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Harford County v. Maryland Reclamation Associates, Inc.

Court of Special Appeals of Maryland

August 1, 2019

HARFORD COUNTY, MARYLAND
v.
MARYLAND RECLAMATION ASSOCIATES, INC.

          Circuit Court for Harford County Case No. 12-C-13-000509

          Berger, Nazarian, Wells, JJ.

          OPINION

          BERGER, J.

         The origin of this dispute dates back to 1990, when Maryland Reclamation Associates, Inc. ("MRA" or "Maryland Reclamation"), appellee, purchased sixty-two acres of land for the purpose of constructing and operating a rubble landfill.[1] After MRA acquired the land, Harford County (the "County"), appellant, modified its zoning laws to disallow landowners -- MRA included -- from operating rubble landfills. For nearly three decades, MRA has fought the County's regulatory efforts in various administrative and judicial forums. The dispute now reaches the Maryland appellate courts for the fifth time.[2]

         In this appeal, the County appeals from a verdict rendered by a jury in the Circuit Court for Harford County, in which MRA prevailed on its inverse condemnation claim and was awarded $45, 420, 076, representing just compensation in the amount of $30, 845, 553 plus $14, 574, 523 in interest. For the reasons explained herein, we reverse the judgment entered below, and remand the case for further proceedings consistent with this opinion.

         After the County enacted zoning regulations that prohibited MRA from operating a rubble landfill, MRA sought several variances. If approved, the variances would have permitted MRA to proceed with its project. The Harford County Hearing Examiner denied MRA's requests, and in 2007, the Harford County Board of Appeals (the "Board of Appeals" or the "Board") affirmed the Hearing Examiner's decision by a unanimous vote. In MRA IV, 414 Md. 1 (2010), the most recent case between the parties, the Court of Appeals held, among other things, that the County was not estopped from amending its zoning laws, and that the County did not err in denying MRA's requests for variances.

         On February 19, 2013, following MRA IV, MRA filed suit in the Circuit Court for Harford County, alleging that the County's actions constituted a regulatory taking in violation of the Maryland Constitution and the Maryland Declaration of Rights.[3]Thereafter, the County filed a motion to dismiss and a motion for summary judgment, arguing that MRA's inverse condemnation claim was barred by the statute of limitations. The County averred that MRA's claim accrued in June 2007, when the Board of Appeals voted 7-0 to deny MRA's requests for variances. The circuit court disagreed. In a memorandum opinion, Judge William O. Carr denied the County's motions, ruling that MRA's claim was timely because the claim accrued in 2010, when the Court of Appeals issued its opinion in MRA IV.

         The case was then tried before a jury in April 2018. The jury ultimately found in favor of MRA on its takings claim and awarded damages in the amount of $45, 420, 076. This timely appeal followed.[4]

         On appeal, the County poses six questions, which we set forth verbatim.

1. Should MRA's takings claim be dismissed based on MRA's failure to raise this constitutional issue in any administrative proceeding?
2. Is MRA's takings claim barred by the statute of limitations when it was filed more than three years after the final administrative agency decision denying MRA's variance requests?
3. Is MRA's takings claim barred by the final judgment in MRA IV under the doctrines of res judicata and collateral estoppel?
4. Did the Board's denial of MRA's variance requests to construct and operate a landfill constitute an unconstitutional taking when MRA has no vested property right or interest with respect to such a use?
5. Did the Board's denial of variances to prevent public harm constitute a taking for which compensation is due?
6. Should the jury's award of more than $45 million in damages be reversed when MRA failed to present any evidence of the Property's fair market value?

         In its cross-appeal, MRA presents an additional question, which we set forth verbatim.

Did the Circuit Court err when it granted summary judgment on MRA's per se takings claim under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)?

         We hold -- as a matter of law -- that MRA's inverse condemnation claim accrued in 2007, when the Board of Appeals denied MRA's requests for variances. As a result, MRA's claim is time-barred. We, therefore, reverse the judgment entered by the circuit court and remand the case for the entry of judgment in favor of the County.

         BACKGROUND

         This dispute concerns a sixty-two-acre plot of land in Harford County, Maryland. We draw from the Court of Appeals' comprehensive opinions in MRA II, supra, 342 Md. 476 (1996), and MRA IV, supra, 414 Md. 1 (2010), to summarize the history of the various administrative proceedings and earlier appeals.

