Cain v. Midland Funding
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Opinion
Clifford Cain, et al. v. Midland Funding, LLC, No. 38, September Term, 2020; Tasha Gambrell v. Midland Funding, LLC, No. 39, September Term, 2020, Opinion by Booth, J.
COURTS & JUDICIAL PROCEEDINGS § 5-101 – STATUTES OF LIMITATION – GENERAL APPLICATION. Maryland’s general three-year statute of limitations under Courts & Judicial Proceedings (“CJ”) § 5-101 applies to claims filed by a judgment debtor against a judgment creditor for unjust enrichment and money damages under the Maryland Consumer Protection Act (“MCPA”) and the Maryland Consumer Debt Collection Act (“MCDCA”) related to collection activities arising from the entry of a judgment at a time when the judgment creditor was not a licensed collection agency.
STATUTE OF LIMITATIONS – ACCRUAL – CONTINUING HARM DOCTRINE. The Court of Appeals declined to apply the continuing harm doctrine to extend the accrual period for claims for unjust enrichment and statutory money damages related to a judgment creditor’s collection activities, where the wrongful conduct forming the basis of the Petitioners’ claims was the debt collector’s licensure status at the time the judgment was entered, and where the collection activities occurred after the debt collector obtained its license.
STATUTES OF LIMITATION – TOLLING – CLASS ACTION TOLLING OF SUCCESSIVE CLASS ACTIONS. The Court of Appeals declined to expand the Maryland class action tolling rule to successive class actions, and instead adopted the reasoning and logic of the Supreme Court in China Agritech, Inc. v. Resh, ___ U.S. ___, 138 S. Ct. 1800 (2018).
STATUTES OF LIMITATION – TOLLING – CROSS-JURISDICTIONAL CLASS ACTION TOLLING. Maryland recognizes American Pipe class action tolling for absent members of putative class actions filed in other state and federal courts. The same factors that we articulated in Christensen for intra-jurisdictional tolling also apply to cross- jurisdictional class action tolling. Specifically, in order for the plaintiff to claim the benefit of class action tolling in a later-filed individual claim, the plaintiff must show that the class action complaint: (1) notified the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs; and (2) the individual suit must concern the same evidence, memories, and witnesses as the subject matter of the original class action suit. Cross-jurisdictional class action tolling ends when there is a clear dismissal of a putative class action, including a dismissal for forum non conveniens, or a denial of class action for any reason.
CIVIL PROCEDURE – APPELLATE JURISDICTION – JURISDICTION OVER A FINAL, APPEALABLE ORDER. The circuit court’s orders in Cain, which entered summary judgment and a declaratory judgment, constituted a final judgment under the procedural posture of this case. The orders completely adjudicated all claims between the parties at the time that the judgment was entered. Circuit Court for Baltimore City Case No.: 24-C-13-004869
Circuit Court for Anne Arundel County IN THE COURT OF APPEALS Case No.: C-02-CV-15-002988 OF MARYLAND Argued: March 4, 2021
Nos. 38 & 39
September Term, 2020
CLIFFORD CAIN, et al.
v.
MIDLAND FUNDING, LLC
TASHA GAMBRELL
Barbera, C.J. McDonald Watts Hotten Getty Booth Biran,
JJ.
Opinion by Booth, J. Pursuant to Maryland Uniform Electronic Legal McDonald, J., dissents in part. Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2021-10-08 16:42-04:00
Filed: August 4, 2021 Suzanne C. Johnson, Clerk In the instant cases, we must decide the applicable statute of limitations for claims
filed by consumer debtors against a consumer debt buyer, Midland Funding, LLC
(“Midland”), alleging improper debt collection activities in connection with money
judgments that Midland obtained against the plaintiffs at a time when Midland was not
licensed as a collection agency under Maryland law.
These matters originated as two separate putative class action cases that were filed
against Midland in Maryland circuit courts. Petitioner Clifford Cain, Jr. filed a putative
class action against Midland in the Circuit Court for Baltimore City on July 30, 2013.
Petitioner Tasha Gambrell filed a putative class action against Midland in the Circuit Court
for Anne Arundel County on September 28, 2015. In both cases, Petitioners allege that
Midland obtained judgments against the named plaintiffs and similarly situated members
of the putative classes for consumer debts during a time period when Midland did not have
a collection agency license under the Maryland Collection Agency Licensing Act
(“MCALA”).1 Both putative class actions included counts for declaratory judgment
(seeking a declaration that the judgments obtained by Midland were void), injunctive relief
preventing Midland from collecting on the judgments in the future, and money damages
arising from claims for unjust enrichment and violations of the Maryland Consumer Debt
Collection Act (“MCDCA”)2 and the Maryland Consumer Protection Act (“MCPA”).3 In
1 Maryland Code, Business Regulation Article (“BR”) §§ 7-101 through 7-502. 2 Maryland Code, Commercial Law Article (“CL”) §§ 14-201 through 14-204. 3 CL §§ 13-101 through 13-501. both cases, the circuit courts resolved the cases by motion. In Mr. Cain’s case, the circuit
court entered an order granting summary judgment to each party in part, and a separate
declaratory judgment declaring the rights of the parties. In Ms. Gambrell’s case, the circuit
court granted Midland’s motion to dismiss.
Both cases were appealed to the Court of Special Appeals. That court issued an
unreported opinion in each case. With respect to Mr. Cain’s case, the Court of Special
Appeals determined that it had jurisdiction to consider Mr. Cain’s appeal, concluding that
the circuit court’s summary judgment order and declaratory judgment constituted a final
judgment. Aside from that procedural issue, which was unique to Mr. Cain’s case, the
Court of Special Appeals resolved Mr. Cain’s and Ms. Gambrell’s claims in the same
manner. In each instance, the intermediate appellate court held that our decision in LVNV
Funding LLC v. Finch, 463 Md. 586 (2019) (“Finch III”) resolved the Petitioners’
declaratory judgment counts and that under Finch III, the judgments obtained when
Midland was unlicensed were not void. The court also held that, since Petitioners’
judgments had been satisfied, they were not entitled to injunctive relief because Midland
was no longer collecting on them. With respect to the remaining claims seeking restitution
under an unjust enrichment theory and money damages for the statutory claims, the Court
of Special Appeals held that the claims were barred by the general three-year statute of
limitations codified at Maryland Code, Courts and Judicial Proceedings Article (“CJ”) § 5-
101. The court rejected Petitioners’ argument that the claims constituted “actions on a
judgment” and were therefore subject to a 12-year statute of limitations applicable to
specialties actions under CJ § 5-102(a)(3). The court similarly rejected Petitioners’
2 assertion that the continuing harm doctrine applied to change the accrual date for their
unjust enrichment claims. Finally, the court rejected Petitioners’ argument that the statute
of limitations was tolled under the class action tolling doctrine based upon Mr. Cain’s
earlier participation as a putative class member in a federal class action case, and in Ms.
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Clifford Cain, et al. v. Midland Funding, LLC, No. 38, September Term, 2020; Tasha Gambrell v. Midland Funding, LLC, No. 39, September Term, 2020, Opinion by Booth, J.
COURTS & JUDICIAL PROCEEDINGS § 5-101 – STATUTES OF LIMITATION – GENERAL APPLICATION. Maryland’s general three-year statute of limitations under Courts & Judicial Proceedings (“CJ”) § 5-101 applies to claims filed by a judgment debtor against a judgment creditor for unjust enrichment and money damages under the Maryland Consumer Protection Act (“MCPA”) and the Maryland Consumer Debt Collection Act (“MCDCA”) related to collection activities arising from the entry of a judgment at a time when the judgment creditor was not a licensed collection agency.
STATUTE OF LIMITATIONS – ACCRUAL – CONTINUING HARM DOCTRINE. The Court of Appeals declined to apply the continuing harm doctrine to extend the accrual period for claims for unjust enrichment and statutory money damages related to a judgment creditor’s collection activities, where the wrongful conduct forming the basis of the Petitioners’ claims was the debt collector’s licensure status at the time the judgment was entered, and where the collection activities occurred after the debt collector obtained its license.
STATUTES OF LIMITATION – TOLLING – CLASS ACTION TOLLING OF SUCCESSIVE CLASS ACTIONS. The Court of Appeals declined to expand the Maryland class action tolling rule to successive class actions, and instead adopted the reasoning and logic of the Supreme Court in China Agritech, Inc. v. Resh, ___ U.S. ___, 138 S. Ct. 1800 (2018).
STATUTES OF LIMITATION – TOLLING – CROSS-JURISDICTIONAL CLASS ACTION TOLLING. Maryland recognizes American Pipe class action tolling for absent members of putative class actions filed in other state and federal courts. The same factors that we articulated in Christensen for intra-jurisdictional tolling also apply to cross- jurisdictional class action tolling. Specifically, in order for the plaintiff to claim the benefit of class action tolling in a later-filed individual claim, the plaintiff must show that the class action complaint: (1) notified the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs; and (2) the individual suit must concern the same evidence, memories, and witnesses as the subject matter of the original class action suit. Cross-jurisdictional class action tolling ends when there is a clear dismissal of a putative class action, including a dismissal for forum non conveniens, or a denial of class action for any reason.
CIVIL PROCEDURE – APPELLATE JURISDICTION – JURISDICTION OVER A FINAL, APPEALABLE ORDER. The circuit court’s orders in Cain, which entered summary judgment and a declaratory judgment, constituted a final judgment under the procedural posture of this case. The orders completely adjudicated all claims between the parties at the time that the judgment was entered. Circuit Court for Baltimore City Case No.: 24-C-13-004869
Circuit Court for Anne Arundel County IN THE COURT OF APPEALS Case No.: C-02-CV-15-002988 OF MARYLAND Argued: March 4, 2021
Nos. 38 & 39
September Term, 2020
CLIFFORD CAIN, et al.
v.
MIDLAND FUNDING, LLC
TASHA GAMBRELL
Barbera, C.J. McDonald Watts Hotten Getty Booth Biran,
JJ.
Opinion by Booth, J. Pursuant to Maryland Uniform Electronic Legal McDonald, J., dissents in part. Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic.
2021-10-08 16:42-04:00
Filed: August 4, 2021 Suzanne C. Johnson, Clerk In the instant cases, we must decide the applicable statute of limitations for claims
filed by consumer debtors against a consumer debt buyer, Midland Funding, LLC
(“Midland”), alleging improper debt collection activities in connection with money
judgments that Midland obtained against the plaintiffs at a time when Midland was not
licensed as a collection agency under Maryland law.
These matters originated as two separate putative class action cases that were filed
against Midland in Maryland circuit courts. Petitioner Clifford Cain, Jr. filed a putative
class action against Midland in the Circuit Court for Baltimore City on July 30, 2013.
Petitioner Tasha Gambrell filed a putative class action against Midland in the Circuit Court
for Anne Arundel County on September 28, 2015. In both cases, Petitioners allege that
Midland obtained judgments against the named plaintiffs and similarly situated members
of the putative classes for consumer debts during a time period when Midland did not have
a collection agency license under the Maryland Collection Agency Licensing Act
(“MCALA”).1 Both putative class actions included counts for declaratory judgment
(seeking a declaration that the judgments obtained by Midland were void), injunctive relief
preventing Midland from collecting on the judgments in the future, and money damages
arising from claims for unjust enrichment and violations of the Maryland Consumer Debt
Collection Act (“MCDCA”)2 and the Maryland Consumer Protection Act (“MCPA”).3 In
1 Maryland Code, Business Regulation Article (“BR”) §§ 7-101 through 7-502. 2 Maryland Code, Commercial Law Article (“CL”) §§ 14-201 through 14-204. 3 CL §§ 13-101 through 13-501. both cases, the circuit courts resolved the cases by motion. In Mr. Cain’s case, the circuit
court entered an order granting summary judgment to each party in part, and a separate
declaratory judgment declaring the rights of the parties. In Ms. Gambrell’s case, the circuit
court granted Midland’s motion to dismiss.
Both cases were appealed to the Court of Special Appeals. That court issued an
unreported opinion in each case. With respect to Mr. Cain’s case, the Court of Special
Appeals determined that it had jurisdiction to consider Mr. Cain’s appeal, concluding that
the circuit court’s summary judgment order and declaratory judgment constituted a final
judgment. Aside from that procedural issue, which was unique to Mr. Cain’s case, the
Court of Special Appeals resolved Mr. Cain’s and Ms. Gambrell’s claims in the same
manner. In each instance, the intermediate appellate court held that our decision in LVNV
Funding LLC v. Finch, 463 Md. 586 (2019) (“Finch III”) resolved the Petitioners’
declaratory judgment counts and that under Finch III, the judgments obtained when
Midland was unlicensed were not void. The court also held that, since Petitioners’
judgments had been satisfied, they were not entitled to injunctive relief because Midland
was no longer collecting on them. With respect to the remaining claims seeking restitution
under an unjust enrichment theory and money damages for the statutory claims, the Court
of Special Appeals held that the claims were barred by the general three-year statute of
limitations codified at Maryland Code, Courts and Judicial Proceedings Article (“CJ”) § 5-
101. The court rejected Petitioners’ argument that the claims constituted “actions on a
judgment” and were therefore subject to a 12-year statute of limitations applicable to
specialties actions under CJ § 5-102(a)(3). The court similarly rejected Petitioners’
2 assertion that the continuing harm doctrine applied to change the accrual date for their
unjust enrichment claims. Finally, the court rejected Petitioners’ argument that the statute
of limitations was tolled under the class action tolling doctrine based upon Mr. Cain’s
earlier participation as a putative class member in a federal class action case, and in Ms.
Gambrell’s case, based upon two would-be class action cases pending against Midland in
Maryland state courts. We granted Mr. Cain’s and Ms. Gambrell’s petitions for writ of
certiorari.4 Because the cases involve the same questions of law, we issue one opinion to
answer the following questions, which we have rephrased for clarity:
1. Whether Petitioners’ claims for unjust enrichment and money damages under the MCPA and MCDCA are subject to the three-year general statute of limitations under CJ § 5-101?
2. Whether the continuing harm doctrine applies to change the accrual date for Petitioners’ claims for unjust enrichment and statutory money
4 The questions presented in Mr. Cain’s petition for writ of certiorari are:
1. Whether the statute of limitations for actions on judgments under [CJ] § 5-102(a)(3) applied to both parties to the judgment?
2. If the Petitioner’s claims here are not governed by [CJ] § 5-102(a)(3), do claims under Maryland’s consumer protection laws concerning the continuing unfair, deceptive and wrongful conduct accrue each time a damage occurs or a[n] ill-gotten benefit is realized by the wrongdoer?
3. Whether the Federal tolling under 28 [U.S.C.] § 1367(d) or class action tolling from a prior Federal action applies to a subsequent Maryland state action?
4. Whether the [Court of Special Appeals] had jurisdiction to review the Circuit Court’s non-final orders?
Ms. Gambrell’s petition for writ of certiorari presented the identical questions to Mr. Cain’s questions 1 and 2. 3 damages because Midland garnished Petitioners’ wages over a period of time after it obtained the judgment?
3. Whether the statute of limitations period on Mr. Cain’s individual claims was tolled under Maryland’s class action tolling doctrine?
4. Whether 28 U.S.C. § 1367(d) tolled the statute of limitations on Mr. Cain’s claims asserted in his state court class action based upon his earlier participation as a putative class member of a federal class action?
5. Whether a final judgment was entered by the circuit court in Mr. Cain’s action that was therefore reviewable by the Court of Special Appeals?
We answer yes to questions one, three and five, and no to question two. Given our
holding that Maryland recognizes cross-jurisdictional class action tolling, we determine that
it is unnecessary to answer question four. In Ms. Gambrell’s case, we affirm the judgment
entered by the Court of Special Appeals in both cases in its entirety. In Mr. Cain’s case,
pertaining to Mr. Cain’s individual claims, we affirm the judgment of the Court of Special
Appeals in part, and reverse it in part.
Before we get into the weeds of the instant cases, we start with some background
and history for context. This is not the first time that we have addressed debt collection
activities by consumer debt purchasers like Midland. It is useful to give an overview of
the licensing laws that apply to the collection activities that spawned several class action
cases in both the United States District Court for the District of Maryland and our state
circuit courts.
