High court upholds Barbera’s statute-of-limitations suspension

Maryland’s then top judge acted within her constitutional authority in suspending the deadline for filing civil claims as she closed the clerks’ offices to stanch the spread of the COVID-19 virus, the state’s high court unanimously ruled Wednesday.

In its 7-0 decision, the Court of Appeals rejected arguments that former Chief Judge Mary Ellen Barbera violated the Maryland Constitution’s separation of powers among the legislative, judicial and executive branches when she altered the statute of limitations set by the General Assembly.

The high court said Barbera’s administrative order that suspended from March 16, 2020, to July 20, 2020, the three-year-time limit for filing claims fell within the Maryland Judiciary’s rule that gives the chief judge suspension authority when the governor declares a state of emergency. The judiciary’s rulemaking authority is granted by the Maryland Constitution, and Gov. Larry Hogan had declared combating COVID-19’s spread a public health emergency, the court said.

The Court of Appeals added that the suspension of the statute of limitations did not “usurp” the General Assembly’s authority to set filing deadlines but rather showed deference during a time of great uncertainty to the legislature’s statutory time limit.

“The (chief judge’s) order was not an expression of a Judicial policy preference for a period of limitations different from that set by the legislature,” Judge Robert N. McDonald wrote for the high court.

“Rather, in a sense, it was an effort to respect the period of limitations set by the General Assembly by ensuring that the administrative obstacles faced by litigants and the courts during the early days of the pandemic did not effectively and retroactively shorten the period of limitations in those cases in which the period would expire while the courts were closed,” added McDonald, a retired judge sitting by special assignment. “Given the court’s role regarding the procedural aspects of the statute of limitations, and given the judiciary’s coordination with the executive branch with regard to the pandemic response, the rule and order also did not encroach upon the executive branch’s emergency powers.”

Barbera did not immediately respond Thursday to a message seeking comment on the court’s ruling.

The Court of Appeals rendered its decision in a federal court dispute pitting J.M. Murphy Enterprises Inc. and the construction company’s president, Jesse J. Murphy, against Liberty Mutual Insurance Co. over its alleged obligation to indemnify the underwriter for financial losses it sustained because of them.

Murphy has argued in court papers that the U.S. District Court in Baltimore lacks jurisdiction because Liberty Mutual’s alleged losses would not have crossed the jurisdictional threshold of $75,000 if the three-year statute of limitations was not suspended, or tolled. Murphy’s argument placed in question the constitutionality of Barbera’s administrative order suspending the three-year-time limit for filing claims.

To help resolve the issue, the judge presiding over the federal case asked the Court of Appeals to decide whether the order was constitutional, as contended by Liberty Mutual.

In response, the high court agreed that the order was constitutional.

In certifying the question to the Court of Appeals, U.S. District Judge Stephanie A. Gallagher explained why she was unwilling to supply the answer herself.

“(T)here are overwhelming federalism concerns implicated by a federal district court potentially concluding, on entirely state law grounds, that Chief Judge Barbera did not have the authority to toll the statute of limitations in the fashion she did,” Gallagher wrote in July.

“Such a decision would dramatically alter Maryland’s legal landscape, possibly upending myriad cases in Maryland state court that have up to this point been allowed to proceed due to the tolled limitations period,” Gallagher added. “The Court of Appeals is indisputably better positioned to interpret Maryland’s Constitution on this question and is better equipped to analyze the interplay between the state’s laws and the state court’s administrative and procedural authority given the far-reaching consequences for the Maryland court system.”

Barbera reached Maryland’s mandatory retirement age of 70 in September. She was succeeded by Chief Judge Joseph M. Getty, who turned 70 this month and has been succeeded by Chief Judge Matthew J. Fader.

In the underlying lawsuit, Liberty Mutual provided surety bonds to Murphy for its installation of concrete at the Maryland State Police Flight Training Facility at Martin State Airport in Middle River. As a condition of receiving the bonds, Murphy agreed to indemnify Liberty Mutual against any claims that would arise, according to the underwriter’s complaint.

Liberty Mutual said equipment suppliers brought claims against it for Murphy’s allegedly unpaid bills.

Liberty Mutual said it paid out more than $75,000 in compensation and then sued Murphy in U.S. District Court on July 2, 2020, seeking indemnification as provided under the bond agreement.

Massachusetts-based Liberty Mutual asserted federal court jurisdiction based on its diversity of citizenship with Maryland-based Murphy and an amount in controversy exceeding $75,000.

Murphy subsequently challenged the federal court’s jurisdiction, saying Liberty Mutual’s payments did not exceed $75,000 during the three-year span that began on July 2, 2017, and ended on the filing date of July 2, 2020.

Liberty Mutual has countered that the three-year span’s end date was not July 2, 2020, but three and half months earlier, on March 16, 2020, when Barbera suspended the statute of limitations – an action Murphy argued in vain was unconstitutional.

Joseph L. Katz, Murphy’s attorney, declined to comment on the Court of Appeals decision. Katz is a Bethesda solo practitioner.

Liberty Mutual’s attorney, Shannon J. Briglia, did not immediately return a telephone message Thursday seeking comment on the high court’s ruling. Briglia is with Smith, Currie & Hancock LLP in Tysons, Virginia.

The Court of Appeals rendered its decision in Jesse J. Murphy et al. v. Liberty Mutual Insurance Co., Misc. No. 5, September Term 2021.

The pending litigation in U.S. District Court is docketed as Liberty Mutual Insurance Co. v. Murphy et al., No. 1:20-cv-01961-SAG.