The Court of Special Appeals of Maryland, Maryland’s second highest court, has now spoken firmly on an important issue that, surprisingly, had not been addressed previously in the state. In its decision in McKlveen v. Monika Court Condominium, handed down on November 28, 2012, the Court held that it is only the amount claimed in a plaintiff’s lawsuit, and not any amounts which a defendant may claim in a counterclaim, which are considered in determining whether the defendant can demand a trial by jury.

In this case, Monika Court Condominium filed suit against one its unit owners for unpaid assessments, and claimed damages of $3,219.17, plus interest of $127.00 and attorney’s fees of $724.79, for a total of $4,070.96. The suit was filed as a small claim, seeking the benefit of expedited proceedings in Maryland’s District Court for Prince George’s County.

The defendant filed a counterclaim, claiming that plaintiff’s debt collection activities amounted to violations of the Maryland Consumer protection Act and the Maryland Consumer Debt Collection Act, and sought total damages of $26,000. The defendant requested a jury trial (available in civil cases where the amount in controversy exceeds $15,000) and the case was moved to the Circuit Court, which hears all jury trials.

In this opinion, the Court of Special Appeals upheld a decision by the Circuit Court to strike the request for a jury trial and to remand the case back to the District Court, holding that only the amount of plaintiff’s original claim, and not the amount of any counterclaim, should be considered in determining whether the amount in controversy entitles a party to a jury trial. The Court pointed to a number of cases which, while not necessarily rising to the level of precedent, support the proposition that the value of the amount in controversy is determined only from the demand in the complaint. The Court also pointed to the federal courts, where a majority of courts (though not all) have ruled that the amount in controversy for purposes of determining the jurisdiction of the court should be considered without reference to counterclaims.

In the author of this blog post’s opinion, this is a very significant decision. A contrary decision would have by and large eliminated the ability to pursue small claims in the Maryland District Court system, as a clever plaintiff’s lawyer could almost always find a way to allege a counterclaim of $15,000 or more. This is significant to every business which needs an efficient and relatively inexpensive and expedited process to have its day in court.