4 I.
Background
A. Debt-Buying Industry—Unlicensed Collection Activities and Legislative Amendments to Regulate Industry
In Finch III,5 we described the emergence of the consumer debt-buying business
model that was developed in the late 1980s, which has become commonplace in the debt
collection industry. Under this new business format, creditors (such as credit card
companies) sell consumer debt accounts that are in default to bulk purchasers for pennies
on the dollar, thereby transferring the expense and risk of consumer debt collection efforts
to the consumer debt purchaser.
In Maryland, a debt collection agency is required to be licensed. See the MCALA,
Md. Code, Business Regulation Article (“BR”) § 7-301(a) (“a person must have a license
whenever the person does business as a collection agency in the State[]”). The MCALA
was enacted by the General Assembly in 1977.6 From its enactment until some
amendments in 2007, the license requirements focused on persons who were “directly or
5 In order to distinguish between the various decisions related to the Finch litigation, we refer to the various cases as follows: Finch v. LVNV Funding, LLC, 212 Md. App. 748 cert. denied, 435 Md. 266 (2013) (“Finch I”); LVNV Funding v. Finch, No. 1075, 2017 WL 6388959 (Md. Ct. Spec. App. 2017) (“Finch II”), vacated, LVNV Funding LLC v. Finch, 463 Md. 586 (2019) (“Finch III”). 6 We summarized the legislative history of the MCALA in Blackstone v. Sharma, 461 Md. 87 (2018). 5 indirectly in the business of collecting for, or soliciting from another, a consumer claim.”
Finch III, 463 Md. at 603 (emphasis omitted).7
By 2007, it was apparent to the state regulators, and ultimately, the General Assembly,
that the new business model did not fit within the existing definition of “collection agency,”
and debt bulk purchasers were engaging in debt collection activities—filing civil lawsuits,
obtaining judgments, and engaging in post-judgment collection activities—in the State
without a license. Id. at 603–04. It was estimated that, by 2007, there were approximately
40 debt purchasers that were engaging in debt collection activities in Maryland without a
license.8 To close this loophole, at the urging of the Commissioner of Financial Regulation,
the General Assembly expanded the definition of “collection agency” to include a person
“who engages directly or indirectly in the business of . . . collecting a consumer claim the
person owns, if the claim was in default when the person acquired it[.]” BR § 7-101(d)(1)(ii)
(the “2007 amendment”). The 2007 amendment took effect on October 1, 2007. From that
date, bulk purchasers of consumer debts “who engaged directly or indirectly in the business
of collecting consumer debt that they owned and that was in default when they acquired it”
were required to be licensed. Finch III, 463 Md. at 604.
7 In Finch III, we pointed out that the 2006 version of the MCALA defined “collection agency” in relevant part as a person who “engages directly or indirectly in the business of collecting for, or soliciting from another, a consumer claim.” 463 Md. at 603 (emphasis in original). 8 See Dep’t Legis. Servs., Fiscal and Policy Note, House Bill 1324, at 2 (2007) (“The department estimates that the bill would make 40 debt purchasers subject to State regulation. Debt purchasers are not currently subject to regulation, as they purchase the debt directly from the creditor and are generally compensated as a percentage of their recovery.”). 6 Despite the legislative change that brought bulk consumer debt purchasers within
the statutory umbrella of the state licensing scheme, some debt purchasers professed
confusion concerning whether they were required to be licensed in certain instances. This
confusion purportedly arose from their reliance on a letter issued in June 2007 by an
employee of the Department of Labor, Licensing and Regulation (“DLLR”) on behalf of
the Chair of the Collection Agency Licensing Board. These debt purchasers relied on the
June 2007 letter as support for the proposition that they were not required to be licensed as
a collection agency, provided that the collections were handled on their behalf by an
attorney who was licensed as a Maryland collection agency.9 To address the confusion, in
May, 2010, the Collection Agency Licensing Board (“Board” or “Licensing Board”) issued
an advisory notice “clarify[ing] that it has been its consistent position that a consumer debt
purchaser that collects consumer claims through civil litigation is a ‘collection agency’
under Maryland law and required to be licensed as such[.]” (Some capitalization omitted).
Notwithstanding the Board’s position on the need for licensing, the Board acknowledged
the “claims of confusion” arising from the June 2007 letter by some consumer debt
purchasers in deciding not to become licensed. In order to facilitate the prompt licensing
9 We summarized the circumstances surrounding the letter, and its contents in Finch III. We noted that the June 2007 letter was written by Kelly Mack, an employee of the Department of Labor, Licensing and Regulation, purportedly on behalf of the Chair of the Collection Agency Licensing Board. Finch III, 463 Md. 586, 604 n.9. In Finch III, we rejected the debt buyer’s reliance on this letter as being inconsistent with both the plain language of the MCALA, and the affidavits submitted by the Commissioner of Financial Regulation, attesting to the fact that the DLLR and Collection Agency Licensing Board had consistently taken the position that consumer debt purchasers who collect debts through civil litigation are “collection agencies” that are subject to the licensing requirements of the MCALA. Id. at 604 n.9. 7 of the unlicensed consumer debt purchasers, the advisory notice stated that the Board
would not preclude an unlicensed consumer debt purchaser from obtaining a license where,
prior to September 1, 2010, it engaged in civil litigation to collect a consumer debt,
provided that: (1) the consumer debt purchaser was represented in the action by an attorney
who was licensed as a Maryland collection agency; and (2) the consumer debt purchaser
applied for a license on or before August 31, 2010. The Board further proclaimed that it
would not bring an action against a consumer debt purchaser solely for its non-licensed
status provided it fit within the criteria set forth above.
After October 1, 2007, the effective date of the 2007 amendment, a multitude of
lawsuits were filed in both state and federal courts seeking to challenge judgments obtained
by debt purchasers who were not licensed as a collection agency at the time they obtained
the judgments, as well as post-judgment collection efforts undertaken by the debt
purchasers. We discuss the history of one such legal saga—“the Finch cases”—below.
We shall explain the Finch litigation in some detail because the Finch cases were decided
during the pendency of the instant cases, and the lower courts relied upon the various Finch
holdings in their rulings below. Moreover, as the Court of Special Appeals correctly noted,
our holding in Finch III resolves some of the claims made by the Petitioners here.
B. The Finch Cases
Finch III originated as a class action lawsuit filed in the Circuit Court for Baltimore
City against LVNV Funding, LLC (“LVNV”) that resulted in money judgments in favor of
two named plaintiffs, as well as a separate money judgment against LVNV in the amount of
$25 million in favor of the class. LVNV was a debt purchaser that began its debt collection
8 activity upon its founding in 2005 but did not obtain a collection agency license until 2010.
During this period, LVNV obtained individual judgments against the named plaintiffs, as
well as members of the plaintiff class, and engaged in post-judgment collection activity. The
plaintiffs alleged that LVNV violated three Maryland consumer protection statutes that
govern debt collection activity—the MCALA (BR §§ 7-101 through 7-502); the MCDCA
(CL §§ 14-201 through 14-204); and the MCPA (CL §§ 13-101 through 13-501). Like the
Petitioners in this case, the plaintiffs in Finch sought, among other things, a declaration that
the judgments entered against them in the state District Court in favor of LVNV when it was
not licensed as a collection agency were void. Id. at 598. On LVNV’s motion, the circuit
court dismissed the complaint on the ground that it amounted to an impermissible collateral
attack on enrolled District Court judgments. Id.
In a reported opinion, the Court of Special Appeals reversed the circuit court’s
judgment, holding that the judgments obtained by LVNV when it was not licensed as a
collection agency were void, and not merely voidable, and could be collaterally attacked
at any time and in any court. See Finch I, 212 Md. App. 748. Upon that ruling, and the
denial of certiorari by this Court, the case returned to the circuit court for further
proceedings. On remand, the case was submitted to a jury on the plaintiffs’ claims of unjust
enrichment and whether LVNV violated the MCDCA. The jury awarded damages to the
named plaintiffs and the class, which was ultimately entered as a judgment in the amount
of $25 million. After the Court of Special Appeals affirmed the judgment in an unreported
opinion (“Finch II”), LVNV filed a petition for writ of certiorari, which we granted to
consider three issues: (1) whether the MCALA was intended to apply to entities such as
9 LVNV that “passively own” consumer debt but retain licensed collection agencies to
collect it; (2) whether a judgment in favor of an unlicensed agency is void; and (3) whether
the lower courts erred in finding a private right of action in the MCALA or MCDCA.
As to the issue of whether the MCALA applied to LVNV, after examining the plain
language of the 2007 amendment, as well as the legislative history, we rejected LVNV’s
argument that the amendment did not apply where the unlicensed agency retains a law firm
licensed as a collection agency to collect the debt. We held that, from the date that the
2007 amendment took effect, “debt buyers who engaged directly or indirectly in the
business of collecting consumer debt that they owned and that was in default when they
acquired it needed to be licensed.[]” Finch III, 463 Md. at 604. Accordingly, we held that
LVNV’s collection activity from October 1, 2007 until it obtained a license in February
2010 was unlawful under the MCALA, MCDCA, and MCPA. Id. at 606.
However, we disagreed with the Court of Special Appeals’ holding in Finch I and
Finch II, that a judgment obtained by an unlicensed collection agency is void. In rejecting
this holding, we explained that “[j]udgments, by and large, are meant to be final.” Id. at
607. Repeating the words expressed by this Court 143 years ago, which have been repeated
several times since, we pointed out that
[i]t is most desirable of course that there should be an end to litigation, and a judgment is presumed to be a settlement of all matters in dispute in that particular case; and once entered, parties are no longer under the necessity of preserving the evidences upon which their claims rested. By it new rights are acquired, and if stricken out other claims may intervene, and the plaintiff may not only lose his lien, but in many cases the entire debt.
10 Id. (quoting Abell v. Simon, 49 Md. 318, 324 (1878)) (additional citations omitted). We
explained that, “[i]n furtherance of that principle, the ability to challenge a civil judgment,
other than by appeal, is limited, even in the court that entered it. The court that rendered the
judgment has discretionary revisory power over it for only 30 days.” Id. We pointed out
that, under Maryland Rules 2-535 and 3-535, the judgment becomes “enrolled” on the 30th
day following its entry, “and after that time, the court may revise it only upon a finding of
fraud, jurisdictional mistake, or irregularity, which are narrowly construed.” Id. at 607–08
(citations omitted).
In addition to principles of finality, we also observed that our jurisprudence dating
back to 1824 distinguished “between judgments that were merely voidable because of
irregularities in the proceeding that produced them and those that were absolutely void ab
initio.” Id. at 608 (citing Barney v. Patterson, 6 H. & J. 182, 204 (1824)). We stated that
[c]ollateral attacks, whether in the court that entered the judgment or in any other court, are even more severely limited and are permitted only when the court that rendered the judgment had no jurisdiction to do so. Indeed, there are few principles of law that are so firmly and consistently entrenched in our jurisprudence, and for good reason.
Id. (emphasis in original). We also explained that our holding was not “a matter of blind
adherence to an outmoded judicial policy[,]” but in recognition that “[e]nrolled judgments
create important vested rights that not just the parties, but the entire public, have a right to
rely upon.” Id. at 611. Because the District Court “clearly had fundamental jurisdiction
over the collection actions filed by LVNV, notwithstanding that LVNV had no legal
authority to file them,” we held that the two lower courts erred in declaring them void. Id.
11 Although we determined that the judgments obtained when LVNV was unlicensed
were not void or otherwise subject to collateral attack, we nonetheless held that the MCALA
establishes a private remedy for the recovery of “any damages” arising from a violation of
its statutory provisions, including for emotional distress. Id. at 612. Accordingly, we
remanded the case for further proceedings with respect to damages. We stated that
“[a]lthough the District Court judgments may not be collaterally attacked, BR § 7-401, read
in conjunction with § 7-101(c), would permit declaratory and injunctive relief precluding
LVNV from taking any action to enforce those judgments and for any damages incurred by
the plaintiffs as the result of LVNV’s collection efforts.” Id. (emphasis in original).
To summarize our holdings in Finch III, we held that:
• As of October 1, 2007—the date that the 2007 amendment took effect—debt
buyers were required to be licensed before engaging in efforts to collect consumer debt.
• Enrolled judgments obtained by an unlicensed debt buyer are not void or subject
to collateral attack on any ground other than the fundamental jurisdiction of the court that
entered the judgment to render it.
• Although an enrolled judgment obtained by an unlicensed debt buyer is not void,
a judgment debtor may still have a cause of action under the Maryland consumer protection
statutes governing debt collection (MCALA, MCDCA and MCPA) for declaratory and
injunctive relief precluding the debt buyer who obtained the judgment while unlicensed,
from enforcing those judgments and for any damages incurred by the plaintiff as a result
of the collection efforts.
12 In Finch III, we did not consider the issue presented in this case—the applicable
statute of limitations that applies to a plaintiff’s claims for unjust enrichment and statutory
monetary damages arising from a debt buyer’s collection activities.10 That issue is
presented in the instant case.
C. Midland’s Licensing Status
Like LVNV in the Finch saga, Midland is also an out-of-state debt-buyer11 that
obtained judgments and pursued debt collection actions at a time when it was not licensed
in Maryland as a debt collector. The Board entered an administrative order on September
16, 2009 requiring Midland and a number of its affiliates to cease and desist collection
activities in Maryland. On December 17, 2009, Midland, several of its affiliates, and the
Board entered into a settlement agreement, whereby Midland agreed to stay all of its active
collection-related actions and not to file any new collection-related actions in Maryland
until it was issued a license by the Licensing Board. The agreement also provided that,
after it obtained the proper license, Midland could “file appropriate motions in the
10 In Finch III, the respondents filed a cross-petition asking the Court to determine whether the subclass members’ claims were barred by the statute of limitations. The purported subclass consisted of all persons who had paid amounts pursuant to the judgments. Given our remand for a consideration of declaratory and injunctive relief that might preclude LVNV from taking prospective action to enforce the judgments, and for any statutory damages arising out of LVNV’s collection efforts, we did not reach the statute of limitations issue, stating that “[b]ecause of this remand for further proceedings with respect to damages, we need not address the issues raised in respondent’s cross-petition. If raised again in the Circuit Court, the context may be different.” 463 Md. at 612. 11 Midland is a limited liability company that was organized in Delaware. Its business is to purchase bulk portfolios of past-due consumer debt from lenders for purposes of collection. 13 Maryland state courts or take other appropriate actions in order to have the voluntary stay
. . . lifted by the courts.” (Capitalization omitted). Midland also agreed to pay a penalty in
the sum of $998,000. On January 15, 2010, the Licensing Board issued Midland a
collection agency license.
Midland’s unlicensed debt collection activity included the collection litigation
against Mr. Cain and Ms. Gambrell that resulted in judgments being entered against them,
and which ultimately gave rise to the putative class actions filed by them in these cases.
We describe the nature of the debt collection activity and the resulting putative class action
litigation below.
II.
Procedural History
A. Mr. Cain’s Litigation with Midland
1. Midland’s 2009 Collection Action Against Mr. Cain
The genesis of Mr. Cain’s dispute with Midland started with a debt collection action
that was filed against him in 2009. Midland purchased a portfolio of past-due loans from
Citibank in January 2009. One of those loans included an unpaid balance on a credit card
account owed by Mr. Cain. On March 30, 2009, Midland filed a collection action against
Mr. Cain in the District Court of Maryland, sitting in Baltimore City. Mr. Cain was served
with the complaint and filed a notice of intention to defend in which he requested a
postponement of the trial date so that he could obtain counsel. When the trial was held on
August 19, 2009, Mr. Cain did not appear. The District Court entered judgment by affidavit
in Midland’s favor in the amount of $4,520.54, plus costs. On September 25, 2009,
14 Midland received a partial payment of $300 toward the judgment. On October 29, 2010,
Midland filed a request for writ of garnishment to collect the remaining balance. Whether
through garnishment or other means, the balance due was paid, and Midland filed an order
of satisfaction on August 8, 2012. When Midland obtained the judgment, and when Mr.
Cain made his first payment, Midland was not licensed as a debt-collection agency under
Maryland law. Midland’s attempts to collect the judgment through its garnishment efforts
occurred after it was licensed as a collection agency.
