Halle Dev., Inc. v. Anne Arundel Cnty.

HALLE DEVELOPMENT, INC., et al., v. ANNE ARUNDEL COUNTY

No. 1298

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2017

March 22, 2019

Circuit Court for Anne Arundel County

Case No. 02-C-01-069418

UNREPORTED

Kehoe, Leahy, Reed. JJ.

Opinion by Leahy, 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.

The Appellants, Halle Development, Inc., et al.,¹ ("the Owners") are the representative plaintiffs in a class action for certain property owners in Anne Arundel County. The origin of this class action dispute dates back to February 2001, when the Owners filed an action in assumpsit seeking to recover development impact fees collected by the Appellee, Anne Arundel County ("the County"). For almost two decades, this case has occasioned interlocutory orders and intervening appeals to this Court and the Court of Appeals. Following a remand by the Court of Appeals in 2009, the Circuit Court for Anne Arundel County decided in favor of the Owners and later entered a final judgment on August 18, 2016 ("August 2016 Order"), requiring the County to pay refunds in the amount of $1,342,360.00 plus five percent simple interest per annum, and to pay attorney's fees, by November 7, 2016. The Owners did not appeal the August 2016 Order.

The County subsequently paid the ordered refund amount, including interest, by the court-ordered deadline. The Owners subsequently filed—more than nine months later—a petition to enforce the final judgment, along with a motion for summary judgment. On August 9, 2017, the circuit court denied both motions. The Owners appealed, again, and present one question for our review:

"Did the circuit court err in granting summary judgment against the Class, when the County's records demonstrate the County received compound interest on impact fees deposited in special funds, yet only paid to the Class simple interest?"

We discern no error in the trial court's denial of summary judgment. The August 2016 Order constituted a final judgment and the Owners subsequently failed to pursue a post-judgment motion under Maryland Rule 2-535. Even if we were to treat the Owners' motion for summary judgment as a post-judgment motion as they suggest, the Owners failed to demonstrate fraud, mistake or irregularity, as required by Rule 2-535(b). And, even if a proper motion had been timely filed in this case, the Owners' appeal would be barred by the law of the case doctrine because our 2008 opinion, Anne Arundel Cty v. Halle Dev., Inc., No. 3552, Sept. Term, 2006 (filed Feb. 7, 2008), on reconsideration, (May 7, 2008) [hereinafter "Halle I"], squarely rejected their investment income argument, and, the Owners failed to raise this issue on appeal in both 2013 and 2017. As we explicated in Halle Dev. Inc. v. Anne Arundel Cty., No. 1299, Sept. Term, 2016 (filed Nov. 22, 2017) [hereinafter "Halle III"], the issue of the interest to which the Owners were entitled was barred by the law of the case. Unfortunately, this is not the first time we have decided that the Owners' arguments are barred by the law of the case. See Dabbs v. Anne Arundel County, 458 Md. 331, 361 (2017); cert. denied sub nom, Dabbs v. Anne Arundel Cty., Md., 139 S. Ct. 230, 202 L. Ed. 2d 127 (2018).

For the foregoing reasons, we decline to reach the merits of this issue.

BACKGROUND

The facts of this longstanding litigation dispute have been set out in detail in the following appellate opinions: Dabbs, 458 Md. at 361; Anne Arundel Cty v. Halle Dev., Inc., 408 Md. 539 (2009); Halle III, No. 1299, Sept. Term, 2016; Dabbs v. Anne Arundel County, 232 Md. App. 314 (2017); Halle Development Inc. v. Anne Arundel County, No.0956, Sept. Term, 2012 (filed July 29, 2013) [hereinafter "Halle II"]; Halle I, No. 2552, Sept. Term 2006, aff'd, 408 Md. 539 (2009); Anne Arundel County v. Cambridge Commons, 167 Md. App. 219 (2005); and Cambridge Commons v. Anne Arundel County, No. 1340, Sept. Term, 2001 (filed Aug. 21, 2002). We need not, therefore, offer a detailed recitation of the facts underlying this case. Instead, we will address only the most relevant procedural facts in order to resolve the issue on appeal.

