Duke Street Ltd. P'ship v. BOARD OF CTY. COMMISSIONERS CALVERT CTY.

EYLER, Judge. Appellant, Duke Street Limited Partnership, was formed for the purpóse of developing a parcel of land in Prince Frederick, Maryland. It appears that things did not go as well as appellant had hoped. The result was a suit against appellee, the Board of County Commissioners of Calvert County, that, on appeal, requires us to address the question as to when a cause of action accrues for the unconstitutional taking of property.

The suit alleged such a taking and contained four counts. The first three sought damages for (1) violation of the Fifth and Fourteenth Amendments to the United States Constitution and Article III, § 40 of the Maryland Declaration of Rights; (2) denial of substantive due process; and (3) violation of 42 U.S.C. § 1983 . Count four sought a declaration that the deed executed by appellant conveying the property in question to appellee was invalid for lack of consideration, and that appellant was entitled to possession of the property. The Circuit Court for Calvert County entered summary judgment in favor of appellee on the following basis: (1) all claims were barred by limitations, (2) appellant had failed to exhaust administrative remedies, (3) there was no violation of substantive due process as a matter of law, and (4) the deed from appellant to appellee was valid.

Appellant appeals from that judgment. Appellee cross-appeals and, while not challenging the judgment entered in its favor, asserts that a pre-judgment ruling by the trial court invalidating Calvert County Zoning Regulation § 6-4.01A should be vacated, and that appellee’s motion to dismiss should have been granted. ⁴¹ Appellant presents the following two questions for our consideration: 1. Did a dispute about material facts preclude the granting of summary judgment on the grounds of limitations? 2. Should the action have been dismissed for failure to exhaust administrative remedies?

We affirm the decision of the trial court because the causes of action are barred by limitations and, consequently, we have no need to decide the other issues raised on appeal. We also vacate the order of the trial court invalidating Calvert County Zoning Regulation § 6-4.01A, without deciding the issue, for reasons discussed below. I. Facts The basic facts are not in dispute. On September 13, 1988, appellant acquired a tract of land containing approximately 10.5 acres fronting on both Route 2-4- and Duke Street in Prince Frederick, Calvert County, Maryland.

Prior to purchasing the land, appellant prepared and had approved by the Calvert County Planning Commission (Planning Commission) a subdivision plan for the property which created a lot of 3.9232 acres (lot one) and which was shown on a subdivision plat recorded among the Plat Records of Calvert County. After the purchase, appellant proceeded to develop the remainder of the property (lots two and three), fronting on both Route 2-4 and Duke Street. During the early stage of the development effort for the remainder of the property, appellant was advised by appellee that in order to obtain approval of the proposed project appellant would have to construct two streets on its property that met certain construction standards, and that the street intersecting with Route 2-4 would have to be dedicated as a public street. The requirements were contained in a document dated February 14, 1989, submitted to appellant by appellee. ⁴² During the same time frame, appellee was in the process of adopting a Master Plan for Prince Frederick.

As adopted in July 1989, the Prince Frederick Master Plan included a road system depicting a new street intersecting with Route 2-4 in approximately the same location as the street referred to in appellant’s plan. The Master Plan also depicted a crossover of Route 2-4 at its intersection with the new street. Appellant entered into a purchase and sale agreement dated December 28, 1988, to sell approximately 4.5 acres of the property, to close within 180 days of the date of the agreement. The agreement was subject to certain contingencies, including subdivision approval, that roads and intersections shown on a final site plan would be constructed to County and State standards, and that “the final site plan shall show a crossover through the median of Route 4 directly across from the access road on the final site plan.” Appellant submitted preliminary subdivision plans and a plat in March 1989 and appellee’s Planning Department and Commission approved the plan on June 23, 1989.

The plan showed the two streets mentioned above, one intersecting with Route 2-4, now named Monitor Way, and the other intersecting with Duke Street, now named Merrimac Way. Because Route 2-4 is a divided highway, a crossover was needed to allow traffic maximum access between Monitor Way and Route 2-4. The subdivision plan described several scenarios, ranging from a limited crossover to a full crossover. It appears from the record that both appellant and appellee desired the. crossover to be built, since both parties would benefit from it.