2. Federal Class Action Litigation - Johnson v. Midland
Midland’s attempts to collect consumer debts without a license spawned class
action litigation. On September 10, 2009, a federal civil action was filed against Midland
in the United States District Court for the District of Maryland. See Johnson v. Midland
Funding, LLC, D. Md. Civil. No. 09-2391. Mr. Cain was a putative class member of the
Johnson plaintiffs’ proposed class, which was defined as “all natural persons who reside
in Maryland and who have been the subject of consumer debt collection efforts by
Midland within three years immediately preceding the filing of this class action that
included the filing of an action before a Court of the State of Maryland.” In June 2010,
the parties agreed to a settlement of the Johnson case. As part of the settlement, the
plaintiff class was narrowed to exclude persons—like Mr. Cain—against whom Midland
had obtained a judgment. The federal district court approved the settlement on March
10, 2011. The claims that were not included in the settlement were dismissed with
prejudice.
15 3. The Present Action
Mr. Cain filed the present action in the Circuit Court for Baltimore City on July 30,
2013. The complaint alleges that Midland improperly sought to collect debts as an
unlicensed collection agency and as a result, the judgments obtained by Midland were void.12
Rather than filing an individual action, Mr. Cain filed the case as a putative class action, with
the proposed class consisting of all persons sued by Midland in Maryland courts from
October 30, 2007 to October 14, 2010, and against whom Midland had obtained judgments.
Mr. Cain, on his own behalf, and on behalf of members of the putative class, brought three
counts seeking declaratory and injunctive relief (counts I, II and III), including: a declaration
that Midland was not entitled to interest, attorney’s fees or court costs on his debt or the debts
of the plaintiff class members because it was acting as an unlicensed debt collection agency;
a declaration that Midland’s judgment against Mr. Cain (as well as any other judgments
obtained against members of the putative class) was void; injunctive relief to enjoin Midland
from engaging in any further collection activities on judgments obtained while it was
unlicensed; and money damages based on theories of unjust enrichment (count IV) and
Midland’s statutory violations of the MCALA, MCDCA and MCPA (count V).
In June 2017,13 Midland filed a motion to dismiss, or in the alternative, for summary
judgment. Although Midland presented a number of contentions, only one is pertinent to
12 Given our holding in Finch III, this claim has been adversely decided against Petitioners.
Between the filing of the complaint and Midland’s filing of its motion to dismiss 13
or for summary judgment, the case took a procedural detour to this Court. As noted above, Midland’s original claim against Mr. Cain was based upon his failure to make payments 16 the present case—specifically, that all counts are time-barred by the applicable statute of
limitations. Mr. Cain filed an opposition to Midland’s motion, as well as his own motion
for partial summary judgment. Relying upon Finch I, 212 Md. App. 748, Mr. Cain argued
that he was entitled to summary judgment as a matter of law on his request for declaratory
judgment, asserting that the judgment was void because Midland was not licensed in
Maryland when it obtained its judgment against him. Mr. Cain also argued that his
additional claims were not time-barred because the statute of limitations was tolled under
the class action tolling doctrine recognized by the Supreme Court in American Pipe &
Construction Co. v. Utah, 414 U.S. 538 (1974), and adopted by this Court in Philip Morris
USA, Inc. v. Christensen, 394 Md. 227 (2006), abrogated on other grounds, Mummert v.
Alizadeh, 435 Md. 207 (2013).
In July 2017, Mr. Cain filed a motion to compel discovery, asserting that Midland
had supplied unresponsive answers to interrogatories, which caused him prejudice. He
requested that the court order Midland to provide complete responses to any outstanding
discovery. Mr. Cain also sent a letter to the court requesting that a hearing be scheduled
on his motion for class certification, which Midland opposed.
on an overdue credit card balance. Midland asserted that it was entitled to invoke a mandatory arbitration clause contained in the credit card agreement between Mr. Cain and Citibank. The circuit court and Court of Special Appeals agreed with Midland. We did not. See Cain v. Midland Funding, 452 Md. 141, 163 (2017) (holding that Midland waived its right to arbitrate the current claim when it chose to litigate the collection action that it initiated against Mr. Cain in 2009). After holding that the mandatory arbitration provisions did not apply, we remanded the case to the circuit court for further proceedings. 17 The circuit court held a hearing on September 13, 2017 on Midland’s motion and
Mr. Cain’s motion for partial summary judgment. On September 21, 2017, the court issued
a memorandum opinion and order that granted each motion in part and denied each in part.
As a result of the memorandum opinion and order, all of Mr. Cain’s individual claims
contained in the amended complaint were adjudicated. First, the court determined that,
based upon the Court of Special Appeals’ decision in Finch I, the judgment that Midland
had obtained against Mr. Cain in 2009 was void, and he was entitled to a declaratory
judgment vacating that judgment. The court further determined that neither laches nor the
statute of limitations applied to that claim. Second, the court determined that Mr. Cain’s
claim for unjust enrichment was barred by the three-year statute of limitations set forth in
CJ § 5-101 and rejected Mr. Cain’s argument that such claims were tolled under a theory
of cross-jurisdictional class action tolling. Third, the court concluded that, because the
judgment against Mr. Cain had been paid and an order of satisfaction had been filed, there
was no basis to grant the injunctive relief sought by him.
Consistent with its September 21 opinion and order, the court entered a separate
declaratory judgment in favor of Mr. Cain in the principal amount of $4,520.54 plus $60 in
costs and post-judgment interest. The court further ordered that the original judgment
entered in favor of Midland and against Mr. Cain in the District Court be vacated. The order
was docketed the following day, on September 22, 2017. The clerk indexed the judgment,
entering a $4,520.54 “money judgment” against Midland on September 29, 2017.
We pause here for a moment to discuss the purported claims that another individual,
Cassandra Murray, attempted to raise in this proceeding. On September 21—the same date
18 that the court signed the order and declaratory judgment—Mr. Cain filed an amended
complaint, which sought to add Cassandra Murray as a second plaintiff.14
Midland and Mr. Cain and Ms. Murray filed motions to alter or amend the court’s
September 21 opinion and order. Mr. Cain and Ms. Murray’s motion to alter or amend
asserted that the court’s opinion and order failed to address: (1) Ms. Murray’s claims; (2)
the putative class claims; or (3) that the case was to be closed.
The court denied all the parties’ motions to alter or amend by an order entered on
October 24, 2017. Midland’s motion is not relevant to the issues presented here, other than
to note that, in denying Midland’s motion, the court accepted Mr. Cain’s argument that the
12-year limitations period set forth in CJ § 5-102(a)(3) applied to Mr. Cain’s statutory
claim that Midland’s act in obtaining a judgment against him while it was unlicensed was
void. Addressing Ms. Murray’s claims, the court pointed out that the amended complaint
was filed on September 21—the same date that the court issued its memorandum opinion
and order. The court further noted that Mr. Cain moved for summary judgment
“individually and on behalf of a class and subclass of similar persons” on July 7, 2017—
several months before Ms. Murray attempted to join the case as a plaintiff. The court also
14 Ms. Murray, through Mr. Cain’s counsel, previously filed a class action lawsuit against Midland in the Circuit Court for Anne Arundel County. The case was later removed to federal court. The federal court decided part of the case against Ms. Murray on the same limitations issue presented in this case, remanded a portion of the case to state court, and certified questions to this Court. See Murray v. Midland Funding, LLC, Case No. JKB-15- 0532, 2015 WL 4994212 (D. Md. Aug. 19, 2015). Ms. Murray dismissed her remaining federal claims, which eliminated this Court’s need to answer the certified question. Ms. Murray ultimately dismissed her state court claims pending in the Circuit Court for Anne Arundel County on August 5, 2017. The amended complaint purporting to add her to this case was filed six weeks later. 19 stated that Ms. Murray’s claims were not argued at the hearing on September 13, and
therefore, the “court did not have the opportunity to opine on Ms. Murray’s hypothetical
claims.” Finally, the court stated that it “was not aware that such claims existed until after
the [o]rder was issued.”
With respect to the plaintiff’s motion to certify the class, the court noted that it
expressly declined to rule on that motion at the September 13 hearing, and specifically stated
at the hearing that the request would be forwarded to the judge assigned to determine class
certification. The court noted that, although the clerk inadvertently closed the case after the
entry of the memorandum opinion and order, the matter was reopened and consequently, the
plaintiff’s motion as it pertained to the improper closure of the case was moot.
Midland filed a timely notice of appeal. After a delay pending this Court’s decision
in Finch III, the Court of Special Appeals requested supplemental briefing, followed by oral
argument. In an unreported opinion, after determining that the circuit court’s summary
judgment and declaratory judgment orders constituted a final appealable judgment, the Court
of Special Appeals held that Mr. Cain’s claims for monetary damages were time-barred; that
Finch III resolved Mr. Cain’s requested declaration that the judgments were void; and that
Mr. Cain’s claim for injunctive relief had no basis because Midland’s judgment against Mr.
Cain had been satisfied before Mr. Cain filed this lawsuit. Midland Funding, LLC v. Cain,
No. 1805, Sept. Term, 2017, 2020 WL 4370888 at *15 (Md. Ct. Spec. App. July 30, 2020).
Mr. Cain petitioned for a writ of certiorari, which this Court granted.
20 B. Ms. Gambrell’s Litigation with Midland
1. Midland’s 2008 Collection Action Against Ms. Gambrell
On July 14, 2008, Midland, through counsel, filed a breach of contract action against
Ms. Gambrell in the District Court of Maryland, sitting in Montgomery County. Midland’s
complaint was served on Ms. Gambrell on August 17, 2008. The trial took place on
October 8, 2008, and the court entered a judgment against Ms. Gambrell in the amount of
$2,420.97, plus $141.68 in prejudgment interest and $60.00 in costs. Ms. Gambrell
subsequently made a partial payment in the amount of $251.32 on November 30, 2009.
It is undisputed that Midland did not have a collection agency license when it filed
the lawsuit against Ms. Gambrell and obtained the judgment against her. As noted above, as
part of the settlement agreement between Midland and the Licensing Board, the Board
authorized Midland to collect on pre-licensure judgments after it became licensed. On
January 15, 2010, Midland obtained a license. Once it was licensed, and because the
judgment against Ms. Gambrell was not satisfied, Midland’s attorneys requested a writ of
garnishment, which was issued on December 5, 2011. Midland’s attorneys requested a
second writ, which they signed on September 17, 2012. The writ noted that, as of September
17, 2012, the sum of $2,216.32 had been paid toward Ms. Gambrell’s judgment and that the
remaining amount due was $437.07. The judgment was fully paid. Ms. Gambrell did not
allege, nor do the docket entries reflect, any collection efforts by Midland after 2012.
2. The Present Action
On September 28, 2015, Ms. Gambrell filed a putative class action against Midland
in the Circuit Court for Anne Arundel County. In 2016, she filed an amended complaint,
21 which is the operative complaint. In it, she alleged that Midland’s failure to have a debt
collection license in 2008 rendered the judgment Midland obtained against her “void and
unenforceable.” She asserted the following five claims, all based on Midland’s licensure
status: unjust enrichment (count I); a claim for disgorgement of all funds collected by
Midland through its efforts to enforce the judgment while unlicensed in violation of the
MCDCA, and the MCPA (count II); a similar claim based on Midland’s alleged violations
of the MCALA and the common law action of money “had and received” (count III); a
declaratory judgment that Midland’s judgment against her was void and unenforceable,
together with an injunction against Midland’s attempts to enforce the judgments in the
future (count IV); and declaratory and injunctive relief against Midland’s attempting to
collect pre- and post-judgment interests and costs (count V). As to each count, Ms.
Gambrell also sought class certification to encompass “[t]hose persons sued by Midland in
Maryland state courts from October 30, 2007 [against] whom Midland obtained a judgment
for an alleged debt, interest or costs, including attorney’s fees[.]”15
Midland filed a motion to dismiss Ms. Gambrell’s amended complaint, arguing, in
pertinent part, that all counts are time-barred and fail to state claims upon which relief can
be granted, that Ms. Gambrell could not attack a judgment obtained in the District Court in
a different county, that Ms. Gambrell’s claims are not justiciable, and that its post-licensure
collection activities were authorized by the State Licensing Board. Ms. Gambrell filed an
opposition to Midland’s motion.
15 Ms. Gambrell also sought a subclass certification consisting of “those members of the [c]lass from whom Midland collected . . . any sum on the judgment.” 22 The court held a hearing on Midland’s motion, at the conclusion of which the court
issued its ruling from the bench. As to Ms. Gambrell’s unjust enrichment, statutory and
disgorgement claims (counts I, II and III), the court concluded that the Court of Special
Appeals’ decision in Jason v. National Loan Recoveries, 227 Md. App. 516 (2016),
controlled and that a three-year statute of limitations applied to those claims. The court
determined that those claims accrued “when the defendant filed the collection action
against the plaintiff as the defendant’s unlicensed status was a matter of public record and
[the Licensing Board] had issued an advisory notice requiring collection agents to be
licensed two years prior to the commencement of that action,” and therefore, that the
limitations period had run in 2011. Accordingly, the circuit court dismissed these counts
with prejudice. With respect to the declaratory judgment and injunctive relief counts
(counts IV and V), the court determined that it lacked authority to issue the declaratory
relief and dismissed those counts without prejudice.16
Ms. Gambrell noted an appeal to the Court of Special Appeals. After arguments,
the case was stayed pending our decision in Finch III. After additional briefing and oral
argument, the Court of Special Appeals issued an unreported opinion affirming the circuit
court’s decision. Gambrell v. Midland Funding, LLC, No. 1939 Sept. Term, 2016, 2020
WL 4371297 (Md. Ct. Spec. App. July 30, 2020). The intermediate appellate court
determined that Ms. Gambrell’s claims for money damages (counts I, II and III) were
16 The Circuit Court for Anne Arundel County concluded that if Ms. Gambrell wished to challenge a judgment entered by the District Court, sitting in Montgomery County, she must do so pursuant to that court’s power under Maryland Rule 3-535, and, if that fails, she may seek declaratory relief in the Circuit Court for Montgomery County. 23 barred by the three-year statute of limitations under CJ § 5-101, and that her claims for
declaratory and injunctive relief (counts IV and V) were resolved by our decision in Finch
III. Ms. Gambrell petitioned this Court for a writ of certiorari, which we granted.
III.
Standard of Review
Under Maryland Rule 2-322(b)(2), a defendant may seek dismissal of a complaint if
the complaint “fail[s] to state a claim upon which relief can be granted.” “A motion to
dismiss is properly granted if the factual allegations in a complaint, if proven, would not
provide a legally sufficient basis for the cause of action asserted in the complaint.” Wheeling
v. Selene Finance LP, 473 Md. 356 (2021). Whether a motion to dismiss was properly
granted or not is a legal question. This Court reviews legal questions de novo, with no
deference given to the trial court. See Lamson v. Montgomery County, 460 Md. 349, 360
(2018). In doing so, the Court “must assume the truth of all relevant and material facts that
are well pleaded and all inferences which can be reasonably drawn from those pleadings.”
Barclay v. Castruccio, 469 Md. 368, 373–74 (2020) (quoting Lloyd v. Gen. Motors Corp.,
397 Md. 108, 121 (2007)). A motion to dismiss may only be granted where the allegations
presented do not state a cause of action. Id. at 374.
Regarding Mr. Cain’s case, on review of a court’s grant of summary judgment, we
must first determine whether a genuine dispute of material fact exists. Koste v. Town of
Oxford, 431 Md. 14, 24–25 (2013). If not, we determine whether the circuit court correctly
entered summary judgment as a matter of law. Id. at 25. The standard of review of a circuit
court’s grant of a motion for summary judgment is de novo. Id.
24 IV.
Discussion
As discussed above, the Court of Special Appeals correctly determined that our
holding in Finch III applies to the Petitioners’ claims seeking a declaratory judgment that
Midland’s judgments against them are void. The Court of Special Appeals also held that
the circuit court correctly dismissed the injunctive relief claims because the judgments
were paid and orders of satisfaction were filed, and accordingly, there was no basis upon
which to grant injunctive relief. The Petitioners did not seek our review of these holdings.
