Fletcher v. Prince George's Cnty.

LESLIE FLETCHER, et al. v. PRINCE GEORGE'S COUNTY, et al.

No. 37

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2016

August 3, 2017

Circuit Court for Prince George's County

Case No. CAE14-24783

UNREPORTED

Meredith, Graeff, Leahy, JJ.

Opinion by Graeff, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

This appeal involves unhappy lot owners in a subdivision where a road and other infrastructure improvements to service the lots were not completed. Appellants, lot owners Leslie Fletcher and North Keys, LLC, filed a complaint in the Circuit Court for Prince George's County against appellees, Prince George's County (the "County") and three of its officials ("individual appellees").¹ The complaint included two counts: (1) declaratory judgment, asserting that, due to appellees' missteps, the County was obligated to complete the work at its own expense; and (2) negligence, requesting damages of $500,000, which reflected the cost to complete the work and the carrying cost of the lots. The circuit court ultimately granted appellees' motion to dismiss, finding that appellants lacked standing to seek declaratory relief, that the county was immune to appellant's negligence claim pursuant to the Local Government Tort Claims Act (LGTCA), and the individual appellees did not owe a duty to appellants.

On appeal, appellants present the following two questions for this Court's review, which we have rephrased slightly, as follows:

1. Did the circuit court err in concluding that appellants do not have standing to seek declaratory relief to determine if appellees have a legal obligation to complete the scope of the bonded work in the Pinnacle subdivision?

2. Did the circuit court err in determining that no statutory relationship or duty of care arose between appellants and the individual appelleespertaining to the release and settlement of bond obligations posted in connection with a road permit issued to a previous developer?

For the reasons set forth below, we answer the first question in the affirmative and the second question in the negative, and therefore, we shall affirm, in part, and reverse, in part, the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

In the circuit court's Memorandum Opinion, the court provided a summary of the background facts of this case, which we have reproduced here, as follows:

The matter in dispute concerns a subdivided parcel of land known as Pinnacle Subdivision ("Subdivision"). The Subdivision was divided into ten lots and was previously owned by Pinnacle, LLC ("Pinnacle"). On October 6, 2005, Plaintiff Fletcher purchased Lot 5 from Pinnacle. On June 13, 2007, Pinnacle recorded the original subdivision plans, obtained a building permit, and submitted a performance bond.² On October 29, 2010, Pinnacle transferred the remaining lots through a deed in lieu of foreclosure to K Bank. Subsequently, on February 17, 2012, Plaintiff North Keys purchased Lots 2, 3, 4, 6, 7, 8, and 10 from K Bank.³ Since ownership, Plaintiffs have been paying property taxes for their respective lots.

Subsequently, Pinnacle's permits expired and Pinnacle did not apply for an extension of the permits. On July 9, 2012, Defendant County submitted a claim against the performance bond posted by Pinnacle. In January 2013, Defendant County and the surety company negotiated a settlement for Defendant County's claim against the bond. The settlementamount of $170,331.00 is equal to the pro-rata share of three (3) of the ten (10) lots that were purchased by Plaintiff Fletcher and two other individuals who are not parties to this case. Prior to Plaintiff North Keys' purchase of their lots, Defendant County informed Plaintiff North Keys that it would have to obtain[] its own building permits and grading permits, build the required public roadway, and post their own performance bond. After Defendant County settled with the surety company on its claim against Pinnacle's performance bond, Defendant County informed Plaintiff North Keys that: 1) it could either complete all the public improvements under the permit requirements and receive the pro-rata share of the previous bond or 2) the County would complete the improvements on North Keys Road[] and Plaintiff North Keys would complete the remaining improvements and construction of the [proposed] public right of way called Turners Landing Court. Plaintiff North Keys refused both options.⁴ In the matter sub judice, Plaintiffs did not submit an application for building or grading permits. On August 25, 2014, Plaintiffs brought suit for declaratory judgment and negligence against the County, public officials within the permitting agency, and the County Attorney ("Defendants").

(footnotes omitted).

