City of Frederick v. Pickett

BATTAGLIA, J. The ease sub judice presents this Court with the task of determining whether the Circuit Court for Frederick County properly dismissed the City of Frederick’s (“the City”) condemnation action with respect to Allan M. Pickett’s property. Because we hold that Maryland Code (1957, 2001 Repl.Vol.), Article 23A, Section 2(b)(37) permits a municipal authority to condemn individual blighted properties that are not within a “blighted area” or “slum area” for urban renewal purposes as a matter of law, we shall reverse the judgment of the Circuit Court and remand the case to that court for further proceedings. Background In 1982, Allen Pickett purchased a two-story brick home located at 20 West Fourth Street, Frederick, Maryland (“the Property”), lived there for approximately one week and thereafter leased it until 1993 to a tenant, after which it remained unoccupied. In 1996, the Frederick City Police Department reported to the Office of Code Enforcement for the City of Frederick that the Property was littered with broken glass and that the rear entrance to the building was broken open.

The Office of Code Enforcement verified the complaint and, upon visiting the premises, determined that vagrants were using the Property and removing the building’s contents. Michael Blank, a building inspector with the Office of Code Enforcement, observed that fires were being set within the ⁴¹⁵ building and that the floor was covered in trash and fecal matter. Moreover, he noted that the foundation in the rear of the building was sinking, which compromised its structural integrity. On May 8, 1996, the Property was condemned.

The City sent notice to Pickett instructing him to secure the Property and clean it up within five days. On May 16, 1996, Blank again visited the Property and confirmed that the building was secured but that the trash on the premises remained. The City removed the garbage and billed the costs to Pickett. Two years later, the Office of Code Enforcement once again received a complaint from the police stating that the basement door of the Property was broken open and that the Property was covered in litter.

An inspection confirmed the allegations of the complaint, and the Office of Code Enforcement again sent a letter to Pickett instructing him to clean up the Property within five days. When a subsequent inspection revealed that the Property remained in non-compliance, the City cleaned the Property and sent a bill to Pickett for the costs as well as a penalty of three hundred dollars. After receiving repeated complaints from the police regarding the Property in 1998 and 1999, the Office of Code Enforcement conducted a comprehensive inspection of the premises on September 14, 1999, and sent a Notice of Violation to Pickett informing him that he had a month to make necessary repairs to the Property consisting of removing the garbage from the lot and repairing the rear door to bring it into compliance with the Property Maintenance Code. In October, the Office of Code Enforcement inspected the Property again; it remained in a state of non-compliance.

On January 20, 2000, Pickett was sent seventy-seven citations for the period from October 16, 1999 through December 31, 1999. The citations were sent to Post Office Box 378, Mount Airy, Maryland, which was an address that the City had for Pickett. On February 9, 2000, the citations were returned to the Office of Code Enforcement as undeliverable. The Office of Code Enforcement subsequently posted the citations on the Property. ⁴¹⁶ A subsequent inspection on January 2, 2002, revealed that the corner of the building on the Property continued to sink into the ground and that the Property continued to be used by transients for the consumption of alcohol and crack cocaine.

One week later the City took action to reinforce the sinking foundation and declared the building “an unsafe structure” under the Property Maintenance Code. 1 On March 21, 2002, the City’s Board of Aldermen 2 passed Ordinance G-02-3, the purpose of which was to “authorize the City to acquire blighted properties by eminent domain and to subsequently dispose of said properties, and thereby to promote public health, safety, and welfare, and to facilitate the use and enjoyment of property.” Ordinance G-02-3 provided in pertinent part: (1) Pursuant to the express authority described above, the City may: (a) Subject to the provisions of paragraph (4) of this section, acquire, within its boundary lines, land and property of every kind, and any right, interest, franchise, easement or privilege therein, by purchase, lease, gift, condemnation or any other legal means, for development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof; and (b) Sell, lease, convey, transfer or otherwise dispose of any of said property, regardless of whether or not it has been developed, redeveloped, altered or improved and irrespective of the manner or means in or by which it may have been acquired, to any private, public or quasi-public corporation, partnership, association, person or other legal entity. ⁴¹⁷ (2) No land or property taken by the City for any of the aforementioned purposes, or in connection with the exercise of any of the powers authorized hereunder, shall be taken without just compensation, as agreed upon between the parties or awarded by a jury, being first paid or tendered to the party entitled to such compensation. (3) All land or property needed, or taken by the exercise of the power of eminent domain, by the City for any of the aforementioned purposes, or in connection with the exercise of any of the powers authorized hereunder, is hereby declared to be needed or taken for a public use or a public benefit. (4) Before the acquisition of any single family or multiple family dwelling unit, or other structure, is made under this Chapter, a finding or determination shall be made that: (a) The dwelling unit or structure has deteriorated to such an extent as to constitute a serious and growing menace to the public health, safety and welfare; (b) The dwelling unit or structure is likely to continue to deteriorate unless corrected; (c) The continued deterioration of the dwelling unit or structure will contribute to the blighting or deterioration of the area immediately surrounding the dwelling unit or structure; and (d) The owner of the dwelling unit or structure has failed to correct the deterioration thereof. (5) The City shall adopt an Ordinance for each acquisition of land or property made under the provisions of this Chapter.

