§ 1A. Defense of sovereign immunity in actions in contract

   (a) Defense not to be raised in certain actions. -- Unless otherwise specifically provided by the laws of Maryland, a county governed by county commissioners and organized according to the provisions of this article, and every officer, department, agency, board, commission, or other unit of county government may not raise the defense of sovereign immunity in the courts of this State in an action in contract based upon a written contract executed on behalf of the county, or its department, agency, board, commission, or unit by an official or employee acting within the scope of his authority.

(b) No liability for punitive damages. -- In any action in contract described under subsection (a) of this section, the county, or its officer, department, agency, board, commission, or other unit of government shall have the immunity from liability described under § 5-508 (a) of the Courts and Judicial Proceedings Article.

(c) Limitation of actions. -- A claim is barred unless the claimant filed suit within one year from the date on which the claim arose or within one year after completion of the contract giving rise to the claim, whichever is later.

(d) Funds to be made available by commissioners. -- In order to provide for the implementation of this section, the county commissioners of every county shall make available adequate funds for the satisfaction of any final judgment, after the exhaustion of any right of appeal, which has been rendered against the county, or any officer, department, agency, board, commission, or other unit of government in an action in contract as provided in this section.

(e) Resolution of dispute in construction contract -- Final binding determination by county officer. -- Except as provided in subsections (f) and (g) of this section, a county governed by county commissioners may not require in a construction contract, or otherwise provide with regard to a construction contract, to which it is a party, that a dispute between the parties involving $ 10,000 or more regarding the terms of the contract or performance under the contract, be subject to final binding or conclusive determination by an officer or official body of a county governed by county commissioners.

(f) Resolution of dispute in construction contract -- Determination by neutral person or arbitration panel. -- A county governed by county commissioners may require or provide, with regard to a construction contract to which it is a party, that if there is a dispute regarding the terms of the contract or performance under the contract, the question or questions involved in the dispute shall be subject to a determination which is final and conclusive on all parties, made either by:

   (1) A neutral person or entity selected by or in accordance with a procedure established by the highest executive authority of a county governed by county commissioners; or

   (2) In the event that the other party does not accept as neutral a person or entity selected under paragraph (1) of this subsection, by an arbitration panel composed of the following:

      (i) One member designated by the highest executive authority of a county governed by county commissioners;

      (ii) One member designated by the other party to the dispute; and

      (iii) One member to be selected by mutual agreement of the two designated members from lists to be submitted by the parties to the dispute.

(g) Resolution of dispute in construction contract -- Determination by county officer subject to court review. -- Notwithstanding the provisions of subsections (e) and (f) of this section, a county governed by county commissioners may provide or require, with regard to a construction contract to which it is a party, that a dispute between the parties involving $ 10,000 or more regarding the terms of the contract or performance under the contract, be subject to a determination of questions of fact by an officer or official body of a county governed by county commissioners, provided that the decision of the officer or official body of a county governed by county commissioners is subject to review on the record by a court of competent jurisdiction.

HISTORY: 1976, ch. 450, § 3; 1984, ch. 539; 1990, ch. 546, § 1; 1997, ch. 14, § 20.