Electro-Nucleonics, Inc. v. Washington Suburban Sanitary Commission

RODOWSKY, Judge. Appellant, the owner of the fee simple estate in property adjacent to that condemned by the appellee, relies on two theories to support this inverse condemnation case. The first submission is that the appellee has taken property of the appellant in the form of the benefit of certain restrictive covenants which had burdened the condemned property. On that theory this action is barred by limitations.

Appellant also submits that the appellee’s use of the adjacent property effects a taking of the appellant’s fee simple property, but there is no evidence to support a taking in the constitutional sense. Consequently, we shall affirm the circuit court’s entry of summary judgment for the appellee. This case is an offshoot of the litigation involved in Washington Suburban Sanitary Comm’n v. Frankel, 57 Md.App. 419 , 470 A.2d 813 (1984), judgment vacated on other grounds, 302 Md. 301 , 487 A.2d 651 (1985). On July 8, 1980, Washington Suburban Sanitary Commission (WSSC) acquired the fee simple title to a parcel of approximately 115 acres, known as “Site 2,” in an industrial park of some 347 acres lying east of U.S. Route 29 and south of Randolph Road in Montgomery County.

In litigation involving the disposition of sewage sludge generated at the District of Columbia’s Blue Plains sewage treatment plant, which served part of Montgomery County, the United States District Court for the District of Columbia had ordered that a sewage sludge composting facility be located and operated at Site 2 by WSSC. According to the terms of declarations recorded in the land records in 1956 and 1959, restrictive covenants had been imposed on the 347 acre tract. Those restrictions, in part, prohibited using any of the land for a dump or sanitary landfill, dumping of waste material or refuse, permitting waste or refuse to remain upon any part of the property outside of buildings, and emitting objectionable ³⁶⁴ odors outside of lot lines. The only defendants named in the eminent domain action by WSSC to acquire Site 2 were the owners of the parcels comprising that site.

No owners of dominant estates benefited by the restrictive covenants were joined. On November 6,1980, WSSC filed a declaratory judgment action (Frankel) against identified and unidentified property owners both within and outside of the industrial park, who claimed “damages or payment ... or relief of any kind, purport edly stemming from the violation, abrogation, or non-observance, or the anticipated violation, abrogation or nonobservance of record covenants ... or for a purported ‘taking’ of property rights or interests without the payment of just compensation, all stemming from the acquisition of [Site 2] for a public use.” The instant appellant, Electro-Nucleonics, Inc. (Plaintiff), has since 1971 owned Lot 6 in the industrial park. That lot is adjacent to Site 2. In its Frankel opinion, the Court of Special Appeals held that the owners of property within the industrial park owned “dominant tenements with respect to the restrictive covenants to which Site 2 was subject prior to its acquisition by WSSC” and that the owners of those properties clearly had a “right to compensation by virtue of WSSC’s taking of the property interest which those negative easements represent.” 57 Md.App. at 435 , 470 A.2d at 821 .

This Court vacated the mandate of the Court of Special Appeals for want of a final judgment in the trial court. We pointed out that most of the defendants in Frankel, anticipating a declaratory judgment adverse to WSSC’s position, had counterclaimed for compensation for the taking of the covenants. Applying East v. Gilchrist, 293 Md. 453 , 445 A.2d 343 (1982), we held that those counterclaims and the request for a declaratory judgment were one and the same claim for purposes of applying what is now Md.Rule 2-602(a). Hence certification of the declaratory judgment as a final judg ³⁶⁵ ment was not the certification of an entire claim.

