccones have not asserted duress. They

have alleged, however, that CHS made misrepresentations that they felt were material and

that amounted to fraud and complained about an alleged failure of CHS to respond to

discovery on the subject. No evidence was taken on the issue. It appears from the record

in this case that the Circuit Court did not evaluate those allegations in assessing the

limitations provision in the contract.

       Nor did the Circuit Court assess the reasonableness of the limitations shortening

provision. Instead, the court initially stated that Ceccones were bound by the one-year

period in the agreement “regardless of all of the background” – i.e., the particular

circumstances of the case that Mr. Ceccone had been attempting to recite. When Mr.

Ceccone pointed to the three year statutory period of limitations, the court opined that the

three-year period in CJ §5-101 is “general” and that parties may “contract it out . . . and

make it six months, 30 days.” When Mr. Ceccone raised the issue of reasonableness of

shortening the limitations period to one year in this context, the Circuit Court responded

only that it had “seen it before” and did not consider the reasonableness of the provision in

relation to the agreement before it.24

       24
          Before us, CHS argues that the court “implicitly” found the provision to be
reasonable. However, it is difficult to credit this argument when the court explicitly
declined to analyze the reasonableness of the provision when that issue was raised by Mr.
Ceccone and stated that it believed that the Ceccones were, in its words, “stuck with”
whatever shortened limitation period was set forth in the pre-printed form, even if the
period had been as brief as 30 days. It does not appear that the court believed that it had
discretion to evaluate the reasonableness of that provision.

                                             16
       On remand, the Circuit Court should consider whatever evidence that the Ceccones

may produce concerning misrepresentation and fraud by CHS and determine whether it

undermines the validity of the shortened limitations period in the agreement.25 The Circuit

Court should also explicitly determine whether the shortened limitations period is

reasonable. In doing so, the court should consider the totality of the circumstances,

including, for example, the length of the shortened limitations period (here, 1 year), its

relation to the statutory period (one-third), the relative bargaining power of the parties,26

the subject matter of the contract (an agreement to service an oil-based home heating

system), whether the shortened limitations period applies only to claims brought by one of

the parties or runs in both directions,27 and other facets of the limitations provision – e.g.,

it appears to apply equally to claims of negligence and intentional torts.

       25
            We express no opinion on the merits of those allegations.
       26
           In this regard, the Ceccones have claimed that the parent company of CHS
controls a number of the providers of these services in Anne Arundel County, suggesting
that this allows CHS to impose one-sided terms. The Circuit Court did not accept any
evidence on this allegation – or any other issue related to the limitations period – and we
cannot assess it on appellate review.
       27
           As noted earlier, Paragraph 10 of the General Terms and Conditions of the
maintenance agreement purports to shorten the period of time for a buyer like the Ceccones
(or their insurer) to bring a contract or tort action against CHS, but does not restrict the
time for CHS to file suit, while Paragraph 9 of the agreement purports to excuse CHS from
delay in enforcing its rights. In this regard the General Terms and Conditions are forgiving
as to CHS in that any delay in enforcement is excused while it is unforgiving with respect
to the Ceccones even where they attributed the filing of their claim beyond one year to their
effort to investigate and satisfy themselves that CHS was actually responsible for the
damage to their home.

                                              17
                                             III

                                        Conclusion

       We hold that a contractual provision that purports to shorten the statutorily-

prescribed time for bringing a civil action is enforceable only if: (1) there is no statute to

the contrary; (2) the provision is not the product of fraud, duress, misrepresentation, or the

like; and (3) the provision is reasonable in light of all the circumstances. In this case, the

trial court must assess, in the first instance, whether the criteria for enforcement of the

provision are met and, in particular, whether the provision is reasonable.

                                    JUDGMENT OF THE CIRCUIT COURT FOR ANNE
                                    ARUNDEL COUNTY VACATED AND CASE REMANDED
                                    TO THAT COURT FOR FURTHER PROCEEDINGS
                                    CONSISTENT WITH THIS OPINION. COSTS TO BE PAID
                                    BY RESPONDENT.

                                             18