Opinion by GREENE, J.
Shailendra Kumar, M.D., P.A. ("Dr. Kumar" or "Petitioner") sued Anand M. Dhanda, M.D. ("Dr. Dhanda" or "Respondent") in the Circuit Court for Montgomery County alleging breach of contract and the breach of a covenant not to compete. The contract at issue provided for disputes to be initially addressed through mandatory, non-binding arbitration. Respondent filed a motion to dismiss the action, asserting that the suit was barred by the applicable statute of limitations. Petitioner opposed dismissal, arguing that the complaint was timely because his cause of action had either not "accrued" or that limitations was tolled until the completion of arbitration. The trial court dismissed the action as time-barred and the Court of Special Appeals affirmed. Based on the record before us, we shall affirm the judgment of the Court of Special Appeals and hold that while non-binding arbitration may have been a condition precedent to litigation, it neither affected the accrual of the underlying breach of contract claims, nor otherwise tolled the statute of limitations applicable to maintaining an action in court.
The complex procedural history essential to our resolution of this case stems from a single contract, prepared without the assistance of counsel. Petitioner and Respondent entered into an employment agreement ("the contract" or "the agreement") on August 28, 2001, whereby Respondent agreed to work as a doctor in Petitioner's urology practice through August 31, 2002. The contract contained, inter alia, a non-compete clause which prohibited Respondent from practicing within a specified radius of Petitioner's multiple offices or soliciting or accepting Petitioner's patients for three years following the expiration of the contract, or through August of 2005. An addendum to the contract prohibited Dr. Dhanda, during the term of the agreement, from practicing medicine or engaging in other professional activities outside of Dr. Kumar's practice, unless he obtained the consent of the association. The contract also included the following mandatory, non-binding arbitration clause:
As a result of discord between the parties, the employment relationship was not renewed upon termination of the Agreement on August 31, 2002. Soon thereafter, Respondent filed an initial suit for breach of contract against Petitioner in the Circuit Court for Anne Arundel County. He sought damages for an alleged breach of contract based on Petitioner's refusal to grant Respondent partner status in the business and the withholding of certain monies.
Petitioner filed an Answer and Demand for Jury Trial on October 18, 2002, which noted that "disputes are to be submitted to arbitration pursuant to agreement between the parties." Four months later, on February 26, 2003, Petitioner filed a motion to compel arbitration and to dismiss the action. The judge presiding in Anne Arundel County dismissed the action without prejudice on April 24, 2003, stating that the "claims are subject to mandatory arbitration,"
The record is silent with regard to any activity between the parties for over two years following this dismissal. On April 29, 2005, however, Petitioner filed, in the Circuit Court for Baltimore City, a petition to compel arbitration and to appoint an arbitrator. The petition also included separate counts concerning the substantive claims for breach of contract and breach of the non-compete provision. Following an apparent delay in service, on March 9, 2006, Respondent filed both a response to Petitioner's petition to compel arbitration and his own motion to dismiss the substantive counts for improper venue and as claims subject to mandatory arbitration. Petitioner then filed a response to the motion to dismiss, offering to withdraw the substantive counts if the Circuit Court would compel arbitration in order to resolve the issues. The court dismissed the substantive counts on April 28, 2006, but did not order arbitration. Four months later, on August 25, 2006, Petitioner filed a motion for summary judgment, urging the Circuit Court for Baltimore City to grant the earlier petition to compel arbitration. Following a brief bench trial, on November 20, 2006, the presiding judge granted the petition to compel arbitration and appointed J. Snowden Stanley, Jr. as the arbitrator the underlying dispute between the parties.
After this apparent victory in securing an order compelling arbitration, Petitioner allowed nearly two more years to pass before actually submitting the matter to the arbitrator in March of 2008. Mr. Stanley issued his award on June 20, 2008. The award denied all relief to Petitioner and also denied relief to Respondent, save for an award of $868.00 as reimbursement for certain disability insurance premiums.
Finally, on March 16, 2009, almost a year after the arbitration award was issued, Petitioner filed the instant action in the Circuit Court for Montgomery County. The complaint stated that "[t]he Agreement requires arbitration as a requirement before Plaintiff can pursue a remedy in court ... [t]he matter went to Arbitration, and a decision in favor of the Defendant was rendered in June of 2008. This matter is brought de novo." Respondent filed a motion to dismiss, arguing that the applicable three-year statute of limitations barred the action because the alleged breaches of contract occurred between 2002 and 2005. Petitioner filed in opposition, contending that, because completion of arbitration was a condition precedent to filing a claim, the statute of limitations had not begun to run until the arbitration decision of June 20, 2008. After a hearing and supplemental briefing by the parties, Judge McGann, of the Circuit Court for Montgomery County dismissed the action with prejudice.
