Assateague Coastal Trust, Inc. v. Schwalbach

McDonald, j. In the State’s Critical Area law, the General Assembly has established a cooperative program with local jurisdictions to ensure that land near Chesapeake Bay and the Atlantic coastal bays has special protection against development that might cause environmental damage. Although that law allows a property owner to seek a variance from the law’s restrictions, the law creates a presumption that a proposed variance does not conform to the purpose and intent of the Critical Area law and places the burden of proof on the applicant to demonstrate that all of the criteria for a variance have been met. Among other things, the applicant must show that the applicant would suffer an “unwarranted hardship” without the variance and that granting the variance will not have an adverse environmental impact.

In this case, Respondent Roy T. Schwalbach sought a variance from a provision in a Worcester County ordinance that limits piers to 100 feet in length. He needed the variance in order to build an extended pier to access navigable water from his waterfront property in a community where piers and boating are common. Mr. Schwalbach obtained necessary approvals from federal, State, and local environmental agencies. The Worcester County Board of Zoning Appeals (“Board”) granted the variance after holding an evidentiary ¹¹⁷ hearing and finding that Mr. Schwalbach had borne the burden of proof on all of the requirements for a variance.

Petitioner Assateague Coastal Trust, Inc. (“ACT”), an environmental advocacy organization, sought judicial review of the grant of the variance, arguing that the Board’s decision was defective for several reasons. The Circuit Court for Worcester County and the Court of Special Appeals both upheld the Board’s decision in written opinions that analyzed the evidence before the Board on the criteria for a variance. Before us, ACT focuses its contentions on three arguments. ACT argues: (1) that denial of the variance would not deny Mr. Schwalbach all reasonable and significant use of the entire property and therefore he could not establish an “unwarranted hardship”; (2) that Mr. Schwalbach did not show, and the Board did not explicitly find, that there would be no adverse environmental impact from granting the variance; and (3) that, although the Board’s written decision concluded that Mr. Schwalbach had satisfied all standards for the variance, the Board did not make an explicit written finding that he had rebutted the statutory presumption of non-conformity with the Critical Area law.

We agree with the Circuit Court and Court of Special Appeals that the Board’s decision should be upheld. In our view, in order to establish an “unwarranted hardship,” Mr. Schwalbach was not required to show that he would be denied all reasonable and significant use of his land without the variance — in essence, a showing of an unconstitutional taking — but rather that he would be denied a reasonable and significant use throughout the entire property. There was sufficient evidence for the Board to conclude that Mr. Schwalbach had satisfied that standard as well as the standard that there be no adverse environmental impact from granting the variance. In addition, the Board’s statement that the application had “satisfied all standards” adequately expressed its determination concerning the environmental impact standard and its conclusion that the evidence presented to it had overcome the statutory presumption of non-conformity. ¹¹⁸ I Background A. Statutory framework The Critical Area Program In order to protect the Chesapeake and Atlantic coastal bays, the General Assembly has enacted the Chesapeake and Atlantic Coastal Bays Critical Area Protection Program (“Critical Area Program”).

See NR § 8-1801 (describing legislative findings and purpose of the Critical Area Program). The Critical Area Program is a cooperative program between the State and local governments that places restrictions on development in certain environmentally sensitive areas. See id.; NR § 8-1807. The Critical Area Program is designed to: • Minimize adverse impacts on water quality as a result of pollutants discharged from structures or conveyances or run-offs from land • Conserve fish, wildlife, and plant habitat • Establish land use policies that accommodate growth while addressing adverse environmental impacts NR § 8-1808(b).

Generally speaking, the Critical Area consists of a 1000-foot swath of land adjacent to the Chesapeake Bay, the Atlantic coastal bays, and their tributaries. NR § 8-1807. Local Critical Area programs are to accord special protection to “buffer” areas along the shoreline. See, e.g., NR §§ 8-1801(a)(2), 8-1801(a)(4), 8-1806(b), 8-1808(c)(l)(iii).

Under the Critical Area Program, land within the Critical Area is divided into three categories — Intensely Developed Areas, Limited Development Areas, and Resource Conservation Areas. NR § 8-1802(a)(13), (15), (22). An Intensely Developed Area is defined as a part of the Critical Area where residential, commercial, institutional, or industrial developed land uses predominate, and where there is relatively little natural habitat. See COMAR 27.01.02.03.

