J.P. Delphey Ltd. Partnership v. Mayor of Frederick

BATTAGLIA, J. Petitioner, J.P. Delphey Limited Partnership, seeks relief from a judgment of the Court of Special Appeals affirming the condemnation of the Delphey property by the City of Frederick. We granted certiorari to consider the Petitioner’s two questions, 393 Md. 477 , 903 A.2d 416 (2006), to which we have added a third question and renumbered, in order to illuminate all of the issues raised in Delphey’s petition, which include: 1. Whether, pursuant to Ann.Code MD Art. 23A § 2(b)(24), the City of Frederick was required to enact an ordinance specific to the property sought to be acquired by condemnation? 2. As a matter of first impression, whether the City of Frederick violated the Ann.Code of MD Art. 23A § 8 in finally deciding to condemn real property at a closed executive session? ¹⁸³ 3.

Whether the City of Frederick violated Section 10-508(a)(3) of the Open Meetings Act in finally deciding to condemn real property at a closed session? We shall hold that the City of Frederick was not required to enact an ordinance, or any legislation, specific to Delphey’s property in order to acquire the property by condemnation and that the City did not violate either Section 10-508 of the Open Meetings Act, State Government Article, Maryland Code (1984, 1995 RepLVol.), or Section Eight of Article 23A, Maryland Code (1957, 2001 Repl. Vol.), when it voted to condemn Delphey’s property during a closed session. I. Facts Since 1997, and on an annual basis thereafter, the Mayor and Board of Aldermen 1 of the City of Frederick have approved the allocation of funds in the City’s five-year budget for the construction of a “fourth parking deck” 2 within the City’s limits. 3 As a result of a parking study undertaken in 1989, the search for the site of the fourth deck was focused ¹⁸⁴ upon East Patrick Street in the vicinity of the Frederick County Courthouse.

The City commissioned a Garage Site Evaluation Study in 1999 to analyze potential sites within this area, as well as the cost and impact 4 of the construction of the new parking deck. The Study recommended 134 through 140 West Patrick Street, a property owned by Delphey, 5 as the site “having the least negative impact on downtown Frederick while yielding the greatest benefit.” 6 On August 9, 2000, the Mayor and Aldermen held an executive session during which they voted to move forward with the purchase of land adjacent to the courthouse and commissioned an appraisal of the property owned by Delphey; the property subsequently was appraised for $1,200,000.00. In October, 2000, the Mayor tried to purchase the property for $1,200,000.00, but Delphey rejected the offer, stating that it was “unacceptable,” and counter-offered to sell the property for a minimum of $3,000,000.00. In 2001, the Mayor and Aldermen created a Parking Task Force which produced a Downtown Parking Plan confirming the 1999 Garage Site Evaluation Study’s selection of the Delphey property as the best site and recommending that the City acquire the necessary property to construct the new parking deck as soon as possible, and, if condemnation were ¹⁸⁵ necessary, to begin the process immediately.

The Mayor and Aldermen adopted those recommendations during a meeting open to the public on September 6, 2001. At another public meeting in April, 2002, the Mayor and Aldermen approved the “Deck 4 Parking Agreement,” a finance agreement between the City and Frederick County for the construction of the new parking garage which incorporated Delphey’s property as the site selected for construction of the new deck. In September, 2002, after the Delphey property was reappraised for $1,675,000.00, the Mayor and Aldermen extended another offer to Delphey in that amount, plus $200,000.00 for relocation fees and $50,000.00 to sign the agreement. Maintaining that the property was worth over $3,000,000.00, Delphey responded to this second offer by letter, stating, “considering how far apart we are at this time, we respectfully reject this offer.” On November 5, 2002, the Mayor released a media advisory announcing that, pursuant to Section 10-508(a)(l), (3) and (8) of the State Government Article, 7 she would request a vote to close the end of the regularly scheduled November 6, 2002, meeting of the Mayor and Board of Aldermen, to discuss a ¹⁸⁶ personnel matter, consult with the city attorney on potential or pending litigation, and to discuss the acquisition of the Delphey property.

Media Advisory, “Mayor Calls Executive Session To Follow Regularly Scheduled Mayor and Board Of Aldermen Workshop,” November 5, 2002. The minutes of the November 6 closed session reflect the following: Delphey’s Acquisition/Condemnation—Parking Deck #4: [The City’s Counsel] provided a written history of the City’s efforts to solve the short term parking problems in downtown. A Garage Site Evaluation Study and phase II of the Parking Master Plan identify the Delphey’s location as the # 1 solution. In August of 2000 the first appraisal of the property was appraised at $1,200,000.

