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LLC v. Rale, Inc.

Court of Special Appeals of Maryland

August 29, 2019


          Circuit Court for Frederick County Case No. 10-C-14-001899

          Meredith, Arthur, Beachley, JJ. [*]


          ARTHUR, J.

         Under a special statutory regime that governs certain administrative decisions affecting land use in Frederick County, a member of the County's governing body must disclose ex parte communications with any "individual" concerning a pending application, during the pendency of the application. If a court finds that a member of the governing body failed to disclose such a communication, the court must remand the case to the governing body for reconsideration.

         In this complex and unusual case, the Circuit Court for Frederick County found that a former member of the Board of County Commissioners had engaged in an undisclosed ex parte communication regarding a pending application to rezone approximately 400 acres of land during the pendency of the application. The court remanded the case to the governing body, the new Frederick County Council, for reconsideration. On reconsideration, the County Council decided to require the applicants to recommence the process of applying for a change in zoning. When the applicants refused to submit a new application, the County Council asked the court to take such action as it deemed necessary to permit a new application to be heard. The court granted the Council's request, vacated the prior approvals, and remanded the case to the Council.

         The applicants appealed. We shall affirm.

         Background Facts

         In November 2012, Payne Investments LLC and 75-80 Properties LLC (collectively, the "Developers") filed an application for a zoning map amendment for more than 400 acres of land near the community of Monrovia in southeastern Frederick County. The application requested that the land, which was zoned for agricultural purposes, be rezoned to permit a planned unit development or "PUD" with 1500 residential units. The development was to be called "Monrovia Town Center."

         When they applied for the zoning map amendment, the Developers filed an application for a Development Rights and Responsibilities Agreement or "DRRA," under which the PUD zoning would remain in place notwithstanding any subsequent changes in the laws, regulations, or policies regarding the use of the real property or the density or intensity of the development on it. See Maryland Code (2012), § 7-304(a) of the Land Use Article. In addition, the Developers requested an Adequate Public Facilities Ordinance Letter of Understanding ("APFO LOU"), which would define the public facilities (such as road improvements and sewer facilities) that they would be required to construct to satisfy the requirements of Frederick County's Adequate Public Facilities Ordinance.

         In November 2013, the Frederick County Planning Commission recommended the approval of the PUD and found that the draft DRRA was consistent with the County's Comprehensive Plan.

         After three public hearings in January 2014, the Board of County Commissioners approved the PUD, subject to a number of conditions. The Developers accepted the conditions, and on March 28, 2014, the Planning Commission recommended the approval of a revised plan.

         In April 2014, the Board of County Commissioners held a total of four public hearings concerning the PUD, the DRRA, and the APFO LOU for Monrovia Town Center. There was considerable public opposition to the proposed development, much of it focused on traffic safety and the adequacy of the local roadways.

         On April 14, 2014, before the fourth and final hearing, Commissioner C. Paul Smith attended a public meeting of an organization called Frederick Area Committee for Transportation or "FACT." FACT was composed of members of the Frederick County business community and representatives of local government. It was formed to facilitate, support, and encourage transportation improvements in Frederick County. Commissioner Smith was the Board of County Commissioners' representative on FACT's Advisory Board. FACT's directors included Michael Smariga, a retired principal of the civil engineering firm that the Developers had engaged to pursue the application; Mr. Smariga's son was involved in pursuing the Developers' application.

         At the FACT meeting, Commissioner Smith argued that the Developers' proposed improvements to the nearby highways (Routes 75 and 80) would benefit all residents in that area of the County. The Commissioner's arguments later reappeared, without attribution, in a letter, on FACT letterhead, that was signed by FACT's secretary and sent to the Board of County Commissioners.

         The Board of County Commissioners received the FACT letter by email at 2:41 p.m. on April 23, 2014, a little more than three hours before the beginning of the final public hearing on the Developers' application. The email, from an employee of the Office of the County Manager, described the letter as "FACT's opinion."

         Toward the end of the ensuing hearing, after 140 pages of testimony, the President of the Board of County Commissioners, Blaine Young, read the FACT letter into the record and named its signatory (FACT's secretary, Michael Proffitt). The President then read the names of each of the FACT directors (though not the names of the members of the Advisory Board, which included Commissioner Smith). When Commissioner David Gray asked whether each of FACT's directors had signed the letter, the President responded that they had not, but that they had given their authority for the letter to be signed.

         Although the FACT letter reiterated the arguments that Commissioner Smith had made at the FACT meeting nine days earlier, the Commissioner did not disclose that those arguments had originated with him.

         Counsel for RALE, Inc., an organization that opposed the Developers' application, asked for an opportunity to cross-examine a representative of FACT. The President responded that FACT was "not testifying," but was "submitting a letter." He accepted the letter into evidence over RALE's objection.