Intense development is to be directed to Intensely Developed Areas. CO-MAR 27.01.02.02; see also Mueller, Paved Intentions: Maryland’s Critical Area Act, 41 Md. Bar J. 10, 12 (2008). ¹¹⁹ Restriction on Pier Length in Worcester County Because the program is cooperative, State law creates some restrictions, and local law creates others. In Worcester County, the additional restrictions are codified in the Atlantic Coastal Bays Critical Area subtitle of the Natural Resources Article of the Worcester County Code (“WCC NR”). One restriction unique to Worcester County is that new piers or docks over State or private wetlands are limited to 100 feet in length.

WCC NR § 3-125(b)(l). Variances A person seeking to develop property in a manner that would violate the Critical Area Program in Worcester County may ask for a variance. WCC NR § 3-111. Pertinent to this case, the request for a variance must meet six requirements: (1) Special conditions or circumstances exist that are peculiar to the applicant’s land or structure and a literal enforcement of provisions and requirements of the County’s Atlantic Coastal Bays Critical Area Program would result in unwarranted hardship; (2) A literal interpretation of the provisions of the Atlantic Coastal Bays Critical Area Program and related laws will deprive the applicant of rights commonly enjoyed by other properties in similar areas within the Atlantic Coastal Bays Critical Area; (3) The granting of a variance will not confer upon an applicant any special privilege that would be denied by the County’s Atlantic Coastal Bays Critical Area Program to other lands or structures within the Atlantic Coastal Bays Critical Area; (4) The variance request is not based upon conditions or circumstances which are the result of actions by the applicant, nor does the request arise from any condition relating to land or building use, either permitted or nonconforming on any neighboring property; (5) The granting of a variance shall not adversely affect water quality or adversely impact fish, wildlife or plant habitat within the Atlantic Coastal Bays Critical Area and ¹²⁰ the granting of the variance will be in harmony with the general spirit and intent of the County’s Atlantic Coastal Bays Critical Area Program; [6 1 ] The Board of Zoning Appeals shall not make a decision relative to a request for such a variance without reviewing the comments of the [County] Department [designated to enforce the Critical Area Program] and finding that the applicant has satisfied each of the provisions and standards contained herein.

WCC NR § 3 — 111(b) (emphasis added); see also COMAR 27.01.12.04B (listing substantially the same requirements, although missing the last and divided differently); NR § 8-1808(d)(5)(i) (also requiring a showing of “unwarranted hardship” as a prerequisite to a variance from a local Critical Area program). Thus, among other things, an applicant for a variance must prove that the applicant would otherwise suffer an unwarranted hardship (standard 1) and that there will not be an adverse effect on water quality or animal and plant habitat from granting the variance (standard 5). The Critical Area law defines “unwarranted hardship” to mean that “without a variance, an applicant would be denied reasonable and significant use of the entire parcel or lot for which the variance is requested.” NR § 8-1808(d)(l); COMAR 27.01.12.01; see also WCC NR § 3-102 (identical definition for purposes of the County law). In general, “[i]n considering an application for a variance, a local jurisdiction shall presume that the specific development activity in the critical area that is subject to the application and for which a variance is required does not conform with the general purpose and intent of’ the Critical Area Program.

NR § 8 — 1808(d)(3)(ii); see also WCC NR § 3-lll(d)(l). “An applicant has the burden of proof and the burden of persuasion to overcome” this presumption. NR § 8 — 1808(d)(4)(i); ¹²¹ see also WCC NR § 3-lll(d)(3). “Based on competent and substantial evidence, a local jurisdiction shall make written findings as to whether the applicant has overcome” this presumption. NR § 8-1808(d)(4)(ii)(l); see also WCC NR § 3-111(d)(4). B. Facts and Procedural History The Schwalbach Property The pertinent facts are uncontested.

Mr. Schwalbach’s property adjoins a tributary of Sinepuxent Bay in an area known as West Ocean City in Worcester County. The property is comprised of five and one-half lots that were platted in 1924. A single-family home stands on one of the lots; two of the lots are entirely within a tidal marsh. The surrounding area is an active boating community and includes a large commercial fishing marina.

