City of Hagerstown v. Long Meadow Shopping Center

FINAN, J., delivered the opinion of the Court. The Long Meadow Shopping Center (Center), the subject of the controversy in this appeal, lies partially within and partially without the city limits of Hagerstown, Maryland, and is owned by one of the appellees in this case, a partnership doing business under the name of the Center and herein referred to as “Long Meadow.” This appeal arises from the refusal of. the Hagerstown Board of Zoning Appeals (Board) to grant Long Meadow and theiy general contractor, Callas Contractors, Inc., the other appellee, a building permit to construct a movie theater on that portion of the Center which is divided by the city limits’ line separating Hagerstown from the ⁴⁸³ remainder of Washington County. The portion of the Center within Hagerstown is located on land shown on the comprehensive zoning map of the City as CSC (Community Shopping Center). Washington County has no zoning ordinance.

The Board denied the permit, finding that the proposed use was not permitted in a CSC district, but on appeal the Circuit Court for Washington County (Rutledge, J.) reversed the Board, holding that the City was estopped to deny the issuance of the permit. The City of Hagerstown and five intervening local residents who live within two blocks of the Center have taken this appeal from the order of the court authorizing the appellees to proceed with the construction of the theater. Before discussing the set of facts which give rise to the present appeal it will be helpful toward an understanding of the issues now before us to review the history of past litigation affecting Long Meadow. On September 17, 1956, Long Meadow first made application for a building permit to construct the Center, and on the same day the City Building Inspector issued it.

On September 25, 1956, however, a local resident filed an appeal to the Board protesting the issuance of the permit and after a public hearing the Board revoked the permit. At that time the Hagerstown Zoning Ordinance contained the following provisions: “Sec. 24.10 1 Community Shopping Center Districts — Generally Community shopping center districts shall be designated as such on the zone district map. They shall be distributed geographically so that each major section or quadrant of the city may have the facilities which they are intended to provide. These districts are intended to provide ordinary retail shopping facilities for adjacent ⁴⁸⁴ and nearby residential neighborhoods, where there may be purchased many small articles, various merchandise and services which meet the average or daily needs of those who dwell in such neighborhoods, * * * * * * 6.

Plans and such specifications as may be required for a project in any community shopping center district shall be submitted to the inspector of buildings and the city engineer for their inspection * * *. If such project is found by such officials to comply with the requirements of this article * * * the same shall be approved and a permit * * * issued * * *. If the proposal does not comply with the regulations of this section, the officials shall disapprove * * (Emphasis supplied) In denying the permit the Board advanced the following reason for its action: “* * * That Section 9 of the City Zoning Ordinance [then, Section 24.10 of The Code of The City of Hagerstown] * * * bearing the title, ‘community shopping center districts’ states * * * that such districts as contemplated by said ordinance are intended to provide ordinary retail shopping facilities for adjacent and nearby residential neighborhoods where may be purchased many small articles, various merchandise and services which meet the average or ordinary daily needs of those who dwell in such neighborhoods. That this Board finds as a fact that the shopping center for which said building permit was issued contemplates providing extraordinary retail shopping facilities, not only for adjacent and nearby residential neighborhoods, but for a wide area extending far beyond such adjacent and nearby residential neighborhoods.” (Emphasis supplied) ⁴⁸⁵ Long Meadow subsequently appealed the Board’s decision to the Circuit Court for Washington County where the Board was affirmed.

