Gregory Smith v. Wakefield, LP
202 A.3d 1240
| Md. | 2019Background
- In 2007 Smith signed a month‑to‑month residential lease; the form included the word “(Seal)” and a clause stating the lease was under seal and subject to CJ §5‑102’s 12‑year limitations period.
- Smith vacated the apartment in 2008; Wakefield waited until 2015 to sue for back rent accrued in 2007–08.
- Wakefield relied on the lease clause to argue the action was a “contract under seal” (a specialty) subject to a 12‑year limitations period under CJ §5‑102; Smith invoked the three‑year period of CJ §5‑101.
- District Court and Circuit Court ruled for Wakefield; Smith appealed to the Maryland Court of Appeals, which granted certiorari.
- The Court examined (1) whether a residential lease can be converted into a specialty by affixing a seal or lease language, and (2) whether parties may by lease agree to extend the limitations period given RP §8‑208(d)’s anti‑waiver rule.
- The Court reversed, holding that back‑rent actions under residential leases are governed by the three‑year limitation in CJ §5‑101 and that an agreement in the lease to extend limitations is unenforceable under RP §8‑208(d)(2) and as unreasonable.
Issues
| Issue | Plaintiff's Argument (Wakefield) | Defendant's Argument (Smith) | Held |
|---|---|---|---|
| Whether a residential lease containing a seal/express clause can be a "contract under seal" (specialty) subject to CJ §5‑102’s 12‑year limitation | Lease language and seal make it a contract under seal; Tipton dicta permits making lease a specialty by in‑body agreement | Tipton’s holding limits residential leases to CJ §5‑101’s 3‑year period; seal/label shouldn’t change longstanding rule | Held for Smith: residential back‑rent claims governed by CJ §5‑101’s 3‑year period regardless of seal/clause |
| Whether parties can contractually extend the limitations period for back rent by lease provision | Parties can agree to alter limitations; clause is enforceable | RP §8‑208(d)(2) prohibits lease provisions waiving or foregoing rights/remedies of applicable law; extension is unreasonable and unenforceable | Held for Smith: such an extension is not enforceable — RP §8‑208(d)(2) bars waiver and extension is unreasonable |
| Whether Tipton’s dicta created a valid “road map” to lengthen limitations by lease language | Tipton’s language allows it; Wakefield relied on that dicta when drafting lease | Tipton’s analysis supports retaining 3‑year rule; dicta nonbinding and cannot override legislative scheme | Held: Tipton’s actual holding preserved 3‑year rule; its dicta does not permit lease recharacterization to override statutes and landlord‑tenant protections |
| Whether the extension is reasonable under Ceccone factors (bargaining power, subject matter, relation to statutory period) | 12 years can be reasonable and is reflected in CJ §5‑102 for specialties | Extension is grossly disproportionate (3 → 12 years), one‑sided, and unreasonable for residential tenancies | Held: extension unreasonable here; factors favor enforcing statutory 3‑year period |
Key Cases Cited
- Tipton v. Partner’s Mgmt. Co., 364 Md. 419 (2001) (held residential lease before Court was subject to three‑year limitation; included dicta about in‑body agreement to invoke §5‑102)
- Ceccone v. Carroll Home Services, LLC, 454 Md. 680 (2017) (framework for when parties may modify a statutory limitations period by agreement)
- Henry’s Drive‑In, Inc. v. Pappas, 264 Md. 422 (1972) (discusses historical treatment of rent arrearages and limitations periods prior to recodification)
- Warfield v. Baltimore Gas & Elec. Co., 307 Md. 142 (1986) (holding that presence of a seal and absence of contrary language can convert an instrument into a contract under seal)
- Mayor of Federalsburg v. Allied Contractors, 275 Md. 151 (1975) (corporate seal alone may not suffice; intent in body or extrinsic evidence required to establish a contract under seal)