Many of the nearby single-family residences have piers that extend into the marsh in order to access navigable water. The property is located within the Atlantic Coastal Bay Critical Area, has a critical area designation as an Intensely Developed Area, and is zoned R-3 (Multifamily Residential District) in the County zoning ordinance. The Proposed Pier and Variance Mr. Schwalbach seeks to build a pier — perhaps better described as a walkway — across the marsh to allow access to navigable water. The pier would measure 3 feet in width by 180 feet in length and would extend to a proposed dock at the shoreline.

Mr. Schwalbach has obtained all necessary permits, including a tidal wetlands license from the Maryland Department of the Environment, an authorization from the United States Army Corps of Engineers, and the approval of the Worcester County Shoreline Commission (the last of which came after an advertised public hearing). Those agencies placed various conditions on the construction and use of the pier and required certain plantings and other mitigation to protect the marshland. On August 14, 2013, Mr. Schwalbach applied to the Worcester County Board of Zoning Appeals for a variance from the ¹²² provision in the Worcester County ordinance that limits the length of piers across tidal wetlands to 100 feet. See WCC NR § 3 — 125(b)(1).

In a report dated September 23, 2013, Board staff evaluated each of the six standards set forth in the Worcester County Code and recommended approval of the variance. Among other things, the staff concluded that Mr. Schwalbach would be unable to reach the navigable waters adjacent to his property without the variance, that the environmental impact would be minimal and would be mitigated by the plantings required by the agencies that had issued permits for the pier, and that failure to grant a variance would result in an unwarranted hardship for Mr. Schwalbach. The Critical Area Commission did not oppose the application, but submitted a letter in which it noted that the property was designated an Intensely Developed Area and that Mr. Schwalbach had received approvals from other agencies, reminded the Board that it must find that an applicant satisfies all standards in the County ordinance, and asked the Board to notify it of the outcome. Hearing and Decision of the Board of Zoning Appeals On October 10, 2013, the Board held a hearing, at which Mr. Schwalbach presented documents and expert testimony, as well as his own testimony.

A surveyor testified that Mr. Schwalbach would be unable to reach navigable waters from his property with a shorter pier. An environmental consultant testified that there were numerous docks in the vicinity and that the design of the proposed pier, which had been negotiated with the environmental agencies, would effect the minimal possible intrusion while allowing Mr. Schwalbach to access navigable water. He also stated that, in light of the special conditions imposed by the permitting agencies, the proposed pier would have no adverse effect on water quality. The consultant also noted that the property was located in a “very heavily used area for boating” and that there were several hundred boats in nearby marinas.

Mr. Schwalbach testified that his property extended to the water’s edge and that he wished to install the pier to have access to navigable water. ¹²³ ACT wrote a letter in opposition to the variance but did not appear at the hearing. In the letter, the Executive Director of ACT argued that construction of the pier would result in a change in the character of the marsh. 2 Although the letter did not specify the variance standards to which ACT’s opposition related, the letter appeared to address primarily the fifth standard (adverse environmental impact). No one else opposed the variance. At the conclusion of the hearing, the Board voted unanimously to grant the variance.

The Board later issued a written decision dated November 14, 2013. In that decision, the Board adopted the staff report and reiterated the staffs analysis of the six requirements in the ordinance. Judicial Review ACT disagreed with the Board’s decision, and filed a petition for judicial review in the Circuit Court for Worcester County. 3 ACT argued that the Board’s decision was deficient because it failed to make a specific finding that Mr. Schwalbach had overcome the presumption of non-conformity and because Mr. Schwalbach had allegedly failed to establish five of the six factors. 4 After holding a hearing for legal argu ¹²⁴ ment, the Circuit Court issued a detailed written opinion on June 19, 2014, in which it affirmed the decision of the Board and rejected all of ACT’s arguments. ACT appealed to the Court of Special Appeals, making the same arguments as it made before the Circuit Court.

The Court of Special Appeals affirmed the Circuit Court decision. 5 223 Md.App. 631 , 117 A.3d 606 (2015). ACT filed a petition for a writ of certiorari, which we granted. 445 Md. 19 , 123 A.3d 1005 (2015). II Discussion A. Standard of Review “When we review 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 Baltimore County v. Loyola College, 406 Md. 54, 66 , 956 A.2d 166 (2008) (internal quotation marks and brackets omitted). We affirm an agency’s decision if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions.

