Board of County Commissioners v. Southern Resources Management, Inc.

JAMES R. EYLER, Judge. This case arises out of an effort by Southern Resources Management, Inc. and Robert Gollahon (hereinafter both will be referred to as Gollahon), appellees and cross appellants, to obtain subdivision approval 1 for a 792.84 parcel of land zoned “rural preservation district,” located in St. Mary’s County (hereinafter the Property). On February 28, 2000, the St. Mary’s County Planning Commission (hereinafter the Planning Commission) approved the subdivision plan for section 1, phase 1, which proposed five fifteen acre lots on a total of 76.67 acres, and approved the phasing plan for the remainder of the Property. The approval for section 1, phase 1 was final and permitted development to go forward, subject to appeal, but the approval of the phasing plan was not a final subdivision approval.

The St. Mary’s County Board, of County Commissioners (hereinafter the County Commissioners), appellant and cross appellee, and the St. Mary’s County Health Department (hereinafter Health Department) appealed to the St. Mary’s County Board of Appeals (hereinafter the Board). On February 5, 2001, the Board reversed the Planning Commission’s approval. Thereafter, Gollahon filed a petition for judicial review in the Circuit Court for St. Mary’s County. On January 13, 2003, the circuit court reversed the Board.

The County Commissioners appealed to this Court. We agree with the circuit court that the Board’s decision cannot be affirmed, but we disagree with the court’s disposition. Consequently, we shall reverse the judgment of the circuit court, vacate the decision of the Board, and remand the case to the Board for further proceedings consistent with this opinion. ¹⁶ Factual Background In the 1950’s, the Property was owned by Hunter Chemical Corporation and Federal Ordnance Corporation, which manufactured and tested ordnance for the United States Navy from 1952 to 1956. The ordnance included items known as detonators, igniters, fuse boosters, and similar items containing relatively small amounts of explosives, used to detonate munitions.

Approximately 100 acres of the Property were used in the manufacturing process. The companies buried unwanted live ordnance on the property as a means of disposing of it. In 1959, Thiokol Chemical Corporation (hereinafter Thiok-ol) 2 purchased the Property. In 1966 and 1967, Thiokol performed an investigation of the site, located three burial sites, and removed ordnance.

Documents indicate, however, that even after this removal process, Thiokol believed that live ordnance remained on the Property. In the early 1980’s, all buildings on the Property were razed. In 1984, the Property was placed on the State’s List of Potential Hazardous Waste Sites so that it could be evaluated. In 1985, the Maryland Department of the Environment (MDE) conducted a preliminary assessment and determined that the site was a low priority for investigation.

In 1989, NUS Corporation performed an assessment of the Property for the Environmental Protection Agency (EPA). The NUS Corporation described chemicals found on the site, indicated that they did not pose significant health or environmental concerns, but also stated that the “greatest concern” was the reported burial of shock sensitive explosives. As a result, it recommended against activities that would disturb the soil or cause shocks to the ground. The EPA listed the site as “no further remedial action planned.” In this same time frame, International Technology Corporation also investigated the Property, apparently on behalf of Thiokol. ¹⁷ In 1991, Thiokol decided to pursue remedial action, and a work plan was developed.

According to a Thiokol report, Thiokol conducted a historical analysis, surveyed and removed all surface debris, used three geophysical methods 3 to locate any buried debris, employed a consultant to intensively explore the sites identified by the surveys, and excavated the sites with the approval of the MDE and the office of the State Fire Marshal (Fire Marshal). The surveys were performed by Geophex, Ltd., and the ordnance was removed by Human Factors Applications, Inc. (HFA). Ninety six priority sites were identified through use of the surveys, by considering the information obtained in the historical investigation, and by considering the location of the former buildings. During investigation of the sites, HFA recovered detonators, flash tubes, boosters, powder rings, igniters, and squibs.

