Argued: February 5, 2016
Circuit Court for Anne Arundel County No. C-13-178391, Maryland
Barbera, C.J., [*] Battaglia Greene Adkins McDonald Watts Wilner, Alan M. (Retired, Specially Assigned), JJ.
In this case we are asked to determine whether A Guy Named Moe, LLC, the Petitioner, a foreign limited liability company doing business in Maryland, having filed a civil action in the Circuit Court for Anne Arundel County, although not registered to do business in Maryland, can continue to pursue its claims, once Chipotle Mexican Grill of Colorado, LLC, the Respondent, moved to dismiss the case because of Moe's failure to register. Because we shall hold Moe can maintain its suit, we also address whether Moe has standing as a "person aggrieved" by the decision of the Board of Appeals of the City of Annapolis to approve Chipotle's application for a special exception and shall hold it does not.
The parties to this case are two foreign limited liability companies: A Guy Named Moe, LLC ("Moe") and Chipotle Mexican Grill of Colorado, LLC ("Chipotle"). Both companies operate a chain of restaurants, which are respectively known as "Moe's Southwest Grill" and "Chipotle Mexican Grill." The dispute between the parties, which underlies this appeal, began in 2012, when Chipotle applied for a "special exception" to build a restaurant at 36 Market Space in Annapolis, Maryland, which is approximately 425 feet from Moe's Southwest Grill at 122 Dock Street. The Department of Planning and Zoning for the City of Annapolis recommended that the City's Board of Appeals approve Chipotle's application, but Moe opposed that recommendation during Board proceedings. The Board, though, unanimously approved Chipotle's request in the Spring of 2013.
Moe subsequently filed a petition for judicial review, pursuant to Maryland Rule 7-201 et seq.,  asking that the Circuit Court for Anne Arundel County review the Board's decision. Chipotle then filed a Motion to Dismiss in which it argued that Moe was unable to file a petition for judicial review because its right to do business had been forfeited, and, thus, could not "maintain" suit under Section 4A-1007(a) of the Corporations and Associations Article of the Maryland Code (1975, 2007 Repl. Vol.). Chipotle also argued that Moe did not have standing to pursue a petition for judicial review of the Board's decision because it was not a "taxpayer" and was not "a person aggrieved" under Section 4–401(a) of the Land Use Article, Maryland Code (2012).
Moe, in response, filed an Amended Petition for Judicial Review and attached a "Certificate of Good Standing" issued by the State Department of Assessments and Taxation on September 24, 2013. Moe argued that, while it was not registered to do business in Maryland when it had filed its petition, it could still "maintain" the action under Section 4A-1007 of the Corporations and Associations Article because it had subsequently successfully registered and paid the associated penalty. Moe also argued that it did have standing, both as a taxpayer and as a person aggrieved.
The Circuit Court, after a hearing, dismissed Moe's petition, reasoning that a foreign limited liability company could maintain an action as long as it "c[a]me back and renew[ed]" its right to do business, but found that Moe lacked standing to petition for judicial review because it was not a taxpayer and the petition was brought "simply [as] a matter of competition":
[THE COURT]: The fact is that in this case, your client does not have standing. Your client is not a taxpayer within the meaning of the statute and therefore on that basis alone the Court must grant the motion.
You stand in the front of either one of these properties and look at the other, you will never have a direct view of it, and I don't even have to get into all of those issues that you have raised, all the other issues. The fact is they are not a taxpayer and therefore cannot maintain this action.
I do believe, however, I believe if a limited corporation does file and hasn't paid their taxes or whatever, if they come back and renew it, I believe that would restore their right to maintain the action. But in this case, it simply appears to this Court it is simply a matter of competition.
It is an argument that is not the subject for which the Court could grant on the basis of competition. So therefore the Court is going to grant the motion to dismiss the case with prejudice. I will sign an order to that effect.
Moe appealed to the Court of Special Appeals, conceding that it was not a "taxpayer, " under Section 4-401(a) of the Land Use Article, but arguing that it still had standing to file such an action as "a person aggrieved" by the Board's decision under the very same statutory provision.