Petitioner noted a timely
We shall affirm the judgment of the Court of Special Appeals and hold that while non-binding arbitration, mandated by the contract, may have constituted a condition precedent to litigation, pursuing arbitration neither postponed the accrual of the underlying breach of contract claims, nor otherwise tolled the statute of limitations applicable to maintaining an action in court.
We recently reiterated the standard of review applicable to motions to dismiss in Parks v. Alpharma, Inc., 421 Md. 59, 25 A.3d 200 (2011), stating:
Parks, 421 Md. at 72, 25 A.3d at 207 (internal quotations omitted). In the instant case, Respondent moved to dismiss based on the affirmative defense of limitations, asserting that Petitioner's claims regarding the underlying contractual disputes were time barred, as a matter of law. We have held consistently that "the question of accrual in § 5-101 is left to judicial determination." Frederick Rd. Ltd. P'ship v. Brown & Sturm, 360 Md. 76, 95, 756 A.2d 963, 973 (2000). We review the grant of Respondent's motion in order to "determine whether the court was legally correct." Parks, 421 Md. at 72, 25 A.3d at 207 (quotation omitted), accord Doe v. Roe, 419 Md. 687, 693, 20 A.3d 787, 791 (2011) ("In reviewing the Circuit Court's grant of a motion to dismiss, our task is confined to determining whether the trial court was legally correct in its decision to dismiss." (quotations omitted)).
The applicable statute of limitations is encompassed in Maryland Code (1973, 2006 Repl.Vol.) § 5-101 of the Courts and Judicial Proceedings Article, which states
Petitioner first contends that because the contract between the parties required the completion of non-binding arbitration as a condition precedent to filing suit, his causes of action had not "accrued" within the meaning of § 5-101 until the arbitration award was issued on June 20, 2008. Therefore, under his argument, Petitioner would have had three years from that date, or until June 20, 2011, to timely file in court. In support of this theory, he cites case law in which we stated:
James v. Weisheit, 279 Md. 41, 44, 367 A.2d 482, 484 (1977) (quoting W., B. & A. Elec. R.R. Co. v. Moss, 130 Md. 198, 205, 100 A. 86, 89 (1917)); accord Henry's Drive-In, Inc. v. Pappas, 264 Md. 422, 428, 287 A.2d 35, 38 (1972) ("[L]imitations will run from the time the plaintiff could have acted...."). Inserting the language from these precedents into his argument, Petitioner summarizes the instant case in the following manner:
Respondent argues otherwise, asserting that the causes of action for breach of contract accrued for the purpose of the statute of limitations at the time of the alleged breaches. Accordingly, the latest possible date for accrual of the breach of contract cause of action was the contract's termination date of August 31, 2002, and the latest date for the accrual of the breach of the non-compete clause was August 31, 2005, the date upon which the clause expired by its own terms. Applying the three-year statute of limitation to these dates makes clear that both claims were time-barred when Petitioner instituted the current suit on March 16, 2009, and were therefore properly dismissed.
We agree with Respondent's assessment of the applicable accrual dates. As our case law makes clear, in the context of the statute of limitations, "[t]he law is concerned with accrual in the sense of testing whether all of the elements of a cause of action have occurred so that it is complete." St. Paul Travelers v. Millstone,
The cases Petitioner cites in order to assert that limitations does not begin to run until a plaintiff can "maintain his action to a successful result," all concerned whether the necessary elements of a cause of action had arisen under the facts that were presented. See James v. Weisheit, 279 Md. 41, 44, 367 A.2d 482, 484 (1977) (analyzing accrual as the point in time that "the plaintiff could have proved all five of the essential elements of deceit"); Henry's Drive-In, Inc. v. Pappas, 264 Md. 422, 287 A.2d 35 (1972) (considering whether a cause of action could arise for breach of lease before the lessor made a demand for payment); W., B. & A. Elec. R.R. Co. v. Moss, 130 Md. 198, 100 A. 86 (1917) (evaluating, and ultimately remanding to the jury, whether the plaintiff's claim was barred by limitations in a quantum meruit suit where plaintiff asserted that he had completed the services less than three years prior to filing). In the instant case, neither party disputes that all of the elements of Petitioner's breach of contract claims existed, at the very latest, as of the dates upon which the applicable contractual provisions terminated.