The only issues before us involve whether Petitioners’ claims for unjust enrichment
and for statutory damages under the MCDCA and the MCPA are time barred, and whether
a final appealable judgment was entered in Mr. Cain’s case. For the reasons set forth
below, we agree with the Court of Special Appeals’ conclusion that the blanket three-year
statute of limitations applies to such claims. We agree that Ms. Gambrell’s claims are time-
barred. As set forth herein, we recognize cross-jurisdictional class action tolling with
respect to Mr. Cain’s individual claims. Based upon the application of class action tolling,
we determine that Mr. Cain’s claims are not time-barred.
A. Accrual of Claims
Before we discuss the applicable statute of limitations, we briefly recount the circuit
courts’ respective determinations concerning the date that Mr. Cain’s and Ms. Gambrell’s
claims for damages accrued. We have said that the question of when an action accrues is
one left to judicial determination. Frederick Rd. Ltd. P’ship v. Brown & Sturm, 360 Md.
76, 95 (2000). In Maryland, we apply the “discovery rule” in civil actions in determining
25 when the statute of limitations begins to accrue on a claim. Poffenberger v. Risser, 290
Md. 631 (1981). Under the discovery rule, a claim accrues when the plaintiff “knew or
reasonably should have known of the wrong.” Id. at 636.
Although neither party has sought review of the circuit courts’ determinations of the
respective accrual dates, we briefly discuss the issue given that any limitations period runs
from that date. With respect to Mr. Cain’s claims, the circuit court concluded that his
claims for money damages accrued for limitations purposes when Midland received its first
payment on the judgment, which was on September 25, 2009. The Court of Special
Appeals affirmed the circuit court’s accrual determination, and Mr. Cain did not seek
review of this issue.17 Mr. Cain filed suit on July 30, 2013—more than three years after
the claim accrued.
With respect to Ms. Gambrell’s claims, the circuit court determined that Ms.
Gambrell’s claims accrued on July 14, 2008, which is the date Midland filed its collection
action against her. The circuit court concluded that Midland’s “unlicensed status was a
matter of public record and [the Licensing Board] had issued an advisory notice requiring
17 Although Mr. Cain did not seek review of the circuit court’s determination of the accrual date and the Court of Special Appeals’ affirmance of the same, Mr. Cain asserts in his brief that he has “no memory of making the alleged payment.” Mr. Cain does not provide any record citation for this statement, and he never raised this issue by way of argument or affidavit. By contrast, with its motion for summary judgment, Midland attached business records pursuant to Maryland Rule 5-803(b)(6) establishing that Midland received a $300 partial payment from Mr. Cain on September 2009, along with an October 29, 2010 writ of garnishment reflecting “total credits” of $300.00. As the Court of Special Appeals aptly stated, if Mr. Cain did not make the September 25, 2009 payment, “the proper way for him to establish a dispute of fact would have been for him to file an affidavit or other evidence to that effect. At best, he has raised a ‘metaphysical doubt,’ which is insufficient.” Cain, 2020 WL 4370888, at *6. 26 collection agents to be licensed two years prior to the commencement of that action.”
Ms. Gambrell filed her lawsuit on September 28, 2015, almost seven years after the
District Court entered judgment against her on October 8, 2008, and nearly six years after
Ms. Gambrell made a partial payment to Midland on November 30, 2009. The Court of
Special Appeals affirmed the circuit court’s determination of Ms. Gambrell’s accrual date,
concluding that her statutory cause of action for money damages accrued when she was
placed on inquiry notice of Midland’s wrongdoing and “[a]t the very latest, this occurred
when Midland received its first payment on the judgment.” Gambrell, 2020 WL 4371297,
at *4. Ms. Gambrell did not seek review from this Court of the circuit court’s accrual
determination, which was affirmed by the Court of Special Appeals.
Although neither party sought review of the accrual date established by the circuit
court, like the Court of Special Appeals, we determine that Ms. Gambrell’s and Mr. Cain’s
claims accrued at the latest when Midland received its first payments on the judgments.
By making the payments, they were clearly on notice of the judgment that had been entered
against them, and had the ability to determine whether Midland was licensed at the time of
the entry of the judgments—information that was a matter of public record.18 Establishing
the accrual date for the Petitioners’ claims as the date that they made their first payment is
consistent with the discovery rule established by our Court in Poffenberger, 290 Md. 631.
In Crowder v. Master Financial, Inc., 176 Md. App. 631, 657–58 (2007), aff’d in part,
Master Financial, Inc. v. Crowder, 409 Md. 51 (2009), in determining that the borrowers’
18 See http://www.dllr.state.md.us/financce/industry/licsearch.shtml. 27 claims under the MCPA were barred by the three-year statute of limitations, the Court of
Special Appeals explained that:
The relevant inquiry for the purpose of determining when a cause of action accrued under the discovery rule is when a plaintiff knew or reasonably should have known of the operative facts giving rise to the cause of action, not whether a plaintiff had knowledge of the applicable law. Neither ignorance of the law nor failure to consult an attorney to inquire about one’s legal rights will expand the period of limitations within which suit must be filed.
(internal citations omitted). As of the date that they made payments on their judgments,
the Petitioners had the ability to ascertain, through due diligence and based upon matters
of public record, whether Midland was licensed at the time that it obtained the judgments.
Given that Petitioners’ claims were filed more than three years after their respective
accrual, they are barred by the three-year statute of limitations unless: (1) an alternative
limitations period applies; (2) it was extended under a continuing harm theory; or (3) it was
tolled.
B. The Default—Three Year Statute of Limitations
As we have made clear on several occasions, the default statute of limitations for civil
actions at law in Maryland, codified at CJ § 5-101, is three years, unless another provision
of the Code expressly provides for an alternative limitations period. See, e.g., AGV Sports
Grp., Inc. v. Protus IP Sols., Inc., 417 Md. 386, 392 (2010); Greene Tree Home Owners
Ass’n, Inc. v. Greene Tree Assocs., 358 Md. 453, 459–61 (2000). The three-year default
statute was enacted in 1973 as part of one of the first articles of the Maryland Code that was
adopted as a result of Governor Marvin Mandel’s Commission to Revise the Annotated Code
that was created in 1970. In Tipton v. Partner’s Management Co., 364 Md. 419 (2001), we
28 described the derivation of the general blanket statute. We need not repeat that history here,
other than to note that it “was enacted as a broad three-year limitation provision for the
purpose of avoiding confusion and providing clarity.” Tipton, 364 Md. at 441.
The language of the three-year limitations statute remains unchanged from its initial
enactment and 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. In Ceccone v. Carroll Home Services,
LLC, 454 Md. 680, 691 (2017), we explained that “[s]tatutes of limitations are designed to
balance the competing interests of plaintiffs, defendants, and the public.” We stated that 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.
Id. (citations omitted). This balance is struck “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.” Shailendra Kumar, P.A. v. Dhanda,
426 Md. 185, 205 (2012) (quoting Bertonazzi v. Hillman, 241 Md. 361, 367 (1966)).
Although statutes of limitations are not sacrosanct, see Ceccone, 454 Md. at 692,
the Court does not craft exceptions to limitations periods without compelling reasons. We
apply a “strict construction regarding tolling of statutes of limitations” and, therefore,
“absent legislative creation of an exception to the statute of limitations, we will not allow
any ‘implied and equitable exception to be engrafted upon it.’” Anderson v. United States,
29 427 Md. 99, 120 (2012) (quoting Hecht v. Resolution Tr. Corp., 333 Md. 324, 333 (1994)
(citations omitted)); see also Minh-Vu Hoang v. Lowery, 469 Md. 95, 126 (2020) (noting
the “well established principle” of “narrow construction of statutes of limitations”); Garay
v. Overholtzer, 332 Md. 339, 359 (1993) (describing narrow construction of statutes of
limitations as a “well established principle”) (citations omitted).
As noted above, Petitioners’ claims are for unjust enrichment and money damages
for violations of the MCPA and MCDCA. We have previously held that a claim for unjust
enrichment that seeks the remedy of restitution of money is subject to the general three-
year statute of limitations. See Ver Brycke v. Ver Brycke, 379 Md. 669, 698 (2004). We
have also held that a claim for money damages under the MCPA is subject to the three-
year statute of limitations. See Master Fin., Inc. v. Crowder, 409 Md. 51 (2009); Greene
Tree Home Owners Ass’n, Inc. v. Greene Tree Assocs., 358 Md. 453 (2000).
Notwithstanding our application of the three-year statute of limitations to similar claims
for money damages, Petitioners assert that their claims fall within the 12-year statute of
limitations applicable to specialties actions because their claims constitute an “action on a
judgment” under CJ § 5-102(a)(3). For the reasons set forth below, we disagree.
C. 12-Year Statute for Specialties Actions “On” a Judgment
The General Assembly has legislated several exceptions to the three-year limitations
period. One such exception is the statute of limitations that is applicable to specialties
actions, set forth in CJ § 5-102, which states:
(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:
30 (1) Promissory note or other instrument under seal; (2) Bond except a public officer’s bond; (3) Judgment; (4) Recognizance; (5) Contract under seal; or (6) Any other specialty.
Petitioners rely exclusively on the specialty addressed in CJ § 5-102(a)(3), which
provides for a 12-year statute of limitations for “[a]n action on [a] . . . judgment.”
Petitioners assert that, because Midland’s wrongful conduct involved the entry of a
judgment, their claims for unjust enrichment and money damages arising under the MCPA
and MCDCA are subject to the 12-year statute of limitations applicable to specialties
actions. The Court of Special Appeals rejected this argument by relying on two reported
cases of that court which addressed this very issue. Cain, 2020 WL 4370888, at *7 (citing
Jason v. Nat’l Loan Recoveries, LLC, 227 Md. App. 516, 527–34 (2016); Murray v.
Midland Funding, 233 Md. App. 254, 259–60 (2017)). In Jason, the Court of Special
Appeals rejected an identical argument made by a similarly situated plaintiff who filed a
claim against a debt buyer who had obtained a judgment against him when it was not
licensed as a collection agency. Id. at 527–34. The intermediate appellate court held that
the 12-year statute of limitations for specialty actions on a judgment—CJ § 5-102(a)(3)—
did not apply to the plaintiff’s claims for unjust enrichment nor to his claims for damages
arising out of alleged violations of the Maryland consumer protection statutes. Id. Instead,
the court in Jason determined that such claims fell within the general three-year statute of
limitations. Id. at 531. The Court of Special Appeals reiterated these holdings in Murray.
233 Md. App. at 259–60. In the case at hand, the intermediate appellate court simply
31 applied its own precedent. Unsurprisingly, Petitioners contend that the Court of Special
Appeals’ holding in Jason is incorrect. This is our first opportunity to address the issue.19
For the reasons set forth below, we agree with the analysis undertaken by our colleagues
in Jason and hold that Petitioners’ claims for unjust enrichment and monetary damages
arising under the MCPA and MCDCA fall within the blanket three-year statute of
limitations under CJ § 5-101 and are not actions “on a judgment” pursuant to CJ § 5-
102(a)(3) subject to the 12-year statute of limitations for specialties actions.
When undertaking an exercise in statutory interpretation, we start with the cardinal
rule of statutory interpretation—to ascertain and effectuate the General Assembly’s purpose
and intent when it enacted the statute. 75-80 Properties, L.L.C. v. RALE, Inc., 470 Md. 598,
623 (2020). To discern the intent of the General Assembly, our analysis begins with the
normal, plain meaning of the language of the statute. Lockshin v. Semsker, 412 Md. 257,
275 (2010). “We neither add nor delete language so as to reflect an intent not evidenced in
the plain and unambiguous language of the statute, and we do not construe a statute with
‘forced or subtle interpretations’ that limit or extend its application.” Id. (citations omitted).
If the statutory language is clear and consistent with its apparent purpose, our inquiry
ordinarily ends, and we apply the statute as written. Id. As we stated in Lockshin:
We, however, do not read statutory language in a vacuum, nor do we confine strictly our interpretation of a statute’s plain language to the isolated section alone. Rather, the plain language must be viewed within the context of the statutory scheme to which it belongs, considering the purpose, aim, or policy of the Legislature in enacting the statute. We
19 No petition for writ of certiorari was filed following the Court of Special Appeals’ opinion in Jason v. Nat’l Loan Recoveries, LLC, 227 Md. App. 516 (2016) nor its opinion in Murray v. Midland Funding, LLC, 233 Md. App. 254 (2017). 32 presume that the Legislature intends its enactments to operate together as a consistent and harmonious body of law, and, thus, we seek to reconcile and harmonize the parts of a statute, to the extent possible consistent with the statute’s object and scope.
Where the words of a statute are ambiguous and subject to more than one reasonable interpretation, or where the words are clear and unambiguous when viewed in isolation, but become ambiguous when read as part of a larger statutory scheme, a court must resolve the ambiguity by searching for legislative intent in other indicia, including the history of the legislation or other relevant sources intrinsic and extrinsic to the legislative process. In resolving ambiguities, a court considers the structure of the statute, how it relates to other laws, its general purpose, and the relative rationality and legal effect of various competing constructions.
In every case, the statute must be given a reasonable interpretation, not one that is absurd, illogical, or incompatible with common sense.
Id. at 275–76 (internal citations omitted).
In this case, both parties assert that the language of the specialties statute applicable
to “[a]n action on [a] . . . judgment” is plain and unambiguous. Petitioners assert that the
plain language of CJ § 5-102(a)(3) does not limit the actions covered to a creditor’s
enforcement of a judgment. Instead, they assert that the General Assembly intended to
establish a 12-year limitations period for any action that involves the entry of a judgment.
Because Petitioners’ claims are based upon judgments that Midland obtained when it was
unlicensed, they assert that their claims falls within the plain language of CJ § 5-102(a)(3).
Unsurprisingly, Midland contends that the only reasonable reading of the plain language
of CJ § 5-102(a)(3) is the interpretation adopted by the Court of Special Appeals in Jason—
which is that an action “on” a judgment is an action seeking to enforce a judgment.
Notwithstanding the parties’ assertions that the language plainly and
unambiguously supports their respective positions, we shall conclude that the language is
33 ambiguous. We reach this conclusion because Petitioners’ interpretation of the phrase
“action on a judgment,” when read in isolation, might arguably be considered to be a
reasonable interpretation, given that their claims are centered around judgments that
Midland obtained when it was unlicensed. See Koste, 431 Md. at 30–31 (determining that
a statute was ambiguous notwithstanding the parties’ mutual assertion of unambiguity
because two reasonable interpretations could be reached when the phrase in question was
read in isolation). However, Petitioners’ plain language interpretation becomes untenable
when viewed in the context of the structure of the statute, how it relates to other laws, its
purpose, and the relative rationality and legal effect of the competing construction.
We start with the plain language of the specialties statute, which is that a 12-year
statute of limitations applies to a specialties “action on [a] judgment.” CJ § 5-102(a)(3).
At issue is the definition or meaning of the preposition “on” and whether it means an action
“involving” a judgment or whether it means an action to “enforce” a judgment. In order to
determine the legislative intent, we must read the language of the statute—providing for a
12-year limitations period for an “action on a judgment”—in context and in relation to all
its provisions. Rentals Unlimited, Inc. v. Adm’r, Motor Vehicle Admin., 286 Md. 104, 108
(1979). Looking at the structure of the statute, although the statute does not define
“specialty,” it lists several types of specialties actions, upon which rights are granted. The
wording of the statute indicates that it applies to “an action on one of the following
specialties,” which includes an action to enforce a promissory note or other instrument
under seal, a judgment, a contract under seal, etc. Given the nature of the specific list of
34 specialties identified, it is clear that the statute is intended to apply to an action to enforce
rights granted by a specialty.
This interpretation is consistent with our application of the statute in our case law.
See, e.g., Goodwin & Boone v. Choice Hotels Int’l, Inc., 346 Md. 153 (1997) (action by a
franchisor against a franchisee based upon an agreement under seal governed by the 12-
year statute of limitations); McMahan v. Dorchester Fertilizer Co., 184 Md. 155 (1944)
(applying the 12-year statute of limitations for initiation of an action to collect “on” a sealed
promissory note); Johnson v. Foran, 59 Md. 460, 461–63 (1883) (noting that execution
cannot be issued more than 12 years after the date of the judgment). In Rentals Unlimited,
Inc., we remarked that, “[i]n Maryland, money judgments may be enforced by various
methods including a new action on a judgment[.]” 286 Md. at 113 (emphasis added). In
O’Hearn v. O’Hearn, 337 Md. 292 (1995), we held that a former wife’s action against her
former husband for reimbursement of their children’s medical and dental expenses fell
within the 12-year specialties statute because the parties’ separation agreement was
incorporated into the divorce decree, and therefore, the claims were a suit “on a judgment.”