Each specific ordinance so adopted shall be maintained by the Legislative Clerk of the City in a file titled “Eminent Domain.” Immediately after passing Ordinance G-02-3, the Board of Alderman discussed Ordinance ED-02-1, which permitted the City to acquire the Property at 20 West Fourth Street through its eminent domain powers. During the meeting the following colloquy occurred: ⁴¹⁸ MAYOR DOUGHERTY:.... We are looking at the ordinance to acquire real property, located at 20 West 4th Street, through the exercise of eminent domain. ALDERMAN M. HALL: I move for acceptance.

ALDERMAN BALDI: You have to base it on five (5) points. ALDERMAN M. HALL: Okay. Let’s see. I move for acceptance of the ordinance to acquire real property located at 20 West 4th Street through the exercise of eminent domain, finding that the structure located at 20 West 4th Street has deteriorated to such an extent as to constitute a serious and growing menace to public health, safety, and welfare; that this structure is likely to continue to deteriorate unless corrected; that the continued deterioration of the structure will contribute to the blighting or deterioration of the area immediately surrounding the structure; and that the owner of the dwelling unit or structure has failed to correct the deterioration thereof.

ALDERMAN RAMSBURG: Second. MAYOR DOUGHERTY: We have a motion from Alderman Marcia Hall, a second from Alderman Ramsburg. All in favor, signify by raising your right hand. That is five (5)— “O” (0).

Ladies and gentlemen, congratulations. Good work, guys. Good job. Pickett has conceded that on March 25, 2002, Frederick Mayor Dougherty signed the enabling ordinance, Ordinance G-02-3, immediately prior to signing Ordinance ED-02-1, which specifically authorized the taking of the Property.

On April 10, 2002, the City initiated condemnation proceedings in the Circuit Court for Frederick County. Five days later, the Circuit Court issued a summons for Pickett, which listed his address as 755 East Watersville Road, Frederick, Maryland 21701. The City, however, was unable to effectuate service prior to the expiration of that summons. On June 28, 2002, the City applied to have the Circuit Court reissue the summons for Pickett with the same address.

The court did so. Once again, the City was unable to serve Pickett prior to ⁴¹⁹ the expiration of the reissued summons. On September 25, 2002, the City again requested that the Circuit Court reissue a summons for service on Pickett at the same address, which the court did. The City attempted to effect service of process throughout the following year.

After repeatedly being unable to effect service upon Pickett, on July 7, 2003, the City filed a motion for alternate service, which the Circuit Court granted, thereby permitting the City to serve process upon Pickett through mailing him a copy of the summons, complaint and other relevant papers at his last known address, which was listed with the State Motor Vehicle Administration as 170 Baughman’s Lane, Frederick, Maryland. The City also served Pickett through regular mail at two other addresses: P.O. Box 378, Mount Airy, Maryland; and 755 East Watersville Road, Frederick, Maryland. 3 Thereafter, on October 10, 2003, the City obtained a default judgment against Pickett based on his failure to respond to the complaint. On November 10, 2003, Pickett filed a motion to strike service of process and to vacate the default judgment entered against him. On December 12, 2003, the Circuit Court vacated the default judgment entered against Pickett, but denied his motion to strike service of process.

One month later, Pickett filed his answer, wherein he raised the affirmative defenses of ultra vires, 4 lack of in personam jurisdiction over him, collateral estoppel, estoppel, and illegality, and asserted ⁴²⁰ the failure to state a claim upon which relief can be granted as a ground for dismissal. On April 26, 2005, the Circuit Court held an evidentiary hearing addressing the City’s entitlement to condemn the Property. At the hearing, Pickett made an oral motion to dismiss the City’s condemnation action based on several grounds. He asserted that the City’s action was ultra vires because Article 23A of the Maryland Code did not empower the City to condemn an individual property within a non-blighted area, and the Board of Aldermen acted beyond its authority when it passed the ordinance applicable to the Property prior to the mayor’s approval of the enabling ordinance.

