Hamdan v. Klimovitz

MARVIN H. SMITH, Judge (Retired, Specially Assigned). Appellant, Hassan Hamdan (Hamdan or appellant), a Harford County pawnbroker, contended unsuccessfully in the Circuit Court for Harford County that sections 188-3 and 188-4 of the Harford County Code were preempted by Title 12 of the Maryland Business Regulation Article. Section 188-3 ³¹⁷ requires “[ejvery pawnbroker doing business in the county” to submit to “the Sheriff of the County, a list of articles bought, traded or pledged” daily. Section 188-4 spells out in detail what must be included in that list.

We would affirm but for the failure of the trial court to issue a declaratory judgment. For that reason we shall vacate the judgment below and remand this case for entry of a declaratory judgment consistent with this opinion. Questions presented by Hamdan are: (1) Are the Harford County Ordinances which the Harford County Government found appellant to have violated preempted by Title 12 of the Maryland Business Regulation Article? (2) Assuming arguendo that the Harford County Government did have jurisdiction to regulate appellant’s activities as a pawnbroker, did the Harford County Government err in failing to explain the basis of its decision and failing to address appellant’s argument that twenty-three of the items which appellant allegedly failed to report to the Harford County Government fell outside of the Harford County Government’s jurisdiction?

Not surprisingly, Klimovitz, Harford County’s Director of Administration, and Harford County see the matter somewhat differently. The questions as presented by him and the County on his behalf are: (1) Is the decision of the Harford County Director of Administration, Larry W. Klimovitz, or the decision of the Harford County Director of the Department of Inspections, Licenses and Permits, Richard D. Lynch, subject to appeal to the Circuit Court (as opposed to judicial review by means of an original action filed in the Circuit Court)? (2) Is Hamdan entitled to a writ of mandamus preventing the two months suspension of his pawnbroker’s license? (3) Does Title 12 of the Maryland Business Regulation Article which regulates dealers and, under certain cir ³¹⁸ cumstances, pawnbrokers preempt" Chapter 188 of the Harford County Code which regulates pawnbrokers?

(4) Is the Harford County Director of Administration, Larry W. Klimovitz, required to make findings of fact or to explain the basis of his decision when he is not the administrative agency that suspended Hamdan’s license? We distill the issues before the Court into: (1) Was the case properly before the trial court? (2) Were the findings of fact adequate? (3) Was the Harford County public local law preempted by state law?

(4) Was the trial judge’s decision otherwise correct? Facts and Procedural Background This case is a procedural mess, as -will appear as we set forth the proceedings in the circuit court. Harford County, pursuant to the home rule provisions of the Maryland Constitution, has adopted a charter. Accordingly, it is permitted to enact public local laws applicable to that county.

As previously indicated, Chapter 188 of its county code in section 188-3, requires every pawnbroker doing business in the county to supply daily to the sheriff of that county “a list of articles bought, traded or pledged,” while section 188-4 states what must be included in that list. Appellant is a pawnbroker in the Edgewood section of Harford County, trading as Starlite Coin & Pawn. During the week of March 30, 1992, representatives of the Harford County Sheriffs Office visited him and explained to him legal requirements relative to his reporting of pawn transactions. This was shortly after he began business.

Thereafter, the sheriffs department by letter dated April 27, 1992, advised him that he had not complied with the regulation and if he failed to do so “within 10 business days of the date of receipt of [the] letter,” action would “be taken to suspend [his] license ----” This letter was sent certified mail, return receipt ³¹⁹ requested. Apparently, he understood this language because he seems to have complied with the reporting requirements for a substantial period of time thereafter. In June of 1995, the Harford County Sheriffs Office, while investigating a breaking and entering, discovered that the alleged victim had rented a VCR and television from another place of business and then pawned them at Hamdan’s establishment. This took place on two separate dates in May of 1995.

These items were reported as stolen in the breaking and entering. Investigators discovered that there was no report from Hamdan concerning these pawn transactions. Under date of June 27, 1995, the sheriffs office brought to the attention of Richard Lynch, Director of Inspections, Licenses, and Permits of Harford County, these derelictions and other factors which suggested to that office “the possibility that [pawn] tickets [were] being issued for items not reported to the Sheriffs Office.” The sheriffs office “requested] that [Lynch] consider a suspension/revocation hearing concerning this matter.” A hearing was held. Hamdan appeared and was represented by counsel.

Lynch’s decision was announced in a letter to Hamdan’s attorney that stated in pertinent part: “Correspondence dated April 27, 1992, from Deputy First Class Diane Newton specifically apprised your client of Section 188-3 of the Harford County Code and warned him at that time that he must comply with that regulation. Your client’s testimony at the hearing informed this Administrator that on or about January of 1995 he elected independently to operate his own pawn shop outside the requirements of Harford County Code Section 188-3 and Section 188-4-. When I questioned as to why he changed his business practice he informed me that it was simply to save unnecessary paperwork for his business as well as the Sheriff’s Department. ³²⁰ operators’s license effective September 15, 1995 to November 15,1995. ³¹⁹ CONCLUSION: I find that your client did freely and willingly operate his pawn shop in direct violation of Harford County Code Section 188-3 and hereby suspend his ³²⁰ I also find that your client did freely and willing operate his pawn shop in direct violation of Harford County Code Section 188-4(A) and hereby suspend his operators [sic] license effective September 15, 1995 to November 15, 1995.” 1 [Emphasis supplied]. Hamdan was advised of a right of appeal to Larry W. Klimovitz, Harford County’s Director of Administration.