At this point, instead of prosecuting its appeal further, Long Meadow chose to seek redress through the legislative branch of the City government, and succeeded in obtaining from the City Council an amendment to Section 24-10 of the Zoning Ordinance, whereby, it was amended to read: “Sec. 24.10, Shopping Center Districts. “* * * These districts [shopping center districts] are intended to provide various shopping facilities, where may be purchased various articles, merchandise and services required by those who reside in the neighborhood and elsewhere in the City of Hagerstown and surrounding trade area. (Emphasis supplied) It is interesting and significant to note that while the City Council amended the title of Section 24.10 (now Section 68.10) by deleting the word “Community,” and amended the definition of a “Community Shopping Center,” as originally provided in the Zoning Ordinance, the Zoning Map itself was in no way changed and while it may be argued that the ordinance as amended allows for facilities ofttimes found in a “Regional Shopping Center,” there was no amendment of the classification of “CSC” (Community Shopping Center) on the legend of the Zoning Map. In this regard it should also be noted that there was no amendment to Subsection 6 of Section 24.10 (now Section 68-10) which continues to refer to “any community shopping center district.” Elsewhere in the zoning ordinance shopping centers are continually referred to as “commuiiity shopping center districts.” (See Section 68-5 titled “Districts Established; Map, * * * D. * * *”) The best that may be said for the tortured construction of the amendment advocated by Long Meadow which would have us construe the amendment as creating a new classification, namely that of a ⁴⁸⁶ “Regional Shopping Center,” for which it alleges a theater would not be a prohibited use, is that, in our opinion, the amendment only sets forth the policy as to permissible and nonpermissible uses within the type of shopping center described in the ordinance which certainly is applicable to Long Meadow. With the above amendment, the way was now paved for the desired permit which Long Meadow acquired and construction was begun in 1956.

The Center opened with a variety of stores including a large department store, two supermarkets, a bank, two dress shops, two shoe stores, a candy store, an automobile supply) store, a jewelry store and a gasoline service station. There was no theater mentioned in the original plans which were approved by the Building Inspector in 1956. At this juncture we should note that Section 24.12, now Section 68-12, remains the same. This section entitled “Prohibited Uses in Shopping Center Districts,” provides : “A. In all community shopping center districts, land and buildings shall not be used * * * for any one of the following specified uses: * * * (3) Retail Business Uses (4) Service Uses (a) Except insofar as Items (3) and (4) may be parts of the entire community shopping center project, integrated with other uses to make up the whole project and shown on the plans referred to in § 68-10.” Thus, although Retail Business Uses may be defined as including a theater and are allowed in a community shopping center where they are included in the original plan, yet, under the ordinance they are a prohibited use in the center if they are not in the original plan of the community shopping center as approved by the Building In ⁴⁸⁷ spector.

In another way it may be stated, that Retail Business Uses and Service Uses are permitted in a community shopping center district if they are contained in the original plan and initially approved by the City. (See Sections 68-13 and 68-15 of the Code of the City of Hagerstown (1966 ed.).) We now pass through an interval of fourteen years which, at least from the record, appears to be quiescent insofar as litigation affecting Long Meadow is concerned. However, in 1969, Long Meadow experienced growing pains which culminated in its desire to demolish an existing store in the Center and construct a twin movie theater. Callas Contractors, Inc., negotiated for the contract to perform the work and endeavored tc obtain from the City Building Inspector, Mr. Gerald Shank, the required building permit.

Mr. Shank testified in the court below that he informed Mr. Michael Callas, the president of the construction company, that since the greater portion of the proposed structure would lie outside of the City limits, the City would require no building permit, and it would suffice if a permit were obtained from the Washington County Tax Assessor’s Office. Mr. Shank further testified that this policy was dictated to him by the Mayor and City Council of Hagerstown and that it was passed along by him to his successor in office, Mr. Thurston A. Keltner. The record additionally reveals that Long Meadow’s mortgagee desired assurance of the fact that the theater would not violate any local zoning ordinances, and that for this purpose Mr. Keltner drafted and delivered to Mr. Callas a letter which stated that no permit would be required by the City. On March 2, 1969, Callas obtained a permit from the Washington County Tax Assessor and shortly thereafter employed an architect to prepare construction drawings. 2 Permits for electric, water and sewer connection and a ⁴⁸⁸ license to operate a motion picture theater were acquired from the City of Hagerstown, and on September 2, 1970, Callas Contractors-, Inc. entered into a contract with Long Meadow to demolish the existing store and' to construct the theater.

