MacBride v. Pishvaian

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Linda MacBride v. Michael M. Pishvaian, No. 42, September Term, 2007 HEADNOTE: COMM ERCIAL LAW STATUTE O F LIMITATIONS T he three-year statute of limitations applies to claims for unfair and deceptive trade practices, under Md. Code § 13-408 o f the Com mercial La w Article. W here there is n o fiduciary relatio nship between the parties, the continuation of events theory does not toll the statute of limitations. A jury s finding that appellant knew or should have kn own of app ellee s unfair and deceptive trade practices at the inception of her lease will preclude the continuing harm theory from tolling the statute of limitations, even if conditions in the lessee s home continue to deteriorate. In the Cir cuit C ourt for F rede rick Cou nty No. 10-C-04-002850 IN THE COURT OF APPEALS OF MARYLAND No. 42 September Term, 2007 ____________________________________ LINDA MACBRIDE v. MICHAEL M. PISHVAIAN ___________________________________ Bell, C.J. Raker Harrell Battaglia Greene Wilner, A lan M. (R etired, Spec ially Assigned) Cathell, D ale R. (Retire d, Specially Assigned), JJ. ____________________________________ Opinion by Greene, J. ____________________________________ Filed: December 13, 2007 This matter arises f rom a civil ac tion filed in the Circuit C ourt for Fre derick Co unty by appellant, Linda MacBride, against appellee, Michael M. Pishvaian, for damages stemming from the poor living conditions of the apartment she rented f rom app ellee, and his allegedly inadequate response to ameliorating those conditions. Appellant filed suit, and at the conclusion of a three day trial, the jury returned a verdict in favor of appellant on her claim of unfair and deceptive trade practices, awarding her damages in the amount of $100,000. The Circuit Court entered a judgment notwithstanding the verdict ( JNOV ) on the grounds that the claim was barred by the statute of limitations, and directed entry of judgm ent for t he app ellee. The principal issue curren tly before this Court is whether the Circuit Court erred when it granted a JN OV on the basis of limitations, and failed to apply either the continuation of events 1 theory, or the continuing harm 2 rule. We shall hold that the issue of when appellant knew or should have known of appellee s unfair and deceptive trade practices was an issue of fact properly reserved for determination by the jury. Given that the jury found that appellant knew or should have known of the unfair and deceptive trade practices more than six years before she filed her complain t, the Circuit Court properly entered a JNOV on the basis of limitations. 1 The continuation of events theory tolls the statute of limitations during the existence of a fiduciary rela tionship betwe en the p arties. Dual Inc . v. Lockhee d Martin Corp., 383 Md. 151 , 173, 857 A.2d 1 095, 1107 (200 4). 2 The continuing harm or continuing violation theory tolls the statute of limitations in situations where there are ong oing vi olations of a po tential pla intiff s r ights. See Shell O il Co. v. Parker, 265 Md. 631 , 636, 291 A.2d 6 4, 67 (1972). Furthermore, we shall hold that, in the case at bar, the continuation of events theory does not toll the statute of limitations, because there was no fiduciary relationship between the parties, and even if there were, appellant knew or should have known of her claim. Finally, w e shall hold that, the continuing harm theory does not apply because the relevant claim in this case is one of unfair and deceptive trade practices, about which appellant knew or should have known, more than six years before filing her complaint. As a result, the deteriorating condition of appellant s apartment is immaterial to our analysis in this case. FACTUAL AND PROCEDURAL BACKGROUND Appellant began lea sing an ap artment on October 28, 1998, at the Little Brook Apartm ents in Fred erick, M aryland, a complex owned by appellee or corporate entities under his control. Appellant renewed the lease periodically, and continued to live on the premises until November, 2004. At the time appellant signed the original lease, the premises looked nice and clean, although appellant noticed water spots on the ceiling and a suspicious od or. Sub sequ ently, during conditions of heavy rain, water would soak the ceiling, walls, and carpet of the apartment. Appellant noticed that there were squirrels running between the walls and over the ceiling. Despite appellant s complaints to management, the problems were not correct ed to ap pellant s satisfa ction. Eventually, a mold problem developed on the premises, and appellant moved out in November, 2004. In Novemb er, 2004, app ellant s relatives c ontacted th e City of Fred erick. A C ity inspector found mold, a sq uirrel s nest in the wall, and both the front door and a refrigerator -2- in need of repair. Testing and analysis confirmed the presence of various molds in the apartmen t. Appellant filed a complaint in the Circuit Court for Frederick County on December 10, 2004, and an amended complaint on November 15, 2005. In