As the intermediate appellate court aptly noted:
Kumar, 198 Md.App. at 345, 17 A.3d at 749 (footnote omitted). We agree with this analysis. As we explain, infra, Petitioner
To bolster his point, Petitioner cites the Ninth Circuit case of Wolsey, Ltd. v. Foodmaker, Inc., 144 F.3d 1205 (9th Cir.1998), which explained:
Wolsey, Ltd., 144 F.3d at 1208 (quoting Harrison v. Nissan Motor Corp., 111 F.3d 343, 350 (3rd Cir.1997)) (emphasis in original). It is clear to us, however, that the Wolsey Court uses the word "recourse," to signify litigating for judicial resolution of a case, which is by definition different than filing an action in order to ensure later compliance with the statute of limitations. See Harris v. Bridgford, 153 Md.App. 193, 206, 835 A.2d 253, 260 (2003) ("Maryland courts have indicated ... that full judicial resolution of the dispute constitutes a waiver [of the right to arbitration], but some limited participation in judicial proceedings does not." (emphasis added) (citations omitted)). The Wolsey case, therefore, does not lend support to Petitioner's argument, and is not inconsistent with the fact that Petitioner could have filed a timely action and sought a stay of his substantive claims pending arbitration.
Indeed, the Maryland Uniform Arbitration Act, to which the parties agreed to be bound,
Md.Code (1973, 2006 Repl.Vol.) § 3-209 of the Courts and Judicial Proceedings Article. In accordance with the statute, this Court and the Court of Special Appeals have recognized the ability of a party to file an action to compel arbitration and seek a stay of claims that are related to arbitrable issues. See Frederick Contractors, Inc. v. Bel Pre Medical Ctr., Inc., 274 Md. 307, 316, 334 A.2d 526, 531 (1975) ("Because we have a viable precedent in our case law, we have no hesitancy in holding that while Bel Pre, by demanding arbitration, should have been allowed to stay the [mechanic's lien foreclosure] proceedings in the circuit court, such a stay will remain effective only until arbitration is concluded or Bel Pre's demand is withdrawn."); Letke Sec. Contractors, Inc. v. United States Sur. Co., 191 Md.App. 462, 471, 991 A.2d 1306, 1311 (2010) (noting that under the Arbitration Act "[n]ot only suits to enforce an arbitrator's award, but also suits to compel arbitration and suits to stay court action pending arbitration, are now to be viewed as `favored' actions." (emphasis added) (quotation omitted)); Redemptorists v. Coulthard Servs. 145 Md.App. 116, 151, 801 A.2d 1104, 1124 (2002) (interpreting § 3-209 to reflect the Legislature's anticipation "that there may be non-arbitrable issues that are closely related to, and indeed dependent upon, arbitrable issues").
In the instant case, the parties agreed to non-binding arbitration. Although this mode of dispute resolution may not necessarily promote the efficiency, speed, or economy achieved through binding arbitration, it will nevertheless be enforced as a term agreed upon by the parties. See Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96, 103, 468 A.2d 91, 95 (1983) ("Arbitration is a matter of contract which the parties should be allowed to conduct in accordance with their agreement." (citations omitted)); NRT Mid-Atlantic, Inc., v. Innovative Properties, Inc., 144 Md.App. 263, 278-79, 797 A.2d 824, 833 (2002) ("Arbitration clauses will be freely enforced when there is an agreement to arbitrate the subject matter of the dispute." (citation omitted)); United States v. Bankers Ins. Co., 245 F.3d 315, 322 (4th Cir.2001) ("Although non-binding arbitration may turn out to be a futile exercise... this does not, as a legal matter, preclude a non-binding arbitration agreement from being enforced." (citations omitted)). In its non-binding form, arbitration is a condition precedent to litigation, however, the parties are not bound by the decision of the arbitrator and afterwards are free to pursue independent legal claims concerning the same issues pursued in arbitration. See General Accident Ins. Co. v. Scott, 107 Md.App. 603, 618, 669 A.2d 773, 780 (1996) ("In essence, the non-binding arbitration amounted to a `dress rehearsal' for the upcoming trial on the merits...."); Dow Corning Corp. v. Safety Nat'l Cas. Corp., 335 F.3d 742, 745 (8th Cir.2003) ("Arbitration usually results in a final determination that is binding on the parties to the underlying dispute, but the parties
By way of comparison, the principle of staying an action involving an issue subject to non-binding arbitration is similar to that specifically approved by this Court in Arroyo v. Board of Educ. of Howard County, 381 Md. 646, 851 A.2d 576 (2004), with respect to administrative proceedings generally. That case involved an educator's wrongful termination action, which he filed in court over three years after the final administrative decision upholding his termination. We made clear that, in accordance with the primary administrative
Arroyo, 381 Md. at 659-60, 851 A.2d at 584 (quoting Md.-Nat'l Capital Park and Planning Comm'n v. Crawford, 307 Md. 1, 18, 511 A.2d 1079, 1087-88 (1986)). Accordingly, we emphasized that in addition to being free to file his legal action immediately after the final administrative decision was issued, the plaintiff could "have filed it even sooner subject to the separate action being stayed during the administrative proceedings." Arroyo, 381 Md. at 650, 851 A.2d at 579. We said:
Arroyo, 381 Md. at 660, 851 A.2d at 584-585 (emphasis added); McCullough v. Wittner, 314 Md. 602, 613, 552 A.2d 881, 886 (1989) ("[W]here a plaintiff has both an administrative remedy and an independent judicial action, and the administrative agency's jurisdiction is deemed primary, it is appropriate for the trial court to retain, for a reasonable period of time, jurisdiction over the independent judicial action pending invocation and exhaustion of the administrative procedures." (citations omitted)).