A number of attempts to negotiate and reach an agreement with the owners were made but the Delphey’s continued to imply they need over $3,000,000.00. The Delphey Partnership has never supplied an appraisal to support their position. In the Summer of 2002 the City agreed to get a new appraisal, which came to $1,675,000. After another negotiation session, the first formal written offer was made on September 27, 2002 for $50,000 to sign the agreement, $200,000 for relocation expenses, and $1,675,000 for the real estate.

There was also a request from the partnership that the Deck be named Delphey’s Deck. On October 24, 2002, the Delphey’s turned down the City’s offer. Mayor Dougherty asked what steps are taken to proceed with condemnation and could condemnation be stopped if a settlement is reached. [The City’s Counsel] said condemnation could be stopped if a settlement is reached. [The City’s Counsel] suggested that the first step would be to hire outside counsel to work on this case. A formal filing is made, there is a series of discovery made and the Delphey’s would have to justify what they are asking.

Alderman Lenhart asked if the City could add an incremental fee to the parking deck and for a period of 10 years provide that fee directly to the Delphey Trust so that the cost would be distributed over a longer period of time. There was addi ¹⁸⁷ tional discussion of the possibility of this option. [The City’s Counsel] said that during negotiations other payment options were discussed. There was discussion as to how the City could offer more than the appraised value of the property. It was suggested that perhaps condemnation would bring this situation to more serious negotiations on the Delphey’s part. [The City’s Counsel] explained the formal actions needed for a condemnation process.

In court the property owner is given the fair appraised value of the property. There was discussion of increase in the appraised value over the past two years. Alderman Lenhart said that he would be inclined not to condemn at this time if an annuity plan is offered. Alderman Baldi recommended continuing negotiations but moving ahead with the condemnation because the condemnation proceeding can be stopped.

Alderman M. Hall mentioned that the appraised value continues to rise and the Board of Alderman needs to stop that from happening. When asked if the Delphey’s are aware of the condemnation [The City’s Counsel] said that they are aware that the City needs this property and that condemnation is an option that the City has. There was again discussion of payment options. Alderman Lenhart said that he could support condemnation provided that it is open to paying the Delphey’s more money than the appraised value provided that money comes from future parking revenue which are above and beyond what the City needs to operate the fund.

Mayor Dougherty and Aider-man Baldi said that the condemnation goes to court and the court determines that amount. The Aldermen then voted unanimously to begin condemnation proceedings with regard to the Delphey property. The Mayor and City of Frederick subsequently filed a complaint in the Circuit Court for Frederick County to initiate the condemnation process, to which Delphey responded by filing a motion to dismiss, contending that the City did not have the authority to condemn the property because no ordinance specific to the Delphey property had been passed; Delphey’s motion was denied. Delphey subsequently filed a ¹⁸⁸ motion for summary judgment alleging that the closed session in which the Mayor and Aldermen decided to condemn the property violated Section 8 of Article 23A of the Maryland Code (1957, 2001 RepLVol.) 8 and the Open Meetings Act codified in Sections 10-501 through 10-512 of the State Government Article of the Maryland Code (1984,1995 RepLVol.). 9 The City of Frederick responded that the session did not violate the Open Meetings Act because, pursuant to Section 10-508(a)(3), closed executive sessions are permitted to consider the purchase of real property.

The City also argued that the motion for summary judgment should be denied because Delphey had failed to comply with Section 10-510 of the Act, 10 ¹⁸⁹ which requires that complaints for failure to comply with the Act be filed within 45 days of the alleged violation. The Circuit Court (Debelius, J.) denied summary judgment, concluding that Delphey had failed to file the petition for enforcement of the Open Meetings Act within the 45 day period provided by the statute. Before trial, the judge also heard oral argument on whether the City possessed the requisite authority to condemn the Delphey property. Delphey asserted that the condemnation proceeding had been brought improperly because no ordinance specific to the property had been enacted as required by Section § 2(b)(24) of Article 23A, and that the City violated Section 8 of Article 23A by voting to condemn the Delphey property in a closed, executive session.