He contended that the City could condemn only those properties located within a “blighted area,” to which end he introduced testimony from a appraiser that his property was not located in a “blighted area” or “slum area.” Pickett also presented portions of Michael Blank’s deposition testimony regarding his knowledge of Pickett’s actual address in support of his argument that the City was acting in bad faith when it claimed to be unable to provide him with notice of the citations issued concerning the Property and to effectuate service of process in the condemnation proceeding. 5 As his final argument, Pickett asset., d that the City never obtained in rem jurisdiction over him because the City was not entitled to substituted sendee because of the bad faith that he alleged formed the basis for its previous attempts to effect service; Pickett contended that the City was aware of an accurate address at which service could have been made. After hearing argument from both sides, the Circuit Court explicated the reasoning for its decision on the record as follows: I heard today attacks on these proceedings on a number of bases. Pve made one ruling [6] and I’ve heard attacks on the ⁴²¹ basis that the ordinance upon which this condemnation proceeding is based is itself ultra vires in the way that it was enacted and in accordance with the charter. Or, the argument would actually be that it was not enacted in accordance with the charter, and therefore, the action taken was ultra vires.

I’ve heard testimony with regard to whether or not there is blight at this property; argument on the issue of constructive fraud as to the information given to the Court to obtain service of process and whether or not the City knew of or had within its grasp information as to he correct address of Mr. Pickett, and then, finally, I don’t believe I’m excluding anything, arguments on constitutional defects of the proceedings in terms of vagueness of the language of the ordinance, the absence of public benefit, and probably a little more, but I’m clear. Okay. Fundamentally, the Maryland General Assembly provided in Article 23(a), Section 2(b), that municipalities have these express powers, and, frankly, we know that the municipality has certain express powers, its has certain implied powers, it has certain powers necessary to carry out that authority, but for purposes of today’s proceeding, we’re focused on the express power provided by the General Assembly in item 37 of subsection 2(b) of Article 23(a)____It says in addition to the authority provided elsewhere in this subsection, subsection 2(b), and provided the municipal corporation has urban renewal authority granted under Article 3, Section 61 of the Maryland Constitution, and there’s provision in that article for acquisition of property by condemnation, and subject to the provisions of subparagraph (iv) to acquire within the boundary lines of the municipal corporation ... land and ⁴²² property of every kind by condemnation or development or redevelopment, including, but not limited to, the comprehensive renovation or rehabilitation thereof. Now, that subsection (iv) says that before the acquisition of a single family or multiple family dwelling unit or structure, other structure is made under this paragraph, certain findings have to be made, four findings. * * * What’s at issue in this case is a single property----In other words, the City has exercised its discretion to an appropriate extent as to this single property, but I’m—I keep harking back to the definitions which talk about slum area, blighted area, and within each definition of area there are references to dwellings predominate, majority buildings.

It nowhere says a slum property, a blighted property. In fact, to step back, it talks about carrying out urban renewal projects and it keeps then referring to slum clearance and slum or blighted areas and redevelopment or the rehabilitation of slum or blighted areas. It doesn’t talk about even a renewal, a suburban renewal project which affects one property. I don’t think I—I’m not going to say it again because I hope I’ve made my point.

The authority granted in Article 3, Section 61, which is the enabling cornerstone, refers to blighted area and slum area, which in turn, refer to multiple buildings. Hs Hi H: I realize that the authority the Constitution grants and which the general assembly exercised and which the City has attempted to invoke is that authority to take private property through condemnation, eminent domain, when it’s necessary for slum clearance, for the purpose of carrying out urban renewal projects, but limited to slum clearance in slum or blighted areas, which, in turn, are area—which are areas, first of all, I can stop there—but area specifically defined to include multiple dwellings, or, in the case of ⁴²³ blighted areas, multiple buildings or a place where a majority of buildings have declined in productivity. * * * With all of that, I must dismiss these proceedings. Mr. Winters, I’m going to ask you to submit an order. I think you can merely say for the reasons stated, or words to that effect, from the bench, the Court’s oral opinion, the matter will be dismissed.

Thank you. On May 26, 2005, the City filed its notice of appeal, and thereafter, this Court issued, on its own initiative, a writ of certiorari, Frederick v. Pickett, 389 Md. 398 , 885 A.2d 823 (2005), prior to any proceedings in the intermediate appellate court. The City’s brief presented the following issue: Whether under Maryland Code (1957, 2001 Repl.Vol.), Article 23A, Section 2(b)(37), the Appellant’s legislature was required to determine that the Subject Property was within a “slum area” or “blighted area” as those terms are defined in Maryland Constitution, Article 3, Section 61 to acquire the Subject Property for the public purpose of development or redevelopment. In his responsive brief in this Court, Pickett also raised the following issues for our consideration: 7 1.