         When the hearing continued, the Developers presented their rebuttal case. As part of that case, the Developers argued that "FACT might be the most apolitical organization in Frederick County," that "FACT doesn't care where or when land gets developed," and that "FACT cares strictly and solely about funding for transportation."

         At the end of the hearing, the Board of County Commissioners voted to approve the PUD, the DRRA, and the APFO LOU by a vote of 4-1. The Commissioners signed the operative documents on May 29, 2014.

         On June 3, 2014, a few days after the PUD, the DRRA, and the APFO LOU took effect, a local newspaper reported that most of the FACT members, including its president, had not seen the letter before it was sent; that Commissioner Smith had continued to discuss his arguments with Mr. Smariga after the FACT meeting ended; that two of FACT's directors drafted the letter at Commissioner Smith's request; that Commissioner Smith said that he had seen a draft version of the letter; and that the members of FACT did not vote on the correspondence or discuss its contents as a group. At about the same time, FACT submitted a second letter in which it backed away from the earlier letter, labelling it "public comment" that was "not to be considered evidence."

         RALE and others filed a petition for judicial review of the approval of the PUD. In one argument in support of its petition, RALE pointed to some of the reported irregularities surrounding the FACT letter. In addition, RALE subpoenaed Commissioner Smith, Mr. Proffitt (the signatory of the FACT letter), and Ronald Burns (the County's traffic engineer) to testify at the hearing on the petition. The County and the Developers moved to quash the subpoenas.

         At a hearing on the motion to quash on January 26, 2015, RALE argued that under Public Service Comm'n v. Patuxent Valley Conservation League, 300 Md. 200, 214 (1984), it may take testimony about an administrative decisionmaker's mental processes if it can make a strong showing of fraud or extreme circumstances that occurred outside the scope of the administrative record. RALE also argued, among other things, that Commissioner Smith had "orchestrated" the creation of the FACT letter - i.e., that he had participated in the creation of evidence in an administrative proceeding in which he was one of the quasi-judicial decisionmakers. In an order dated January 27, 2015, the circuit court granted the motion to quash the subpoenas on Mr. Proffitt and Mr. Burns, but denied the motion to quash the subpoena on Commissioner Smith.

         The County, the Developers, and Commissioner Smith moved the court to reconsider the order denying the motion to quash, while RALE moved the court to remand the case to the newly constituted Frederick County Council.[1] In support of its motion to remand, RALE relied on Md. Code (2014), §§ 5-857 to -862 of the General Provisions Article ("GP"), the special provisions for Frederick County in the Maryland Public Ethics Law. In particular, RALE argued that Commissioner Smith had engaged in undisclosed ex parte communications concerning the Developers' application, in violation of GP § 5-859(b).[2] Consequently, RALE argued, the court was required to "remand the case to the governing body for reconsideration." GP § 5-862(b).

         After a hearing on March 10, 2015, the circuit court issued an order in which it remanded the Developers' application and the related approvals to the County Council. The court based its order on the following findings:

1) That Commissioner Smith attended the April 14, 2014 FACT Committee meeting;
2) That Commissioner Smith commented on [the Developers'] pending zoning application, as reflected in the April 14, 2014 FACT Committee Meeting Minutes;
3) That [GP § 5-859(b)] states: "A member of the governing body who communicates ex parte with an individual concerning a pending application during the pendency of the application shall file with the Chief Administrative Officer a separate disclosure for each communication within the later of 7 days after the communication was made or received," and therefore requires disclosure of such communications;
4) That pursuant to the Public Ethics 2014 Annual Report to the Frederick County Ethics Commission, wherein the [Board of County Commissioners] discloses ex parte communications, Commissioner Smith's comments were not disclosed;
5) That the FACT committee incorporated the information from Commissioner Smith into its April 23, 2014 letter to the [Board of County Commissioners];
6) That the FACT letter was presented to the Commissioners with the intent to influence the pending vote;
7) That the FACT letter was read into the record at the end of testimony by [Board of County Commissioners] President, Blaine Young, which is highly suggestive that the [Board] relied on it.

         The court went on to say that it could not make a judgment about whether the record supported the decision to approve the PUD, because the FACT letter, its timing, and the potential that the Board members had relied on it "form[ed] an integral part of the record."