The City responded that it acted pursuant to Section 173 of the City Charter, which granted the Mayor and Aldermen the authority to condemn properties, so that no ordinance specific to the property was required. After a hearing, the judge ruled that the City was entitled to condemn the Delphey property. A six-person jury subsequently rendered an inquisition, 11 setting Delphey’s total damages to be $1,015,000.00, and the court issued an order that, upon payment of the damages, title in the property should vest in the City of Frederick. Delphey noted a timely appeal to the Court of Special Appeals, alleging that the City of Frederick was required under Section 2(b)(24) of Article 23A to pass an ordinance specific to its property before commencing the condemnation process, and that the Mayor and Aldermen were prohibited from voting to condemn the property in a closed, executive meeting.

In an unreported opinion the intermediate appellate court affirmed the trial court and held that neither Section ¹⁹⁰ 2(b)(24) of Article 23A 12 nor Section 173 of the Frederick City Charter 13 require the enactment of ordinances specific to the property to be condemned. The Court of Special Appeals further concluded that the condemnation of the Delphey property constituted an executive, not a legislative, action and therefore, did not require the passage of an ordinance specific to the property. 14 Before this Court, Delphey contends that the City of Frederick was prohibited under both Section 8 of Article 23A, and by Section 10-508(a)(3) of the Open Meetings Act, from making its final decision to condemn Delphey’s property during a closed session on November 6, 2003. Delphey further asserts that the condemnation of property constitutes a legislative act under Section 2(b)(24) of Article 23A and therefore requires ¹⁹¹ the passage of an ordinance specific to each property being condemned. Conversely, the City of Frederick argues that the Mayor and Aldermen were acting pursuant to the authority of two separate ordinances, Section 173 of the City Charter, which grants the City the power to condemn, as well as the City’s five-year budget, which was adopted by ordinance, when the City made the decision to condemn the Delphey property, and that the decision constituted an executive, and not legislative, act and therefore did require the passage of an ordinance specific to the property.

Further, the City asserts that, because the condemnation constituted an executive action, the City did not violate Section 8 of Article 23A, which only precludes legislative acts from being taken during closed, executive sessions. The City also contends that Section 10-508(a)(3) of the Open Meetings Act authorizes the Mayor and City to consider the purchase of real property during closed, executive sessions, and therefore the City complied with the provisions of the Act.

II

Analysis A. Whether An Ordinance Specific To The Property Was Required Delphey argues that Section 2(b)(24) of Article 23A required that the Aldermen enact an ordinance specific to 134 through 140 West Patrick Street before initiating the condemnation process because the decision to condemn is a legislative, and not executive, act, citing Inlet Associates v. Assateague House Condominium Ass’n, 313 Md. 413 , 545 A.2d 1296 (1988), (“Inlet”), as authority. We agree that condemnation is a legislative function; we disagree with Delphey that an ordinance specific to each property is required in order to condemn, but note that, even if a legislative act specific to each property was required, that the Aldermen, as a legislative body, did vote to condemn the Delphey property on November 6, 2003, in a closed session. ¹⁹² The City of Frederick was incorporated as a municipality in 1816 pursuant to Chapter 74 of the Acts of 1816. As a municipality, it is governed by Article 23A, the first section of which provides: The inhabitants of every incorporated municipality in Maryland constitute and shall continue to be a body corporate, and under the corporate name shall have perpetual succession, may sue and be sued, and may pass and adopt all ordinances, resolutions or bylaws necessary or proper to exercise the powers granted herein or elsewhere. Maryland Code (1957, 2001 Repl.Vol.), Article 23A Section 1.

Section 2 of Article 23A enumerates the express ordinance-making powers conferred in Section 1 and states: (a) General authority.—The legislative body of every incorporated municipality in this State, except Baltimore City, by whatever name known, shall have general power to pass such ordinances not contrary to the Constitution of Maryland, public general law, or, except as provided in § 2B of this article, public local law as they may deem necessary— (b) Express powers.—In addition to, but not in substitution of, the powers which have been, or may hereafter be, granted to it, such legislative body also shall have the following express ordinance-making powers: (24) To acquire by conveyance, purchase or condemnation real or leasehold property needed for any public purpose; to erect buildings thereon for the benefit of the municipality; and to sell at public or private sale after twenty days’ public notice and to convey to the purchaser or purchasers thereof any real or leasehold property belonging to the municipality when such legislative body determines that the same is no longer needed for any public use. Maryland Code (1957, 2001 RepLVol.), Article 23A Section 2 (emphasis added). ¹⁹³ The plain language of Section 2(b) confers the power of condemnation on the legislative body of the municipality. Section 7 of Article 2 of the City of Frederick Charter vests “[a]ll legislative powers of the city” in the Aldermen, and Section 173 of Article Fourteen of the Charter also authorizes the Aldermen to: condemn any property, right, or interest belonging to any person, persons, corporation, or corporations for the purpose of making any public improvement. Thus, pursuant to the express grant of authority of Section 2(b)(24) of Article 23A and Section 173 of the City of Frederick Charter, the Aldermen, acting in their legislative capacity, possessed the requisite authority to condemn the Delphey property specifically when they so voted in the November 6 closed, executive session.