In other words, the wife was seeking to enforce the terms of the separation agreement, the
obligations of which had been incorporated into the divorce judgment. Id. at 301. By
contrast, Petitioners are not seeking to enforce a judgment—quite the opposite—they are
seeking a declaration that the judgments obtained against them are void (a declaration that
is no longer available given our holding in Finch III) and money damages arising from the
entry of the judgments against them.
35 Our interpretation of the statute as providing a 12-year statute of limitations on a
specialties action to enforce a judgment is also confirmed by its legislative history. The
present statute, CJ § 5-103, is a recodification of former Md. Code (1957), Article 57, § 3,
which provided:
No bill, testamentary, administration or other bond (except sheriff’s and constables’ bonds), judgment, recognizance, statute merchant, or other staple or other specialty whatsoever, except as shall be taken for use of the State, shall be good and pleadable, or admitted in evidence against any person in this State after the principal debtor and creditor have both been dead twelve years, or the debt or thing in action is above twelve years standing . . . .
(Emphasis added). The language in the original specialties statute clearly contemplated a
12-year statute of limitations for actions on a judgment brought against a judgment debtor.
There is nothing in the prior version of the statute that could be construed to establish a 12-
year statute of limitations for a judgment debtor to assert a claim against a judgment
creditor for a matter arising out of the entry of a judgment. As we explained in detail in
Tipton, the 1970 Code Revision process was not intended to, and did not change the
substantive meaning of this section. 364 Md. at 437–45.
Our interpretation of the plain language of CJ § 5-102(a)(3)—as establishing a 12-
year statute of limitations only to enforce a judgment and not establishing the same period
to challenge a judgment—is consistent with principles of finality expressed by the Supreme
Court and by this Court for over a century. In Milwaukee County v. M.E. White Co., Justice
Harlan Stone explained the difference between “a cause of action on a judgment” and an
“action upon which the judgment was entered” as follows:
A cause of action on a judgment is different from that upon which the judgment was entered. In a suit upon a money judgment for a civil cause of
36 action, the validity of the claim upon which it was founded is not open to inquiry, whatever its genesis. Regardless of the nature of the right which gave rise to it, the judgment is an obligation to pay money in the nature of a debt upon the specialty. Recovery upon it can be resisted only on the grounds that the court which rendered it was without jurisdiction.
296 U.S. 268, 275 (1935). In Finch III, we expressed similar sentiments. We observed
that “[j]udgments, by and large, are meant to be final. Even the court that rendered them
has but a limited ability to open and revise them.” 463 Md. at 607. Citing to our case law
dating back 141 years, which has been repeated several times since, we noted that
“[i]t is most desirable of course that there should be an end to litigation, and a judgment is presumed to be a settlement of all matters in dispute in that particular case; and once entered, parties are no longer under the necessity of preserving the evidences upon which their claims rested.”
Id. (citing Abell v. Simon, 49 Md. 318, 324 (1878)). To interpret the specialties statute as
providing a 12-year statute of limitation for a debtor to challenge a judgment, or activities
related to the entry of the judgment, runs contrary to the very principles we recently
expressed in Finch III concerning the finality of judgments.
By contrast, the competing construction—that the General Assembly would
establish a longer limitations period only to enforce a judgment—is consistent with the
general purpose of collection laws, which enable judgments to be paid over a longer time
period thereby ensuring that payment is not unduly burdensome to a judgment debtor. A
money judgment is valid for 12 years from the date of entry or its most recent renewal. See
Maryland Rule 2-625. Once a money judgment is entered, the law provides several
collection tools at the judgment creditor’s disposal, such as discovery in aid of enforcement
(see Maryland Rule 2-633) and a garnishment of the judgment debtor’s wages (see CL §§
37 15-601 through 15-606). These laws also protect a debtor’s rights during the post-
judgment collection process. Our societal standards have evolved from the colonial
practice of imprisoning debtors for nonpayment of debts20 to the enactment of laws that
limit a judgment creditor’s ability to attach a judgment debtor’s wages over a statutorily
established amount per pay period.21 These protections give a judgment debtor some
breathing room to pay debts over time (of course, at a cost in the form of post-judgment
interest), and correspondingly, the specialties statute gives a judgment creditor a longer
time period for the collection of payment on the judgment.
Finally, we conclude that Petitioners’ interpretation would also create illogical
results. In other contexts, we have rejected arguments that statutory claims for money
damages fall within other categories of the 12-year specialties statute instead of the three-
year default statute. For example, as noted above, in Greene Tree Home Owners Ass’n v.
Greene Tree Assocs., 358 Md. 453 (2000), we held that a claim based on the MCPA did
not constitute a specialty action within the purview of CJ § 5-106(a)(6) (which includes
“[a]ny other specialty”) and were therefore subject to the three-year period of limitations
provided for in CJ § 5-101. In Master Financial, Inc. v. Crowder, 409 Md. 51 (2009), we
held that the three-year statute of limitations governed claims brought by borrowers against
their lenders for deceptive trade practices under the MCPA where the alleged underlying
20 See Md. Const., art. III § 38, which establishes a constitutional ban against imprisonment of debtors. 21 See CL §§ 15-601–606. 38 conduct involved lack of licensure in violation of the Secondary Mortgage Loan Law.22
See also NVR Mortgage Fin., Inc. v. Carlsen, 439 Md. 427 (2014) (holding that a violation
of a provision of the Maryland Finder’s Fee Act, CL § 12-805(d) is subject to the default
three-year statute of limitations and is not an “other specialty” under CJ § 5-102(a)(6));
AGV Sports Group, 417 Md. 386 (holding that a private cause of action under the State
Telephone Consumer Protection Act did not fall within the “any other specialty” category
for statute of limitations purposes and that such claims were subject to the three-year
22 In Greene Tree and Crowder, the plaintiffs alleged that their claims for money damages under the MCPA fell within CJ § 5-102(a)(6), which establishes a 12-year statute of limitations for an action on “[a]ny other specialty.” Greene Tree Home Owners Ass’n v. Greene Tree Assocs., 358 Md. 453 (2000); Master Fin., Inc. v. Crowder, 409 Md. 51 (2009). We rejected these arguments and determined that the three-year default statute of limitations applied. In Crowder, we offered a “workable general principle” for determining when a statutory action falls within the “any other specialty” category under CJ § 5- 102(a)(6). The framework has the following criteria:
(1) the duty, obligation, prohibition, or right sought to be enforced is created or imposed solely by the statute, or a related statute, and does not otherwise exist as a matter of common law; (2) the remedy pursued in the action is authorized solely by the statute, or a related statute, and does not otherwise exist under the common law; and (3) if the action is one for civil damages or recompense in the nature of civil damages, those damages are liquidated, fixed, or, by applying statutory criteria, are readily ascertainable.
Crowder, 409 Md. at 70. Applying this framework to the plaintiff’s claims for violations of the Secondary Mortgage Loan Law (“SMLL”) and the MCPA, we determined that the applicable statutory provisions of the SMLL provided for civil penalties for violations of its provisions, and that the damages were for a fixed determinable amount. Accordingly, we concluded that SMLL-based claims fell within the “narrow catchall” that is the “[a]ny other specialty” provision. Id. at 72. By contrast, we determined that an action for unliquidated damages under the MCPA did not constitute a statutory specialty and was therefore subject to the three-year default statute of limitations. In this case, Petitioners do not allege that their statutory claims for money damages under the MCPA and MCDCA fall within the “other specialty” exception under CJ § 5-106(a)(6), presumably because of our holding in those cases. 39 blanket limitations statute). It would be illogical to apply a strained interpretation to the
specialties statute and hold that a 12-year limitations period applies to claims under the
MCPA for unlicensed collection activities that result in the entry of a judgment, but only
apply a three-year limitations period to claims for similar conduct that by happenstance,
does not result in the entry of a judgment.
In summary, we hold that the 12-year statute of limitations under CJ § 5-102(a)(3)
is intended to apply to an action to enforce a judgment. Because the Petitioners are not
seeking to enforce a judgment, but rather, are seeking money damages resulting from
Midland’s efforts to collect the judgment, CJ § 5-102(a)(3) does not apply and such claims
are subject to the default three-year statute of limitations under CJ § 5-101.
D. Continuing Harm Doctrine
To avoid the three-year limitations bar to their claims, the Petitioners also contend
that the continuing harm doctrine applies to change the accrual date for their claims since
they made multiple payments to Midland over a period of time. To support their argument,
Petitioners rely upon this Court’s application of the continuing harm doctrine in Litz v.
Maryland Department of Environment, 434 Md. 623 (2013). Midland argues that this
Court should not apply the continuing harm doctrine in these cases, pointing out that the
Court has not applied the doctrine outside of the context of claims for nuisance and trespass
where the conduct was continuing in nature. Midland also asserts that the application of
the doctrine is particularly inappropriate under the facts of these cases—noting that neither
40 Petitioner alleges that Midland’s post-judgment collection activities occurred during a
period when it was not licensed.
The continuing harm doctrine permits recovery by an injured party caused by a
tortfeasor’s sequential breaches of an ongoing duty by imposing a new limitations period
for each breach. Litz, 434 Md. at 649. As the Court of Special Appeals explained in
rejecting its application here, the doctrine is usually applied in nuisance, trespass, and other
tort cases. We examine the Maryland cases where the doctrine has been discussed, and the
limited contexts in which it has been applied.
In Shell Oil Company v. Parker, 265 Md. 631 (1972), the owner of an independently
owned and operated Shell Oil service station filed suit against Shell Oil Company (“Shell”)
after Shell constructed a billboard that falsely stated that another service station was the
last Shell station on a highway. The independently owned station was in fact the last station
on the highway. The owners alleged that the false message on the billboard forced them
out of business. They filed an action in the circuit court claiming that Shell had erected the
false sign “for the specific purpose of diverting business from the independently owned
service station . . . to the company owned service station of Shell and that the action was
part of an intentional and malicious plan to divert such business[,]” which they asserted
was “illegal, deceitful and fraudulent[.]” Id. at 635–36 (cleaned up). Shell erected the sign
in 1962 or 1963. Id. at 634. The owners of the independently owned station filed suit in
November 1968. Id. at 635. With no discussion or analysis, we determined that the station
owner’s “rights were continuing in nature and were not barred by the three year [s]tatute
41 of [l]imitations for the continuing violation during the three year period prior to the filing
of the action.” Id. at 636.
In MacBride v. Pishvaian, 402 Md. 572 (2007), we discussed the continuing harm
doctrine in the context of a suit brought by a tenant against a landlord alleging claims for
unfair and deceptive trade practices, fraud, negligence, breach of contract, and unjust
enrichment. In that case, the tenant argued that the continuing harm theory should apply
to extend the accrual date for limitations purposes, where the condition of her apartment
continued to deteriorate over time. Id. at 576. At the commencement of the lease in 1998,
the apartment was “nice and clean,” although the tenant “noticed water spots on the ceiling
and a suspicious odor.” Id. Subsequently, during heavy rains, water would soak the
ceiling, walls and carpet. The tenant also discovered a mold problem, and eventually
moved out in November 2004.
In seeking to avoid the limitations bar, the tenant argued that her claims involved
“an ongoing harm, in particular, the deteriorating condition of her apartment.” Id. at 585.
We noted that this Court and the Court of Special Appeals have recognized the “continuing
harm” doctrine, “which tolls the statute of limitations in cases where there are continuous
violations.” Id. at 584 (citing Shell Oil, 265 Md. at 636; Edwards v. Demedis, 118 Md. App.
541, 562 (1997); Duke St. Ltd. P’ship v. Bd. of Cty. Comm’rs of Calvert Cty., 112 Md. App.
37, 50 (1996)). Although we pointed out that the Maryland appellate courts had previously
recognized the doctrine, we also observed that we had “not [] found a reported opinion, in
either this Court or the intermediate appellate court, involving an application of the doctrine
of continuing harm.” MacBride, 402 Md. at 584 n.7 (cleaned up). We were unpersuaded
42 by the tenant’s argument that the doctrine should apply to the facts presented in her case,
concluding that her “complaints 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.” Id. (emphasis in original) (internal quotations
omitted).23
In contrast to MacBride, we applied the doctrine in Litz, which involved a property
owner’s complaint for negligence, nuisance, trespass and inverse condemnation. The
plaintiff alleged that the Maryland Department of the Environment (MDE), a county health
department, and a municipality, by their inactions, failed to enforce state regulations and a
consent order to address failing individual septic systems within the vicinity of the
plaintiff’s property. Over time, the effluent from the failing septic systems leached into
the ground water and caused plaintiff’s private lake to become contaminated to the point
that she was unable to operate her private campground and pay her mortgage and, as a
result, caused her property to be sold in a foreclosure sale. We applied the continuing harm
doctrine and held that the plaintiff had pleaded a sufficient injury to withstand dismissal of
her claims because the complaint alleged that the defendants, by their inactions, caused a
continuous physical invasion of polluted effluent onto the plaintiff’s property, which was
allegedly causing a continuous injury over an extended period of time. Id. We explained
23 As the Dissent correctly notes at Slip Op. 6, in Litz, we disavowed part of the dicta in the MacBride opinion that stated that the continuing harm doctrine would not toll the statute of limitations if the plaintiff “sooner knew or should have known of the injury or harm.” Litz v. Maryland Dep’t of Env’t, 434 Md. 623, 647–48 n.9 (2013); Id. at 586 (internal quotations omitted). 43 that the doctrine is premised on the notion that, where the violation or the wrongful act is
ongoing or continuing in nature (as opposed to the continued ill effects from the original
alleged violation), the ongoing violations will not be barred by the statute of limitations
merely because one or more of them occurred earlier in time. Id. at 646.
In Duke Street v. Board of Commissioners of Calvert County, the Court of Special
Appeals rejected the argument that the continuing harm doctrine should apply to a
constitutional takings claim arising from an allegation that the plaintiff was coerced into
deeding land for a public street, explaining that, “[w]hile there may have been continuing
ill effects from the original alleged violation, there was not a series of acts or course of
conduct by [the defendant] that would delay the accrual of a cause of action to a later date.”
112 Md. App. 37, 52 (1996) (emphasis in original).
We are not persuaded to apply the continuing harm doctrine under the facts of this
case to extend the accrual date for Petitioners’ claims based upon payments that they made
to Midland during the period after which Midland became licensed. As discussed above,
we have only applied the doctrine in limited contexts involving ongoing wrongful
conduct—in the case of Shell Oil, which involved an ongoing fraud arising from a false
statement erected on a billboard, and in the case of Liz, involving an ongoing trespass and
nuisance.
Here, the wrongful conduct that forms the basis of Petitioners’ claims is Midland’s
unlicensed status when it filed the collection actions and obtained the judgments against
the Petitioners. Although Midland was unlicensed at the time that it obtained judgments
against Mr. Cain and Ms. Gambrell, Midland subsequently entered into the settlement
44 agreement with the Licensing Board on December 17, 2009, whereby Midland agreed to stay
all collection-related actions until it was issued a license. The Licensing Board issued Midland
a collection agency license on January 15, 2010. The collection activities upon which
Petitioners seek to extend their accrual date for limitations purposes occurred after Midland
became licensed. We decline to apply the continuing harm doctrine where the alleged
continuing harm is Midland’s attempts to collect on the judgments after it became licensed.
See Finch III, 463 Md. at 606 (observing that LVNV’s collection activities were unlawful
under MCALA, MCDCA and MCPA “until it obtained its license in February 2010 . . .”)
