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“You didn’t sue fast enough” is no excuse

Court of Appeals says companies can’t put unreasonable limits on consumers’ access to the courts

July 28, 2017: One winter evening, you notice that the house is a bit chilly. You get up to adjust the thermostat, but the furnace doesn’t kick in. That’s odd, you think. I just paid to have it inspected. The company said the furnace was fine; now you have to pay thousands of dollars out-of-pocket to keep your family warm. Not easy to swing when you’re living paycheck to paycheck.

You start to wonder: maybe the person servicing the furnace wasn’t licensed or overlooked a critical part of the inspection. But when you try to get more information from the company, they evade your requests. Almost two years go by and you are left with one option: filing a small claims suit in district court.

But, to your surprise, the judge points out that in tiny writing, on the back of your contract with the company, is a clause that requires you to bring a suit within one year, instead of the three years allowed by law, or you forfeit your right to any legal recourse. You suddenly find yourself cast out of court based on a provision that you never had a say in.

This practice is all too common in “adhesion contracts” – take-it-or-leave it contracts drafted by larger companies, the terms of which consumers cannot change. Anthony May, Murnaghan Fellow at the Public Justice Center, explains: “Companies limit their liability by adding ‘limitations provisions’ to adhesion contracts that reduce the time the law permits a consumer to file suit. Companies often abuse limitations provisions to restrict consumers’ access to courts without their knowledge.”

On July 28, the Court of Appeals of Maryland took a step toward curtailing these abusive practices. In Ceccone v. Carroll Home Services, LLC, Richard and Daphne Ceccone appealed their case, unrepresented, to the state’s highest court. The Public Justice Center, Phillip Robinson of the Consumer Law Center, and Civil Justice filed an amicus brief in support of the Ceccones, and the PJC’s Anthony May argued the case. In the brief and at argument, he contended that the trial court erred by blindly accepting a limitations provision in the Ceccones’ home furnace maintenance contract and dismissing their small-claims suit without first considering their argument that the limitations provision was unreasonable and unenforceable.  

The Court ultimately ruled in favor of the Ceccones and held that trial courts must carefully evaluate limitations provisions before kicking a consumer out of court. Trial courts are now required to make an explicit finding that a limitations provision is reasonable, taking into account the subject matter of the contract, the duration of the shortened limitations provision compared to otherwise controlling law, the relative bargaining power of the parties, and whether the provision applies equally to both parties for all potential claims. With this ruling, the Court ensured that consumers are provided meaningful access to courts without having that right stripped away by large companies who attempt to insulate themselves from liability.

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