Because Route 2-4 is a State highway, appellee’s approval of the plan recited that appellant would have to apply to the State Highway Administration for approval to make a cut in the median. Appellant subsequently requested permission from the State Highway Administration to construct the crossover at the intersection of Route 2-4 and proposed Monitor Way. The State Highway Administration, in a letter dated April 7,1989, declined to approve the crossover. ⁴³ Appellant entered into a Public Works Agreement dated October 19, 1989, providing for the construction of the two streets. Pursuant to the agreement, appellant was required to dedicate the land for both the streets, 1 perform the necessary engineering work, construct the streets, maintain them for a period of one year following construction, (July 1,1991 is the operative date) and to indemnify appellee from all claims arising from the construction of the streets.

The Public Works Agreement contained an expiration date of August 31, 1991. The streets were constructed and transferred by appellant to appellee by deed dated March 28, 1990 and recorded among the Land Records of Calvert County. As mentioned, the State Highway Administration initially refused to allow the crossover but later agreed to reconsider and ordered a traffic study. The issue was described as “open” in a memo dated November 7, 1989, after the subdivision approval on June 23, 1989 and the execution of the Public Works Agreement on October 24, 1989.

The State Highway Administration finally granted permission to construct the crossover in 1992, but a debate ensued as to who should pay for the crossover. In January of 1995, there was a written proposal to split the cost equally between the State, appellee, and appellant, with appellee fronting appellant’s share to be reimbursed at a later time. Appellant did not sign this agreement and the cross-over has not been built; consequently, Monitor Way cannot be accessed by southbound traffic on Route 2-4, although the complaint alleged that “there are plans to construct the [crossover] in fiscal year 1995.” The crux of appellant’s suit is that it was coerced into building and dedicating the streets, and that this coercion amounted to an unconstitutional taking. Appellant maintains that it was assured by appellee that the streets would be part ⁴⁴ of “an integrated street system, including a crossover at the intersection of Monitor Way at Route 2-4,” that appellee intended for appellant to rely on the assurances, and that appellee knew appellant was relying upon the assurances by building and transferring title to the streets.

Appellant alleged that the cost of the streets imposed an extraordinary burden on its project, that its property became “economically worthless and valueless” without the crossover and the lack of a crossover denied it “all reasonable economic use of the land.” In response, appellee filed a motion to dismiss. After a hearing on December 1, 1994, in an opinion and order dated January 10, 1995, the trial court denied appellee’s motion to dismiss. The trial court noted that appellee’s motion raised various issues, “including the statute of limitations and [appellant’s] failure to state a cause of action as to all counts.” 2 The court noted that “for the purposes of this early motion, the allegations of the [appellant] must be presumed to be true” and found “both the date of the termination of the public works agreement (August 31,1991), and the termination of the street maintenance agreement (July 1, 1991), to be within three years of the June 30, 1994 filing date and, therefore, ... not an impediment to this filing.” The trial court further found that counts one, two, and three, characterized as “inverse condemnation” claims, stated a cause of action based on the allegation that there was no reasonable nexus between the taking of the streets and the subdivision requirements. The trial court characterized count four as an “action for possession ... based primarily on illegal extraction of property making the deeds unenforceable.” The trial court acknowledged difficulty with appellant’s argument “related to promises by county agents concerning the cross ⁴⁵ over” but concluded that “the allegations of illegal taking, assumed to be true at this stage, preclude dismissal of this count at this time.” On July 5, 1995, appellant filed a motion for summary judgment/ruling on point of law prior to trial, to which an answer was filed on July 21, 1995.

A hearing was held on August 15, 1995, and, on that same date, the trial court entered an order granting the request for a ruling on point of law. In pertinent part, the order FOUND, that Calvert County Zoning Regulation § 6-4.01A is in conflict with Md. Annotated Code Transportation Article § 8-625(c)(2), thereby rendering the Zoning Regulation § 6-4.01A invalid and it is further FOUND, that the determination of this invalidity is retroactive thereby rendering the [appellee] unable to rely on Calvert County Zoning Regulation § 6-4.01A during trial. Appellee filed a notice of appeal from that ruling to this Court. The appeal was dismissed on August 29, 1995.

