Wilson v. Md. Dep't of the Env't

217 Md.App. 271

92 A.3d 579

Keith N. WILSON

v.MARYLAND DEPARTMENT OF the ENVIRONMENT.

No. 2551, Sept. Term, 2012.

Court of Special Appeals of Maryland.

May 27, 2014.

Mary T. Keating, Baltimore, MD, for appellant.

Christopher S. Corzine (Douglas F. Gansler, Atty. Gen., on the brief) Baltimore, MD, for appellee.

Panel: KRAUSER, C.J., GRAEFF, and BERGER, JJ.

GRAEFF, J.

This appeal arises from an action brought by the Maryland Department of the Environment (“MDE”), appellee, against Keith N. Wilson, appellant, based on Mr. Wilson's ownership of two properties in Baltimore City that are subject to laws aimed at protecting tenants from lead paint exposure. Specifically, after MDE determined that Mr. Wilson had failed to certify that the two properties complied with lead paint risk reduction standards prior to admitting new tenants, as required, it issued an administrative complaint and order requiring Mr. Wilson to bring all occupied properties into compliance, as well as assessing an administrative penalty in the amount of $30,000.

An Administrative Law Judge (“ALJ”) issued a Default Order against Mr. Wilson for failing to respond to the complaint. The ALJ subsequently denied Mr. Wilson's motion to vacate the default order, and Mr. Wilson sought judicial review in the Circuit Court for Baltimore City, which affirmed the ALJ's decision.

On appeal, Mr. Wilson presents two questions for our review,¹ which we have reordered and rephrased as follows:

1. Did the ALJ err in denying Mr. Wilson's Motion to Vacate the default judgment?

2. Did the circuit court err in denying Mr. Wilson's Motion for Leave to Present Additional Evidence?

For the reasons set forth below, we shall vacate the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

Mr. Wilson is the owner of 39 residential properties in Baltimore. Because they were built before 1950, the properties are classified as “Affected Properties” under Maryland Code, Title 6, Subtitle 8 of the Environment Article, governing “Reduction of Lead Risk in Housing.” See Md.Code (2010 Supp.) § 6–801 of the Environment Article (“Envir.”) (“ ‘Affected property’ means: (i) A property constructed before 1950 that contains at least one rental dwelling unit.”).

Envir. § 6–811 requires owners of an Affected Property to register the property with MDE, and Envir. § 6–812 requires owners to renew the registration for the property annually. Owners of Affected Properties must take certain actions each time there is a change in occupancy at the property. Specifically, the property must either pass a test that detects lead-contaminated dust,² or the owner must perform specific lead hazard reduction treatments. Envir. § 6–815(a)– (b). If the property is unable to pass the test for the presence of lead contaminated dust, and the owner must perform lead hazard reduction treatments, the owner must have “the property inspected to verify that the risk reduction standard ... has been satisfied.” Envir. § 6–815(c). MDE may, “at any time, spot check affected properties that have been reported as satisfying the risk reduction standard or verified as satisfying the modified risk reduction standard,” and if the check reveals that the Affected Property is not in compliance with the risk reduction standard, MDE may order the owner to comply. Envir. § 6–852. The purpose of this statutory scheme is to “reduce the incidence of childhood lead poisoning, while maintaining the stock of available affordable rental housing.” Envir. § 6–802.

On April 28, 2000, Mr. Wilson began registering Affected Properties with MDE and renewing his registration annually in accordance with the statute. On June 3, 2010, Mark Borgoyn, an MDE inspector, conducted a site inspection and tenant interview at 2224 Christian Street, one of Mr. Wilson's properties. The tenant informed Mr. Borgoyn that he had moved to the Christian Street residence on April 1, 2010. Mr. Borgoyn noted that, despite the change in occupancy on April 1, 2010, Mr. Wilson had failed to obtain a certificate indicating that the property had been inspected and that the risk reduction standard had been satisfied, in violation of Envir. § 6–815.

On August 17, 2010, Mr. Borgoyn conducted a site inspection and tenant interview at another property belonging to Mr. Wilson, 1938 Christian Street. The tenant reported to Mr. Borgoyn that he had moved into the property in September 2009. Again, Mr. Wilson failed to obtain a certificate indicating that the property had been inspected and the risk reduction standard had been satisfied, in violation of Envir. § 6–815.