Whether they styled the result as an ordinance is of no moment, nor whether the session was characterized as “executive;” the action taken by the Aider-men was legislative within the meaning of the Section 2 of Article 23A. Delphey, however, cites Inlet, supra, as authority for its contention that an enabling ordinance specific to the property is required to condemn. Delphey misconstrues Inlet. Inlet, which does not even pertain to a condemnation, held that the substance of the Ocean City Council’s actions conveying property did not comply with the requirements of Article 23A and the Ocean City Charter for an ordinance conveying City property.

Inlet involved an agreement by Ocean City to convey twenty-five feet of a city street and its appurtenant riparian rights to Inlet, a private corporation, in exchange for Inlet’s agreement to develop and maintain the property. Section 2(b)(24) of Article 23A authorizes municipalities to convey to the purchaser or purchasers thereof any real or leasehold property belonging to the municipality when such legislative body determines that the same is no longer needed for any public use. Maryland Code (1957, 2001 RepLVol.), Article 23A Section 2(b)(24). This Court, in an opinion by Chief Judge Robert ¹⁹⁴ Murphy, first emphasized that it is the substance of the City Council’s action which determines its legality: considering the legality of the action taken by the City Council in this case, therefore, and in particular whether in the circumstances the conveyances could properly be authorized by resolution, we look to the substance of what the City Council undertook to achieve by its action.

Inlet, 313 Md. at 430 , 545 A.2d at 1305 (emphasis added). The Court then pointed out that the “conveyance of the City’s interest in the [property] solely for the private benefit of another, is not within the legislative body’s power,” and went on to state that both the Ocean City Charter and Section 2(b)(24) of Article 23A required that the Ocean City Council affirmatively make a determination that “there is no longer any public need for the street” before undertaking the conveyance, and that the Council’s actions failed to comply with this requirement. Id. at 431 , 545 A.2d at 1305 . The Court also stated that an ordinance conveying property was required to be signed by the Mayor or passed over the Mayor’s veto, and that the City Council’s actions failed to meet this requirement.

Id. at 433-34 , 545 A.2d at 1306 . The Inlet opinion concluded that: Considering the central involvement of South Division Street and the waters of the bay in Inlet’s proposal, and the magnitude of the property interest involved (City property of estimated value approximating one million dollars), a simple resolution, neither reduced to writing nor journalized as required by the City Charter, cannot suffice to validate the City’s actions. An ordinance was thus fundamental to the legality of the conveyances here in question; without it, the City Council's action was without legal effect. Id.

(emphasis added). The record is devoid in the present case of any evidence that the actions of the Mayor and Aldermen of the City of Frederick failed to comply with Article 23A and Charter requirements for the condemnation of property, which is a failure of proof on the part of Delphey, the- movant for ¹⁹⁵ dismissal and summary judgment in which the City’s authority was challenged. See Goodwich v. Sinai Hosp. of Baltimore, Inc., 343 Md. 185, 206 , 680 A.2d 1067, 1078 (1996) (stating that moving party bears initial burden of proof). As a result, Delphey’s reliance on Inlet is misplaced.

In recognizing that the Mayor and Aldermen did act legislatively in condemning the specific Delphey property, we do not hold that a property specific ordinance, or legislative act, is always required in order to condemn. In fact, our jurisprudence supports the opposite conclusion. In Anne Arundel County v. Bowen, 258 Md. 713 , 267 A.2d 168 (1970), and Boswell v. Prince George’s County, 273 Md. 522 , 330 A.2d 663 (1975), this Court held that no ordinances specific to the properties being condemned were required when legislative authorization had previously been granted. In Bowen , the respondents challenged the County Executive’s authority to condemn their property because no ordinance had been passed by the County Council specific to their property.

We affirmed the condemnation because the County Council had set aside funds in the annual budget for the construction of the road for which the respondents’ property was being condemned, and therefore the condemnation had been legislatively authorized. Bowen, 258 Md. at 720 , 267 A.2d at 171 . In Boswell , we again affirmed a condemnation executed by the Prince George’s County Executive and held that no ordinance specific to property was required because the project was already authorized by the county