Chesapeake Bay Foundation, Inc. v. DCW Dutchship, LLC, 439 Md. 588, 611 , 97 A.3d 135 (2014). An agency’s decision is to be reviewed in the light most favorable to it and is presumed to be valid. Id. (quotation marks and citation omitted).

However, we do not defer to the agency on the applicable legal standards. ¹²⁵ Before us, ACT has focused its argument concerning compliance with the requirements for a variance on two standards: standard 1 (unwarranted hardship) and standard 5 (adverse environmental impact). With respect to each of those standards, ACT not only challenges the sufficiency of the evidence before the Board, but also other aspects of its decision. As to standard 1, ACT suggests that the Board applied the wrong legal standard. As to standard 5, ACT contends that the Board failed to make the requisite finding.

ACT also continues to contend that Mr. Schwalbach failed to overcome the presumption of non-conformity and that the Board failed to make an express finding to that effect. Thus, we must decide three issues: 1 — Whether there was substantial evidence to support the Board’s finding that denial of the variance would result in an “unwarranted hardship” in light of the definition of that phrase. 2 — Whether there was substantial evidence to support a finding that the granting of the variance would not have an adverse environmental impact and whether the Board’s decision was sufficiently explicit in making such a finding. 3 — Whether the Board’s decision adequately stated that the applicant had overcome the presumption of non-conformity. B. Unwarranted Hardship To satisfy the first requirement for a variance under the Critical Area law, an applicant must prove that “[s]pecial conditions or circumstances exist that are peculiar to the applicant’s land or structure and that a literal enforcement of provisions and requirements of the County’s Atlantic Coastal Bays Critical Area Program would result in unwarranted hardship.” WCC NR § 3-lll(b)(l); see also NR § 8-1808(d)(5)®. The Board found that Mr. Schwalbach had satisfied this standard of the Critical Area law because, without the variance, he would be prohibited from enjoying the riparian rights ¹²⁶ associated with his property as an expanse of wetlands prevented the property owner from reaching navigable waters.

There appears to be no question that there are special conditions or circumstances present with respect to Mr. Schwalbach’s property. An owner of property that is adjacent to a body of water has riparian rights under both common law and statute. Worton Creek Marina, LLC v. Claggett, 381 Md. 499, 508-12 , 850 A.2d 1169 (2004). Fundamental among those rights is access to the water.

Id. Thus, it is well established that the property owner has “the right to make a landing, wharf or pier” to provide access to navigable water subject to “general rules and regulations ... necessary to protect the rights of the public.” Causey v. Gray, 250 Md. 380, 387 , 243 A.2d 575 (1968). As the Court of Special Appeals pointed out in its opinion in this case, this is a particularly important property right in a boating community. 223 Md. App. at 647 , 117 A.3d 606 . Unsurprisingly, the record before the Board indicates that there are numerous properties in the area of Mr. Schwalbach’s property with piers that extend more than 100 feet across the tidal marsh to reach navigable water.

Without a variance allowing an extended pier, Mr. Schwalbach could not have a pier that would reach the navigable water adjoining his property. The question is whether that inability to exercise that riparian right amounts to an “unwarranted hardship.” The statute and local ordinance both define “unwarranted hardship” to mean that, in the absence of a variance, the applicant “would be denied reasonable and significant use of the entire parcel or lot ...” NR § 8-1808(d)(l); WCC NR § 3-102. ACT appears to concede that denying Mr. Schwalbach a variance would result in at least a “diminution” of his riparian rights. ACT contends that the Board applied the wrong legal standard because “a use,” in plain English, is not the same as “use.” 6 In the Circuit Court, ACT argued that, in order to ¹²⁷ demonstrate “unwarranted hardship,” Mr. Schwalbach was required “to prove that without the variance he could not make any reasonable and significant use of his property.” (emphasis added).