(emphasis added).24
E. Class Action Tolling
Mr. Cain’s next argument25 requires that we decide whether the limitations period
was tolled during the pendency of class action cases that were filed prior to the cases that are
24 The Dissent contends that our refusal to apply the continuing harm doctrine to extend the accrual date for limitations purposes is inconsistent with our holding in Finch III. Dissent Slip Op. at 2–3. It is not. Although we stated in Finch III that a judgment creditor could be barred by injunction from engaging in prospective enforcement action and could liable for damages under the MCDCA and MCALA, as explained in note 10, supra, we specifically declined to address the statute of limitations defense presented in that case, and left the issue open for the circuit court to consider on remand. See Finch III, 463 Md. at 612 (“Because of this remand for further proceedings with respect to damages, we need not address the issues raised in respondent’s cross petition. If raised again in the Circuit Court, the context may be different.”). In addition to declining to address the limitations issue, we observed that LVNV’s collection activity was unlawful under the MCALA, MCDCA and MCPA “until it obtained its license in February 2010[.]” 463 Md. at 606 (emphasis added). 25 Ms. Gambrell did not raise class action tolling in her petition for writ of certiorari. Accordingly, we shall only consider the application of the doctrine to Mr. Cain’s claims. See Robinson v. Balt. City Police Dep’t, 424 Md. 41, 49 (2011). Even if we were to consider the application of the doctrine where it was not raised in her petition for writ of 45 the subject of this appeal. Mr. Cain contends that we should apply our class action tolling
rule, described below, to toll the applicable statute of limitations on his claims filed in the
instant case for a time period equal in duration to the pendency of the federal Johnson case
(wherein he was a putative class member). Midland asserts that our class action tolling
doctrine does not apply to toll claims filed by a former member of a putative class action
who files a successive class action, as opposed to an action for individual claims. Midland
also points out that this Court has not adopted cross-jurisdictional class action tolling—in
other words, the tolling of individual claims that are filed in a Maryland court by a former
putative member of a class action that was pending in federal court or another state court.
Before we address the specifics of the parties’ class action tolling contentions, it is
useful to briefly discuss our general limitations on judicial expansion of statutes of
limitations established by the Legislature. We have previously explained that:
Statutes of limitation are intended simultaneously to provide adequate time for diligent plaintiffs to file suit, to grant repose to defendants when plaintiffs have tarried for an unreasonable period of time, and to serve societal purposes, including judicial economy. There is no magic to a three-year limit. It simply represents the legislature’s judgment about the reasonable time needed to institute suit.
certiorari, Ms. Gambrell has not made clear onto which class actions she should be permitted to piggyback. In her brief, Ms. Gambrell appears to assert that she was a putative member of Mr. Cain’s class action. In her appeal before the Court of Special Appeals, Ms. Gambrell asserted that the running of the statute of limitations on her claims for money damages was tolled by two pending class actions—the Cain case that is the subject of this matter, as well as the case of Murray v. Midland Funding, LLC, No. 02-C-14-187207, filed in the Circuit Court for Anne Arundel County on April 24, 2014, which we briefly discussed in note 14, supra. As noted, Ms. Murray voluntarily dismissed her state court case on August 5, 2017. In her Amended Complaint, Ms. Gambrell only alleged that she should have the benefit of tolling from the Murray Action “and other related actions against Midland.” We will not consider these vague assertions where she did not raise them in her petition for writ of certiorari. 46 Shailendra Kumar, P.A. v. Dhanda, 426 Md. 185, 209 (2012) (cleaned up) (quoting
Bragunier Masonry Contractors v. Catholic Univ. of Am., 368 Md. 608, 627 (2002)). Such
statutes “are by definition arbitrary, and their operation does not discriminate between the
just and the unjust claim, or the avoidable and unavoidable delay.” Walko Corp. v. Burger
Chef Sys., Inc., 281 Md. 207, 210 (1977) (quoting Chase Secs. Corp. v. Donaldson, 325
U.S. 304, 314 (1945)).
Recognizing that the Legislature has exercised its judgment in determining the
reasonable time needed to institute suit, we have adopted few judicial tolling exceptions.
See Garay v. Overholtzer, 332 Md. 339, 359 (1993) (noting the general rule that “where
the legislature has not expressly provided for an exception in a statute of limitations, the
court will not allow any implied or equitable exception to be engrafted upon it”) (citation
and quotation omitted).
In Bertonazzi v. Hillman, 241 Md. 361 (1966), we recognized a judicial tolling
exception where a case was filed timely, but in the incorrect forum (based upon the
plaintiff’s mistaken belief that the defendant lived in Baltimore County rather than
Baltimore City). In a later case, Walko Corp., we further explained the rationale behind
the narrow exception to the general rule against implying exceptions to the statute by
explaining that, at the time, Maryland was one of few states to have neither a saving statute
nor a venue transfer statute—“a fact which, absent the Court’s limited holding, might well
have wrought great injustice on unwitting plaintiffs in particular cases.” 281 Md. at 214.
47 In this case, Mr. Cain contends that this Court should apply a judicial tolling
exception based upon class action tolling. The concept of “class action tolling” is rooted
in two decisions of the Supreme Court, which this Court adopted in Philip Morris USA,
Inc. v. Christensen, 394 Md. 227, 238 (2006), abrogated on other grounds, Mummert v.
Alizadeh, 435 Md. 207 (2013). Accepting Mr. Cain’s application of the doctrine would
require that we expand the Maryland class action tolling rule that we pronounced in
Christensen in two ways: first, we would apply the rule not just to individual claims filed
by a putative class member after class action certification was denied, but also to successive
class action suits; and second, we would expand the rule to include cross-jurisdictional
claims (in order words, where the initial putative class action was filed in federal court or
in another state court). As explained below, we are unwilling to expand our class action
tolling doctrine to include successive class actions and instead adopt the approach taken by
the Supreme Court in China Agritech, Inc. v. Resh, ___ U.S. ____, 138 S. Ct. 1800 (2018).
In order to explain our unwillingness to expand the class action tolling doctrine to
successive class actions, it is useful to briefly discuss its origin and purpose.
1. Supreme Court Jurisprudence Establishing Class Action Tolling for Intervenor Claims and Individual Claims
In American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), the Supreme
Court first set forth the conceptual basis for class action tolling. That case originated as a
class action, but eventually the federal district court ruled that the number of possible
plaintiffs who could assert meritorious claims was not large enough to warrant class action
status. Id. at 543. After the court’s order denying class action certification, more than sixty
48 local government entities in the State of Utah moved to timely intervene as individual
plaintiffs in the still-pending action, shorn of its class character. All of them had been
identified in the class action complaint as members of the proposed class. The federal
district court denied the motions on the ground that the relevant statute of limitations had
expired for the would-be intervenors.
The Supreme Court determined that the district court erred and set forth the
conceptual basis for class action tolling in the context of federal class action litigation. The
Court observed that the federal rule governing class actions, Rule 23, was intended to
promote efficiency and economy of litigation. Id. at 553. The Court concluded that tolling
was necessary because, without a rule that tolls the statute of limitations, members of the
putative class would be forced to file protective motions to join or intervene in the action
in order to ensure that they would not be barred from bringing suit individually in the event
the court determined that the action could not be maintained as a class action. Id. at 553–
54. Thus, the Court concluded as follows:
We are convinced that the rule most consistent with federal class action procedure must be that the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.[]
Id. at 554. Despite its adoption of the tolling rule, the Court narrowly expressed its holding
as follows:
We hold that in this posture, at least where class action status has been denied solely because of failure to demonstrate that ‘the class is so numerous that joinder of all members is impracticable,’ the commencement of the original class suit tolls the running of the statute for all purported members of the class
49 who make timely motions to intervene after the court has found the suit inappropriate for class action status.
Id. at 552–53. The issue in American Pipe was whether putative members of the proposed
plaintiffs’ class could intervene in the case once the class certification was denied. In
Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345 (1983), the Court considered whether
the filing of a putative class action tolled the statute of limitations for putative class
members who filed individual claims after class certification was denied rather than timely
intervened in the original action. The Court held that American Pipe applied to toll the
statute of limitations for the individual claims of putative class members filed after denial
of class certification in the same manner as claims for intervenors. Id. at 350–51. The
Court explained that the extension of American Pipe to later-filed individual claims was
necessary for the same reasoning articulated for intervenors’ claims—to avoid
inefficiencies that would arise if individual putative class members were required to file
individual protective claims in the class action litigation. Id. The Court articulated many
reasons that a plaintiff may prefer filing an individual claim over intervention: the putative
class member may choose to file in a more convenient forum than the forum of the original
putative class action, the putative class member may not wish to share control of the
litigation with the other plaintiffs in the original action, and if intervention is not available
as a matter of right, the plaintiff runs a risk of the denial of its motion to intervene under
Federal Rule 24(b). Id.
50 2. Maryland’s Adoption of the American Pipe Class Action Tolling Rule
Both American Pipe and Crown, Cork & Seal involved the application of Federal
Rule 23, which allowed for the tolling of the statute of limitations for federal claims filed
in federal court following the denial of class certification. In Christensen, 394 Md. 227,
we addressed whether Maryland would adopt the class action tolling rule articulated by the
Supreme Court in American Pipe and Crown, Cork & Seal for intra-jurisdictional claims—
that is, individual claims filed in Maryland state court by a former member of a putative
class after the denial of class action certification by another Maryland state court. (For
simplicity’s sake, we shall refer to the Supreme Court rule as articulated in American Pipe
and extended by Crown, Cork & Seal, as the “American Pipe class action tolling rule.”).
In Christensen, Mr. Christensen had been a participant in a putative class action that
was filed in the Circuit Court for Baltimore City against defendant manufacturers of tobacco
and their Maryland distributors. Although Mr. Christensen was not a named plaintiff nor an
intervenor in the class action suit, he participated in the litigation, including testifying at a
de bene esse deposition. Id. at 234. After the circuit court issued a class certification order,
we granted the defendants’ petition for a writ of mandamus in the class action and issued a
writ of mandamus directing the circuit court to vacate the class certification order.
After Mr. Christensen died, his wife brought a survival and wrongful death action
against the defendants who had also been defendants in the putative class action litigation.
The circuit court granted the defendants’ motion for summary judgment on the basis that
the claims were barred by the statute of limitations. We granted certiorari to determine
whether, and under what circumstances, the pendency of a putative class action tolls the
51 statute of limitations for the members of a putative plaintiff class that were not the named
plaintiffs in the action. Id. at 231.
In ultimately holding that we would adopt the American Pipe class action tolling rule,
we made several observations and conclusions. First, we noted that our “precedents
generally have been less than hospitable to the concept of judicially created tolling
exceptions[.]” Id. at 237. Citing to Bertonazzi, we observed that we had been willing to
judicially establish a tolling exception when doing so would be consistent with the purposes
of statutes of limitations. We identified, for the first time, two factors which guide our
consideration of whether to apply judicial tolling in a particular case. Specifically, we stated
that
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.
Id. at 238. We noted the several instances in which we declined to recognize a tolling
exception to a statute of limitations where the exception in question failed to meet one or
more of the Bertonazzi requirements.26 Id. at 240–41.
26 See, e.g., Walko Corp. v. Burger Chef Sys., Inc., 281 Md. 207 (1977) (declining to recognize a tolling exception to the three-year statute of limitations on tolling actions where the appellant argued that the statute was tolled during the pendency of its motion to intervene in another suit involving the appellee in the United States District Court for the District of Columbia); Booth Glass Co., Inc. v. Huntingfield Corp., 304 Md. 615 (1985) (declining to recognize a tolling exception to suspend the running of a statute of limitations applicable to a claim based upon the negligent installation of a product during the installer’s attempted repair where the defendant installer did not hold out an inducement not to file suit or indicate that limitations would not be pleaded); Burket v. Aldridge, 241 Md. 423, 428 (1966) (declining to recognize a tolling exception that would toll the general three- 52 We concluded that in this instance, our adoption of the American Pipe class action
tolling rule met both the Bertonazzi requirements. First, we noted that the Supreme Court’s
principal justification for the American Pipe class action tolling rule was its necessity for the
preservation of the class action procedures set forth in Federal Rule 23. We observed that
our class action rule—Maryland Rule 2-231—was modeled after Federal Rule 23, and that
the aspects of the federal rule that were principally relied upon by the Supreme Court in
reaching its holding in American Pipe are virtually identical to subsections (a) and (b) of
Maryland Rule 2-231. We observed that the majority of states with class action rules similar
to Federal Rule 23 have followed the American Pipe class action tolling rule. Id. at 250–51.
Ultimately, we found the principal rationale offered by the Supreme Court in
American Pipe and Crown, Cork & Seal to be persuasive—that one of the main reasons for
having a class action procedure in the first place is to promote judicial economy and
efficiency. Id. at 253 (citing American Pipe, 414 U.S. at 553). We observed that “[c]lass
action procedures are designed to promote these ends by preventing duplication, permitting
when possible the claims of large classes of persons to be litigated at once[,]” as opposed
to individual claims “or as a joint action in order to avoid unnecessary repeated litigation
year statute of limitations applicable to tort actions upon the alleged tortfeasor’s death because the absence of an express statute provision providing for such tolling was understandable in “light of the purposes of [the] Statute of Limitations”); McMahan v. Dorchester Fertilizer Co., 184 Md. 155, 159–60 (1944) (declining to recognize a tolling exception to a 12-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 the grounds that the statute expressly provided for a three-year suspension upon each payment of interest, observing that the Legislature had expressly indicated when and how payments on a note should suspend the running of the limitations period). 53 of substantially similar issues, and to avoid the procedural inefficiencies involved with the
joinder of large numbers of parties and with the litigation of joint actions involving large
numbers of parties.” Id. at 253–54. We noted that the “ends of efficiency and economy”
are undermined where members of a putative plaintiff class “have a genuine incentive to
file prophylactic motions to intervene or individual complaints in order to prevent their
claims being barred by the statute of limitations.” Id. at 254. With principles of judicial
economy and efficiency in mind, we agreed with the American Pipe Court that, “in the
absence of a class action tolling rule, putative class members will . . . have a sufficiently
strong incentive to file protective claims to justify adoption of a class action tolling rule.”
Id. We also agreed with the Crown, Cork & Seal Court’s conclusion that the same
principles of judicial economy and efficiency compelled the application of the tolling rule
to putative class members who chose to pursue later-filed individual claims in the event
that class action certification is denied. Id.
In order to ensure that our adoption of the American Pipe class action tolling rule was
consistent with the Bertonazzi factors outlined for judicial recognition of tolling exceptions
in Maryland, we added some additional notice restrictions. Specifically, we held that, in
addition to the requirements outlined in American Pipe, in order for the plaintiff to claim the
benefit of class action tolling in a later-filed individual claim, the plaintiff must show that
the class action complaint: (1) “notified the defendants of not only . . . the substantive claims
being brought against them, but also of the number and generic identities of the potential
plaintiffs[;]” and (2) “the individual suit must concern the same evidence, memories, and
witnesses as the subject matter of the original class suit[.]” Id. at 255–56 (internal quotations
54 omitted).27 We stated that “[c]laims as to which the defendant was not fairly placed on notice
by the class suit are not protected under American Pipe[.]” Id. at 250. We added these
additional requirements in observance of our “long recognized . . . policy considerations in
favor of strict application of statutes of limitations” and our adoption of tolling exceptions
only where they are consistent with the purposes of statutes of limitations. Id. at 256.
Finally, in Christensen, we pointed out that we were expressing “no opinion as to whether
we would recognize the doctrine of cross-jurisdictional class action tolling, under which the
filing of a putative class action in a different jurisdiction tolls the statute of limitations for
putative class members to file individual claims” in Maryland. Id. at 256 n.9. We further
observed that “the supreme courts of states that recognize class action tolling have split on
the issue of whether to adopt cross-jurisdictional tolling.” Id. With this case, we pick up our
discussion on cross-jurisdictional class action tolling where we left off in Christensen. But
first, we address Mr. Cain’s argument that we should extend American Pipe class action
tolling to successive class action cases.
3. We Decline to Adopt Successive Class Action Tolling
As previously noted, Mr. Cain’s claims are different from the claims that were tolled
in Christensen, which involved the application of the American Pipe class action tolling
rule to individual claims asserted by the personal representative of a former putative
27 The additional requirements that we identified in connection with our adoption of the American Pipe class action tolling rule were the views expressed by Justice Blackmun’s concurrence in American Pipe (as to our additional requirement (1)) and by Justice Powell’s concurrence in Crown, Cork & Seal (as to our additional requirement (2)). See Philip Morris USA Inc. v. Christensen, 394 Md. 227, 255–56 (2006). 55 member of a class after an unsuccessful class certification. Here, Mr. Cain seeks the
application of class action tolling to successive class action suits. In China Agritech, the
Supreme Court declined to extend the American Pipe class action tolling rule to seriatim
class action suits. Just as we find the Supreme Court’s logic persuasive in its application
of class action tolling to later-filed individual claims under the American Pipe class action
tolling rule, so too are we equally informed by the Court’s logic in refusing to extend the
doctrine to claims involving successive class action suits. Because these matters involve
questions of state law, we are not bound by the Supreme Court’s jurisprudence on this
topic. However, we find the Court’s reasoning to be persuasive and shall follow it.
