Opinion
CIVIL NO. CCB-08-384.
August 25, 2008
MEMORANDUM
Plaintiffs Neos and Rina Gregoriou ("the Gregorious") have sued defendant Explosives Experts, Inc. ("Explosives Experts") in this court seeking tort damages for injury to their property. Specifically, the plaintiffs claim that Explosives Experts, a Maryland corporation, performed explosive blasting and excavation in close proximity to their residence causing substantial injury to their home in Sterling, Virginia. The defendant has moved to dismiss on the grounds that the complaint is time-barred because the plaintiffs failed to file suit within the three-year limitations period established by § 5-101 of the Courts and Judicial Proceedings Article of the Annotated Code of Maryland. In response, the Gregorious have moved to transfer venue to the Eastern District of Virginia. The parties have fully briefed the motions and no hearing is necessary. See Local Rule 105.6. For the reasons articulated below, the defendant's motion will be granted and the plaintiffs' motion will be denied.
BACKGROUND
The Gregorious live and own a residence in Sterling, Virginia. (Compl. ¶ 1.) They contend that Explosives Experts caused significant injury to that residence when it performed explosive blasting in close proximity to their home. ( Id. ¶ 11.) According to the plaintiffs, the blasting began in the spring of 2002 and continued into early 2003. ( Id. ¶ 7, 10.) On February 12, 2008, the Gregorious filed their complaint against the defendant asserting a strict liability cause of action.
Explosives Experts argues that because the current lawsuit was filed more than three years after the cause of action accrued during the period of spring 2002 through early 2003, the plaintiffs are time-barred by the § 5-101 Maryland statute of limitations. Thus, the defendant moves to dismiss the claim pursuant to Rule 12(b)(6).
The defendant has also moved for judgment on the pleadings pursuant to Rule 12(c). The standard for evaluating that motion is the same as for a Rule 12(b)(6) motion to dismiss. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) ("[V]iewing the Defendants' motion as a Rule 12(c) motion does not have a practical effect upon our review, because we review the district court's dismissal de novo and in doing so apply the standard for a Rule 12(b)(6) motion.").
In response, the Gregorious moved to transfer the case to the Eastern District of Virginia pursuant to 28 U.S.C. § 1404(a) or § 1406(a), claiming the Virginia district is the proper venue because the cause of action accrued in Virginia and the damaged property is located in Virginia.
ANALYSIS
"The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint; importantly, a Rule 12(b)(6) motion does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) (internal quotation marks and alterations omitted). When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true," and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). Following the Supreme Court's ruling in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007), "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at 1969 (quoted in Goodman v. Praxair, 494 F.3d 458, 466 (4th Cir. 2007)). Moreover, the "plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1964-65. Rule 12(b)(6) motions to dismiss may properly raise statute of limitations defenses where the defense is apparent from the face of the complaint. Wright v. United States Postal Serv., 305 F.Supp.2d 562, 563 (D. Md. 2004) (citing Pantry Pride Enters., Inc. v. Glenlo Corp., 729 F.2d 963, 965 (4th Cir. 1984)).
A. Statute of Limitations
Sitting in diversity, this court applies the conflict of law rules of Maryland, pursuant to which procedural matters are governed by Maryland law. Sokolowski v. Flanzer, 769 F.2d 975, 977-78 (4th Cir. 1985). The statute of limitations is generally considered a procedural matter under Maryland law. Id. at 978 (citing Doughty v. Prettyman, 148 A.2d 438 (Md. 1959)). Thus, Maryland's applicable statute of limitations controls.
Under Maryland law, "[a] civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced." Md. Code Ann., Cts. Jud. Proc., § 5-101. Maryland has also adopted the "discovery rule" for all civil actions in place of the historical rule that deemed an action to accrue "on the date of the wrong." Pennwalt Corp. v. Nasios, 550 A.2d 1155, 1158 (Md. 1988) (citing Hahn v. Claybrook, 100 A. 83 (Md. 1917)). Under the discovery rule, "the cause of action accrues when the claimant in fact knew or reasonably should have known of the wrong." Poffenberger v. Risser, 431 A.2d 677, 680 (Md. 1981). Thus, the discovery rule requires that the plaintiff have notice of a claim to start the running of the statute of limitations. The Maryland Court of Appeals has defined such notice as "express cognition, or awareness implied from knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry (thus, charging the individual) with notice of all facts which such an investigation would in all probability have disclosed if it had been properly pursued." Id. at 681.
