Ceccone v. Carroll Home Servs. (Ct. of Appeals)

Filed: July 28, 2017

Opinion by: Judge Robert N. McDonald

Holding: Under Maryland law, contractual provisions which purport to shorten the statutorily-prescribed period of time within which a civil action must be brought are enforceable only if (1) there is no statute to the contrary; (2) the provision is not the product of fraud, duress, misrepresentation, or the like; and (3) the provision is reasonable in light of all the circumstances.

Facts: Homeowners brought suit against a provider of maintenance services in connection with damages allegedly arising from improper maintenance of their home furnace.  The Defendant moved to dismiss the action based on a provision of a maintenance agreement entered into by the homeowners which provided that all claims of the homeowners against the Defendant, whether in contract or tort, were subject to a one-year limitations period.  The action, having been brought more than one year after the homeowners were on notice of a potential claim against the Defendant, was dismissed.    

Analysis:  The Court of Appeals reviewed the factors to consider in determining whether the contractual provision in question was reasonable.  The Court of Appeals provided that the circuit court should consider the totality of the circumstances, including, for example, the length of the shortened limitations period, its relation to the statutory period, the relative bargaining power of the parties, the subject matter of the contract, whether the shortened limitations period applies only to claims brought by one of the parties or runs in both directions, and other facets of the limitations provision—e.g., it appears to apply equally to claims of negligence and intentional torts.  Here, the Court of Appeals noted circumstances to suggest that the Defendant had greater bargaining power.

The Court of Appeals reversed the dismissal and remanded the matter to the Circuit Court to consider whether there was any misrepresentation or fraud which undermines the validity of the shortened limitations period provided in the maintenance agreement and to determine expressly whether the shortened limitations period is reasonable.

The full opinion is available in PDF.