Effective January 1 of this year, a new rule provision went into effect governing damages clauses in civil complaints in Circuit Court. Under newly modified Rule 2-305, a demand for a money judgment less than $75,000 shall specify the amount sought, but a demand for more than $75,000 shall not specify the amount, but merely indicate that the sought amount exceeds $75,000.
According to the Reporter’s Notes from the 174th meeting of the Standing Committee on Rules and Practice and Procedure on November 1 of last year, the Rules Committee thought that “ad damnum clauses are damaging to defendants who become frightened upon receiving complaints with huge amounts specified in the clauses; to plaintiffs who may become disillusioned as to the value of their cases; and to the legal profession because they lead to a negative public perception by distorting the attorney’s actual valuation of the case.” Presumably by “ad damnum” clauses the Committee referred to the large, round figures in ad damnum clauses now prohibited in most cases by this Rule. Per the Reporter’s Notes the $75,000 figure is designed to allow parties to be aware promptly of the possibility of diversity jurisdiction in federal court, and the damage amounts for lesser claims affect the jurisdiction of the courts and the right to a civil jury trial.
Practitioners need to be aware that the failure to plead properly under this new Rule may result in the dismissal of a Complaint or, perhaps more likely, an Order granting time to amend a non-compliant damage clause under pain of possible dismissal. A close-to-the-statute of limitations filing might have serious problems with an error on this point, and it is easy to imagine a large claim being filed close to the statutory limit in, say, a major personal injury or other claim.
This Rule went into effect with relatively little fanfare, such that at the MSBA Annual Meeting this year, Judge Battaglia as emcee stumped much of the room during the “Are You Smarter Than A Law Clerk?” session. I was part of the “stumpees” at the time; I had not become aware of this rule from any source including the MSBA Solo and Small Firm listserv (it may have been discussed, but I missed it) or any other source to my knowledge.