her amended complaint, appellant advanced claims of unfair and deceptive trade practices,3 fraud, negligence, breach of contract, and unjust enrich ment. 4 Appellee raised the issue of limitations in a motion for partial summary judgme nt, in preliminary statements a t trial, in a motion for judgment, and at a renewed motion for judgment. The Court denied the motion for judgment, but reserved on the lim itations is sue. After a three day trial, the jury returned a verdict, finding in favor of appellee on appellant s claims of fraud, negligence, and breach of contract. The jury, however, found that appellee had engaged in unfair and deceptive trade practices, and awarded appellant $100,000 in damages. The jury also found, by special verdict, that ap pellant kn ew or sho uld have known of the unfair and deceptive trade practices on October 28, 1998 , more than six years before ap pellant filed suit. After a hearing on Oc tober 31, 2006, the C ircuit Court 3 Appellant s unfair and deceptive tra de practices claim is filed pursuant to Md. Code (1975, 2005 Repl. Vol.), §13-408 of the Commercial Law Article, which c reates a priva te right of action for losses sustained as a result of a practice prohibited by that Article. Unfair and dece ptive trad e pra ctice s are defi ned, in pa rt, as any [ f]als e, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capac ity, tenden cy, or effect of deceiving or misleading consumers. Md. Code (1975 , 2005 Repl. Vo l., 2007 Supp. Vo l.), §13-301(1). 4 The unjust enrichment claim was later dismissed. -3- entered a JNOV on the ground s of limitations, noting that th e continu ing condu ct rule did not apply. Th e court stated , in relevant pa rt: The difficulty in this case is the jury did not find breach of contract or negligence in this action. They found violation of a Consumer Protection statute. In looking at the Consumer Protection statute . . . the time of the alleged violation, at the time of the inception of the lease, which is what the jury found and set the date for . . . October 28 th . . . 1998 . . . there is no exception that the Court c an find to extend that three year limitation period of time, and in f act suit was not f iled until mor e than three years after that. I don t see that I have any choice, but to grant the judgment notwithstanding the verdict on the limitations grounds due to the jury s finding that M s. MacB ride knew or should have known [ ] of that violation on that date. Appellant noted an appeal to the Court of Special Appeals on November 15, 2006, and appellee noted a cross-appeal on November 20, 2006, which was withdrawn on April 2, 2007.5 Prior to proceedin gs in the interm ediate appe llate court, we issued a writ of ce rtiorari, on our own initiative.6 MacBride v. Pishvaian, 400 Md. 646 , 929 A.2d 889 (2007). 5 Appellee filed, in the Court of Special Appeals, a Motion to Strike the Use of the Trial Transcript, on the grounds that appellee did not receive the tria l transcript in a tim ely manner, in compliance with Md. Rule 8-411(b)(1). Appellee renews his motion in this Court. We deny appellee s motion because the delay in receiving the trial transcript was not prejudicial, given that appellee received the transcript on June 18, 2007, and his brief was not due in this Cou rt until August 31, 2007. See Moshyedi v. Council of Unit Owners of Annap olis Rd. Med. Ctr. Condo., 132 Md. App. 184, 190, 752 A.2d 279, 282 (2000) (denying a motion to dismiss for fa ilure to comply with Rule 8-411 and 8-412(d) on the grounds that the delay in filing the transcript did not result in any prejudice). 6 Appellant presents the following issue in her brief: (continued...) -4- DISCUSSION Parties Ar gumen ts Appellant argues that, by returning a verdict in her favor on the unfair and deceptive trade practices claim and aw arding her d amages f or that claim, th e jury implicitly decid ed that the claim was not barred by limitations. Alternatively, appellant maintains that even though she knew or should have known about the unfair and deceptive trade practices on October 28, 1998, the statute of limitations should be tolled because either the continuation of events rule, or the continuing harm rule applies to the instant case. Appellee asserts that the question of when appellant knew or should have known of the unfair and deceptive trade practices was a question of fact, which was properly left to the jury. According to appellee, the Circuit Court judge properly applied the three year statute of limitations to the factual findings of the jury. Appellee contends that the continuation of events rule does not apply to this case, because the relationship at issue is a contractual relationship, and not a fiduciary relationship. In the alternative, ap pellee argu es that even if the relationship in this case were fiduciary, the continuation of events theory does not toll the statute of limitations where an aggrieved party knew or should have known of the 6 (...continued) Did the Circuit Court err in granting a judgment notwithstanding verdict and entering judgment for [a]ppellee, on [a]ppellant