In August 1989, the plaintiff-appellant, Maryland Reclamation Associates, Inc., contracted to purchase property located adjacent to Gravel Hill Road in Harford County, Maryland. Maryland Reclamation intended to construct and operate a rubble landfill on this property; thus, it began the process of obtaining a rubble landfill permit from the Maryland Department of the Environment pursuant to Maryland Code (1982, 1996 Repl. Vol), §§ 9-204 through 9-210, §§ 9-501 through 9-521 of the Environment Article, and COMAR 26.03 through 26.04.
Maryland Reclamation first requested that Harford County include the Gravel Hill Road property in Harford County's Solid Waste Management Plan as a rubble landfill. Thereafter, Harford County amended its Solid Waste Management Plan to include Maryland Reclamation's Gravel Hill Road site as a rubble landfill. The property's inclusion in the Harford County Solid Waste Management Plan, however, was made subject to twenty-seven conditions, including a minimum landscape buffer of 200 feet. On November 16, 1989, Harford County advised the Maryland Department of the Environment that Maryland Reclamation's Gravel Hill Road property had been included in the County's Solid Waste Management Plan as a rubble landfill site.
Maryland Reclamation next sought approval at the state government level from the Department of the Environment. On November 20, 1989, Maryland Reclamation received Phase I permit approval from the Department of the Environment. Maryland Reclamation then filed with the Department the necessary reports and studies for Phase II and Phase III approvals.
[M]aryland Reclamation had entered into a contract to purchase the property located adjacent to Gravel Hill Road in August 1989, before its inclusion in Harford County's Solid Waste Management Plan. Allegedly relying on the property's inclusion in Harford County's Solid Waste Management Plan and on the Department of the Environment's Phase I approval, Maryland Reclamation consummated the purchase of the Gravel Hill Road property on February 9, 1990, for $732, 500. The settlement occurred on the last possible day under the terms of the contract of sale.
Four days after the settlement date, newly appointed Harford County Council President Jeffrey D. Wilson and Council Member Joanne Parrott introduced in the County Council Resolution 4-90, which provided for the removal of Maryland Reclamation's property from the County's Solid Waste Management Plan. [Footnote omitted.] In the litigation that ensued over this resolution, the Court of Special Appeals held that Resolution 4-90 was invalid because it was preempted by the State's authority over solid waste management plans and the issuance of rubble landfill permits. [MRA I], 90 Md.App. 120, 600 A.2d 864, cert. dismissed sub nom. County Council v. Md. Reclamation, 328 Md. 229, 614 A.2d 78 (1992). [Footnote omitted.]
While the litigation over Resolution 4-90 was pending, Bill 91-10 was introduced in the Harford County Council, on February 12, 1991, as an emergency bill. Bill 91-10 proposed to amend the requirements for a rubble landfill by increasing the minimum acreage requirements, buffer requirements, and height requirements. The bill, inter alia, would establish a minimum rubble fill size of 100 acres and a buffer zone of 1000 feet. After public hearings, the County Council passed the bill on March 19, 1991, and the County Executive signed the bill into law on March 27, 1991. [Footnote omitted.]
On April 2, 1991, Bill 91-16 was introduced in the Harford County Council. This bill would authorize the County Council to remove a specific site from the County's Solid Waste Management Plan if the site does not comply with certain zoning ordinances, if a permit has not been issued by the State Department of the Environment within eighteen months of the site being placed in the County's Solid Waste Management Plan, or if the owner of the site has not placed the site in operation within the same eighteen month period. Bill 91-16 was passed by the County Council, signed into law by the County Executive on June 10, 1991, and is codified as § 109-8.4 of the Harford County Code. [Footnote omitted.]
The President of the Harford County Council, on April 25, 1991, sent a letter to the State Department of the Environment, enclosing a copy of enacted Bill 91-10, and advising the Department that the provisions of the bill could call into question the status of sites which were in the process of obtaining rubble landfill permits. On May 2, 1991, the Department of the Environment advised the County Council that if a permit were to be issued to Maryland Reclamation, such issuance would not authorize Maryland Reclamation to violate any local zoning or land-use requirements.
Also on May 2, 1991, the County's Director of Planning sent a letter to Maryland Reclamation informing it of Bill 91-10, indicating that Maryland Reclamation's property would apparently fail to meet the requirements of Bill 91-10, stating that Maryland Reclamation should submit documentation showing that the Gravel Hill Road site could meet the requirements of the zoning ordinances, and stating that, if the site could not meet such requirements, Maryland Reclamation would need a variance to operate a rubble landfill on the property. Maryland Reclamation did not submit any documents pursuant to the May 2, 1991, letter and did not file an application for a variance. [Footnote omitted.] Maryland Reclamation did file on May 21, 1991, an "appeal" to the Harford County Board of Appeals from the "administrative decision pursuant to Section 267-7 E in a letter dated 5/2/91," requesting that the Board "review and reverse the decision of the Zoning Administrator interpreting that the standards of Council Bill 91-10 apply to the Applicant." The "application" to the Board of Appeals asserted that Bill 91-10 was inapplicable to the property and that, if it was applicable, it was invalid. [Footnote omitted.]
On May 14, 1991, Resolution 15-91 was introduced in the Harford County Council. This resolution purported to interpret Harford County law and determine that the Gravel Hill Road site was not in compliance with county law; the resolution went on to remove the site from the County's Solid Waste Management Plan. The County Council passed Resolution 15-91 on June 11, 1991. The resolution was apparently not submitted to the County Executive for his approval.
Maryland Reclamation on June 20, 1991, filed a complaint in the Circuit Court for Harford County, seeking a Declaratory Judgment and Injunctive Relief against Harford County and the Harford "County Council." Maryland Reclamation requested, inter alia, the following: (1) a declaration that Bills 91-10 and 91-16, as well as Resolution 15-91, are "null and void as to the Gravel Hill Site;" (2) an injunction preventing the County from enforcing Bills 91-10 and 91-16 and Resolution 15-91 against Maryland Reclamation; and (3) an injunction staying all further action on Maryland Reclamation's "appeal" to the Board of Appeals. Maryland Reclamation advanced numerous legal theories to support its complaint for declaratory and injunctive relief.
The circuit court on June 28, 1991, issued an interlocutory injunction preventing enforcement of Bills 91-10, 91-16, and Resolution 15-91 against Maryland Reclamation. The order expressly allowed the Department of the Environment to continue its processing of Maryland Reclamation's pending permit application. The order also stayed the processing of Maryland Reclamation's administrative "appeal" from the Director of Planning's "decision" contained in the Director's May 2, 1991, letter. Finally, the interlocutory order prohibited Maryland Reclamation from starting any construction without court approval.
On February 28, 1992, the State Department of the Environment issued to Maryland Reclamation a permit to operate a rubble landfill on its property. The Department expressly conditioned the permit upon Maryland Reclamation's compliance with all local land-use requirements. [Footnote omitted.]
Upon cross-motions for summary judgment, the circuit court on May 19, 1994, filed an opinion and judgment, declaring that Harford County was entitled to enact new zoning laws that may prevent Maryland Reclamation from operating a rubble landfill, and that Bills 91-10 and 91-16 were not invalid on the grounds asserted by the plaintiff. The court, however, declared that Resolution 15-91 was invalid on its face. According to the circuit court, the Harford County Council was acting as a legislative body when it passed the resolution, and the passage of the resolution constituted an illegal attempt to interpret and apply the laws which the Council had previously enacted.
Maryland Reclamation appealed to the Court of Special Appeals with respect to the circuit court's declaration that Bills 91-10 and 91-16 were not invalid. The County did not cross-appeal from the circuit court's declaration that Resolution 15-91 was invalid. Before any further proceedings in the intermediate appellate court, this Court issued a writ of certiorari.

