Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Smith v. Wakefield, LP

Court of Appeals of Maryland

February 27, 2019

Gregory Smith
v.
Wakefield, LP

          Argument: November 5, 2018

          Circuit Court for Baltimore City Case No. 24-C-18-000566

          Barbera, C.J., Greene McDonald Watts Hotten Getty, Adkins, Sally D. (Senior Judge, Specially Assigned), JJ.

          OPINION

          McDonald, J.

         For three centuries, Maryland law has provided that an action seeking payment of back rent for a residential lease is to be brought before the expiration of a three-year period of limitations. That period of limitations is currently reflected in Maryland Code, Courts & Judicial Proceedings Article ("CJ"), §5-101. In recent decades, the question has arisen whether the period of limitations for such an action may be extended to 12 years by converting a residential lease into a "contract under seal" so that it might be regarded as a "specialty" - a type of action for which another statute, CJ §5-102, provides the longer period of limitations. In Tipton v. Partner's Management Co., 364 Md. 419 (2001), this Court said "no," but that answer was a partial one, as it was based on the characteristics of the particular lease in that case. This is the sequel.

         In 2007, Petitioner Gregory Smith entered into a month-to-month lease for an apartment in Baltimore City. It is undisputed that he remained in the apartment only a few months before vacating it and ceasing to pay rent. The circumstances under which he left are in dispute. According to the landlord, Respondent Wakefield, LP ("Wakefield"), Mr. Smith was evicted for failure to pay rent in 2008; according to Mr. Smith, he gave appropriate notice for terminating the lease and left voluntarily.

         Seven years later, in 2015, Wakefield brought suit against Mr. Smith seeking to recover unpaid rent that it claimed Mr. Smith owed from 2008. When the case finally came to trial in 2018, Mr. Smith asserted that Wakefield had not filed suit within the three-year period of limitations in CJ §5-101 that applies to actions seeking back rent. Wakefield argued that the lease qualified as a "contract under seal" and that the 12-year statute of limitations set forth in CJ §5-102 applied. If Wakefield is correct, its suit was timely; if Mr. Smith is correct, it was not.

         The District Court sitting in Baltimore City agreed with Wakefield's argument and entered a judgment in its favor. On appeal, the Circuit Court for Baltimore City reached the same conclusion.

         We reverse. We hold that actions for back rent under residential leases are subject to a three-year period of limitations - as they have been for the past three centuries in Maryland - regardless of whether the lease includes provisions that purport to convert it into a contract under seal. To the extent that such provisions might be considered an agreement to modify the otherwise applicable period of limitations, such an agreement would be contrary to the State's landlord-tenant law and unreasonable under the particular circumstances of this case.

         I

         Background

         A. Statutes of Limitation for Civil Actions

         1. CJ §5-101 and CJ §5-102

         Two statutes that set forth limitations periods are relevant to this case. First, the general statute of limitations for civil actions prescribes a three-year limitations period. It states:

A civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced.

CJ §5-101. Another statute provides a longer 12-year period of limitations for bringing certain types of actions classified as "specialties." It states, in pertinent part:

(a) An action on one of the following specialties shall be filed within 12 years after the cause of action accrues, or within 12 years from the date of the death of the last to die of the principal debtor or creditor, whichever is sooner:
(5) Contract under seal …

CJ §5-102(a)(5).[1]

         2. The Tipton Case

         This Court considered the possible application of these two statutes of limitations to an action seeking to recover back rent nearly two decades ago in Tipton v. Partner's Management Co., 364 Md. 419 (2001). That case concerned a residential lease. The landlord and tenant entered into a one-year lease beginning in January 1992. Just above the signature lines on the pre-printed lease form appeared the legend: "IN WITNESS WHEREOF the parties hereto have set their hands and seals the day and year first above written." 364 Md. at 423 (emphasis added). In addition, the word "SEAL" appeared in parentheses at the end of the signature line. Id.

         The tenant was evicted from the property in November 1992 for failure to pay rent. The landlord sent the tenant a letter requesting payment, but did not take any legal action to collect the back rent for approximately seven years. In 1999, an agent of the landlord filed a complaint in the District Court. The tenant raised a defense that the suit had been filed well after the three-year period of limitations provided in CJ §5-101. The landlord responded that the lease was a "contract under seal" and that, accordingly, the 12-year period of limitations provided in CJ §5-102(a)(5) applied. The District Court, in a decision affirmed by the Circuit Court on appeal, agreed with the landlord and denied the tenant's motion to dismiss the complaint.

         This Court granted a writ of certiorari to consider whether the lease in question was a contract under seal - i.e., a specialty - and, if so, whether application of the period of limitations under CJ §5-102(a)(5) would be "repugnant" to certain provisions of the State landlord-tenant law providing protections to tenants in residential leases. 364 Md. at 422. The Court ultimately concluded that the lease in question was not a "contract under seal" and, therefore, the 12-year period of limitations for specialty actions did not supersede the three-year period of limitations set forth in CJ §5-101 in that case. The Court was careful to say that it was not resolving whether application of the 12-year period of limitations would conflict with provisions of the State landlord-tenant law. Id.

         In reaching its disposition of the case, the Court observed that documents and instruments concerning the conveyancing of real property, such as leases, had long been executed "under seal" without any intention of creating a specialty action. 364 Md. at 425-34. The Court also recounted, in elaborate detail, the legislative history of CJ §5-101 and observed that historically Maryland law had applied a three-year period of limitations to actions for back rent since colonial times. It noted that the enactment of CJ §5-101 was a product of code revision and that there was no evidence that the General Assembly intended to change the longstanding period of limitations applicable to actions for back rent. Id. at 434-45. The Court stated that "[w]ithout evidence of [legislative] intent, we will not … hold that the statute of limitations was changed in respect to leases during a general recodification." Id. at 446.