s claim of unfair and deceptive trade practices, due to the Court s decision that the claim was barred by limitations and due to the Court s decision not to apply the continuing conduct or continuing violation rule to this claim? -5- wrongdoing. The Jury Findings The jury in this case retu rned both a general verdict in favor of appellant, and a special verdict, finding that appellant knew or should have known of the unfair and deceptive trade practices on October 28, 1998. Appellant argues that the jury must have determined that the statute of limitations did not apply, because it returned a verdict in her favor on that claim, and awarded her damages. We do not find this argument persuasive. The jury was neither instructed on the statute of limitations, nor the legal ramifications of its finding that appellant knew or should have known of the unfair and deceptive trade practices on a particular date. Instead, the jury was told that [a] cause of action accrues when a Plaintiff knows, or by reasonable, diligent investigation should have known, of the injury or damage. The jury was also given general instru ctions on the definition o f unfair trade practices. Nowhe re in the instructions was the jury told about the statute of limitations or the legal effect of finding that appellant knew or should have known of the unfair and deceptive trade practices on Octo ber 28, 199 8. Furtherm ore, it is coun sel s respon sibility to assure that all critical issues are submitted to the jury. Edwards v. Gramling Eng g Corp., 322 Md. 535, 549, 588 A.2d 793, 800 (1991). Appellant may not, on appeal, bemoan the imprecise language of the special verdict, when she did not object to the questions submitted to the jury. Id. at 550, 588 A.2d at 800. Moreover, the trial court reserved on the issue of statute of limitations, which suggests that the Court would later apply the law to the facts, as -6- found b y the ju ry. Appellant argues that the jury s award of damages, coupled with its finding that appellant knew or should have known of the cause of action more than six years before she filed her complaint, indicates that the jury determined that the statute of limitations did not apply. We do n ot find this argument persuasive either. The ju ry s award of damage s and its finding that appellant knew or should have known of her potential claim on October 28, 1998 are not inconsistent, because the jury was asked to render a verdict on the merits of the claim, and asked separately to determine the accrual date of the claim, but was not asked to apply the statu te of lim itations. This Court will reconcile the jury s response to a special verdict under the assumption that t he ju ry acte d rationa lly and consiste ntly. Edwa rds, 322 Md. at 547, 588 A.2d at 799. Even assum ing, arguendo, that there is any inconsistency between the jury s determination that appellant s claim accru ed on O ctober 28, 1 998, and its verdict in favor of appellant, the apparent inconsistency may be reconciled. Without instructions on the legal ramifications of determining that appellant s claim accrued on October 28, 1998, the jury w ould have no reason to apply th e statute of limita tions to a ppellan t s claim . We, therefore, interpret the jury s decision under the assumption that it acted rationally, and attribute its award of damages to its inability to apply a law on which it was never instructed. We have said th at the questio n of wh en an action accrues, is one that is left to judicial determination. Frederick Rd. Ltd. P ship v. Brown & Sturm, 360 Md. 76, 95, 756 A.2d 963, -7- 973 (2000). In order to determine when an action accrues, this Court has adopted the discovery rule, which tolls the accrual date of the action until such time as the potential plaintiff either discovers his or her inju ry, or should have discovered it through the exercise of due diligenc e. Id. at 95-96, 756 A.2d at 973. The determ ination as to whether the plaintiff s failure to discover his cause of action was due to failure on his part to use due diligence, or to the fact that defendant so concealed the w rong that pla intiff was u nable to discover it by th e exe rcise of due dilige nce, is ord inarily a question of fact f or the jury. Id. at 96, 756 A.2d at 974 (quoting O Hara v. Kovens, 305 Md. 280, 294-95, 503 A.2d 1313, 1320 (1986)). In this case, the jury properly determined that appellant knew or should have known of the cause of action on October 28, 1998 . The trial judg e then app lied the statute of limita tions to th e jury s fa ctual fin dings, a nd dete rmined that the c laim w as barre d. Matters of Law Having determined that the jury properly found that appellant knew or should have known of her injury on October 28, 1998, w e now tu rn to the Court s application of the law to that factual finding. Maryland law provides that [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. Md. Code (1973, 2006 Repl. Vol.), §5-101 of the Courts and Judicial Proceedings Article. This statute of limitations is meant to promote the interests of fairn ess and jud icial econom y by allowing a dequate