Viewing the evidence in the light most favorable to the non-moving plaintiffs, the court must determine when the plaintiffs knew or should have known of their potential cause of action to assess whether the statute of limitations has run. The Gregorious allege that the damage to their home was caused by the defendant's blasting, which began in spring 2002 and continued through early 2003. (Compl. ¶ 7, 10.) There is no indication in the complaint or further pleadings that the plaintiffs failed to learn of the alleged damage to their home during the blasting period. In fact, the Gregorious contend the explosions "produced violent concussions and vibrations of the earth and air which shook the property and residence of Plaintiffs," causing damage to the foundation of the residence and "the whole structure, including its walls, windows, ceilings, chimneys, floors, walkways, driveways, doorways, and rendered the same unsafe or damaged." ( Id. ¶ 11.) Based on the facts alleged in the complaint, it is apparent that the alleged property damage occurred and was known to the Gregorious, at the latest, by early 2003, giving them sufficient notice of their claim against Explosives Experts. Consequently, this court finds that the plaintiffs' claim filed February 12, 2008, is barred pursuant to § 5-101 of the Maryland Code.
B. Transfer of Venue
Where as here the court's jurisdiction is founded solely on diversity of citizenship, venue is proper in
(1) a judicial district where any defendant resides, if all defendants reside in the same state, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.28 U.S.C. § 1391(b). In the context of § 1391, "a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c). Since Explosives Experts is a Maryland corporation with its principal place of business in Cockeysville, Maryland (Answer ¶ 2), it is subject to litigation in this jurisdiction. Md. Code Ann., Cts. Jud. Proc., § 6-102(a). Thus, venue is proper in this judicial district.
Section 1404(a) authorizes transfers of venue "[f]or the convenience of parties and witnesses, in the interest of justice," 28 U.S.C. § 1404(a), while section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought," 28 U.S.C. § 1406(a).
Since venue is proper in this jurisdiction, transfer of venue is assessed pursuant to § 1404(a). In determining whether a plaintiff's transfer request is in the interest of justice, this court may consider whether the problem with the initial filing was reasonably foreseeable to plaintiffs' counsel and the costs already imposed on the defendant and the judicial system by the initial filing. See Nichols v. G.D. Searle Co., 991 F.2d 1195, 1201 (4th Cir. 1993) (concluding that a district court acts within its discretion in rejecting a plaintiff's transfer request attempting to cure an "obvious" filing error, noting that such improper filing has already levied costs on the defendant and the court).
The Fourth Circuit has interpreted § 1406(a) to authorize transfers in cases where venue is proper but an impediment (such as lack of personal jurisdiction) exists that would prevent the action from going forward in that district. In re Carefirst of Md., Inc., 305 F.3d 253, 255-56 (4th Cir. 2002). The analysis of whether a transfer is "in the interest of justice" under § 1406(a) is the same as under § 1404(a). Nichols v. G.D. Searle Co., 991 F.2d 1195, 1201 n. 5 (4th Cir. 1993) (citing 15 Charles A. Wright, Arthur R. Miller Edward H. Cooper, Federal Practice and Procedure, § 3827, at 246-66 (1986)).
While the Eastern District of Virginia may have been a more convenient forum in which to file suit, as the plaintiffs reside in Virginia and the allegedly damaged property is located in Virginia, the plaintiffs chose to file suit in this district. They now seek to transfer their case to Virginia, which has a potentially more favorable statute of limitations, only after being served with the defendant's motion to dismiss. This is not a case where plaintiffs seek to correct an erroneous guess as to proper venue; rather they seek to avoid a reasonably foreseeable tactical error in choosing to file suit in Maryland. See id. at 1200 (stating that where plaintiffs' attorneys filed in a court lacking personal jurisdiction over the defendants "not `because they . . . made an erroneous guess with regard to an elusive fact,' but because he/she made an obvious error, transfer . . . is inappropriate.") (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466 (1962)). Thus, this court concludes that seeking transfer to avoid an obvious statute of limitations defense, taking into consideration the costs already imposed on the defendant and the judicial system and the likelihood that the claim also is time-barred under Virginia law, does not warrant a transfer in the interest of justice pursuant to § 1404(a).
It is likely, however, that the plaintiffs' claim would be time-barred even by the Virginia statute of limitations, which requires actions for injury to property be brought within five years after the cause of action accrues. Va. Code Ann. § 8.01-243. The plaintiffs contend that Explosives Experts's blasting began in spring 2002 and continued through early 2003. (Compl. ¶ 7, 10.) Thus, depending on when during the alleged period of blasting the cause of action accrued, the plaintiffs' case might well be dismissed under Virginia law for failure to file within the statutory period.
For the foregoing reasons, the defendant's motion to dismiss will be granted, and the plaintiffs' motion to transfer will be denied. A separate Order follows.
ORDER
For the reasons stated in the accompanying Memorandum, it is hereby ORDERED that:
1. The defendant's motion to dismiss (docket entry no. 13) is GRANTED;
2. The plaintiffs' motion to transfer (docket entry no. 17) is DENIED; and
3. This case is DISMISSED.