E-Alert Case Updates
No “Dismissal With Prejudice” Provided By MD. RULE 2-507(b)
Hariri, et al. v. Dahne, et al.
The Court of Appeals of Maryland held that MD. RULE 2-507(b) does not permit dismissal “with prejudice.” Accordingly, the Court affirmed the judgment of the Circuit Court for Baltimore County in its order that the case be dismissed without prejudice.
On October 14, 2003, Plaintiffs filed a Complaint in which they asserted that Dr. Hariri had breached a covenant not to compete in a contract under seal that was signed by the parties on October 3, 2000. Dr. Hariri was never served with a copy of that Complaint. On February 7, 2005, Plaintiffs filed a second Complaint in which they asserted that Dr. Hariri and five other defendants had breached the same covenants not to compete, signed under seal. Three of the defendants to the second Complaint were served by certified mail with a copy of the Complaint. Those defendants included: 1.) Dr. Hariri, served on September 6, 2007, approximately 2½ years after the second Complaint was filed; 2.) Dr. Thomas Blaik, served on September 6, 2007, approximately 2½ years after filing of the second Complaint; and, 3.) Dr. Belle, served on October 3, 2007, approximately 2½ years after filing of the second Complaint.
On September 14, 2007, the Clerk issued a notification to parties of contemplated dismissal pursuant to MD. RULE 2-507. The notice required that within thirty (30) days, parties must show good cause to defer entry of an order of dismissal. A variety of other filings followed including:
Finally, on November 15, 2007 Dr. Hariri and Dr. Hatfield filed a Motion to Dismiss for Lack of Prosecution Pursuant to MD. RULE 2-507(c). In that filing, the parties requested dismissal with prejudice.
After a hearing, the Circuit Court held that the case be dismissed without prejudice. Drs. Hariri, Hatfield and Blaik appealed to the intermediate appellate court, but the Court of Appeals took certiorari before the Court of Special Appeals even had an opportunity to hear or rule on the case. The issue was whether the trial court erroneously determined that it lacked the authority to grant dismissal with prejudice pursuant to MD. RULE 2-507, when the defendant was belatedly served and the Court failed to dismiss the action pursuant to MD. RULE 2-507(c).
When an action is dismissed pursuant to MD. RULE 2-507, the plain language of the Rule expressly provides that dismissal be entered “without prejudice.” In pertinent part, the Rule provides:
The purpose of the rule is not meant to punish Plaintiffs for action or inaction, but rather to rid the docket of stale cases. The contract in question was executed under seal. The statute of limitations applicable to these actions is twelve (12) years. Accordingly, Plaintiff could have brought this lawsuit as late as 2008 and still would have been within the applicable statute of limitations. Even if the Clerk had entered dismissal for lack of service at the first opportunity, the Plaintiffs had ample time to re-file.
Accordingly, the Court of Appeals held that only a dismissal without prejudice can be had pursuant to MD. RULE 2-507 and affirmed the trial court’s ruling.
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