Was the trial court legally correct in dismissing Appellant’s Amended Complaint because Appellant’s simultaneous enactment of both the enabling ordinance and the ordinance specific to Appellee’s property rendered both the specific ⁴²⁴ ordinance and Appellant’s subsequent actions in seeking to condemn Appellee’s property ultra vires, illegal acts? 2. Was the trial court legally correct in dismissing Appellant’s Amended Complaint because the Circuit Court never acquired in rem jurisdiction over Appellee’s property? 3. Was the trial court legally correct in dismissing Appellant’s Amended Complaint because Appellant’s action in determining the necessity for condemning Appellee’s property was so oppressive, arbitrary, and unreasonable as to suggest bad faith? We hold that the Circuit Court erroneously dismissed the City of Frederick’s condemnation action based on an incorrect interpretation of the requirements of Maryland Code (1957, 2001 Repl.Vol.), Article 23A, Section 2(b)(37).

Although the Circuit Court relied solely on its erroneous interpretation of Maryland Code (1957, 2001 RepLVol.), Article 23A, Section 2(b)(37) as the basis for its dismissal of the City’s complaint for condemnation of the Property, we could affirm the dismissal “on any ground adequately shown by the record, whether or not relied upon by the trial court.” Berman v. Karvounis, 308 Md. 259, 263 , 518 A.2d 726, 728 (1987), citing Robeson v. State, 285 Md. 498, 502 , 403 A.2d 1221, 1223 (1979) (and cases cited therein), cert. denied, 444 U.S. 1021 , 100 S.Ct. 680 , 62 L.Ed.2d 654 (1980). As we noted in Robeson , [considerations of judicial economy justify the policy of upholding a trial court decision which was correct although on a different ground than relied upon. This was explained by the Supreme Court in Securities and Exchange Com. v. Chenery Corp., 318 U.S. 80, 88 , 63 S.Ct. 454, 459 , 87 L.Ed. 626 (1943): ‘It would be wasteful to send a case back to the lower court to reinstate a decision which it had already made but which the appellate court concluded should properly be based on another ground within the power of the appellate court to formulate.’ Robeson, 285 Md. at 502 , 403 A.2d at 1223 . Therefore we may consider whether the Circuit Court’s dismissal could be af ⁴²⁵ firmed on alternate grounds adequately shown in the record.

Of the three alternate grounds presented by Pickett for our consideration, only the issue of whether the Board of Aider-men’s approval of the ordinance applicable to the Property was an ultra vires action was adequately developed in the record. The Circuit Court’s dismissal of the City’s condemnation action, however, may not be upheld on the ground that the Board of Aldermen’s actions were ultra vires because the Board was not required to enact an enabling ordinance prior to the passage of an ordinance authorizing the condemnation of a specific property. Moreover, assuming arguendo that an enabling ordinance was required, the Board of Aldermen was empowered to pass the second ordinance in anticipation of the enabling ordinance’s approval by the mayor, particularly because the parties do not dispute the fact that the mayor signed the enabling ordinance prior to signing the ordinance specifically aimed at the condemnation of the property at issue in the present case. The remaining two issues, lack of in rem jurisdiction and bad faith, were not adequately developed in the record and as such, we may not rely upon them as grounds to uphold the Circuit Court’s dismissal.

Discussion The City argues that the language of the controlling statute, Maryland Code (1957, 2001 Repl.Vol.), Article 23A, Section 2(b)(37), 8 is clear and unambiguous. According to the ⁴²⁶ City, the purpose of Article 23A, Section 2(b)(37) is to empower municipalities to condemn individual blighted properties even within a non-blighted area. Therefore, the City concludes that the Board of Aldermen properly exercised its power to do so when it passed an ordinance authorizing the condemnation of Pickett’s property. Moreover, the City asserts that even if the language were ambiguous, the legislative history and the context surrounding the enactment of Article 23A, Section 2(b)(37) support the interpretation that the statute does not require the finding of a “slum area” or “blighted area” for the City to be able to condemn the Property.

Pickett concedes that Article 23A, Section 2(b)(37) empowers municipalities to condemn individual blighted properties within a non-blighted area; however, he asserts that the dismissal may be upheld on appeal regardless of the fact that the Circuit