Board of County Commissioners of Washington County v. H. Manny Holtz, Inc.

WILNER, Judge. We have before us an anomaly: a zoning case with some interesting legal questions. We shall address only one of them. In 1982, appellee H. Manny Holtz, Inc. (Holtz) filed an application with the Board of County Commissioners of Washington County for a zoning map amendment to reclassify a certain tract of land from Residential, Urban to Business, Local. 1 Under § 11.1 of the county zoning ordinance, there are seven categories of principal permitted uses in a business, local zone — (1) a variety of at least thirty-six types of retail or service shops, (2) commercial parking lots, (3) funeral homes, (4) offices and clinics, (5) retirement, nursing, and boarding homes, (6) schools of various types, and (7) social clubs and community meeting halls.

Although the application did not propose, or seek to be limited to, any one or more of those uses, both before the Planning Commission and the Board of County Commissioners, Holtz indicated that it intended to develop a convenience food store (a “Sheetz Kwik Shop”) on the property and had entered into a contract with Sheetz for that pur ¹³⁶ pose. Such a store is plainly allowed under the first category of permitted uses. The core issue before the Board of County Commissioners was whether there had been a change in the neighborhood since the last comprehensive rezoning in 1973 and since an intervening application by Holtz for rezoning had been rejected in 1977. No evidence was presented to warrant a finding of initial mistake in placing the property in the residential zone.

The Planning Commission, which is an advisory body to the Board, recommended rejecting the application, finding an insufficient change to warrant approval. At the public hearing before the Board on January 11, 1983, however, contrary evidence, tending to show substantial changes in the area, was presented on behalf of Holtz. At one point during the public hearing, one of the County Commissioners asked a Holtz witness whether Holtz had given “any thought to some form of conditional zoning,” to which the witness responded that “originally, in our submission before the Planning Commission, we had talked about restricting uses,” but that Holtz currently had a contract with Sheetz and that its intent was “to develop this property in a way that it is going to be compatible and also provide commercial business that will serve the area.” When the hearing concluded, the Board chairman announced that the record would remain open for ten days for further comment. A few letters, mostly from area residents protesting the application, were received during that period.

On February 1, 1983, without further notice or hearing, the Board rendered its decision. The minutes of that meeting express the decision thusly: “After due consideration of all the matters and facts adduced at the Public Hearing held on January 11, 1983, and the comments received in writing during the ten (10) day period following that date, and having given consideration to the Planning Commission’s staff report concern ¹³⁷ ing increase of traffic, a MOTION was made by Commissioner Roulette, seconded by Salvatore, to approve of the request of H. Manny Holtz, Inc. for the reclassification of land located at 1901-1903 Virginia Avenue intersecting with Marbern Road, consisting of 33,400 sq. ft., from the present ‘RU’ (Residential Urban) Zoning Classification to the ‘BL’ (Business Local) Zoning Classification on the basis that there has been a change in the character of the neighborhood; with said rezoning conditional upon the use of said property being limited to the principal permitted uses as defined in Article 11, Section 11.1, (c), (d), (e), and (f) of the Washington County Zoning Ordinance. Motion carried with Commissioner Bowers voting ‘AYE’ and Commissioners Downey and Snook voting ‘NO’. Commissioners Downey and Snook qualified their negative votes as opposition to the conditions imposed in this case, and not against the rezoning.” What this seems clearly to say is that: (1) all five Commissioners voted for the rezoning “on the basis that there has been a change in the character of the neighborhood”; (2) three of the Commissioners — a majority — voted, as a condition to the rezoning, that the use of the property be limited to a funeral home (§ 11.1(c)), an office or clinic (§ 11.1(d)), a retirement, nursing, or boarding home (§ 11.-1(e)), or an art, trade, business, or nursery school (§ 11.1(f)); and (3) the other two Commissioners voted for the rezoning without conditions.

The effect of the Board’s decision, of course, was to preclude Holtz from using the property in a manner clearly authorized for a business, local zone and as Holtz in fact intended to use it. Receiving considerably less than half a loaf — mostly the crust — Holtz appealed to the Circuit Court for Washington County, complaining that the Board was “without authority to limit the principal uses permitted in a Business Local District” and that, on the record before the Board, “the imposition of the conditions ... was without substantial evidence and was arbitrary and capricious.” ¹³⁸ Holtz asked that the court affirm the rezoning but reverse that portion of the decision limiting the use of the property. Regarding itself as a party to the proceeding, the Board filed an answer to Holtz’s petition for appeal. In its answer, the Board admitted Holtz’s averments in paragraphs 5 and 6 that the evidence before the Board “proved that there was a change in the character of the neighborhood which justified and compelled the rezoning to Business Local” and that such evidence “did prove a convincing demonstration that the proposed rezoning would be appropriate and logical for the subject property.” (Emphasis supplied.) It did, however, deny the accusatory allegations regarding the conditions and asked that the petition simply be dismissed.