         The court remanded the matter to the County Council, as the successor to the Board of County Commissioners, "for further proceedings, including testimony, to resolve the issues raised in [its] Opinion." At the same time, the court quashed the subpoena on Commissioner Smith, presumably because no further circuit court proceedings were in the offing. The court did not dismiss the case.[3]

         On remand, the Council asked former Commissioners Smith, Young, and Gray to submit affidavits regarding "their position on the significance of the FACT correspondence on the case." Commissioner Gray, who cast the sole vote against the application in 2014, wrote that the letter "with the letterhead of FACT had no affect [sic] on [his] vote" and that "[i]ts source was suspect and its validity in question." Commissioner Young, on the other hand, stated that he would have voted to approve the application even if the FACT letter had not been introduced. Similarly, the two councilmembers who had also been County Commissioners in 2014 told their new colleagues that the FACT letter did not affect their decision.

         Commissioner Smith declined the Council's request that he submit an affidavit concerning the significance of the FACT letter. Citing the threat of criminal prosecution, [4] Commissioner Smith instead submitted a five-page letter in which he refrained from denying any of the factual allegations concerning the provenance of the FACT letter, but argued that a restriction on ex parte communications by a quasi-judicial decisionmaker would violate his First Amendment rights. Commissioner Smith proceeded to address, at some length, other issues that the Council had not asked him to address.

         The Council held two public hearings in June 2015. In connection with the hearings, the Council received lengthy written submissions from RALE and from the attorneys for the Developers. Additionally, the Council heard from members of the public, some of whom reiterated the published reports that former Commissioner Smith had asked one or two of the FACT directors to submit the letter on FACT's behalf and that the directors of FACT had not authorized the letter (notwithstanding the representation by the Board President at the hearing at which the PUD was approved). Perhaps because of limitations on the Council's subpoena power, [5] it did not compel testimony from Commissioner Smith, Mr. Smariga, Mr. Proffitt, FACT's president, or other persons who might have personal knowledge of how the FACT letter came about. None of those persons came forward voluntarily to explain how Commissioner Smith's arguments coincidentally reappeared in a letter that was presented as FACT's opinion, or to explain why FACT backed away from that characterization after the PUD was approved.[6]

         On September 1, 2015, Councilmember Keegan-Ayer "moved to send the entire matter back to the Frederick County Planning Commission (PC) to begin again, because at this time it is not possible to reconcile the affidavits and statements made and submitting to the Council with respect to [the FACT letter] and its alleged influence on the previous Board of County Commissioners' decision with the actions, statements, and behavior surrounding the letter; its inception; its creation; its phraseology; its timing and its introduction and handling once it was introduced[.]" The motion envisioned that the Planning Commission would report back in six months or less and that, if possible, the Developers' fees would be waived. The motion passed by a vote of 4-3.

         The Developers declined to begin the process anew and to return to the Planning Commission, contending that they had vested rights in the prior approvals. Consequently, on February 7, 2017, the County Council, in a 4-3 vote, adopted what it called its "Post Remand Conclusions." The substantive portion of the resolution began with the following conclusions:

Other than the statements submitted by the former County Commissioners, the testimony and exhibits presented to the County Council during the hearings were consistent with [the circuit court's] findings regarding former Commissioner Smith's ex parte activities: attending the April 14, 2014, Frederick Area Committee for Transportation (FACT) Committee meeting; commenting during that meeting about the [Monrovia Town Center] pending applications; [and] failing to disclose those ex parte communications as required by law; which led to the preparation of the FACT letter dated April 23, 2014, and its presentation to the Board of County Commissioners (BOCC) near the conclusion of its hearing with the intention to influence the upcoming vote; [and] the reading into the record of the letter by the then Board President at the end of the testimony.

         The Council also concluded that "[t]he aggregate of information reveals extreme irregularity surrounding the FACT letter." In support of that conclusion, the Council cited "the timing of its presentation," its "handling by the BOCC President during the hearing, and the emphasis placed on this 'last minute' document during the applicant's rebuttal" case. The Council added that at the time of the hearing "the FACT committee had been viewed as knowledgeable and influential in the area of Frederick County transportation matters." But although "[i]t was represented by the BOCC President during the hearing that the whole FACT committee had approved the letter," it was later "revealed that the FACT letter had been generated by only two of the Committee members, one of whose son and former company represented and performed services for the [Monrovia Town Center] applicants before and during the BOCC hearings." Furthermore, the Council observed that Commissioner Smith "did not testify during the Council hearings nor did he submit sworn testimony," as he had been requested to do.

         For purposes of determining how to proceed on remand, the Council remarked that the testimony "revealed additional inconsistencies and irregularities relating to the crucial issue of the adequacy of the transportation network in the area." County law, the Council wrote, requires findings on that issue.

         Because the Developers had declined to return to the Planning Commission and had said that they would oppose any effort to reconsider the approval of the PUD, the DRRA, and the APFO LOU, the Council concluded that it had "done what it can to fully comply with the Remand Order." It asked the circuit court to "take such action as it deems necessary and ...

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