In the meantime, on August 9, 1995, appellee filed a motion for summary judgment. Appellant filed an opposition to the motion, appellee filed a reply, and a hearing was held on August 28,1995. On that date and prior to the hearing on the summary judgment motion, appellant filed a motion for summary judgment and a motion in limine, seeking a ruling that appellee was liable as a matter of law for the taking of appellant’s property or, in the alternative, a ruling that the only issues to be tried were whether a legally sufficient nexus existed between appellee’s actions and appellant’s project and the amount of damages sustained. Additionally, appellant sought a ruling that appellee’s experts would not be permitted to testify with respect to the issue of liability at trial.

On September 1, 1995, appellee filed a motion to reconsider the trial court’s ruling on appellant’s motion for summary judgment/ruling on point of law prior to trial and, on September 11, 1995, appellee filed an opposition to appellant’s motion for summary judgment and motion in limine. The trial court held a hearing on appellant’s motion for summary judgment and motion in limine on September 14 but, prior to ruling on ⁴⁶ that motion, issued an opinion and order dated September 26, 1995, granting appellee’s motion for summary judgment. Subsequently, on September 28, 1995, a “line” was filed by the trial court, reciting that there was no need to consider plaintiffs motion for summary judgment and motion in limine or defendant’s motion for reconsideration of its earlier ruling invalidating Calvert County Zoning Regulation § 6-4.01A, in light of the fact that summary judgment had been entered in favor of appellee. In the opinion and order dated August 28, 1995, granting appellee’s motion for summary judgment, the trial court summarized the facts, the issues, and the reasons for its conclusion.

The court stated: In the [appellee’s] motion for summary judgment, they allege several things: 1. The Statute of Limitations bars Duke Street’s claims. 2. The deed of the roads to the County is valid. 3. Plaintiff failed to exhaust administrative remedies. 4.

Plaintiff has no takings claim because it deeded the property to the County. 5. Plaintiff has no standing. 6. Plaintiff has not demonstrated a violation of its substantive due process rights. 7. Plaintiff cannot demonstrate a violation of § 1983. 8.

A demonstrable nexus exists between Plaintiff’s property. and the county requirements. The Court will address the statute of limitations, exhaustion of administrative remedies, validity of the deed and substantive due process. The trial court then held that the twenty-year period of limitations in Md.Code Ann., Courts & Judicial Proceedings art. (CJ), § 5-103 (1995 RepLVol.) was inapplicable and that appellant’s claims were barred by the three year statute of limitations contained in CJ § 5-101. ⁴⁷ In addressing the question as to when the causes of action accrued, the trial court found that appellant knew or should have known of its loss at the time of execution of the deed to appellee and, consequently, that the statute of limitations for counts one, two and three began to run “at the latest” on March 28, 1990.

With respect to count four, the trial court found that appellant knew or should have known of the absence of consideration for the deed at the time of its execution, knew or should have known of its loss, and could have challenged the legality of appellee’s actions at the time that it deeded the property to appellee. Thus, the trial court concluded that all claims were barred because they accrued no later than March 28, 1990, considerably more than three years before appellant’s complaint was filed on June 30, 1994. 3 II. Discussion Counts one through three contain inverse condemnation claims based on an allegation that appellee’s actions constituted a “taking” for which appellant seeks “just compensation,” a violation of the due process clause of the Fourteenth Amendment for which appellant seeks “damages,” and a violation of the Maryland constitution. Appellant’s assertions are vague as to the identity of the property interest it believes was taken.