time for a pe rson of ordina ry diligenc e to brin g an ac tion, while providing potential -8- defenda nts with a degree of repose. Frederick Rd., 360 Md. at 94, 756 A.2d a t 973. This Court has adopted the discovery rule as a means of determining when the claim begins to accrue for purposes of the statute o f limitatio ns. Id. at 95, 756 A.2d at 973. Out of fairness to potential plaintiffs, the discovery rule tolls the accrual of the limitations period until the time the plaintiff discovers, or through the exercise of due diligence, should have discovered, the injury. Id. at 95-96, 756 A.2d at 973. In Maryland, there are several exceptions to the discovery rule, incl uding t he con tinuatio n of ev ents the ory, Dual Inc. v. Lockheed Ma rtin Corp., 383 Md. 151, 173, 857 A.2d 1095, 1107 (20 04), and the continu ing har m theo ry, see Shell Oil Co. v. Parker, 265 M d. 631, 6 36, 291 A.2d 6 4, 67 (1 972). Appellant argues that the Court erred when it granted a JNOV, because either the continuation of events theory or the continuing harm theory should apply, and toll the statute of limita tions. We h old that app ellant s claim is barred by the statute of limitations because, as a matter of law, there was no fiduciary relationship that would trigger the application of the con tinuation of ev ents rule, no r doe s the con tinuing h arm rule app ly, because the jury did not d etermine tha t there were ongoing violations, rath er than merely continuing ill effects of a single earlier ac t. Continuation of Events Theory This Court recognizes the continuation of events theory, in which the statute of limitations is tolled during the e xistence of a fiduciary relatio nship betwe en the p arties. Dual Inc., 383 Md. at 173, 857 A.2d at 1107. In Vincent v. Palmer, 179 M d. 365, 19 A.2d 183 -9- (1941), this Court applied the contin uation of events theory to an ongoing employment relationship, where the employment contract did not mention a finite period of emplo yment. Vincent, 179 Md. at 374, 19 A.2d at 189. Similarly, in Waldman v. Rohrbaugh, 241 Md. 137, 215 A.2 d 825 (19 66), we ap plied this theo ry to ongoing medical trea tment, noting that if the facts show continuing medical or surgical treatment for a particular illness or con dition in the cours e of wh ich there is malpractice producing or aggravating harm, the cause of action of the patient accrues at the end of the treatment for that particular illness, injury or condition, unless the patient sooner knew or reasona bly should have kn own of the injury or harm, in which case the statu te would s tart to run w ith actual or constructive knowledge. Waldman, 241 Md. at 142, 215 A.2d at 828. The common reasoning in cases where we have applied the continuation of events theory is that a relationship which is built on trust and confidence generally gives the confiding party the right to relax his or her guard and rely on the good faith of the other party so long as the relationship continues to exist. Frederick Rd., 360 Md. at 97-98, 756 A.2d at 975. In Dual, this Court noted that mere conclusory allegations of a fiduciary relation ship are insufficient to support the application of the continuation of e vents th eory. Dual, 383 Md. at 173-74, 857 A.2d at 1107-08. Instead, the C ourt required specific fa cts supporting such a relationship. Id. at 173, 857 A.2d at 1107. This Court has held that, abse nt sp ecia l circ ums tanc es to the c ontrary, the landlordtenant relationship is a contractual relation ship. Rhaney v. Univ. of Maryland E. Shore, 388 Md. 585, 602, 880 A.2d 357, 367 (2005); see also Dugan v. First Nat l B ank in W ichita, 227 -10- Kan. 201, 209, 606 P.2d 1009, 1016 (1980) (noting, of the lessor-lessee relationship, under usual circumstances this is not a confidential relationship ). In this case, appellant and appellee had an arm s-length contractual relationship. We hold that, as a matter of law, there are no specific facts in this case that would support a determination that the parties had a relationship built on trust and confidence such that appellant had a right to rely on appellee s good faith. Furthermore, even if appellant and appellee had a fiduciary relationship, the continuation of events th eory does no t toll the statute of limitations where a party had knowledge of facts that would lead a reasonab le person to undertake an investiga tion that, with reasonable diligence, w ould have revealed wrongdoing on the part of the fiduciary. Dual, 383 Md. at 174, 857 A.2d at 1108. Because the jury determined that appellant knew or should have known of the unfair and deceptive trade practices on October 28, 1998, the continuation of events theory does not toll the statute of limitations. Continuing harm Theory This Court and the Court of Special Appeals have recognized the continuing harm or continuo us violation doctrine, w hich tolls the sta tute of limitations in cases whe re there are continuous violations.7 See Shell Oil, 265 Md. at 636, 291 A.2d at 67 ; see also Edwards v. Deme dis, 118 Md. App. 541, 562, 703 A.2d 240, 250 (1997). Under this theory, violations that are