In a reported opinion, A Guy Named Moe, LLC v. Chipotle Mexican Grill of Colorado, LLC, 223 Md.App. 240, 242, 115 A.3d 733, 734 (2015), the Court of Special Appeals affirmed the Circuit Court but disagreed with the lower court on the seminal issue of whether Moe could maintain its suit. Our intermediate appellate court concluded that, "the petition at issue was void ab initio, given that, at the time that it was filed, Moe's had lost its right to do business in Maryland and was nonetheless continuing to do business in Maryland." Id. at 246, 115 A.3d at 736. The court reasoned that Moe's right to do business in Maryland was forfeited when it had filed its initial petition for judicial review and had not been restored until over four months after the 30–day filing period had lapsed. Id. at 244, 115 A.3d at 735. Thus, according to the court, Moe could not proceed with its action because "it did not meet Rule 7–203(a)'s 30–day deadline, as it had no right to 'maintain suit' under C.A. § 4A–1007(a) during the entire 30–day period and, when it re-attained that right, the thirty-day period had long since lapsed." Id. at 254, 115 A.3d at 741. The court opined that, "the plain language of the statute allows a foreign LLC to 'cure the infirmity' of forfeiture so that it may 'maintain suit, '" but that even after satisfying the court of its right to maintain suit it could not "rely on a petition it had filed with the court when it had no such right to do so". Id. at 248, 115 A.3d at 738.
The Court of Special Appeals determined that "there are no Maryland appellate decisions that address the issue of a foreign LLC's standing to bring or maintain a legal action under the circumstances presented by this case". Id. at 249, 115 A.3d at 738. The court, nonetheless, relied on Price v. Upper Chesapeake Health Ventures, 192 Md.App. 695, 995 A.2d 1054 (2010), which dealt with a domestic limited liability company's ability to file and maintain suit after forfeiture:
In Price, members of a domestic LLC filed a derivative suit against members of the LLC's management committee, who had decided to sell substantially all of its assets, as well as against those members of the LLC who had ratified that sale. But the suit was brought nearly a year after the domestic LLC's right to do business had been forfeited. While noting that C.A. § 4A–920 does provide that "[t]he forfeiture of the right to do business in Maryland and the right to the use of the name of the limited liability company does not . . . prevent the limited liability company from defending any action, suit, or proceeding in a court of this State, " we stressed that "[t]he negative implication of such language, and the sweep of the 'doing business' and name 'using' prohibition is that the company may not file or maintain a lawsuit after its rights have been forfeited." That reasoning and, more specifically, that "negative implication" is applicable to foreign LLCs, like Moe's, as well. Like C.A. § 4A–920, the statute governing domestic LLCs, C.A. § 4A–1007(b), the statute governing foreign LLCs, provides: "The failure of a foreign limited liability company to register in this State does not impair the validity of a contract or act of the foreign limited liability company or prevent the foreign limited liability company from defending any action, suit, or proceeding in a court of this State." Then, significantly, the foreign LLC subtitle goes one step further and includes a statutory provision, C.A. § 4A–1007(a), that expressly bars a foreign LLC from maintaining suit when it is doing business in Maryland without a right to do so. Thus the reasoning in Price clearly applies to the instant case: If a domestic LLC cannot, by "negative implication, " file or maintain suit, then surely a foreign LLC containing an express bar to such legal action cannot file or maintain suit, or its legal equivalent, a petition for judicial review.
Id. at 249-50, 115 A.3d at 738-39 (citations omitted) (emphasis in original). The court concluded that, "a foreign LLC, like Moe's, that had its right to do business in Maryland forfeited but nonetheless continued to do business in this State, in violation of Maryland law, cannot maintain a suit in Maryland. And, if it files a petition for judicial review during that time, that action is void ab initio." Id. at 253-54, 115 A.3d at 741.
The court also found helpful "cases involving the legal effects of the loss of a corporate charter, by forfeiture, upon a corporation." The Court of Special Appeals concluded that "neither a corporation nor, by implication, an LLC like Moe's may revive a suit that, though timely filed, was initiated by such an entity, after it had lost the right to do business in Maryland and yet persisted in doing business in this State." Id. at 253, 115 A.3d at 741. The court reasoned that since a domestic limited liability company or corporation, under Maryland law, could not revive a suit filed after forfeiture, then neither could a foreign limited liability company. Id.
The Court of Special Appeals also addressed whether Moe was a "person aggrieved" by the Board's decision to grant Chipotle's special exception. Our intermediate appellate court declared that, "the circuit court, in effect, appeared to make a finding as to whether Moe's qualified as 'a person aggrieved' when it opined, in its oral decision, that Moe's action against Chipotle was brought simply as a 'matter of competition.'" Id. at 254, 115 A.3d at 742. The court concluded that, "a person is not 'aggrieved' for standing purposes when his sole interest in challenging a zoning decision is to stave off ...