A. Anne Arundel County's Impact Fee Ordinance

Judge Glenn Harrell, writing for the Court of Appeals, explained the relevant history:

This is the latest installment of a litigation saga (although perhaps we are nearing its end) traveling two quite kindred paths over more than fifteen years, (Halle, et al. v. Anne Arundel County ("Halle") and Dabbs, et al. v. Anne Arundel County ("Dabbs")) in Maryland's courts. Pursuant to the power vested in the government of Anne Arundel County, Maryland ("the County") through 1986 Md. Laws, ch. 350, the County imposed road and school impact fees according to County districts beginning in 1987. These fees were paid usually by land developers and builders. Those who paid impact fees (like the Dabbs Class) might become eligible, under certain circumstances, for refunds of those fees. See Anne Arundel County Code § 17-11-210. Refunds were contingent upon the County's failure to utilize or encumber within a specified time the collected fees for present or future eligible capital improvements, i.e., projects for the "expansion of the capacity of public schools, roads, and public safety facilities and not for replacement, maintenance, or operations." § 17-11-209(a).

Dabbs, 458 Md. at 336-38.² (Internal footnotes omitted). The Impact Fee Ordinance required the County to deposit collected impact fees into the appropriate special fund "toensure that the fees and all interest accruing to the special fund are designated for improvements reasonably attributable to new development and are expended to reasonably benefit the new development." § 17-11-208.

Most relevant to this appeal was the ordinance's refund provision.³ Generally,

[s]ection 17-11-210(b) provides that, if the impact fees collected in a district are not expended or encumbered within six [fiscal years ("FYs")] following the FY of collection, the County Office of Finance must give notice to current property owners that impact fees are available for refund. Section 17-11-210(e), however, allows the PZO to "extend for up to three years the date at which the funds must be expended or encumbered." Such an extension may be made "only on a written finding that within a three-year period certain capital improvements are planned to be constructed that will be of direct benefit to the property against which the fees were charged.

Dabbs, 232 Md. App. at 320. Section 17-11-210(c) nevertheless requires an eligible property owner to file an application for a refund within 60 days of the notice. "On proper application and demonstration that the fee was paid, the Controller shall refund the fees to the property owner with interest at the rate of 5% per year." § 17-11-210(c) (emphasis added).

B. The County's Withholding of Fees

Between fiscal years 1988 and 1996, the County collected millions of dollars in impact fees from property owners in Anne Arundel County. See Halle, 408 Md. at 546. The County attempted to extend the statutory time period for expending and encumbering the fees through interoffice memoranda, which the circuit court later found to be deficient for failure to properly identify the properties that would be directly benefitted by the planned improvements. See id. at 546-47, 549.

The County's actions led the Owners to file a class action suit in the Circuit Court for Anne Arundel County on February 21, 2001, against the County, on behalf of certain owners and developers of property in Anne Arundel County for the development impact fees collected between the fiscal years of 1988 and 1996. Id. at 547. The Owners sought declaratory and injunctive relief for the County's failure to issue refunds, under the Ordinance, owed to current property owners for properties as to which impact fees were paid, but not expended or encumbered within the statutorily required six years after the collection of the impact fees. Id. The Owners' complaint asserted three causes of action, alleging that the County:⁴ (1) deprived the Owners of their legal rights to a refund under the Ordinance in violation of 42 U.S.C. § 1983; (2) deprived the Owners of their property in violation of Article 24 of the Maryland Declaration of Rights; and (3) withheld theimpact fees subject to refund, causing the County to become unjustly enriched in violation of the Ordinance, and thereby creating the basis for a constructive trust. Id.

1. The December 2006 Order

On December 15, 2006, the circuit court issued a decision on the merits ("December 2006 Order") intended to resolve all open issues and certified it as a final judgment pursuant to Maryland Rule 2-602. The circuit court found that the total amount of impact fees due to the fee-paying property owners for refunds was $4,719,359, subject to "5% interest per annum on the amount to be refunded. This interest for each current owner would run from the date each impact fee originally was paid." Halle Dev. Inc. v. Anne Arundel Cty., Case No. 02-C-01-69418, slip op. at 11 (Cir. Ct. Anne Arundel Cty., Md., Dec. 15, 2006). The refund amount reflected fees collected, but not timely spent or encumbered, from 1988 through 1996.⁵ The circuit court certified its order for immediate appeal, pursuant to Maryland Rule 2-602, and both parties timely appealed to this Court.

2. The 2008 COSA Opinion

On appeal to this Court, the County argued that (1) the case must be remanded to the Planning and Zoning Officer to make the required written findings for an effective extension under § 17-11-210(e); (2) the circuit court erred by refusing to permit the County to include encumbrances in calculating the refund; (3) the Owners' claims are barred bythe statute of limitations; (4) the refund procedure pursuant to §...