MRA II, supra, 342 Md. at 480-86. Ultimately, the Court of Appeals held in MRA II that "MRA had not exhausted its administrative remedies, including appealing the Zoning Administrator's ruling to the Board of Appeals, and applying to the Zoning Administrator for variances." MRA IV, supra, 414 Md. at 12 (citing MRA II, supra, 342 Md. at 496-97).

Thereafter MRA filed requests for interpretation with the Zoning Administrator, presenting nine issues. After receiving unfavorable rulings, MRA appealed to the Board of Appeals. The Board, through its Zoning Hearing Examiner, conducted a hearing and issued a decision dated April 2, 2002 that the application of Bill 91-10 to the proposed rubble landfill did not violate federal, state, or local laws. As summarized by Judge Harrell in MRA III, the Hearing Examiner's findings and conclusions underlying this decision were as follows:
1. Bill 91-10 applies to MRA's property on Gravel Hill Road.
2. The requirements of Bill 91-10 can be validly applied to MRA's property on Gravel Hill road under the circumstances of this case and in light of the Environmental Article of the Maryland Code as well as other principles of Maryland law.
3. MRA's operation of a rubble landfill on its property at Gravel Hill Road pursuant to its state permit will violate applicable Harford County Zoning law, particularly Harford County Code §§ 267-40.1, 267-28C, 267-28D(4) and 267-41. Moreover, the Hearing Examiner questions whether the permit issued to MRA by MDE is validly issued as it was based on misinformation provided to the State by MRA regarding the conformance of the property and use with Harford County Zoning law.
4. MRA cannot obtain a grading permit unless it can meet the requirements of Harford County Zoning law. To the extent MRA does not meet specific standards it must seek a variance and obtain a variance from provisions with which it cannot comply. MRA's reliance on site plan approvals that pre-date the enactment of Bill 91-10 is without merit.
5. MRA's operation of a rubble landfill on its property at Gravel Hill Road pursuant to its State-issued Refuse Disposal Permit No. 91-12-35-10-D and as renewed by Refuse Disposal Permit 1996-WRF-0517 will violate applicable Harford County zoning law.
6. Harford County is not prohibited by the principles of estoppel from applying the provisions of Harford County Bill 91-10 (section 267-40.1 of the Harford County Code) to MRA's property and specifically, to ...

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