In China Agritech, the Supreme Court addressed the following question: “Upon
denial of class certification, may a putative class member, in lieu of promptly joining an
existing suit or promptly filing an individual action, commence a class action anew beyond
the time allowed by the applicable statute of limitations?” ___ U.S. ___, 138 S. Ct. at 1804.
The Court’s answer was no, and it concluded that:
American Pipe tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails. But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.
Id.
Writing for the Court, Justice Ginsburg explained that the principles of “efficiency
and economy of litigation” that support tolling of individual claims “do not support [the]
maintenance of untimely successive class actions[.]” Id. at 1806. The Court noted that
successive class action suits “would allow the statute of limitations to be extended time
56 and again; as each class is denied certification, a new named plaintiff could file a class
complaint that resuscitates the litigation.” Id. at 1808. The Court observed that
[t]he time to file individual actions once a class action ends is finite, extended only by the time the class suit was pending; the time for filing successive class suits, if tolling were allowed, could be limitless. . . . Endless tolling of a statute of limitations is not a result envisioned by American Pipe.[]
Id. at 1809. The Court concluded by stating that:
The watchwords of American Pipe are efficiency and economy of litigation, a principal purpose of Rule 23 as well. Extending American Pipe tolling to successive class actions does not serve that purpose. The contrary rule, allowing no tolling for out-of-time class actions, will propel putative class representatives to file suit well within the limitation period and seek certification promptly. For all the above-stated reasons, it is the rule we adopt today: Time to file a class action falls outside the bounds of American Pipe.
Id. at 1811. We can express these sentiments no better than Justice Ginsburg and adopt the
China Agritech Court’s logic and reasoning. Applying these principles within the context
of our Maryland tolling jurisprudence, we determine that adopting successive class action
tolling would be inconsistent with the Bertonazzi factors. There is no persuasive authority
or policy considerations that would support the recognition of tolling of successive class
action suits—such an exception is inconsistent with notions of judicial economy and
efficiency that form the basis of our Rule 2-231 class certification process.28 Additionally,
28 The Supreme Court’s concerns that multiple class action lawsuits may attempt to piggyback off each other for tolling purposes appears to be prophetic here. As Midland noted in its brief, after the settlement of Johnson v. Midland Funding, LLC, D. Md. Civil. No. 09-2391, which is discussed in Part II.A.2 of this opinion, three class action suits were filed by the same counsel—Mr. Cain’s putative class action, filed in the Circuit Court for Baltimore City; Ms. Gambrell’s putative class action, filed in the Circuit Court for Anne Arundel County; and Cassandra A. Murray v. Midland Funding, LLC, No. 02-C-14- 187207, filed in the Circuit Court for Anne Arundel County (the “Murray Action”). In her Amended Complaint, Ms. Gambrell alleges that she should have the benefit of the tolling 57 adopting such a rule would be antithetical to the generally recognized purposes of the
statute of limitations—“to encourage prompt resolution of claims, to suppress stale claims,
and to avoid the problems associated with extended delays in bringing a cause of action,
including missing witnesses, faded memories, and the loss of evidence.” Anderson, 427
Md. at 118. To permit tolling based upon successive class action suits could result in a
“rolling tolling” approach to class action suits, whereby a putative class member could toll
his or her statute of limitations after the denial of one class action certification in one circuit
court by filing a successive class action in one of the other 23 state circuit courts. Such an
approach would be anathema to the notions of judicial economy and efficiency that the
class certification process envisioned by Maryland Rule 2-231. Accordingly, we hold that
American Pipe class action tolling does not apply to permit a putative class member, upon
denial of class certification, to file a successive class action past the expiration of the statute
of limitations.
4. We Adopt Cross-Jurisdictional Class Action Tolling for Later Filed Individual Claims
At this stage of the pleadings, Mr. Cain’s complaint involved his individual claims,
as well as those brought on behalf of the putative class that has not yet been certified. Our
above holding causes the putative class claims to fall to the wayside. This leaves Mr.
Cain’s individual claims. His individual claims only survive if we recognize cross-
from the Murray Action “and other related cases against Midland.” We decline to extend class action tolling to successive class action cases, which would encourage this rolling approach to the tolling of claims and would defeat the very purpose behind Maryland Rule 2-231—the efficient and timely resolution of class action claims. 58 jurisdictional class action tolling for later filed individual claims—in other words, whether
a class action filed in another jurisdiction tolls the applicable Maryland statute of limitations
for later-filed individual claims after the denial or dismissal of the putative class members’
claims in another jurisdiction.
As previously noted, our opinion in Christensen expressed no opinion on whether
we would recognize the doctrine of cross-jurisdictional class action tolling. 394 Md. at
254 n.9. We pointed out that our sister states that have considered the issue are split on its
recognition. Id.29 In the years since our 2006 decision in Christensen, we note that several
of the supreme courts in our sister states have adopted cross-jurisdictional tolling. See,
e.g., Bermudez Chavez v. Occidental Chem. Corp., 158 N.E.3d 93, 104 (2020) (“In sum,
New York recognizes American Pipe tolling for absent class members of putative class
actions filed in other state and federal courts.”); Patrickson v. Dole Food Co., Inc., 368
P.3d 959, 960 (Haw. 2015) (“We hold that the filing of a putative class action in another
29 In Adedje v. Westat, Inc., 214 Md. App. 1 (2013), the Court of Special Appeals considered the issue and declined to apply cross-jurisdictional class action tolling to an employees’ individual claim for overtime wages under the Maryland Wage Payment and Collection Law after she had participated in a class action case in federal court where her claim was dismissed. After discussing the split in authority in other states concerning adoption of cross-jurisdictional class action tolling, and acknowledging the lack of Maryland precedent addressing the issue, the intermediate appellate court declined to adopt it and held that the plaintiff’s claims were barred by the statute of limitations. Id. at 31. We consider the Court of Special Appeals’ holding in Adedje to be influenced in large part by the procedural history and the facts of that case—specifically, that appellant’s later-filed state claims did not concern the same claims that had been raised in the federal case (and therefore, the employer was not on notice of the later filed claims), and also that the federal court had given the appellant the opportunity to continue her action by dismissing her claim with leave to amend, but “for reasons not apparent” to the court, she elected to file a new complaint in the Circuit Court for Montgomery County. Id. at 33. 59 jurisdiction does toll the statute of limitations in this state, as such ‘cross-jurisdictional
tolling’ supports a primary purpose of class action litigation, which is to avoid a
multiplicity of suits.”); Dow Chem. Corp. v. Blanco, 67 A.3d 392, 395 (Del. 2013) (“We
are persuaded by the reasoning of other state supreme courts that have recognized the
doctrine of cross jurisdictional class action tolling.”); Stevens v. Novartis Pharms. Corp.,
247 P.3d 244, 253 (Mont. 2010) (adopting cross-jurisdictional tolling, but noting that a
considerable number of jurisdictions have not squarely addressed the issue, and noting that
the “outlines [of the doctrine] are still in the process of developing[]”).
Some states have refused to adopt cross-jurisdictional tolling. See, e.g., Casey v.
Merck & Co., Inc., 722 S.E.2d 842 (Va. 2012); Maestas v. Sofamor Danek Grp., Inc., 33
S.W.3d 805 (Tenn. 2000); Portwood v. Ford Motor Co., 701 N.E.2d 1102, 1104 (Ill. 1998).
Although their reasons vary, most of the jurisdictions that have refused to adopt cross-
jurisdictional class action tolling have done so based upon concerns over judicial economy.
See, e.g., Portwood, 701 N.E.2d at 1104 (stating that “[u]nless all states simultaneously
adopt the rule of cross-jurisdictional class action tolling, any state which independently
does so will invite into its courts a disproportionate share of suits which the federal courts
have refused to certify as class actions after the statute of limitations has run[]”). Other
states, such as Virginia, have declined to judicially expand exceptions to statutes of
limitations because the limitations are based upon statutes. See Casey, 722 S.E.2d at 845
(observing that under Virginia law, “[a] statute of limitations may not be tolled, or an
exception applied, in the absence of a clear statutory enactment to such effect. . . . Given
these principles, there is no authority in Virginia jurisprudence for the equitable tolling of
60 a statute of limitations based upon the pendency of a putative class action in another
jurisdiction.”) (internal quotations and citations omitted).
Applying the Bertonazzi factors, we determine that adopting cross-jurisdictional
class action tolling is consistent with our Maryland tolling jurisprudence. Specifically, we
conclude that the same principles that support intra-jurisdictional class action tolling also
support cross-jurisdictional class action tolling. As noted in Part IV.E.2., supra, the class
action certification process promotes judicial economy and efficiency. Permitting the
tolling of potential individual claims of a putative class member during the pendency of
the class action promotes these objectives. Tolling negates any need that a putative class
member would have to file individual claims during the pendency of the putative class
action suit. Our sister states that have adopted cross-jurisdictional class action tolling have
relied upon the same principles. See Vaccariello v. Smith & Nephew Richards, Inc., 763
N.E.2d 160, 163 (Ohio 2002) (observing that cross-jurisdictional class action tolling would
simply prevent Ohio plaintiffs from filing protective claims in Ohio courts during the
pendency of a putative class action in federal court); Blanco, 67 A.3d at 397 (The Delaware
Supreme Court observing that, “[i]f we do not recognize cross-jurisdictional tolling,
putative class members will still be incentivized to file placeholder actions in Delaware to
protect their interests in the event that the putative class is not certified[]”).
Once the trial court, in any jurisdiction, determines that the case cannot proceed as
a class, the putative members should be permitted to file their individual claims without
regard to whether the class action was pending in a Maryland state court, federal court, or
another jurisdiction. Like our sister states who have adopted cross-jurisdictional class
61 action tolling, we see no sound reason to limit the application of American Pipe class action
tolling only to class action cases pending in our state courts. See, e.g., Stevens, 247 P.3d
at 256 (Montana Supreme Court stating that “[w]e see no reason why jurisdictional
boundaries should operate as a bar to the application of [class action tolling]”).
In conclusion, we hold that Maryland recognizes American Pipe class action tolling
for absent members of putative class actions filed in other state and federal courts. We
further hold that the same factors that we articulated in Christensen for intra-jurisdictional
tolling also apply to cross-jurisdictional class action tolling. Specifically, in order for the
plaintiff to claim the benefit of class action tolling in a later-filed individual claim, the
plaintiff must show that the class action complaint: (1) “notified the defendants of not only
. . . the substantive claims being brought against them, but also of the number and generic
identities of the potential plaintiffs[;]” and (2) “the individual suit must concern the same
evidence, memories, and witnesses as the subject matter of the original class suit[.]”
Christensen, 394 Md. at 255–56 (internal quotations omitted).
And because all things must come to an end, we must determine when the tolling
concludes. We agree with the rationale expressed by our sister Court of Appeals in New
York that: “Because recognition of cross-jurisdictional tolling implicates our statutes of
limitations, a bright-line rule is necessary to provide clarity to all parties in understanding
their rights and obligations and . . . to balance the interests of both plaintiffs and defendants.”
Bermudez Chavez, 158 N.E.3d 93, 104 (emphasis in original). We therefore hold that tolling
ends when there is a clear dismissal of a putative class action, including a dismissal for forum
non conveniens, or a denial of class action for any reason.
62 Applying these principles to Mr. Cain’s individual claims, we determine that the
three-year statute of limitations was tolled from the filing of the Johnson case on September
10, 2009 until March 10, 2011—the date that the federal district court approved the
settlement of the limited class and entered an order dismissing the claims that were not part
of the settlement. Mr. Cain’s individual claims were tolled during the pendency of the
Johnson action, or for 546 days. The circuit court determined that Mr. Cain’s claim started
to accrue when Midland received its first payment on the judgment on September 25, 2009.
Mr. Cain filed the present action 1,404 days later—on July 30, 2013—which is beyond the
three-year statute of limitations. However, if the three-year statute is tolled during the
pendency of the Johnson action for a period of 546 days, Mr. Cain’s individual claims are
not barred by the three-year limitations period (1,404 days – 546 days = 858 days). Applying
cross-jurisdictional tolling to Mr. Cain’s individual claims, we determine that the claims
were timely filed.
F. Given Our Holding on Cross-Jurisdictional Class Action Tolling, We Do Not Determine Whether 28 U.S.C. § 1367(d) Applies in the Context of the Dismissal of a Class Action Certification
Finally, Mr. Cain argues that under 28 U.S.C. § 1367(d), the Supreme Court’s
decision in Artis v. District of Columbia, ____ U.S. ____, 138 S. Ct. 594 (2018) and
Maryland Rule 2-101, his limitations period was tolled during the pendency of the Johnson
action plus 30 days for his putative class action. In Turner v. Kight, 406 Md. 167 (2008),
we discussed the legislative history and our interpretation of the supplemental jurisdiction
statute, 28 U.S.C. § 1367. Our interpretation was recently confirmed in Artis. The statute
“enables federal district courts to entertain claims not otherwise within their adjudicatory
63 authority when those claims are so related to claims within federal-court competence that
they form part of the same case or controversy.” Artis, 138 S. Ct. at 597 (cleaned up) (citing
§ 1367(a)). Section 1367(d) provides:
The period of limitations for any claim asserted under subsection (a),[30] and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.
Although the federal supplemental jurisdiction statute includes “claims that involve
the joinder or intervention of additional parties[]”, see § 1367(a), it is silent as to its
application to putative class action claims. Given our holding that Maryland recognizes
cross-jurisdictional class action tolling, we do not need to determine whether the federal
supplemental jurisdiction statute, § 1367(d), applies to later filed individual claims after a
non-merits dismissal of class action certification.31
30 Section 1367(a) states:
Except as provided in subsections (b) and (c) or as expressly provided by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. 31 Artis v. District of Columbia, ___ U.S. ____, 138 S. Ct. 594 (2018) does not address the applicability of the supplemental jurisdiction statute to a non-merits dismissal of class action certification. Artis involved individual claims filed in federal district court alleging violations of federal law and state law. After the federal district court dismissed the plaintiff’s sole federal claim, the court declined to exercise supplemental jurisdiction over a state law claim. The plaintiff then filed the state law claim in D.C. Superior Court. The Supreme Court accepted certiorari to “resolve the division of opinion among State Supreme Courts on the proper construction of § 1367(d)”—namely whether the word 64 G. The Finality of the Circuit Court Judgment
In his last argument, Mr. Cain alleges that the Court of Special Appeals did not have
jurisdiction to review the circuit court’s decision because the September 21 opinion and
order and the associated declaratory judgment (the “September 21 orders”) did not
constitute a “final judgment.” A “judgment” is defined under Maryland Rule 1-202(o) as
an “order of court final in nature entered pursuant to these rules.” A judgment is “rendered”
when a court has “clearly indicate[d] that the issue submitted has been adjudicated
completely and it has reached a final decision on the matter.” Hiob v. Progressive Am. Ins.
Co., 440 Md. 466, 485 (2014) (citation and quotation marks omitted). The circuit court in
this case rendered a final judgment on September 21, 2017. The orders issued on that date
disposed of Midland’s motion to dismiss and granted Mr. Cain’s motion for summary
judgment—constituting an unqualified decision as to all claims in Mr. Cain’s complaint.