No issue was raised before Lynch concerning the preemption by state statute of the county code provisions relative to pawnbrokers here in question. No evidence was presented to show that twenty-three of the 129 items at issue met the definition of “precious metal object” under the state statute and thus, pursuant to a contention presented to us, could not be policed or regulated by the county. Harford County has in effect what it calls “Administrative Rules of Procedure for Regulations and Hearings.” These are not laws. Rule R-2.4 provides that in a situation such as the case at bar an appeal lies to the Director of Administration, which Klimovitz is.

Hamdan appealed. He appears to have raised the preemption issue for the first time before Klimovitz, who found no preemption and upheld the suspension. Hamdan then filed in the Circuit Court for Harford County what he styled as a petition for judicial review of the decision of Klimovitz, attaching a copy of that decision. The County countered on behalf of Klimovitz with a motion to dismiss.

(In an earlier generation we would have referred to it as a demurrer.) The motion asserted that the court was “without jurisdiction to hear an appeal of the County Administrative Decision at issue .... ” Hamdan then filed an amended petition. He said he “amend[ed] his Petition for Judicial Review and, in the alternative, brings an action for declaratory relief ____” He ³²¹ asserted that “the Klimovitz decision was arbitrary and capricious and ... otherwise illegal” because of the alleged preemption; that if the code provisions did apply to him, “the hearing below was contaminated with illegal evidence since the allegations against Mr. Hamdan included the assertion that [he] had violated the Harford County Code by failing to report property items which clearly fell within the category of second hand precious metal objects, coins and numismatic items” (exempt under the state statute from regulation); that his right to appellate review was limited because the proceeding before Klimovitz “was not stenographically recorded or transcribed but, instead, was notated by secretarial shorthand”; and that the decision by Klimovitz “fail[ed] to make a specific finding of fact as to why he chose to uphold the two-month suspension at issue and, therefore, violate[d] Mr. Hamdan’s right to be informed as to the basis of the decision,” which, he said, “constitut[ed] a deprivation of Mr. Hamdan’s rights to due process.” He prayed a declaration that the decision was “arbitrary and capricious, illegal and ... otherwise null and void .... ” The trial judge treated the action as one for mandamus. He regarded this proceeding as governed by the Administrative Procedure Act and thus the test was whether there was substantial evidence from the record as a whole to support the agency’s decision. He found no conflict between the State and County laws.

Among other things, he pointed to the revisor’s note to Title 12 of the Business Regulation Article, which we shall later quote. He found without merit the argument that there were insufficient findings of fact. He further found that Hamdan “knowingly chose to disregard” the requirements for reports to the sheriffs office. Noting that the license at issue here “easily could have [been] suspended ... for a longer and perhaps more appropriate time period,” but instead was suspended for but two months, he said that he “w[ould] not second guess or modify the suspension period of Appellant’s license.” Accordingly, the decision of the Director of Administration was affirmed.

This appeal followed. ³²² I. Was the Case Properly Before the Trial Court? Klimovitz argues that the administrative decisions here are not subject to the provisions of the Administrative Procedure Act and thus are not subject to appeal to the circuit court. No one has pointed to a statutory provision for appeal to the circuit court. Such would be necessary for there to be a right of appeal.

In Urbana Civic Assn., Inc. v. Urbana Mobile Village, Inc., 260 Md. 458 , 272 A.2d 628 (1971), the Court of Appeals was faced with an attempt to appeal approval of a subdivision plat for a mobile home park. Judge Digges there said for the Court: We have determined ... that not only must the appellants’ case be dismissed for lack of jurisdiction in this Court, Maryland Rule 835(a)(2) and (b)(1), but the appellee’s initial appeal to the circuit court must also be dismissed for a lack of jurisdiction in that court. See Barnett v. Charles County, 206 Md. 478, 485 , 112 A.2d 492 (1955).’ Id. at 460 , 272 A.2d 628 . The Court further said that the actions there in question were not “reviewable under the Administrative Procedure Act since county agencies are not included within its provisions,” and that “it should not be thought that the Maryland Rules regulating appeals from administrative agencies ... can grant a right of appeal.” Id. at 462 , 272 A.2d 628 .

The opinion concluded by stating, “Neither the appellant nor the appellee are without a remedy, for they may utilize mandamus or seek appropriate equitable relief in an original action in their attempt to resolve the legal status of the proposed mobile home park.” Id. at 463 , 272 A.2d 628 . Although perhaps inartfully phrased, we regard Hamdan’s “amended petition for judicial review” as essentially an original action for declaratory relief. Obviously, as we shall point out, if this were an action for declaratory relief the trial court had jurisdiction, notwithstanding the fact that the trial judge addressed the issues in terms of mandamus. ³²³ Maryland Code (1973, 1998 Repl.Vol.), section 3-403(a) of the Courts and Judicial Proceedings Article states, “Except for the District Court, a court of record within its jurisdiction may declare rights, status and other legal relations whether or not further relief is or could be claimed.” It follows that the County was in error when it suggested to the trial judge in its response to the amended petition that the court lacked subject matter jurisdiction over the cause of action and that the complaint failed to state a claim upon which relief can be granted. Citing almost a half-page listing of cases, the Court of Appeals in Broadwater v. State, 303 Md. 461, 465 , 494 A.2d 934 (1985), pointed out that “[Regions of [its] cases hold that a demurrer, the type of motion to dismiss [t]here involved, rarely is appropriate in a declaratory judgment action.” The Broadwater court quoted from Hunt v. Montgomery County, 248 Md. 403 , 237 A.2d 35 (1968), where Chief Judge Hammond said for the Court: The reason is plain why a demurrer should be used in declaratory judgment actions only to