A total of 1,360 pounds of material, the same as or similar to the type described above, were recovered and destroyed. In June, 1995, after the remediation was completed, Thiokol issued a report, and the report was placed in the St. Mary’s County Public Library. In January, 1999, Gollahon purchased the Property with the intent of developing a residential subdivision. Prior to the sale, Thiokol recorded a declaration of covenants among the land records, prohibiting construction on a substantial number of acres, the area where manufacturing had occurred.

In early 1999, Gollahon moved ahead with his subdivision plans. In June, MDE expressed concern regarding the potential hazard of buried ordnance. MDE reviewed HFA documents and determined that HFA believed that not all sites investigated by it had been completely cleaned. HFA also advised that the surveys used might not be able to detect small amounts of ordnance and had “hit or miss capabilities.” Thiokol became re-involved and contracted with Apex Environmental, Inc. (Apex) and UXB International, Inc. (UXB) to perform additional remediation.

Apex and UXB developed ¹⁸ work plans in conjunction with MDE and the Fire Marshal. Ten sites, totaling 22.4 acres, were identified to be explored. The work plans were approved by MDE and the Fire Marshal, and the plans were determined to be in conformance with United States Army Corps of Engineers and Department of Defense standards. According to Apex’s final report dated June 30, 2000, approximately 16,000 detonators were recovered, plus small quantities of blasting caps, boosters, detonator fuses, flash tubes, and squibs.

Also recovered were .5 pounds of raw propellant, .8 pounds of military dynamite, and 2.5 inert rocket warheads. In all, approximately 82 pounds of material was recovered with a net explosive weight of approximately 11 pounds. In addition, 218 tons of soil containing an estimated 3.5 to 10.4 pounds of detonators were removed from the property. By letter dated November 23, 1999, the Fire Marshal advised Thiokol that the work plan had been completed in accordance with the work plan approved by that office, and by letter dated December 3, 1999, MDE advised Thiokol that, for the areas sampled, “no significant chemical contamination exists above acceptable risk levels”.

The letter further stated that once the ordnance investigation is completed, it would issue a final determination. At some point in 1999, Gollahon applied to St. Mary’s County Department of Planning and Zoning 4 for subdivision approval. Gollahon divided the Property into two sections. Section 1, phase 1 consisted of 76.74 acres, and section 2 consisted of the remaining 716.16 acres.

On February 28, 2000, the Planning Commission granted final approval for section 1, phase 1 and granted approval for the phasing plan for section 2. Robert Gollahon, John B. Norris, Jr., with NG & O Engineering, Inc., Vince DiRenzo, with Apex, and Hugh Sease, with UXB, testified in support of ¹⁹ the application. The first paragraph of the minutes of the February 28 meeting states: Ms. Grover stated that all agencies have issued final approvals with regard to Section 1, and there are no outstanding issues. Staff recommends approval.

However, regarding the Phasing Plan for Section 2, there has been an ongoing cleanup of residual contamination from detonators previously manufactured on site by the Hunter Manufacturing Company. Applicant states cleanup has proceeded to the point where the site has deemed to be ‘clean’ except for one large pile of dirt. However, in the absence of a final determination from MDE and in view of the number of outstanding issues on this section, including site access, staff recommends the Commission defer decision on the phasing plan until all outstanding issues are resolved. The minutes inform us that Gollahon advised the Planning Commission that the areas of concern with respect to ordnance were contained in the area used for manufacturing, the area restricted by the declaration of covenants.

Mr. DiRenzo reported on the cleanup of the site. Detonators were discussed, and Mr. DiRenzo stated they were small and would not inflict injury. Ms. Ann Rose, Director of Environmental Health, stated that, to the contrary, she was advised by a representative of UXP that detonators could cause injury. A representative of the Fire Marshal’s office advised that the Fire Marshal was merely certifying that the work plan had been completed and was not certifying the site as safe for residential construction.