ACT asserts that he cannot satisfy such a standard because there is already a residence and other improvements on the property. It also argues that Mr. Schwalbach did not prove that, without the variance, he is denied exercise of his riparian rights with non-motorized vessels. Mr. Schwalbach, of course, agrees with the Board’s finding and argues that an inability to exercise his riparian rights to access the navigable water, including with motorized vessels, would deny a reasonable and significant use of the entire property. We are thus confronted with a problem of statutory construction.

To prove an “unwarranted hardship,” must an applicant demonstrate a denial of all reasonable and significant use of the entire property, or must the applicant show a denial of a reasonable and significant use of the entire property? 1. Statutory text We begin, as always, with the text of the statute. As noted above, the pertinent State statute and County ordinance both define “unwarranted hardship” as a denial of “reasonable and significant use of the entire” property. 7 While it is clear that the restriction must relate in some way to use of the “entire” property and that the deprivation must relate to something that is “reasonable and significant,” neither law specifies whether the deprivation must be of all such uses of the entire property — i.e., “any” reasonable and significant use — or it can be of one such use assessed in relation to the entire proper ty — i.e., “a” reasonable and significant use. ¹²⁸ A reading of the statute that would require the applicant to demonstrate that, without a variance, the applicant would be foreclosed from any reasonable and significant use of the entire property under the Critical Area requirements would appear to require the applicant to meet the standards for a “taking” of the property. Under the “taking” standard, “a regulation which denies all economically beneficial or productive use of land will require compensation under the Takings Clause.” Palazzolo v. Rhode Island, 533 U.S. 606, 617 , 121 S.Ct. 2448 , 150 L.Ed.2d 592 (2001) (internal quotation marks omitted); see also Litz v. Maryland Department of Environment, 446 Md. 254, 267 , 131 A.3d 923 (2016). 8 “All economically beneficial or productive use” of a property would appear to be a subset of “all reasonable and significant use of the entire property.” Thus, if Mr. Schwalbach needed to show that he would be denied all reasonable and significant use of the property without a variance, then the “unwarranted hardship” standard would collapse into the “taking” standard, because such a showing would also satisfy the “taking” standard.

Yet this Court has repeatedly (and recently) held that the “unwarranted hardship” standard is not as demanding as the “taking” standard. See DCW Dutchship, 439 Md. at 619 , 97 A.3d 135 . Accordingly, we are reluctant to accept ACT’s assertion the Board applied an incorrect legal standard when it did not require Mr. Schwalbach to show that he would otherwise be prohibited from all reasonable and significant use of the entire property. The legislative history of the Critical Area law confirms we should not. 2.

Legislative history The phrase “unwarranted hardship” first appeared without definition in the regulations of the Critical Area Commission, was later construed by this Court in a series of cases that turned on those regulations, and was ultimately defined by the ¹²⁹ General Assembly in the Critical Area statute in reaction to that case law. 1986: Adopting the “unwarranted hardship” standard in regulation The phrase “unwarranted hardship” did not appear in the Critical Area law, as it was originally enacted. See Chapter 794, Laws of Maryland 1984. Rather, the phrase appeared in regulations adopted by the Critical Area Commission and in local Critical Area ordinances required to be consistent with those regulations. See 12: 24 Md. Reg. 2352 (November 22, 1985), adopting COMAR 14.15.11. 9 The regulations did not define “unwarranted hardship.” 1999-2000: Defining “unwarranted hardship” in case law It fell to this Court to define “unwarranted hardship” in a trio of cases decided during 1999-2000.

Belvoir Farms Homeowners Ass’n, Inc. v. North, 355 Md. 259 , 734 A.2d 227 (1999); White v. North, 356 Md. 31 , 736 A.2d 1072 (1999); Mastandrea v. North, 361 Md. 107 , 760 A.2d 677 (2000). In Belvoir Farms, a county board of appeals granted a variance, applying a definition of “unwarranted hardship” that equated that standard with the “practical difficulties” standard under the local zoning law. This Court held that the “unwarranted hardship” standard is more stringent than the “practical difficulties” standard and that, therefore, the board had committed an error of law. 355 Md. at 265-67 , 734 A.2d 227 . To provide guidance to the board on remand, the Court articulated a definition of “unwarranted hardship.” It found the phrase to be indistinguishable from the standard of “unnecessary (or undue) hardship” applied in use variance applications: “whether the applicable zoning restriction when applied to the property in the setting of its environment is so unreasonable as to constitute an arbitrary and capricious interference with the basic right of private ownership.” Id. at 276 , 734 A.2d 227 (quotation marks and citation omitted).