As of September 21, 2017, there were no issues remaining between Mr. Cain and Midland
for adjudication and Mr. Cain had no active complaint that could be amended. We
conclude that the September 21 orders were an unqualified final disposition of all claims
“tolled” means the state limitations period is suspended entirely during the pendency of a federal suit or whether the limitations period continues to run, but a plaintiff has 30 days to refile in state court if the federal case is dismissed. Artis, 138 S. Ct. at 601. The Supreme Court determined that the former reading was most appropriate, and held that if a plaintiff files a mix of federal and state claims in federal court and that court dismisses the state law claims, § 1367(d) suspends the statute of limitations for bringing those claims in state court for the period that federal case was pending plus 30 days. Id. at 608. The Court’s holding in Artis has no application here as that case did not involve a non-merits dismissal of class certification. 65 in the complaint and had the effect of putting Mr. Cain—the only named plaintiff at that
time—out of court.32
We similarly reject Mr. Cain’s assertion that the September 21 orders did not
constitute a final judgment because this lawsuit was filed as a putative class action, and
motions for class certification and to compel discovery were outstanding. As the Court of
Special Appeals observed in Murray v. Midland Funding, LLC, 233 Md. App. at 264 n.7,
Maryland Rule 2-231(c) “states the hearing [on a motion for class certification] must be
held soon, but it does not say the hearing must be held before a ruling on a motion to
dismiss.” (Emphasis in original). Federal courts that have interpreted Federal Rule 23(c)—
the federal counterpart to Maryland Rule 2-231—have similarly held that a trial court is
32 We reject Mr. Cain’s argument that the September 21 orders lack finality because Ms. Murray’s claims were pending. The trial court specifically noted that Ms. Murray’s claims were not addressed by the Court because “she was not a party” until she filed an Amended Complaint on September 21—the same day that the court issued its final orders. The trial court also pointed out that Mr. Cain moved for summary judgment prior to the belated attempt to add Ms. Murray to the case and that Mr. Cain’s counsel did not argue (or even mention) Ms. Murray at the September 13 hearing. The trial court also pointed out that, not only did the court not have the opportunity to opine on “Ms. Murray’s hypothetical claims,” the court was not aware such clams existed until after the final orders were issued. Based upon this record, we determine that the September 21 orders fully adjudicated and disposed of all of Mr. Cain’s claims—the only claims then pending before the court—and therefore, the orders constituted a final judgment, thereby precluding Mr. Cain from amending the complaint. See Md. Rule 2-322(c) (if a court dismisses a complaint for failure to state a claim, “an amended complaint may be filed only if the court expressly grants leave to amend”); Davis v. DiPino, 337 Md. 642, 648–49 (1995) (a circuit court has “no . . . discretionary authority to permit the amendment of the complaint subsequent to the grant of summary judgment”). Moreover, Mr. Cain clearly believed that the September 21 orders constituted a final judgment because he filed a motion to alter or amend the judgment pursuant to Md. Rule 2-534—a procedure that applies only after a final judgment disposing of all issues is rendered. To the extent that Ms. Murray’s individual claims are not barred by the applicable statute of limitations, she is free to file a complaint consistent with the holdings expressed herein. 66 not required to resolve a plaintiff’s class certification motion before ruling on a dispositive
challenge to the class representative’s claims. See, e.g., Wooden v. Bd. of Regents of the
Univ. Sys. of Ga., 247 F.3d 1262, 1289 (11th Cir. 2001). Similarly, we are not aware of
any authority to support the notion that an outstanding discovery motion can prevent a
dispositive ruling from becoming a final, appealable judgment.
Conclusion
For the reasons set forth in this opinion, we hold as follows:
(A) Petitioners’ claims for unjust enrichment and statutory claims for money
damages are subject to the three-year statute of limitations established by CJ § 5-101.
(B) The statute of limitations governing specialties actions “on a judgment”
established under CJ § 5-102(a)(3) applies to actions to enforce a judgment and has no
application here.
(C) We decline to apply the continuing harm theory to extend the accrual date
for Petitioners’ claims.
(D) We decline to expand the American Pipe class action tolling rule to
successive class action cases.
(E) Maryland recognizes the American Pipe class action tolling rule for absent
members of putative class actions filed in other state and federal courts. The same factors
that we articulated in Christensen for intra-jurisdictional tolling also apply to cross-
jurisdictional class action tolling. Specifically, in order for the plaintiff to claim the benefit
of class action tolling in a later-filed individual claim, the plaintiff must show that the class
67 action complaint: (1) notified the defendants of not only of the substantive claims being
brought against them, but also of the number and generic identities of the potential plaintiffs;
and (2) the individual suit must concern the same evidence, memories, and witnesses as the
subject matter of the original class suit.
(F) Cross-jurisdictional class action tolling ends when there is a clear dismissal of
a putative class action, including a dismissal for forum non conveniens, or a denial of class
action for any reason.
(G) Applying the American Pipe class action tolling rule to Mr. Cain’s individual
claims, we determine that the claims were timely filed.
(H) A final, appealable judgment was entered in Mr. Cain’s case and that the
Court of Special Appeals had jurisdiction to consider the appeal.
We, therefore, affirm the decision of the Court of Special Appeals in part, and reverse
it in part, in the case of Cain. We affirm the decision of the Court of Special Appeals in the
case of Gambrell in its entirety.
IN CASE NO. 38, JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED IN PART AND REVERSED IN PART. CASE REMANDED TO THE COURT OF SPECIAL APPEALS WITH INSTRUCTIONS TO REMAND THE CASE TO THE CIRCUIT COURT FOR BALTIMORE CITY WITH FURTHER INSTRUCTIONS TO DISMISS THE PUTATIVE CLASS ACTION CLAIMS, AND FOR FURTHER PROCEEDINGS ON MR. CAIN’S INDIVIDUAL CLAIMS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT TO BE PAID BY RESPONDENT.
68 IN CASE NO. 39, JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED. COSTS IN THIS COURT TO BE PAID BY PETITIONER.
69 Circuit Court for Baltimore City Case No.: 24-C-13-004869
Circuit Court for Anne Arundel County IN THE COURT OF APPEALS Case No.: C-02-CV-15-002988 OF MARYLAND Argued: March 4, 2021
Opinion by McDonald, J., dissenting in part.
Filed: August 4, 2021 The Majority Opinion is well-researched, well-written, and, in many respects, an
important contribution to our case law. However, I disagree with its treatment of a key
element of the limitations issue – when and how a cause of action accrues.
Limitations and Accrual
Any limitations rule can be divided into three parts: (1) the time at which it begins
to run, usually referred to as the time of accrual of the cause of action; (2) a duration,
generally set by statute (the “statute of limitations”); and (3) any applicable tolling
principle, common law or statutory, that either stops the clock or extends the duration in
some way.1
My disagreement with the Majority Opinion on the limitations issue in these cases
relates to the first element – accrual. Accrual is often the critical element in deciding
whether limitations has run. The continuing harm doctrine – which might more
appropriately be labeled the continuing accrual doctrine – plays an important role in
situations in which a defendant’s wrongdoing consists of discrete actions over a period
of time that result in the damages or other harm suffered by the plaintiff.
Different theories abound as to how to define accrual of a cause of action: “Some
courts have held the cause of action accrues when the defendant commits his wrong,
others when the plaintiff discovers the wrong, and still others have held that it does not
accrue until the maturation of harm.” Mattingly v. Hopkins, 254 Md. 88, 92-93 (1969).
1 See, e.g., Swam v. Upper Chesapeake Medical Center, 397 Md. 528 (2007) (judicial tolling of limitations on plaintiff’s claim in light of statutory “ambiguity regarding the appropriate forum”); Maryland Code, Courts & Judicial Proceedings Article, §5-205 (tolling related to defendant’s absence from State). The Majority Opinion applies a discovery rule. The continuing harm doctrine relates
accrual to the maturation of harm.
The Majority Opinion’s Theory of Accrual
In the Gambrell case, the date of accrual was identified by the circuit court as the
date when Midland “filed the collection action” against Ms. Gambrell – on the theory
that she was constructively on notice as to its unlicensed status.2 Majority slip op. at 23,
26-27. In the Cain case, the date of accrual was identified by the circuit court as the date
when “Midland received its first payment on the judgment” against Mr. Cain – a very
different start date for limitations that is well after Midland’s filing of the complaint.
Majority slip op. at 26. The Majority opts for the date chosen by the circuit court in Cain.
It states that their claims accrued “at the latest” at the time that Midland received its first
payment – on the theory that plaintiffs should have been aware of the judgments against
them at that time and could have learned of Midland’s unlicensed status if they had
checked an agency website. Majority slip op. at 27 & n.18. This is an application of a
discovery rule that does not take into account later discrete acts of Midland that caused
the harm.
Is the Majority Opinion’s Theory Consistent with Finch III?
In any event, neither theory of accrual set out in the Majority Opinion appears to
be consistent with this Court’s decision in Finch III. LVNV Funding LLC v. Finch, 463
2 This conception of accrual is puzzling. Even if Ms. Gambrell could be charged with somehow knowing that Midland was not listed as a licensee on a relatively obscure agency website, she presumably was not aware that Midland had filed a complaint against her until she was served with it. 2 Md. 586 (2019). In that case, the Court held that judgments obtained by the unlicensed
debt collector were not void. However, the debt collector could be barred by injunction
from taking “any action” to enforce those judgments. 463 Md. at 612. Moreover, the
debt collector could be held liable for damages relating to any collection efforts, pursuant
to MCDCA3 and MCALA4 – two of the statutes on which the cases before us are also
based. Id. Such collection efforts occur through discrete acts, such as applications for
writs of garnishment based on such a judgment. The Court remanded the case in Finch
III for further proceedings in the circuit court to compute damages incurred by the
plaintiffs as a result of the debt collector’s collection efforts. Id.
In light of that holding in Finch III, it makes no sense to say that all such violations
are complete and all such claims accrue when the original debt collection action was filed
or when the debt collector first succeeded in obtaining payment on the judgment. Any
such theory potentially gives the debt collector advance immunity from the liability
recognized in Finch III for later discrete efforts to enforce such a judgment.
The Continuing Harm Doctrine
The Majority Opinion asserts that no one raised the issue of accrual in these
appeals. Majority slip op. at 26, 27. But the concept of accrual is inherent in the
continuing harm doctrine that the Petitioners argued on appeal and is clearly articulated
Maryland Consumer Debt Collection Act (“MCDCA”), Maryland Code, 3
Commercial Law Article, §14-201 et seq. 4 Maryland Collection Agency Licensing Act (“MCALA”), Maryland Code, Business Regulation Article §7-101 et seq. 3 in their brief. For example, they argue that the failure to apply the continuing harm
doctrine in these circumstances effectively requires plaintiffs to file a complaint before
“all the elements of their claims ha[ve] accrued.” Petitioners’ Brief at 31.
The continuing harm doctrine is appropriately applied when a defendant’s
wrongdoing consists of discrete acts that are part of an overall scheme that causes harm
to another. In Mattingly, the Court noted that, under the “continuation of events theory”
(i.e., a continuing harm theory), “only the last [event] starts the running of the statute [of
limitations].” 254 Md. at 94. See also Muffoletto v. Towers, 244 Md. App. 510, 528,
cert. denied, 469 Md. 276 (2020) (“the continuing harm doctrine rests on a new
affirmative act”). It is a cousin to similar doctrines in other areas of the law. For example,
in the criminal law context, it is well understood that the statute of limitations for a
conspiracy charge “runs from the last overt act during the existence of the conspiracy,”
not the first. Fiswick v. United States, 329 U.S. 211, 216 (1946).
The Majority Opinion acknowledges that the continuing harm doctrine relates to
accrual, but believes that the doctrine applies only “in limited contexts.” Majority slip
op. at 41, 44. Midland asserts that the doctrine applies only to nuisance and trespass
cases, and the Majority Opinion seemingly takes little issue with that characterization of
the law. Majority slip op. at 40-41 (stating that continuing harm doctrine “is applied in
nuisance, trespass, and other tort cases”). There is no obvious reason to limit the doctrine
to such claims. Further, a review of this Court’s case law demonstrates that this Court
has not done so to date. For example, in Shell Oil Co. v. Parker, 265 Md. 631, 636 (1972),
this Court applied the continuing harm doctrine in holding that plaintiffs’ fraud claim
4 against the defendant was not barred by limitations. No claim of nuisance or trespass
was made in that case. See also Duke Street Limited Partnership v. Board of County
Commissioners, 112 Md. App. 37, 50 (1996) (recognizing that continuing harm doctrine
can apply to civil rights claims, claims of unconstitutional takings, and nuisance claims,
although it did not apply the doctrine in the case before the court).
The Court’s two most recent considerations of the continuing harm doctrine are
instructive. In MacBride v. Pishvaian, 402 Md. 572 (2007), a jury awarded a tenant
$100,000 in damages against a landlord for the landlord’s unfair and deceptive trade
practices, but the circuit court entered judgment notwithstanding the verdict in favor of
the landlord on the ground that the claim was barred by limitations. The tenant appealed,
asserting, among other things, that the action was timely under the continuing harm
theory of accrual.
Although the Court ultimately ruled for the landlord, the Court considered
application of the continuing harm doctrine to the claim in that case. The Court noted
that the continuing harm doctrine applied when “there are ongoing violations of a
potential plaintiff’s rights.” 402 Md. at 575-76 n.2. The claim of unfair and deceptive
trade practices was based upon “misstatements made directly to a consumer, or by
advertisement, or phone solicitation concerning the quality and availability of goods or
services….” Id. at 585 (internal quotation marks and punctuation omitted). In the case
before it, the jury had not only returned a general verdict in favor of the plaintiff, but had
also returned a special verdict in which it found that the plaintiff was aware of the
landlord’s unfair and deceptive trade practices on a date six years before suit was filed.
5 As the only misstatements found by the jury had occurred six years before the suit was
filed, the grant of JNOV was affirmed. Id. at 585-86.
Thus, in MacBride, the Court recognized that the continuing harm doctrine could
apply to a landlord-tenant claim under the Consumer Protection Act, but held that the
essence of the claim in that case was the alleged misrepresentation by the landlord and
incorporated a discovery rule in its analysis to find the claim untimely.
Subsequently, in Litz v. Maryland Department of the Environment, 434 Md. 623
(2013), this Court observed that the MacBride decision had improperly limited the
continuing harm doctrine on the ground that the plaintiff had become aware of a
continuing violation at an early date. Disavowing that part of the MacBride opinion, the
Court explained: “The purpose of the continuing harm doctrine is to avoid punishing a
plaintiff because one or more violations occurred earlier in time when such violations are
continuing in nature. A potential plaintiff’s knowledge of the harm, therefore, is
inconsequential.” 434 Md. at 647-48 n.9 (citations, internal quotations and punctuation
deleted).5 In Litz, the Court held that the continuing harm doctrine saved the plaintiff’s
negligence and trespass claims from dismissal on limitations grounds. Id. at 645-50.
Nothing in the Court’s opinion limited that doctrine to negligence and trespass claims –
or any other cause of action – so long as the violation was continuing or ongoing in
5 Midland and the Majority Opinion rely precisely on the notion that this Court rejected in Litz. See Majority slip op. at 27 (relating its holding on accrual to the date that Mr. Cain and Ms. Gambrell “were clearly on notice of the judgment” and could have known of Midland’s unlicensed status).
6 nature.6 Moreover, whether the plaintiff knew – or should have known – of an early event
in an ongoing series of events causing the harm did not matter.
In the two cases before us, the alleged wrongful conduct of Midland was
continuing and consisted of a series of discrete acts to obtain judgments against Mr. Cain
and Ms. Gambrell in violation of MCALA and MCDCA and then to enforce those
judgments through subsequent collection activity. There is no question that these discrete
acts were related and part of an ongoing effort to collect on actions brought in violation
of several State statutes. The Majority Opinion essentially holds that one of the earliest
of those actions (that resulted in a “first payment”), coupled with imputed knowledge of
Midland’s unlicensed status, was the date of accrual of any cause of action Mr. Cain and
Ms. Gambrell had for all the later discrete actions by Midland to collect on those
judgments. For the reasons explained above, this narrow view of the accrual of these
claims is inconsistent with our case law under the continuing harm doctrine.
6 In Walton v. Network Solutions, 221 Md. App. 656, 676-77 (2015), the Court of Special Appeals suggested that the holding in Litz might be so limited. However, the Litz opinion itself does not state such a limitation and in fact applied the continuing harm doctrine in computing the period of limitations applicable to a negligence claim. Moreover, the Walton court explicitly left open the possibility that reliance on a second later incident between the plaintiff and one of the defendant’s employees, apparently not preserved for the appeal, would have made the plaintiff’s claim timely. 221 Md. App. 675 n.3. 7 The correction notice(s) for this opinion(s) can be found here:
https://mdcourts.gov/sites/default/files/import/appellate/correctionnotices/coa/38a20cn.pdf
Related
Cite This Page — Counsel Stack
475 Md. 4, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cain-v-midland-funding-md-2021.