The County Commissioners and the Health Department requested the Planning Commission to reconsider its decision. The Planning Commission denied the request, and the County Commissioners and the Health Department appealed to the Board. The Board held evidentiary hearings on July 13, 2000, August 24, 2000, December 4, 2000, and December 7, 2000. The Board also held a work session on July 24, 2000.

That session was not recorded, and no minutes were kept. ²⁰ In addition to receiving documentary evidence, the Board heard testimony from several witnesses, which we shall summarize in very general terms. Jon R. Grimm, Director of the Department of Planning and Zoning, presented documentary information and summarized the staffs position, similar to what had been done before the Planning Commission. John Norris and Vince DiRenzo testified on behalf of Gollahon. Mr. Norris’ testimony appeared to be similar to that presented to the Planning Commission.

Mr. DiRenzo reviewed the remediation process from when Thiokol purchased the Property through issuance of Apex’s final report. He testified that, at the time of the February 28, 2000 hearing before the Planning Commission, there was a 400 ton pile of dirt that the Fire Marshal wanted removed and the Planning Commission wanted removed, and that had been done. He also testified that Apex’s final report was filed after the Planning Commission’s decision. On cross-examination, Mr. DiRenzo acknowledged that the Planning Commission had not been informed with respect to all of the items found in 1999 but explained that they had emphasized those items which were of the greatest concern.

Karl Kalbacher, a representative of MDE, testified on behalf of the County Commissioners. He explained that MDE was primarily concerned with hazardous substances and was only concerned with particular portions of the Property, being the areas previously determined to contain ordnance. Mr. Kalbacher acknowledged that the investigation and clean up had been completed to MDE’s satisfaction. Mr. Hugh Sease, a representative of TJXB, also testified on behalf of the County Commissioners.

He testified that the Property was safe because UXB covered the sites thoroughly and the ordnance was insensitive to shock. He acknowledged that UXB was only involved with remediation of certain sites and not the whole Property. In other words, UXB did not redo the earlier surveys which identified those areas where ordnance had been buried, i.e., the manufacturing area. He also acknowledged that complete information with respect to ²¹ the items found by UXB had not been given to the Planning Commission.

The final witness for the County Commissioners was Wayne Lewallen, the vice-president of Explosive Ordinance Technologies. Mr. Lewallen had 20 years’ experience in explosive ordnance remediation and testified as an expert witness. Mr. Lewallen read the historical documents, at least some of the exhibits before the Board, and listened to at least some of the testimony before the Board. He opined that the historical documents showed the presence of dangerous ordnance and that the remediation efforts were inadequate.

Gollahon called Mr. Sease and Mr. DiRenzo in rebuttal. Both witnesses defended the remediation efforts as appropriate, in compliance with applicable standards, and adequate. On February 5, 2001, the Board issued an opinion and order in which it reversed the Planning Commission’s decision and denied Gollahon’s request for approval of the section 1, phase 1 subdivision plan and the phasing plan for the remainder of the proposed subdivision. The Board’s opinion contained the following.

First, the Board observed that it had appellate jurisdiction pursuant to Md.Code art. 66B, section 4.07(d)(1), and that the matter was properly before it. Second, the Board determined that the County Commissioners and the Health Department had standing to appeal the Planning Commission’s decision pursuant to art. 66B, section 4.07(f). Last, the Board addressed whether there was an error in the Planning Commission’s decision. The Board, observing that public safety was a valid consideration, concluded that the Planning Commission erred in approving the phasing plan without adequately addressing whether the Property was safe for residential use, and also determined that the section 1, phase 1 plan was not severable from the phasing plan.

The Board referred to the “lack of continuity between the various contractors hired to ‘clean’ ” the Property, and the “conflicting information as to the status of the ‘clean-up’ efforts,” and the testimony of Hugh Sease, an employee of UXB, who “admitted ²² that the cleanup process was not as thorough as should be expected or as is needed for the residential development” of the Property. The Board concluded that Gollahon had not adequately addressed the potential existence of ordnance on the Property. On February 22, 2001, Gollahon filed a petition for judicial review. The circuit court held hearings on February 1, 2002, and January 13, 2003, and on the latter date, issued an opinion and order.