After further surveying case law in Maryland and other states, ¹³⁰ the Court concluded that the “unwarranted hardship” standard could be “either the denial of beneficial or reasonable use or the denial of all viable economic use, the unconstitutional taking standard.” Id. at 281 , 734 A.2d 227 (emphasis added). In the end, it rejected the latter definition, equivalent to the taking standard, as “superfluous” and defined the standard as “denial of reasonable and significant use of the property.” Id. at 282 , 734 A.2d 227 . In White , a county board of appeals granted a variance from the Critical Area restrictions to permit a homeowner to locate an in-ground pool in a part of the property that lay in the extended buffer established by the Critical Area regulations. The circuit court overturned the grant of the variance, and the Court of Special Appeals affirmed that decision — decisions that were made before this Court had defined “unwarranted hardship” in Belvoir Farms.

This Court vacated the lower court decisions in White and ordered that the case be remanded to the board of appeals for application of the unwarranted hardship standard in light of the definition provided in Belvoir Farms. The Court reiterated that an unwarranted hardship “can result from the denial of a reasonable and significant use” and that the standard was less stringent than that required to prove a taking. 356 Md. at 49 , 736 A.2d 1072 (emphasis added). The Court then proceeded to discuss the various other standards set forth in the ordinance for a variance. In the course of providing further guidance to the board of appeals on remand, the Court stated that the applicants did not have to satisfy every specific standard of the variance ordinance; rather, the applicants needed only to show whether the requirements were “generally met.” Id. at 50 , 736 A.2d 1072 .

The Court also indicated, among other things, that the board could consider the existence of neighbors’ pools that pre-dated that Critical Area regulations and that were legal non-conforming uses. Id. at 51-52 , 736 A.2d 1072 . In Mastandrea , a county board of appeals granted a variance to a homeowner for the construction of brick pathway, part of which lay within the Critical Area buffer, for the ¹³¹ benefit of a wheelchair-bound member of the household. The circuit court overturned that decision.

This Court issued a writ of certiorari in advance of a decision by the Court of Special Appeals and took the occasion to further discuss the concept of “unwarranted hardship.” 10 Referring to the definition developed in Belvoir Farms, the Court reiterated that an “unwarranted hardship” was “a denial of reasonable and significant use of land” and that it was a lesser standard than required to prove an unconstitutional taking. 361 Md. at 136 , 760 A.2d 677 (emphasis added). The Court held that the property owners needed to establish whether they “would be denied a reasonable and significant use” of the property. Id. (emphasis added).

The Court also stated that the board did not have to assess whether the use in question related to the “entire” property. Rather, the board should consider whether the property owners, in light of the family member’s disability, would be denied a reasonable and significant use of the waterfront portion of the property. Id. 2002: Adding the “unwarranted hardship” criterion to the statute The General Assembly was apparently displeased with the Court’s interpretation of the Critical Areas law in those cases in several respects, although it expressed no discomfort with the Court’s articulation of the “unwarranted hardship” standard as less than a taking. In particular, the General Assembly disagreed with the Court’s holding in Mastandrea that a board could assess the proposed development with respect to only a portion of a property rather than the entire property (including alternative locations for the development), and the holdings in White that an applicant need only “generally” satisfy variance requirements and that a board should consider comparable legal non-conforming uses that predated the Critical Area regulations. ¹³² In 2002, the Legislature amended the Critical Area statute for the explicit purpose of overruling those decisions with respect to those three holdings.

See Chapters 431, 432, Laws of Maryland 2002. 11 The preambles of those laws, which described the holdings and the General Assembly’s intention to overrule them, provided in pertinent part: WHEREAS, Recent decisions by the Maryland Court of Appeals have held that a variance may be granted if the regulations would deny development on a specific portion of an applicant’s property rather than considering alternative locations on-site; and WHEREAS, The Court of Appeals has ruled that a local Board of Appeals, when determining if denial of a variance would deny an applicant rights commonly enjoyed by others in the Critical Area,