On October 5, 2010, MDE filed an Administrative Complaint, Order, and Penalty against Mr. Wilson based on the two violations of Envir. § 6–815. Specifically, it alleged that, “from April 10, 2010, through June 3, 2010, Keith Wilson failed to bring 2224 Christian Street into compliance with the full risk reduction standard, in violation of § 6–815,” and that “[d]uring the period of October 1, 2009, through August 17, 2010, Keith Wilson failed to bring 1938 Christian Street into compliance with the full risk reduction standard, in violation of § 6–815.” MDE asserted that, as of the date of its complaint, it still had not received full risk reduction certificates for the two properties.

MDE's administrative order provided that, within 30 days of the receipt of its complaint and administrative order, Mr. Wilson “shall bring all occupied Wilson Affected Properties into compliance” with the risk reductions standard set forth in the Code. It further ordered, in part, that Mr. Wilson ensure that no children under the age of six and no pregnant women be present during the performance of lead hazard reduction treatments, that he pay reasonable expenses for relocating his tenants should the lead hazard reduction treatments take more than one day, and that, within five days of the completion of the lead hazard reduction treatments, Mr. Wilson ensure that the Affected Properties are inspected by an accredited inspector and certificates of compliance be filed with MDE and provided to the tenants. In addition, based on the two violations of Envir. § 6–815, MDE sought a $30,000 penalty against Mr. Wilson.

MDE's Administrative Complaint, Order, and Penalty informed Mr. Wilson of his right to a hearing to contest the contents of MDE's filing. To contest the Order portion of the filing, Mr. Wilson was required to file a written request within 10 calendar days of receiving the Complaint, Order, and Penalty. SeeEnvir. § 7–261(b) (“Within 10 days after being served with an order under § 7–259(a)(1) [governing orders for corrective action] of this subtitle, the person served may request, in writing, a hearing before the Department.”). To contest the Penalty portion of the document, Mr. Wilson had to file a written request for a hearing within 30 days. SeeCode of Maryland Regulations (“COMAR”) 26.01.02.05C (a contested case hearing “shall be requested ... 30 days after notice is served, unless otherwise provided by law”). MDE advised that, if Mr. Wilson chose “not to request a hearing within the times required, the Order will become final from the date issued, and [MDE] will seek a default order requiring [Mr. Wilson] to pay the entire penalty.”

On April 24, 2012, MDE filed with the Office of Administrative Hearings (“OAH”) a Request for Final Default Order Assessing Administrative Penalties for Failure to Request a Hearing. It contended that Mr. Wilson had failed to request a hearing on the Administrative Complaint, Order, and Penalty. ³ MDE further asserted that, “[p]ursuant to § 7–262(a) of the Environment Article, the Order portion of the Complaint is now a Final Administrative Order.” SeeEnvir. § 7–262(a)(1) (“Unless the person served with an order ... makes a timely request for a hearing, the order is a final order.”). Accordingly, MDE requested that the ALJ enter a Final Default Order against Mr. Wilson, assessing an administrative penalty of $30,000.

MDE asserted that, on March 25, 2011, Mr. Wilson was served with the Administrative Complaint, Order, and Penalty via a private process server. It attached an affidavit by the process server stating that the complaint was served, i.e., “Accepted by Corey Blandon, co-resident” at 27 South Calhoun St, Unit 1, in Baltimore. MDE attested that it mailed a copy of its request for a default order to Mr. Wilson at 27 South Calhoun Street, Unit 1, in Baltimore.

On May 8, 2012, the ALJ issued a Default Order, finding Mr. Wilson in default. The ALJ noted that COMAR 26.01.02.13A provides as follows:

If after receiving proper notice a party fails to timely request a hearing, or to attend or participate in a prehearing conference, hearing, or other stage of an adjudicative proceeding, either the hearing examiner or final decision maker, whichever person is appropriate, may proceed in that party's absence, may rely on affidavits, or may conduct hearings as appropriate. Upon a prima facie showing by the moving party, the final decision maker may issue a final default order against the defaulting party.

The OAH's procedural rules, set forth in COMAR 28.02.01.23A, similarly provide that, if a party fails to participate in a hearing after receiving proper notice, “the judge may proceed in that party's absence or may ... issue a final ... default order against the defaulting party.”

The ALJ ordered that Mr. Wilson was “required to comply with ... Maryland's laws pertaining to the reduction of lead paint hazards in rental housing, as set forth in the Order,” and he granted MDE's request for a penalty assessment of $30,000. The Default Order further provided that, within 30 days, Mr. Wilson could file a written motion to modify or vacate the Default Order. If Mr. Wilson did not show good cause to excuse his default, the order was to become final and enforceable. The Default Order was mailed to Mr. Wilson at 27 South Calhoun Street, Unit 1, in Baltimore.

On July 3, 2012, Mr....