The court reversed the Board’s decision and reinstated the Planning Commission’s decision. 5 Because we perform the same function as the circuit court, it is not necessary to summarize the court’s opinion in detail. It is necessary to summarize the court’s holdings, however, in order to understand the issues presented on appeal. The court held (1) the Board was within its jurisdiction in addressing potential harm to public safety; (2) the Fire Marshal had a responsibility to determine safety, and the burden was not solely on Gollahon; (3) the Board erred in conducting a pure de novo review; (4) the notices of appeal to the Board were deficient because of lack of specificity, and the Board should have dismissed the appeal; (5) the Board erred in imposing a 100% certainty standard; and (6) the evidence was insufficient to support the Board’s conclusion. Questions Presented The questions raised by the County Commissioners, as slightly rephrased by us, are: 1.

Did the circuit court err in ruling that the Board should have dismissed the case due to deficient notices of appeal? 2. Did the circuit court err in holding that the Board used an incorrect standard in reviewing the Planning Commission’s decision? ²³ 3. Did the circuit court err in its determination of the scope of responsibility of the Office of Eire Marshal with respect to the Property? 4. Did the circuit court err in holding that the Board acted arbitrarily and capriciously?

Gollahon raises the following question, as rephrased by us: Did the circuit court err in holding that the Board had authority to determine potential harm to public safety when the application otherwise met the requirements of the subdivision ordinance? Judicial Standard of Review When more than one administrative entity is involved in the decision process, it is the final decision that we review. Dept. of Health & Mental Hygiene v. Shrieves, 100 Md.App. 283, 301-02 , 641 A.2d 899 (1994). In the case before us, that is the Board’s decision.

In Hikmat v. Howard County, 148 Md.App. 502, 522-23 , 813 A.2d 306 (2002), this Court set out the three part analysis an appellate court must engage in when reviewing an administrative board’s decision: 1. First, the reviewing court must determine whether the agency recognized and applied the correct principles of law governing the case. The reviewing court is not constrained to affirm the agency where its order is premised solely upon an erroneous conclusion of law. 2. Once it is determined that the agency did not err in its determination or interpretation of the applicable law, the reviewing court next examines the agency’s factual findings to determine if they are supported by substantial evidence, i.e., by such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

At this junction, ... it is the agency’s province to resolve conflicting evidence, and, where inconsistent inferences can be drawn from the same evidence, it is for the agency to draw the inference. ²⁴ 3. Finally, the reviewing court must examine how the agency applied the law to the facts. This, of course, is a judgmental process involving a mixed question of law and fact, and great deference must be accorded to the agency. The test of appellate review of this function is whether a reasoning mind could reasonably have reached the conclusion reached by the [agency], consistent with a proper application of the [controlling legal principles.] (Citations and quotations omitted).

The Court of Appeals recently expanded upon the discussion of an appellate court’s review of an agency’s application of the law to the facts in Lewis v. Dept. of Natural Resources, 377 Md. 382, 405-08 , 833 A.2d 563 (2003)(quoting Stansbury v. Jones, 372 Md. 172, 182-85 , 812 A.2d 312 (2002)): Almost a half-century ago, in a case involving a denial of a use permit, we stated: “It is a clearly established rule in the law of zoning that a court may not substitute its judgment for that of the Zoning Board.” Dorsey Enterprises, Inc. v. Shpak, 219 Md. 16, 23 , 147 A.2d 853 (1959). Chief Judge Hammond wrote for the Court in State Ins. Comm’r v. National Bureau of Casualty Underwriters, 248 Md. 292, 309 , 236 A.2d 282 (1967), that “under ... [either] of the standards the judicial review essentially should be limited to whether a reasoning mind reasonably could have reached the factual conclusion the agency reached, (alteration added).’ Whether reasoning minds could reasonably reach a conclusion from facts in the record is the essential test. If such a conclusion is sufficiently supported by the evidence, then it is based upon substantial evidence.