In an accompanying memorandum, the Board urged that it had authority under State and county law to impose the conditions complained of and submitted, as its conclusion, that “the rezoning of the property to Business Local was justified by a change in character of the neighborhood and that the restrictive conditions and limitations placed on the Business Local category were proper.” Thus was the case submitted to the circuit court. The Board was accepted as a party and exercised the rights of a party. In an opinion filed October 28, 1983, the court concluded that the rezoning was valid, but that the conditions attached to it were not. The basis for striking down the conditions was not the lack of substantive authority on the part of the Board to impose them, however, but rather the fact that they had been imposed without an opportunity by Holtz (or anyone else) to present evidence or argument in opposition to them, and without explanation by the Board.

Based in part upon a provision in Md.Code Ann. art. 66B, § 4.01(b) and in part upon its conception of due process requirements, as explicated in a 1978 opinion of the Attorney General (63 Op.Att’y Gen. 531), the court concluded that the procedure followed by the Board was “inadequate to satisfy the minimum requirements of procedural due process of law.” 2 It ¹³⁹ also found a violation of substantive due process “in failing to make findings of fact to substantiate the imposition of conditions to the rezoning.” Finding the Board’s decision “divisible,” however, the court sustained the rezoning and rescinded the illegal conditions. The Board, feeling itself aggrieved by the court’s action, has brought this appeal to us. It concedes that, procedurally, the conditions were improperly imposed and for that reason are invalid. It argues most earnestly, however, that the court overstepped its bounds in affirming the rezoning sans the conditions and insists that what the court should have done was to remand the case to it for further proceedings.

In that way, it says, the procedural deficiencies — lack of notice, opportunity to be heard, and explanations for any conditions imposed — could be corrected. Merely striking down the conditions and approving the rezoning unconditionally, the Board contends, amounts to judicial zoning, which is impermissible. (1) Standing of the Board to Appeal The Board, as we have noted, was the body that heard and determined the rezoning application, and that raises some preliminary questions as to its standing to pursue this appeal. As we shall see, the questions are not easy ones; the general rules that apply so well in other contexts do not quite fit when applied to a board of county commissioners.

We start our analysis with Zoning Appeals Board v. McKinney, 174 Md. 551 , 199 A. 540 (1938). The Zoning Appeals Board of Baltimore City was a body created by law and empowered, among other things, to issue permits for ¹⁴⁰ filling stations. McKinney arose when the board approved such a permit and, on appeal by a protestant, the Baltimore City Court reversed. The board then noted an appeal to the Court of Appeals.

The appellate court dismissed the appeal, after concluding that the board had no standing to bring it. The Court recognized that, even without special statutory authority, “a municipality has the same right to appeal as any other litigant,” but that that rule was not applicable to “judicial and quasi judicial officers and boards.” 174 Md. at 562-63 , 199 A. 540 . Such officers and boards, the Court decided, “not being a party to its proceedings, and not having any legal interest in maintaining its determination, can neither appeal from a judgment or order of a court reversing the proceedings nor be heard on the appeal.” Id., at 563 , 199 A. 540 , quoting 3 C.J. 660. Although acknowledging that the board exercised both “quasi judicial and legislative functions,” id. at 558 , 199 A. 540 , the Court, without discussion, tacitly assumed that, in considering and ultimately approving the filling station permit, the board acted in a quasi-judicial, rather than a quasi- legislative, capacity.

It concluded, then, at 564, 199 A. 540 : “Since therefore the Board is not a party to this proceeding, has no interest in.it different from that which any judicial or quasi judicial agency would have, which is to decide the cases coming before it fairly and impartially, is in no sense aggrieved by the decision of the Baltimore City Court, and has no statutory right of appeal, it had no power to take this appeal, and the appeal must be dismissed.” The rule laid down in McKinney has been rather consistently applied over the years. See, for example, Roeder v. Brown, 192 Md. 639 , 65 A.2d 333 (1949); Md. Pharmacy Board v. Peco, 234 Md. 200 , 198 A.2d 273 (1964); Board of Zoning Appeals v. Guns, 259 Md. 368 , 269 A.2d 833 (1970); Maryland Board v. Armacost, 286 Md. 353 , 407 A.2d 1148 (1979); and cf. Md. Port Adm. v. C.J. Langenfelder & S., 50 ¹⁴¹ Md.App. 525, 438 A.2d 1374 (1982). As most recently enunciated by the Court of Appeals in Md. Board v. Armacost, supra, 286 Md. at 354-55 , 407 A.2d 1148 , the rule is this: “Generally, an administrative agency acting in a quasi-judicial capacity cannot appeal when one of its decisions is reversed by a court of competent jurisdiction unless the authority to appeal to a higher court is provided by law. When an administrative agency functions in this capacity, it is immaterial whether the issue involved relates to a matter of procedure or substance.

In either event, absent statutory authority, it has no standing to appeal.” As made clear in McKinney and subsequently in Knox v. City of Baltimore, 180 Md. 88 , 23 A.2d 15 (1941), and Adler v. M. & C.C. of Baltimore, 242 Md. 329 , 219 A.2d 22 (1966), the disqualification, or lack of standing, arises ultimately from the proposition that the agency is not a party to the administrative proceeding before it. That is why it has no cognizable interest in the outcome of the proceeding; that is why it is not regarded as a proper party in the circuit court, even as a respondent/appellee; and that is why it has no authority to appeal from a judgment of the circuit court that reverses or modifies its administrative decision. That underlying principle does not, however, apply to the body politic itself or to other officers or agencies of the body politic. Throughout its development, this rule has operated to disqualify only the