This Court’s Frankel opinion was filed February 7, 1985. “Instead of joining the other Industrial Park owners in filing a counterclaim in the Frankel case, Electro-Nucleonics filed this separate action in inverse condemnation on March 27, 1986.” Appellant’s Brief at 1. WSSC took no issue with the Plaintiff’s spin-off of its claims into this separate action. Procedurally more significant is that WSSC dismissed, without prejudice, its action for declaratory relief as to Electro-Nucleonics, Inc. 1 The relief sought in Plaintiff’s separate “Complaint for Inverse Condemnation,” as amended, was that a “taking be declared,” that “the covenants which are described herein be condemned,” and that WSSC pay to the Plaintiff $20 million “as damages for the taking of the covenants.” The two issues on which we decide this appeal were raised in summary judgment proceedings. Plaintiff, in moving for partial summary judgment as to liability, submitted that WSSC’s “ownership of and activities on Site [2] violate these covenants and amount to a taking for which Plaintiff must be compensated.” Plaintiff also selected the general statute of limitations as the applicable provision and argued that the cause of action accrued on or about April 25, 1988, the date indicated by certain evidence as that on which operation of the WSSC facility commenced. 2 In opposition to Plaintiffs motion, WSSC pointed out that ³⁶⁶ under Plaintiff’s theory, WSSC’s ownership of Site 2, as well as WSSC’s activities thereon, violated the “purported” restrictive covenants and that, under that theory, Plaintiff’s cause of action necessarily accrued when WSSC gained title to Site 2 by condemnation in July 1980.

WSSC has never formally moved for summary judgment in its favor on the limitations issue, but it is not necessary that WSSC have done so. See Md.Rule 2-501(e). While Plaintiff’s motion was pending, Maryland Port Admin. v. QC Corp., 310 Md. 379 , 529 A.2d 829 (1987) was decided. Relying on QC, WSSC moved for summary judgment in its favor on the ground that “the alleged impact of WSSC’s operations at Site 2 on Electro-Nucleonics’ property does not constitute a constitutionally-compensable taking of property under Maryland law.” (Footnote omitted).

WSSC supported its motion with the deposition of Eugene H. LaBrec, Ph.D., Corporate Director of Regulatory Affairs for the Plaintiff, who was designated as Plaintiff’s deposition representative. The circuit court granted summary judgment in favor of WSSC in a ruling from the bench. In addition to those reasons discussed in its oral ruling, the circuit court specifically granted summary judgment based on “any other reasons” which WSSC had raised. The trial judge thereby negated any possibility that he would have exercised discretion to deny summary judgment in the event his more fully articulated reasons for granting summary judgment might ultimately be legally erroneous.

Cf. Metropolitan Mortgage Fund v. Basiliko, 288 Md. 25 , 415 A.2d 582 (1980) (a trial court ordinarily possesses discretion affirmatively to deny a summary judgment in favor of a full hearing on the merits even though the technical requirements for summary judgment have been met). Here, with respect to a taking of the covenants, the circuit court concluded that “[t]he loss to the property of Electro-Nucleonics, Incorporated was in July of 1980, if at all, when the WSSC condemned [Site 2].” The court said that “the covenants no longer exist as [they apply] to the WSSC property, and [Plaintiff is] not entitled ³⁶⁷ to compensation for breach of the covenant.” With respect to Plaintiffs theory that there had been a nonpossessory taking of Lot 6, the circuit court recognized that the complaint had not been based on that theory. Nevertheless, the court ruled that “there certainly is no sufficient showing to establish that the present use by WSSC [of Site 2] is causing an inverse condemnation of [Lot 6].” We issued the writ of certiorari prior to consideration of the appeal by the Court of Special Appeals.

I We are able, without a detailed presentation of the facts, to dispose of Plaintiffs claim to compensation based on the taking of its property in the form of the benefit of restrictive covenants burdening Site 2. In this connection we shall assume, as Plaintiff contends, that the restrictive covenants were validly established in the industrial park, that they run with the land, and that the use made of Site 2 falls within the prohibitions of the restrictions. In Mercantile-Safe Deposit & Trust Co. v. Baltimore, 308 Md. 627, 641 , 521 A.2d 734, 740 (1987), we acknowledged that “the majority rule in the United States is that a restrictive covenant running with the land is a compensable property right for condemnation purposes.” We had “no difficulty, therefore, in concluding that a covenant running with the land ordinarily is a compensable property interest in the condemnation context, at least to the extent it adds measurable value to the land to which it is attached.” Id. at 641 , 521 A.2d at 741 . In the instant case we shall also assume that the covenants at issue added measurable value to Lot 6.

Nevertheless, Plaintiffs inverse condemnation claim, based on the theory of a per se taking of a property right, is barred by limitations because, on that theory, the inverse condemnation claim accrued when WSSC acquired title by condemnation to Site 2. On this appeal Plaintiff submits alternative reasons why instituting this action on March 27,1986, was timely. First, ³⁶⁸ CJ § 5-101 is said to be inapplicable because it is not a special statute of limitations directly pertaining to inverse condemnation. Absent a special statute, Plaintiff submits that no time bar arises until the inverse condemnor acquires title by adverse possession.