Similarly, if the parties agree to non-binding arbitration, what they pursue afterwards in court is not modification, confirmation, or vacation of an award, but an entirely independent legal determination on the merits. Therefore, under these circumstances, the court's jurisdiction over the arbitrable claims is neither "extremely limited," Letke Sec. Contrs., Inc. v. United States Sur. Co., 191 Md.App. 462, 472, 991 A.2d 1306, 1312 (2010), nor is the action governed by the limitation periods applicable to appeals of binding arbitration awards. See § 3-223; § 3-224 of the Courts and Judicial Proceedings Article. Like the situation in Arroyo, while resolution of the legal action must wait until the satisfaction of the condition precedent, the court's jurisdiction may be maintained and the claim properly stayed prior to that time.
It is clear, as discussed supra, that Petitioner's cause of action accrued more than three years prior to his filing suit. We now examine the issue implicated by Petitioner's second question before this Court, namely, whether the limitations period was tolled by either a legislative or judicial exception at any point after accrual. We can find no applicable exception to Maryland Code § 5-101 of the Courts and
In Bertonazzi v. Hillman, 241 Md. 361, 216 A.2d 723 (1966), we recognized a judicial tolling exception where a case was filed timely, but in the incorrect forum. The plaintiff in Bertonazzi mistakenly believed that the defendant lived in Baltimore County rather than Baltimore City, and therefore filed suit in the County. By the time the Circuit Court for Baltimore County dismissed the suit for improper venue, the Baltimore City filing was timebarred. In reversing, this Court reasoned that a tolling exception was consistent with the policy inherent in the statute of limitations. We said, "[s]tatutes of limitations are designed 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." Bertonazzi, 241 Md. at 367, 216 A.2d at 726. Under the facts presented it was clear that "[t]he appellee ... was as fully put on notice of the appellant's claim by the suit in Baltimore County as she would have been by suit in Baltimore City...." Id. We further explained the rationale behind our Bertonazzi holding in the later case, Walko Corp. v. Burger Chef Systems, Inc., 281 Md. 207, 378 A.2d 1100 (1977). There, we noted that the narrow exception to the general rule against implying exceptions to the statute of limitations was supported in Bertonazzi by the fact 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." Walko Corp., 281 Md. at 214, 378 A.2d at 1103.
Recently, in Swam v. Upper Chesapeake Medical Center, Inc., 397 Md. 528, 919 A.2d 33 (2007) we again determined that a judicial tolling exception was appropriate. In that case the plaintiff accompanied her father to the hospital where he would undergo surgery. Plaintiff was injured while in a waiting area, when she was stuck by an uncapped hypodermic needle after placing her hand on a counter. She filed suit in the Health Care Alternative Dispute Resolution Office, however, her suit was dismissed because she was not a patient receiving treatment, and therefore her injury was not a "medical injury" within the meaning of the Maryland Health Care Malpractice Claims Act. Her subsequent claim in the Circuit Court for Harford County was filed beyond the statute of limitations and was therefore also dismissed. In reversing, we held that the complaint related back to the plaintiff's timely, albeit misdirected, filing with the alternative forum and therefore could proceed on the merits. We explained that under the first requirement set out in Philip Morris, the "persuasive policy supporting the exception" was the "ambiguity regarding the appropriate forum for a medically-related claim and basic fairness to the parties." Swam, 397 Md. at 543, 919 A.2d at 41 (noting that "[t]he difficulty in determining the proper forum is analogous to the difficulty faced by the plaintiff in Bertonazzi."). The second component of the Philip Morris test was met because recognizing a tolling exception "would not contravene the general purpose of the statute of limitations" as the hospital had notice of the Swams' claims within three years of the injury such that the claims were not "so stale as to be unjust." Swam, 397 Md. at 544, 919 A.2d at 42 (quotation omitted).