Forty years ago in Snowden v. Mayor and City Council of Baltimore, 224 Md. 443, 447-48 , 168 A.2d 390 (1961), we noted that: The substantial evidence test “means that the reviewing court’s inquiry is whether on the record the agency could reasonably make the finding.” ... Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” The heart of ²⁵ the fact finding process often is the drawing of inferences from the facts. The administrative agency is the one to whom is committed the drawing of whatever inferences reasonably are to be drawn from the factual evidence. “The Court may not substitute its judgment on the question whether the inference drawn is the right one or whether a different inference would be better supported. The test is reasonableness, not rightness.” [Citation omitted.] Nonetheless, we have also indicated in our cases that where an administrative agency’s conclusions are not supported by competent and substantial evidence, or where the agency draws impermissible or unreasonable inferences and conclusions from undisputed evidence, such decisions are due no deference.

In Belvoir Farms Homeowners Association, Inc. v. North, 355 Md. 259, 267-68 , 734 A.2d 227 (1999), we stated: Generally, a decision of an administrative agency, including a local zoning board, is owed no deference when its conclusions are based upon an error of law. Catonsville Nursing Home, Inc. v. Loveman, 349 Md. 560, 569 , 709 A.2d 749 (1998) (“We may reverse an administrative decision premised on erroneous legal conclusions.” (citing People’s Counsel v. Maryland Marine Mfg. Co., 316 Md. 491, 497 , 560 A.2d 32 (1989))). In Maryland Marine Mfg., supra, 316 Md. at 496-97 , 560 A.2d 32 , we said: As we have frequently indicated, the order of an administrative agency must be upheld on judicial review if it is not based on an error of law, and if the agency’s conclusions reasonably may be based upon the facts proven.

But a reviewing court is under no constraints in reversing an administrative decision which is premised solely upon an erroneous conclusion of law. [Citation omitted.] [Emphasis added.] ²⁶ In sum, we review the instant case to ensure, first, that the Board applied the correct legal standard in making its determination, and second, that the Board’s conclusion was sufficiently supported by the evidence. Where either an incorrect legal standard is used or the Board’s conclusion is not sufficiently supported by the evidence, the decision is considered arbitrary and capricious and, therefore, must be reversed. Lewis, 377 Md. at 408 , 833 A.2d 563 . Discussion Adequacy of Notices of Appeal The procedure for appealing a decision of the Planning Commission to the Board is set forth in St. Mary’s County Zoning Ordinance, No. 90-11 (1990), Art. VI, § 66.1.1, 6 as follows: An appeal may be taken to the Board of Appeals by any person, firm, or corporation aggrieved by a decision of the Planning Director or designee or by any officer, department, board or bureau affected by a decision of the Planning Director or designee.

Such appeal shall be taken within 30 days of the date of the decision by the Planning Director by filing with the board a notice of appeal specifying the grounds thereof. The Planning Director or designee shall forthwith transmit to the board all of the papers constituting a record upon which the action appealed from was taken. This section of the St. Mary’s County Zoning Ordinance is derived from Md.Code Ann., Art. 66B, § 4.07(e)(2)(2000), which states: ²⁷ Aii appeal shall be taken within a reasonable time, as provided by the rules of the board of appeals, by filing with the administrative officer from whom the appeal is taken and with the board of appeals a notice of appeal specifying the grounds of the appeal. Article 66B, section 4.07(d)(1) provides that the Board may hear and decide appeals where it is alleged “there is an error in any order, requirement, decision, or determination made by administrative officer... . ” St. Mary’s Zoning Ordinance section 66.00.4a is to the same effect.

