Kenwood Gardens Condos., Inc. v. Whalen Props., LLC

449 Md. 313

144 A.3d 647

Kenwood Gardens Condominiums, Inc., et al.

v.Whalen Properties, LLC

No. 86 September Term 2015

Court of Appeals of Maryland.

August 19, 2016

Argued by J. Carroll Holzer (Holzer & Lee, P.A., Towson, MD), on brief, for Petitioners

Argued by G. Scott Barhight (Adam D. Baker, Whiteford, Taylor & Preston, L.L.P., Towson, MD; Dwight W. Stone, II, Peter W. Sheehan, Jr., Whiteford Taylor & Preston, L.L.P., Baltimore, MD), on brief, for Respondent

Argued Before: Barbera, C.J.; Greene, Adkins, McDonald, Watts, Hotten and Lynne A. Battaglia (Retired, Specially Assigned), JJ.

Greene, J.

The Baltimore County zoning regulations create a Planned Unit Development (“PUD”)¹ approval process that is partly legislative and partly quasi-judicial or adjudicative in nature. The instant case arises from a dispute over the approval of a PUD application in Baltimore County. Petitioners, Kenwood Gardens Condominiums, Inc., et al. (“Kenwood”), allege that the PUD developer made illegal campaign contributions to the county councilman who formally accepted the PUD application submitted by the developer. Respondent, Whalen Properties, LLC (“Whalen Properties”), the developer, submitted the PUD application on August 9, 2011, to First District Councilman Thomas Quirk (“Councilman Quirk”) of Baltimore County. The proposed site for the PUD is located in Councilman Quirk's legislative district. On August 30, 2011, Stephen Whalen, Jr., owner and principal of Whalen Properties, withdrew $8,500 from the company's account and subsequently distributed this money to several individuals, who were instructed to deposit the sums into their own accounts and to write checks in those amounts to the campaign committee, Friends of Thomas Quirk.²

Kenwood is an adjacent landowner who challenges the approval of the PUD on the appearance of impropriety generated by the donations. We conclude that because the introduction and passage of a resolution is a legislative action, the legislative intent is subject to limited judicial review. In addition, the alleged “appearance of impropriety” generated by illegal campaign contributions does not negate the presumption of validity of the legislative act.

FACTUAL AND PROCEDURAL BACKGROUND

Pursuant to Article 32, Title 4, Subtitle 2, §§ 32-4-242–402.1 (2003, 2012 Supp.) of the Baltimore County Code (“BCC”),³ the PUD approval process in Baltimore County begins with the submission of an application to the county councilman for the district in which the proposed PUD is to be located. BCC § 32-4-242(a). The application is subsequently incorporated into a County Council Resolution. Substantive review of the application may not proceed unless the County Council passes the resolution. Following the passage of the resolution, the application undergoes an extensive review and approval process by various Baltimore County planning and zoning agencies before concluding in a final public hearing before an administrative law judge (“ALJ”).

On August 9, 2011, Whalen Properties submitted a PUD application to Councilman Quirk for a seven story mixed-use medical services building. Notice of the PUD was posted and a community input meeting was held on September 1, 2011. On September 19, 2011, Councilman Quirk introduced Resolution 108-11, which contained the PUD proposal. The County Council unanimously approved the Resolution on October 17, 2011. Whalen Properties met with Baltimore County agencies on October 24, 2011 and October 29, 2011 to review the concept plan and held a community input meeting on December 22, 2011 “to solicit detailed comments from local community members.”

On June 6, 2012, approximately eight months after the County Council adopted Resolution 108-11, the Council enacted Bill 38-12, which exempted PUDs in certain areas of Baltimore County from traditional compatibility standards under the zoning regulations and substituted a more lenient set of compatibility objectives for all qualifying future PUD applications. Kenwood alleges this is evidence of an improper “special law.”⁴ On June 8, 2012, Whalen Properties filed a finalized development plan, which it reviewed with Baltimore County on August 1, 2012.