In support of this position, Plaintiff cites Annotation, State Statute of Limitations Applicable to Inverse Condemnation or Similar Proceedings by Landowner to Obtain Compensation for Direct Appropriation of Land Without the Institution or Conclusion of Formal Proceedings Against Specific Owner, 26 A.L.R.4th 68 , 73 (1983) and 1A J. Sackman, Nichols on Eminent Domain § 4.102[1] (rev. 3d ed. 1985). If, on the other hand, § 5-101 does apply, then Plaintiff argues that the cause of action did not accrue until WSSC began operating the facility on Site 2, an event which Plaintiff places in April 1983. Plaintiffs legal analysis is that restrictions on Site 2 incompatible with the purpose underlying the exercise of eminent domain survived WSSC’s acquisition of title and were not breached until WSSC began prohibited operations. Thus, although the Plaintiff could not by injunction prevent the prohibited operations because of their public purpose, it could at that time first claim compensation.

As we shall see below, § 5-101 is intended to establish limitations for actions based on certain constitutional violations, including violations of due process. We shall further demonstrate that, under the property theory of restrictive covenants on which this claim necessarily rests, Plaintiffs property was taken when WSSC acquired Site 2 by eminent domain. A The ultimate foundation of Plaintiffs claims is constitutional. The takings clause of the fifth amendment to the United States Constitution 3 is incorporated against the states by the fourteenth amendment.

Nollan v. California ³⁶⁹ Coastal Comm’n, 483 U.S. 825, 828-829 , 107 S.Ct. 3141, 3144 , 97 L.Ed.2d 677, 684 (1987). The Court has also said: “The constitutional requirement of due process of law, which embraces compensation for private property taken for public use, applies in every case of the exertion of governmental power. If in the execution of any power, no matter what it is, the government, Federal or state, finds it necessary to take private property for public use, it must obey the constitutional injunction to make or secure just compensation to the owner.” Chicago, Burlington, & Quincy Ry. v. Illinois, 200 U.S. 561, 593 , 26 S.Ct. 341, 350 , 50 L.Ed. 596, 609 (1906). The Maryland Declaration of Rights, art. 24 which, prior to November 7, 1978, was numbered as art. 23, provides “[tjhat no man ought to be ... deprived of his ... property, but by the judgment of his peers, or by the Law of the land.” “Law of the land” is equated with due process of law.

Horace Mann League of the United States of America, Inc. v. Board of Public Works, 242 Md. 645 , 220 A.2d 51 , cert. denied, 385 U.S. 97 , 87 S.Ct. 317 , 17 L.Ed.2d 195 (1966). Maryland Constitution art. III, § 40 also provides: “The General Assembly shall enact no Law authorizing private property, to be taken for public use, 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.” The relationship between § 40 and art. 24 was stated in Riden v. Philadelphia, Balt. & Wash. R.R., 182 Md. 336, 339-40 , 35 A.2d 99, 100-01 (1943). “It is a fundamental principle of constitutional law that the power of eminent domain is a prerogative of sovereignty and does not require the sanction of the Constitution for its existence in the State____ The Constitution of the State of Maryland, Art. 3, Sec. 40, declares that the Legislature shall enact no law authorizing private property to be taken for public use, without just compensation as agreed upon between the parties, or awarded by a jury, being first paid or tendered to the party entitled to ³⁷⁰ such compensation.

This provision is not a grant of power, but a limitation upon the exercise of power____ Keeping in mind that the rights of personal liberty and private property are held sacred in our government, and the courts never assume that the people intend to relinquish rights so vital to their security and well-being by any general grant of legislative authority or any general expression of the will of the people ..., we hold that this section of the Constitution unmistakably declares by implication that private property shall be taken only for public use and then only for just compensation, and no private property shall be taken for private use, either with or without compensation, except with the owner’s consent. Moreover, the taking of a man’s property for the private use of another, even with just compensation, violates Article 2[4] of the Maryland Declaration of Rights, which declares that no man ought to be deprived of his life, liberty or property but by the law of the land. Likewise, the taking of private property for private use by authority of the State is a violation of the due process clause of the Fourteenth Amendment of the Constitution of the United States____ It follows that where an undertaking for which private property is sought by condemnation is intended for private use, the property owner can invoke the aid of a court of equity to restrain the unlawful condemnation.” (Citations omitted). See also Columbia Hills Corp. v. Mercantile Safe Deposit & Trust Co., 231 Md. 379 , 190 A.2d 635 (1963); Lichtenberg v. Sachs, 213 Md. 147 , 131 A.2d 264 (1957); Easter v. Dundalk Holding Co., 199 Md. 303 , 86 A.2d 404 (1952).