continuing in nature are not barred by the statute of limitations merely because one 7 We have not, howe ver, found a reported opinion, in either this Court or the intermediate appellate court, involving an application of the doctrine of continuing harm. -11- or more of them o ccurred earlier in time. See Shell O il, 265 M d. at 636, 29 1 A.2d a t 67; see also Duke Street Ltd. P ship v. Bd. of Cty. Comm rs, 112 Md. App. 37, 50, 684 A.2d 40, 47 (1996) (noting that [c]laims that are in the nature of a continuous tort, such as nuisance, can extend the period of lim itations due to their new occurren ces over time ). Continuing violations that qualify under this theory are continuing unlawful acts, for exam ple, a monthly over-charge of rent, not m erely the continuing ef fects of a single earlier ac t. 78/79 York Assocs. v. Rand, 175 Misc.2d 960, 966, 672 N.Y.S.2d 619, 623 (199 8); see also Alston v. Hormel Foods Corp., 273 Neb. 422, 42 6, 730 N.W .2d 376, 381 (200 7) ( continuing tort doctrine requires that a tortious act - no t simply the con tinuing ill effe cts of prior tortious acts - fa ll within the limita tion per iod ). Appellant argues that her claims are not barred by the statute of limitations because her claims invo lve an ong oing harm , in particular, the deteriorating condition of her apartmen t. We are not persu aded by this argument, as her complain ts are merely the continuing ill effects from the original alleged violation, and not a series of acts or course of conduct . . . that would delay the accrual of a cause of action to a later date. Duke Street, 112 M d. App . at 52, 68 4 A.2d at 48. Furtherm ore, the jury did not find that the unfair and decep tive trade practices were ongoing violations. With regard to the sole remaining claim of unfair and deceptive trade practices, the jury was instructed as follows: Unfair trade practices are defined as misstateme nts made directly to a consumer, or by advertisement, or phone solicitatio n . . . -12- concerning the quality and availability of goods and services or the expertise and affiliation of merchants. The jury then found that appellant knew or should have known of these unfair and deceptive trade practices on October 28, 1998. The jury was not asked to decide whether the unfair and deceptive trade practices were ongoing violations. Pursuant to Md. Rule 2-522(c), [i]f the court fails to submit any issue raised by the pleadings or by the evidence, all parties waive their right to a trial by jury of the issues omitted unless before the jury retires a party demands its submission to the jury. Furthermore, [i]n the absence of a finding by the [trier of fact], the rule requires us to presume a finding consistent with the trial court s judgment. Ver Brycke v. Ver Brycke, 379 Md. 669, 701-02 n.15, 843 A.2d 758, 777 n.15 (2004). The jury was not asked to determine whether the unfair and deceptive trade practices were a continu ing har m. In other words, the jury was not asked to determin e if appellee made any further qualifying misstatements to appellant after October 28, 1998. As a result, we presume that the ju ry found the violations were not a continuing harm, which is consistent with the trial court s judgment that the con tinuing h arm theo ry doe s not apply. Although the damage to appellant s apartment was ongoing, the only misstatements found by the jury were th ose ma de at or n ear the in ception of the le ase. Because there were no ongoin g unlaw ful acts , this is no t the type o f contin uing ha rm con templa ted by the rule. Even if this case were the type to qualify within the continuing harm theory, the doctrine only tolls the statute of limitations unless the [potential plaintiff] sooner knew or should have k nown of the in jury or har m. Duke Street, 112 Md. App. at 52, 684 A.2d at 48. -13- The jury in this case determined that appellant knew or should have known of the unfair and deceptive trade practices on October 28, 1998. Therefore, we hold, as a matter of law, that the continuing harm theory does not toll the statute of limitations in this case. CONCLUSION We hold that the da te on which app ellant knew or shou ld have know n of appellee s unfair and deceptive trade practices was a factual question properly reserved for the jury. To the extent that it is legally inconsistent with the jury s award of damages, we resolve that by noting that the jury was not instructed on the application of the statute of limitations, and as such, it properly found that appellant knew or should have known of her claim more than six years before she filed it. The statute of limitations is not tolled in this case by the continuation of events th eory because there is no fiduciary relationship, nor by the continuing harm theory, because the relevant claim is based on misstatements made to appellant at or near the inception of her lease. For these reasons we hold that the Circ uit Court co rrectly entered JNOV in favor of appellee. JUDGMENT OF TH E CIRCU IT COURT FOR FREDERICK COUNTY IS AFFIRMED. APPELLANT TO PAY THE CO STS. -14-

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