Demolition work commenced on September 15, 1970, but was interrupted on September 21, 1970, when Mr. Keltner informed Callas that a demolition permit would be required by the City for the approximately one-fourth of the work being performed within the City limits. Upon arrival at Mr. Keltner’s office to secure the demolition permit, Callas was further notified that Mr. Keltner thought that application should also be made for a building permit. On September 29, 1970, after the expenditure of $25,950.00 on the project and after Long Meadow had entered into a lease agreement with a tenant for the theater space, the applications for the demolition and building permits were denied by the Building. Inspector.

Mr. Keltner’s decision was subsequently appealed to the Board where it was found that a motion picture theater was not an allowable use under Sections 68-12, 68-13, and 68-15 of the City Zoning Ordinance in a community shopping center district. The Board further discussed the question of the application of the doctrine of estoppel against the City, preventing it from revoking the permit, stating: “The applicant and owner themselves both argue and contend that no building permit was ever issued because they were told one is not needed. Assuming for the moment that a permit was issued, it would have been a completely ultra vires act on the part of the Building Inspector and would not have been a valid permit. It is well settled that the Building Inspector must follow the building code and ordinances and an exercise of independent discretion that violates the terms of the same are not controlling.

(Zoning Law and Practice, Yokley, Vol. 1, under Permits) * * * ⁴⁸⁹ * * * There can be no estoppel raised against the Board of Zoning Appeals or possibly the municipality, where one acts in reliance upon a permit invalidly issued by the administrative officer, where even the permittee had no knowledge of the invalidity. [Citing Law of Zoning and Planning, Rathkopf, Vol. 2, Ch. 56 and 57.-28, Section 12].” On appeal of the Board’s decision to the Circuit Court for Washington County, the lower court, although noting that “It is clear from an examination of the authorities that estoppel in zoning cases is rarely applied against municipalities,” nonetheless, held that, “in the peculiar and unique circumstances of this case, estoppel should be applied * * and reversed the Board’s decision assigning as its reasons: “First, we are dealing with more than the zoning laws; we are dealing with a city policy. The existence of such a policy was proved to the satisfaction of the Court. The only effort to rebut the policy was the testimony of the city clerk who testified he did not know of any such policy. No mayor or former mayor or councilman or former councilman was called to testify.

The present building inspector even testified that the policy has not been cancelled. Second, more than three fourths of the proposed building would be outside the city limits in the unzoned county. The appellants could probably redesign the building so as to be wholly in the county, and could operate just as well as if one-fourth were inside the city limits. And there would be no difference in the increased traffic (which worries the intervenors).

Hence, to force the appellants to redesign would be a costly burden on them, and in the end would not accomplish what the city and intervenors seek to prevent.” ⁴⁹⁰ Predicated upon the above rationale, the lower court ordered the City Building Inspector to issue the building permit. It should be noted that pending the appeal to this Court, work was resumed on March 24, 1971, and after an expenditure of some $200,000.00, the theater was opened to the public on August 18, 1971. This latter turn of events has prompted Long Meadow, in addition to relying upon the doctrine of estoppel against the City of Hagerstown, as it did before the Board and the lower court, to now raise the issue of “mootness” and that by failing to file a supersedeas bond, the City permitted the completion of the building, and that the rights of the lessee who was not a party to the present proceedings may not presently be affected by a contrary ruling of this Court. Addressing ourselves first to the merits of the case, we think the lower court erred, if not in its finding of facts, then at least in its application of the law to the facts.

We are fully aware that under Maryland Rule 886 we are obliged to accept the finding of facts of the lower court unless they be clearly erroneous. In the instant case the chancellor found as a matter of fact that a policy existed whereby the City waived the requirement for a building permit in those casés where the major portion of the proposed structure would be outside the City limits. A close scrutiny of the record fails to reveal any formal or informal action ever taken by the Mayor and City Council whereby an official declaration was ever made as to such a policy as here described. In this regard, the best that may be said in support of the existence of such an alleged policy is that Mr. Keltner, the Building Inspector, who finally drafted the letter informing the contractor that no permit was needed, testified that he understood from his predecessor, Mr. Gerald Shank, that such was the City’s policy and Mr. Shank testified in substance, that he had never seen any such an instruction on policy in writing but that he had an understanding regarding this with one or more different Mayors and one or more different Councils.

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