Pursuant to BCC § 32-4-245(b) (2003, 2012 Supp.), a Hearing Officer, hereinafter designated as an ALJ, is required to “review the proposed [PUD] for compliance with the requirements of the Baltimore County zoning regulations and the development regulations.” The ALJ's review is narrow and fact-specific. Between August 22, 2012 and December 3, 2012, an ALJ conducted five days of public administrative hearings on the PUD development plan and approved the PUD on January 29, 2013.⁵

Kenwood challenged the proposed PUD at the hearing before the ALJ and subsequently at the hearing before the Baltimore County Board of Appeals (“Board of Appeals” or “the Board”). The ALJ rejected Kenwood's challenge that the alleged appearance of impropriety was reviewable or invalidated the process. Kenwood appealed the ALJ's approval of the PUD to the Board of Appeals. See BCC § 32-4-281(a), (c) and (d) (2016) (“The Board of Appeals shall hear the appeals in accordance with the rules of procedure adopted by the Board of Appeals”). Following a review of the ALJ's decision, the Board may:

(i) Remand the case to the ALJ;

(ii) Affirm the decision of the ALJ; or

(iii) Reverse or modify the decision of the ALJ if the decision:

1. Exceeds the statutory authority or jurisdiction of the ALJ;

2. Results from an unlawful procedure;

3. Is affected by any other error of law;

4. Is supported by competent, material, and substantial evidence in light of the entire record as submitted; or

5. Is arbitrary and capricious.

BCC § 32-4-281(e) (emphasis added).

On June 7, 2013, the Board of Appeals affirmed the decision of the ALJ. The decision to affirm the ALJ's approval of the proposed PUD was the agency's final decision in the matter. The Board agreed with the ALJ and concluded that any alleged improper motivation underlying the actions by the County Council was beyond the permitted scope of review. Kenwood sought judicial review in the Circuit Court for Baltimore County. The Circuit Court reviewed the record and arguments presented by the parties and affirmed the decision of the Board of Appeals. The Circuit Court concluded, however, that the passage of Resolution No. 108–11 constituted a quasi-judicial action rather than legislative action because the County Council's process with regard to the “resolution for the PUD [wa]s focused upon the analysis of factors relating to a single property.” Notwithstanding that conclusion, the Circuit Court recognized that “[t]he issue for judicial review is not how the process for a PUD review was initiated” and that “[t]he focus is [on] whether the substance of the administrative review process was fair, and whether the decision to approve the PUD complied with the law and was supported by the evidence.”

Kenwood noted a timely appeal to the Court of Special Appeals. In an unreported opinion, the Court of Special Appeals affirmed the judgment of the Circuit Court. It held that the ALJ's decision did not exceed his statutory authority or result from an unlawful procedure or other error of law and that the ALJ's findings were supported by substantial evidence in the record.

Kenwood filed a petition for writ of certiorari. We granted certiorari . Kenwood Gardens Condo. v. Whalen Properties , 446 Md. 218, 130 A.3d 507 (2016). Kenwood raised multiple overlapping questions in its petition, which revolve around whether the alleged appearance of impropriety generated by the campaign donations invalidates Whalen's submission of the PUD application to Councilman Quirk and whether the County Council's development process for approval of the PUD is subject to judicial review and the scope of that review. We have condensed and restated these issues for the purposes of clarity and concision:⁶

1. Does the alleged impropriety or the alleged appearance of impropriety affect Councilman Quirk's legislative ability to introduce or vote on Resolution 108-11 under Article 7, Title 1, Subtitle 3, § 7-1-301 (2003, 2011 Supp.) of the Baltimore County Code?

2. Does the alleged appearance of impropriety invalidate Bill 38-12 as an improper “special law”, specifically designed to assist Respondent's PUD application?

STANDARD OF REVIEW

In reviewing the final decision of an administrative agency, such as the Board of Appeals, we look “through the circuit court's and intermediate appellate court's decisions, although applying the same standards of review, and evaluate the decision of the agency.” People's Counsel for Balt. Cnty. v. Loyola Coll. , 406 Md. 54, 66, 956 A.2d 166, 173 (2008) (quoting People's Counsel for Balt. Cnty. v. Surina , 400 Md. 662, 681, 929 A.2d 899, 910 (2007) ). Our scope of review is narrow and “is limited to determining whether there is substantial evidence in the record as a whole to support the agency's findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.” Md. Aviation Admin. v. Noland , 386 Md. 556, 571, 873 A.2d 1145, 1154 (2005). We defer to the regulatory body's fact-finding and inferences, provided they are supported by evidence which a reasonable person could accept as adequately supporting a conclusion. Surina , 400 Md. at 681, 929 A.2d at 910 (quotation marks and citation omitted). However, if we determine that the agency's decision is based on an erroneous conclusion of law, no deference is given to those conclusions. Surina , 400 Md. at 682, 929 A.2d at 911. “[E]ven though the decision of the Board of Appeals was based on the law, its expertise should be taken into consideration and its decision should be afforded appropriate deference in our analysis of whether it was ‘premised upon an erroneous conclusion of law.’ ” Marzullo v. Kahl , 366 Md. 158, 173, 783 A.2d 169, 178 (2001) (citing Bd. of Physician Quality Assurance v. Banks , 354 Md. 59, 68...