There have also been several cases in which we have refused to recognize a tolling exception because it would not comport with the factors expressed in Philip Morris. Particularly important to our consideration of the issues in the instant case is our decision in Walko Corp. v. Burger Chef Systems, Inc. 281 Md. 207, 378 A.2d 1100 (1977). In that case we considered on certification from federal court, whether the statute of limitations was suspended during the pendency of a motion for leave to intervene in a suit against the same defendant, ultimately denied as procedurally defective. Walko, 281 Md. at 209, 378 A.2d at 1101 (noting that the federal district court denied the motion to intervene after finding the "allegations to be `entirely unrelated to the subject matter' of the underlying suit."). We held that there was no justification for tolling the statute of limitation under the facts presented. Despite
Walko, 281 Md. at 215, 378 A.2d at 1104 (internal citations and quotations omitted).
Returning to the instant case it is clear that where arbitration is non-binding, "the court house door remain[s] open to resolve that same controversy provided that a lawsuit is filed before the applicable statute of limitations has run." 3 Thomas H. Oehmke, Commercial Arbitration, 49:8 (3rd ed.2011) (emphasis added). We find no "persuasive authority or persuasive policy considerations supporting the recognition of the tolling exception," under the facts presented. See Philip Morris, 394 Md. at 238, 905 A.2d at 347. There is no doubt that arbitration is favored and encouraged in Maryland because it "provides an informal, expeditious, and inexpensive alternative to conventional litigation." RTKL Assocs. Inc. v. Baltimore Cnty., 147 Md.App. 647, 656, 810 A.2d 512, 517 (2002) (internal quotation omitted).
The ability, however, to contractually affect the statute of limitations applicable to the underlying cause of action within the arbitration agreement, suggests to us that a judicial tolling policy is not necessary to ensure the continued use of arbitration in Maryland or fairness to the parties. See Md. Rule 2-323(g)(15); Kim v. Comptroller, 350 Md. 527, 536, 714 A.2d 176, 180 (1998) (stating that "[s]tatutes of limitation are not ordinarily jurisdictional, and are generally waivable...."). We agree with the Court of Special Appeals's assessment that, therefore:
Kumar, 198 Md.App. at 350, 17 A.3d at 752.
Further, tolling limitations during the pendency of mandatory, non-binding arbitration
Bragunier Masonry Contrs. v. Catholic Univ. of Am., 368 Md. 608, 627, 796 A.2d 744, 755 (2002) (quotation omitted); accord Hecht v. Resolution Trust Corp., 333 Md. 324, 338, 635 A.2d 394, 401 (1994) ("[T]he purposes of statutes of limitation are to provide adequate time for a diligent plaintiff to bring suit as well as to ensure fairness to defendants by encouraging prompt filing of claims."); Pierce v. Johns-Manville Sales Corp., 296 Md. 656, 665, 464 A.2d 1020, 1026 (1983). In declining to adopt a judicial tolling exception in Walko, we emphasized that:
Walko, 281 Md. at 210, 378 A.2d at 1101 (citations and quotation omitted). As demonstrated by the record, summarized again below, Petitioner's pursuit of his legal claims, just as in Walko, was "hardly one of vigilance."
The breach encompassed in the first count of Petitioner's complaint must have occurred no later than August 31, 2002, the date upon which the contract expired by its own terms. Any breach of the non-compete provision must have occurred prior to August 31, 2005, three years after Dr. Dhanda's termination from employment. The statute of limitations on the claims expired, therefore, at the very latest, on August 31, 2005, and August 31, 2008, respectively. Petitioner filed his petition to compel arbitration in Baltimore City on April 29, 2005. After receiving the Court's order permitting arbitration in 2006, he delayed two years, until March 2008 to actually submit the claim to the court-appointed arbitrator. After the arbitration award was issued in June of 2008, and Petitioner, under his own logic could "go to court," he waited another nine months before filing in the Circuit Court for Montgomery County on March 16, 2009. Therefore, we hold that when Petitioner filed his cause of action nearly six years after the termination of the contract, and more than three years after the expiration of the non-compete provision, his action was time-barred, as a matter of law. It is more than feasible that arbitration could have been completed before the expiration of the three-year statute of limitations, and nothing prevented Petitioner from filing his claims and requesting a stay if timely arbitration was in doubt. Thus, while completion of arbitration may have represented a condition precedent to litigation, because of Petitioner's failure timely file in court he "cannot be heard to