The possibilities are that appellant is asserting a taking and damages for the street beds and that its allegation of diminution in value refers to the property underlying the street beds or, alternatively, that the taking and damages and the alleged diminution in value refer to the entire tract including the street beds. The allegations in the complaint and the language in the motion papers appear to refer only to the street beds. At oral ⁴⁸ argument, appellant’s counsel stated that the property taken was the street beds, but that it included the cost of construction and the obligations under the Public Works Agreement. Even if we assume an intent to claim a taking or damage to the entire property, there are no allegations or evidence of value of that property at any point in time or of the impact on value because of the failure to construct a crossover at any given point in time.

There is nothing to show when the entire property became, if ever, economically nonviable. There are vague references that the crossover was not “timely” constructed, but there is no evidence of the impact on the entire property or when any such impact occurred. Consequently, we conclude that the subject of the alleged taking for Fifth Amendment purposes, and the subject of the alleged action amounting to a taking in violation of due process and in violation of the Maryland Constitution, is the street beds and the costs associated with them. Appellant asserts that summary judgment is precluded because there are fact questions to be resolved in each of the following arguments: (1) the taking action did not accrue until the taking had been completed, which appellant argues is the expiration in August 1991, of the obligation to maintain and indemnify under the Public Works Agreement; (2) the actions did not accrue until an actionable injury occurred, which appellant argues is the time appellant became actually aware that the crossover would not be timely built; (3) the regulation relied upon by appellee to support its action was invalid, but appellant could not have known of its illegality until it was declared illegal, which was after the action was filed; and (4) with respect to count four, the action for possession of the property is governed by a twenty-year period of limitations.

A. Constitutional Claims We do not address whether a taking occurred as alleged in counts one, two, and three or whether the deed was invalid as ⁴⁹ alleged in count four. We only address the question of when the causes of action accrued. As we noted above, appellant’s first three claims are fundamentally inverse condemnation claims. An inverse condemnation action is nothing more than a claim for damages, regardless of the theory or theories alleged.

Millison v. Wilzack, 77 Md.App. 676, 684 , 551 A.2d 899 , cert. denied, 315 Md. 307 , 554 A.2d 393 (1989). The three-year statute of limitations is applicable to inverse condemnation actions, even if based on constitutional grounds. CJ § 5-101. See Electro-Nucleonics, Inc. v. W.S.S.C., 315 Md. 361, 370-71 , 554 A.2d 804 , cert. denied, 493 U.S. 854 , 110 S.Ct. 158 , 107 L.Ed.2d 115 (1989); Millison v. Wilzack, 77 Md.App. at 684 , 551 A.2d 899 .

(The statute of limitations applicable to a federal civil rights action is the relevant state statute of limitations, which the Supreme Court has held is the one applicable to personal injury actions. Wilson v. Garcia, 471 U.S. 261 , 105 S.Ct. 1938 , 85 L.Ed.2d 254 (1985).) The time of accrual of a § 1983 civil rights action, however, is a question of federal law. McCoy v. San Francisco, 14 F.3d 28 (9th Cir.1994). A claim will accrue when the affected party knew or should have known of the injury which is the basis of the action.

See National Advertising Company v. Raleigh, 947 F.2d 1158 (4th Cir.1991), cert. denied, 504 U.S. 931 , 112 S.Ct. 1997 , 118 L.Ed.2d 593 (1992), Bireline v. Seagondollar, 567 F.2d 260 (4th Cir.1977), cert. denied 444 U.S. 842 , 100 S.Ct. 83 , 62 L.Ed.2d 54 (1979). The Maryland discovery rule applies with respect to State claims. The general Maryland law on accrual of a cause of action is stated in Poffenberger v. Risser, 290 Md. 631 , 431 A.2d 677 (1981); it accrues at the point in time when a claimant knew or should have known of circumstances that would cause a reasonable person to undertake an investigation which, if pursued with reasonable diligence, would have led to knowledge of the actionable wrong. We have analyzed both federal law and state law relevant to the accrual of appellant’s causes of action, ⁵⁰ and we come to the same conclusion in each instance: they accrued no later than when the property was conveyed.

Appellant argues that the Public Works Agreement amounted to a “continual taking,” thereby extending the limitations period to three years after the obligation to maintain the streets and indemnify against claims under the Public Works Agreement terminated, on August 31, 1991. Appellant also argues that it should not have become