In their complaint, appellants alleged that, "[g]enerally, whenever a developer desires to record a subdivision and sell lots before the completion of the roads . . . and other infrastructure improvements, the developer must post a [completion] bond" with the Department of Public Works and Transportation ("DPW&T") "to provide a financial guarantee that the work will be completed so that homeowners do not end up paying for lots that can never be used." "As part of this process," appellants alleged, "the developer typically submits the bond(s) to DPW&T who in turn has the bond(s) reviewed by the County Attorney as part of the approval process." Appellants alleged that the Countyshould not have allowed the subdivision plat to be recorded because appellees "were not authorized to allow the Pinnacle subdivision to be recorded without a completion bond." They did so, however, and "it was reported that [appellees] typically never required completion bonds for similar residential subdivisions."

The complaint alleged that, instead of requiring "the Developer to post a completion bond for the construction of roads necessary to serve all lots," the developer posted a "performance bond" in the amount of $567,700. The developer, however, did not complete any "material portion" of the work covered by the performance bond. The complaint alleged that, although DPW&T had the authority to call the bond and have the work completed with the bond proceeds, appellees initially "did nothing," and it was only after appellants urged appellees to call the bond after Pinnacle's default that appellees took any action. Appellants alleged that appellees' decision to settle with the bond company "for a little over $100,000" was improper and "did not result in a release of [appellees'] obligation to cause the bonded work to be completed."

In Count 1 of the complaint, appellants requested the circuit court to declare the following:

(i) the County should never have allowed the subdivision to be recorded without a completion bond, (ii) DPW&T and the County Attorney should never have approved the bond, (iii) DPW&T and the County Attorney were required to call the bond and cause the bonded work to be completed when the Developer failed to do so prior to the expiration of the road permit, (iv) DPW&T and the County Attorney should never have released the bonding company of its obligations under the bond, (v) DPIE [(Department of Permitting, Inspections & Enforcement)] is required to issue building permits for Lots which have frontage on North Keys Road without requiring completion of the bonded work or the posting of a new bond to ensurecompletion of the work, and (vi) the County is now obligated to complete the bonded work at its own expense.⁵

In Count 2, alleging negligence, appellants claimed that appellees

owe[d] a duty to [appellants] to exercise reasonable care in connection with the recordation of the Pinnacle subdivision, to require compliance with applicable Subdivision ordinances, to require a completion bond as prescribed, and to enforce rights against the bond to cause the bonded work to be completed when the developer failed to complete the work before the road permit expired, and to complete the bonded scope of work at this time.

Appellants sought "damages equivalent to the cost to complete the bonded work together with the carrying costs of the Lots, which amount is estimated to be $500,000.00, plus the bond proceeds held by the County."

On November 12, 2014, appellees filed a motion to dismiss, or in the alternative, a motion for summary judgment. They first argued that appellants lacked standing to maintain their lawsuit, asserting that, to have standing, appellants must "establish the 'existence of a [justiciable] controversy,'" and to do that, appellants were required to submit applications for building permits, which they failed to do.

Second, appellees argued that the individual appellees could not be sued for negligence because they were public officials acting in a discretionary capacity. Moreover, they argued that there was no privity between appellants and appellees—no contractual or special relationship—that would permit appellants to maintain a negligence claim againstthem. Appellees also argued, and appellants conceded, that the Local Government Tort Claims Act (LGTCA) "bars Prince George's County, Maryland from being . . . named as a party in a common law tort action."

On December 17, 2014, appellants filed an opposition to appellees' motion. They asserted that, pursuant to Section 24-127 of the Prince George's County Code ("PGCC"),⁶ the Pinnacle "subdivision should never have been approved or recorded without the posting of a completion bond for Turner's Landing Court which is a secondary rural [road] that was to connect to North Keys Road, a public road." DPW&T, however, "allowed the subdivision to be approved and recorded and allowed the developer to sell lots to the public without requiring the completion bond to ensure that Turners [sic] Landing Court would be constructed." Appellants asserted...