The notice of appeal filed by the County Commissioners stated that the basis of the appeal was “error in the order, requirement, decision or determination made by the Planning Commission” with respect to Gollahon’s application. The notice filed by the Health Department stated: “Testimony for the applicant on February 28, 2000, described discovery of detonators with minimal net explosive weight. Subsequent inspection of public information files described in testimony on behalf of the applicant reveal that numerous types of ordnance with exponentially greater net explosive weight have been discovered in previous site investigations. Similar items have been recovered in the current investigation.” The circuit court relied on Norwood Heights Improvement Assn., Inc. v. Mayor and City Council of Baltimore, for the proposition that a party seeking to appeal the decision of the Planning Commission “must set out specifically the fact which he contends is a violation of a particular paragraph of the Ordinance, otherwise he has set out no cause whatever.” 195 Md. 1 , 7, 72 A.2d 1 (1950).

As the County Commissioners correctly point out, however, “[t]he statutory language cited in Norwood Heights no longer appears in Article 66B”; thus specific facts are no longer required to support alleged violations by the Planning Commission. In addition, Norwood Heights dealt with a Baltimore City Zoning Ordinance where an appeal was sought after building permits issued. The Court dismissed the appeal because “the appellant had no authority under the statute to appeal,” rather than because ²⁸ facts were not set forth. Id. at 8, 72 A.2d 1 .

As the circuit court noted, the Court in Norwood Heights observed that, under the Baltimore City ordinance, the notice of appeal had to include factual allegations showing how the ordinance was violated. Id. at 7, 72 A.2d 1 . Appellee cites a subsequent Norwood Heights case for the proposition that the notices in this case were deficient. See Norwood Heights Improvement Assn., Inc. v. Mayor and City Council of Baltimore, 195 Md. 368 , 73 A.2d 529 (1950).

In this later decision, the same parties brought a similar dispute before the Court. Id. at 372 , 73 A.2d 529 . The Court cited the earlier decision and dismissed the appeal. Id. at 373, 73 A.2d 529 .

Again, the party seeking the appeal was not a party authorized to appeal under the statute, so the petition was dismissed. Id. More important for present purposes, however, is that the above cases were decided under a Baltimore City ordinance and prior to the amendment of the language in article 66B, referenced above. The County Commissioners virtually concede their notice was deficient but argue the Health Department’s notice was sufficient without explaining why that would enable the County Commissioners to orchestrate the opposition of the opponents to Gollahon’s application.

In our view, the County Commissioner’s notice was probably deficient while the Health Department’s notice was probably sufficient. We need not decide that, however, because a deficiency in the notice of appeal does not necessarily require dismissal of the appeal. Assuming the notice or notices in this case were deficient, there is no statute, ordinance, or rule requiring the Board to dismiss the County Commissioners’ appeal. An administrative proceeding is subject to the requirements of due process.

This includes an adequate formulation and notice of the issues in the case. Boehm v. Anne Arundel County, 54 Md.App. 497, 511 , 459 A.2d 590 (1983). Generally, a notice of appeal, in the judicial context, is not required to contain specifics, but the formulation of issues and adequate notice is addressed and governed by other requirements. ²⁹ Generally, such other requirements are not present in the administrative context. Thus, the notice of appeal is required to specify grounds.

An agency has discretion, as long as it does not change the nature of the original proceeding, violate due process, act arbitrarily, or run afoul of some legislative or self imposed requirement. Hikmat, 148 Md.App. at 531 n. 10, 813 A.2d 306 . An administrative agency, exercising appellate jurisdiction, must, through some procedure, satisfy fairness requirements. Whether an appeal is on the record, substantially de novo, or purely de novo, the agency must determine the issue or issues being heard and decided.

Even in a purely de novo appeal, only those matters appealed are heard and decided, not every matter that was involved in the underlying application. Halle Companies v.