         The Court reiterated the results of its analysis in three separate sentences beginning "We hold ...." A difference in the language of one of those sentences may have significance for this case. First, at the outset of the opinion, the Court previewed what was to come:

We hold that a residential lease agreement, even if the lease agreement has the word seal affixed, is subject to the three-year limitation period enunciated in [CJ §5-101].

364 Md. at 422. In a footnote appended to that sentence, the Court observed that parties could agree to waive an otherwise applicable statute of limitations, but that a seal alone would not effect such a waiver. Id. at 422 n.3.

         Second, at the beginning of the "Discussion" section of the opinion, the Court again summarized its holding in similar language:

We hold that actions for rent arrears under any kind of residential lease must be filed in compliance with [CJ §5-101].

364 Md. at 425. A footnote appended to that sentence cross-referenced the footnote concerning waiver that appeared with the prior statement of the holding. Id. at 425 n.9.[2]

         Thus, the first two iterations of the holding in Tipton simply state that actions for back rent are subject to the three-year period of limitations in CJ §5-101, that limitations periods may be waived, and that a seal does not suffice to effect such a waiver.

         Finally, in the concluding paragraph of the Tipton opinion, the Court reprised its holding in a passage that sets the stage for this case. The Court stated:

We hold that claims for arrearages of rent under a residential lease, even a lease to which a seal is affixed, must be filed within the three-year limitation period unless the parties to the lease agree, in the body of the lease, that the lease is subject to the twelve-year limitation period of section 5-102.

364 Md. at 445. As is evident, the first clause of that sentence restated the Court's conclusion concerning the lease that was before it. Unlike the previous two instances, however, the Court did not qualify its holding with a reference to the possibility of waiver of limitations. Instead, the second clause of the sentence following the word "unless" addressed a somewhat distinct question: whether a lease could be converted into a contract under seal and thus be made subject to the 12-year period of limitations in CJ §5-102. This seemed to predict the Court's opinion about a hypothetical lease that might appear in a future case - the kind of prediction that is often referred to as dicta, as it was unnecessary to the decision in Tipton.

         The dicta in Tipton generates several questions. It is not clear how that dicta related to the Court's reasoning in the case before it. The dicta seems at odds with the Court's indication that it would require evidence of legislative intent to extend the statute of limitations applicable to actions for back rent. It may be that the Court intended the dicta to illustrate a situation in which the parties waived the otherwise applicable period of limitations of CJ §5-101, although it is not clear why such a waiver would need to involve CJ §5-102. In addition, there also remained the question that the Court in Tipton said that it was not answering - whether such an extension of the period of limitations would be "repugnant" to the State landlord-tenant law.

         This case presents the hypothetical future lease imagined in the Tipton dicta. We are now called upon to answer those questions.

         B. Wakefield's Action Against Mr. Smith for Back Rent

         The Lease

         On March 6, 2007, Mr. Smith entered into a lease agreement with Wakefield[3] to rent an apartment in Baltimore City.[4] A one-page cover sheet identified the address of the property and the tenant, specified the term (month-to-month) and the monthly rent, and set forth the basic lease agreement, incorporating an attached preprinted form entitled "Lease Covenants." The cover page included signature lines for the tenant and landlord's agent followed by "(Seal)." The attached Lease Covenants form consisted of seven pages of 90 numbered sections of varying lengths that stated various conditions of the lease and obligations of the tenant. Among those provisions was a paragraph, which stated (in a font considerably smaller than what appears below):

STATUTE OF LIMITATIONS: This lease is under seal and is subject to the twelve-year limitation period of Section 5-102 of the Courts and Judicial Proceedings Article of the Annotated Code of Maryland.

         This provision of the lease appeared to echo the dicta in the Tipton decision quoted earlier.[5]

         Complaint, Motion to Dismiss, and Trial in District Court

         On September 22, 2015, Wakefield filed a complaint in the District Court sitting in Baltimore City. In an attachment to the complaint, Wakefield alleged that Mr. Smith had failed to pay rent on December 1, 2007, and had been evicted as of the end of January 2008 - more than seven and a half years before the filing of the complaint. Wakefield sought to recover $4, 035.42 (for unpaid rent and related costs) from Mr. Smith plus interest, attorney's fees, and court costs.

         Nearly two more years passed before Wakefield served Mr. Smith with the complaint on August 14, 2017. Mr. Smith filed a notice of intent to defend (later amended), in which he stated, among other things, that he had given the landlord 90 days advance notice of his intent to vacate the property and that he owed no rent as of that time. In a written submission to the District Court, Mr. Smith also argued that Wakefield had failed to file its action within the three-year period of limitations applicable to an action for back rent. In response, Wakefield asserted that the lease was a contract under seal and that the applicable period of limitations was therefore 12 years pursuant to CJ §5-102. At the trial on December 18, 2017, the District Court rejected Mr. Smith's limitations defense and entered judgment for Wakefield in the amount it had requested.

         De Novo Appeal in Circuit Court

         Mr. Smith pursued a de novo appeal in the Circuit Court for Baltimore City. In that court, he moved to dismiss the complaint on the basis of the statute of limitations. On April 20, 2018, the Circuit Court heard argument on the motion and denied it. After conducting a de novo trial that same day, the Circuit Court entered judgment in favor of Wakefield.[6]

         Mr. Smith then filed a petition for a writ of certiorari, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.