In the context of a claim for compensation based on an alleged taking by the State in the constitutional sense, it is immaterial for Maryland statute of limitations purposes whether the inverse condemnation claim is predicated on Maryland Constitution art. 3, § 40, on the state due process clause, on the federal fourteenth amendment, or on a combination of some or all of those constitutional ³⁷¹ provisions. In the inverse condemnation context a statute of limitations specifically governing a claim based on any one of the constitutional provisions will govern as to a claim based on any or all of the other provisions. Prior to Ch. 2 of the Acts of the First Special Session of 1973, which recodified certain statutes into the Courts and Judicial Proceedings Article, CJ § 5-101 was, or at least included, Md.Code (1957, 1972 Repl.Vol.), Art. 57, § 1. That section in part provided: “[A]ll actions for ... violation of the twenty-[fourth], twenty-sixth, thirty-first and thirty-second articles of the Declaration of Rights, or any of them, ... shall be commenced, sued or issued within three years from the time the cause of action accrued[.]” The Revisor’s Note to § 5-101, Md.Code (1974), CJ Article at 159, explains that § 5-101 “is new language derived from Article 57, § 1.

Rather than listing the various forms of action, it is decided that a blanket three-year provision, with exceptions for other limitations, be substituted.” Judge Eldridge, writing for the Court in Widgeon v. Eastern Shore Hosp. Center, 300 Md. 520 , 479 A.2d 921 (1984), traced this history. The inclusion for more than a century in the general statute of limitations of actions based on specific articles of the Declaration of Rights supported our holding in Widgeon that this State recognizes a common law action for damages for violations of arts. 24 and 26 of the Maryland Declaration of Rights. The applicability of § 5-101 is reinforced by the discussion, albeit limited, in our cases concerning the pleading of a cause of action where the theory of the case is inverse condemnation.

In Public Serv. Comm’n v. Highfield Water Co., 293 Md. 1 , 441 A.2d 1031 (1982), a certified question case, a county sanitary district had taken possession of the property of a privately owned water company. Contemporaneously with the seizure, a circuit court enjoined the water company from interfering with the seizure. When ³⁷² the water company sued in federal court, we were asked whether the sanitary district’s taking of possession gave rise to an implied contract to pay the fair market value of the water company’s property and, thus, gave rise to an obligation separate and distinct from any constitutional right to fair compensation based on a taking.

We answered the certified question, “No,” reasoning that “a determination that a taking in the constitutional sense has occurred is a prerequisite to implying a contractual obligation on the part of a governmental body.” Id. at 20 , 441 A.2d at 1040 . A taking was found to have occurred in Walters v. Baltimore & O.R.R., 120 Md. 644 , 88 A. 47 (1913). In response to a statutory mandate that it eliminate grade crossings at certain intersections in Baltimore City, the railroad elevated the bed of the public street and public sidewalk in front of the plaintiffs’ house. The bridge, although fully on public property, passed within three inches of the front of the plaintiffs’ home, effectively barred all ingress to and egress from that side of the residence and diminished light and air in the residence.

The plaintiffs sued the municipality and the railroad in a declaration sounding in trespass. The plaintiffs abandoned, however, any claim of a physical invasion of the residence and rested on the theory that the elevated public street was such an invasion of the plaintiffs’ rights as to amount to a taking of the residence in a constitutional sense. We described both defendants as tortfeasors and held that the plaintiffs could recover from either or both. Utilizing as the procedural vehicle for vindicating the underlying constitutional right either an action in quasi contract (under common law pleading, an action for money had and received) or a tort action by analogy to trespass q.c.f. is entirely compatible with an action governed by the general three year statute of limitations.

The Court of Special Appeals has held that