Jordan Towing, Inc. v. Hebbville Auto Repair, Inc.

CATHELL, Judge. The Baltimore County Department of Permits and Development Management (DPM) 1 granted a towing license to Jordan Towing, Inc., appellant. In response to the issuance of that license, Hebbville Auto Repair, Inc., Varsity Auto Repair, Inc., and Windsor Service, Inc., appellees, appealed the approval of appellant’s towing license application to the County Board of Appeals of Baltimore County (Board of Appeals). The Board of Appeals .reversed the decision of the DPM.

Appellant sought judicial review in the Circuit Court for Baltimore County, which affirmed the decision of the Board of Appeals. Appellant filed a Notice of Appeal to the Court of Special ⁴⁴¹ Appeals. We granted certiorari on our own motion prior to. consideration by the Court of Special Appeals. Jordan Towing, Inc. v. Hebbville Auto Repair, Inc., 367 Md. 722 , 790 A.2d 673 (2002).

Appellant presented the following questions: “A. Did the Board of Appeals commit error in finding that Windsor Service, Inc., Hebbville Auto Repair, Inc., and Varsity Auto Repair, Inc. have standing to raise an Equal Protection challenge in this case? B. Did the Board of Appeals commit error in concluding that the actions of the Department of Permits and Development Management were subject to an Equal Protection analysis? C. Did the Board of Appeals commit error in its determination that the actions of the Department of Permits and Development Management violated the Equal Protection clause of the Fourteenth Amendment?” In their brief to this Court, the appellees have presented the following responses: “1. Do Hebbville, et al. have standing?

Are Hebbville, et al. aggrieved persons? Has Jordan misstated the issue? Is the issue untimely raised? 2. Consistent with Pollard’s Touring, is the County Board of Appeals finding (based on established criteria) that Jordan failed to prove need [entitled to] due deference under the narrow scope of judicial review of factual inferences and application of law to facts? 3.

Is the County Board of Appeals interpretation reasonable, as a matter of statutory construction, that it is impermissible to utilize racial diversity and/or racial orientation in a service area to find a need for additional service? 4. Is the County Board of Appeals finding proper, on this record, that county issuance of the license conflicted with the Equal Protection Clause of the United States Constitution? 5. Does the license application comply in other respects with the county towing ordinance?” ⁴⁴² We answer appellant’s first question in the negative— appellees had standing before the Board of Appeals. Section 24-225 of the Baltimore County Code, which states, “[a]ny person who is aggrieved by a decision of the department of permits and licenses shall have the right to file an appeal” conferred standing upon appellees to challenge, via an appeal to the Board of Appeals, the granting of appellant’s towing license.

Appellant contends that this independent basis for standing does not confer standing upon the appellees to raise a constitutional challenge to the granting of appellant’s towing license. The Circuit Court, in the case sub judice, stated: “The protestants [appellees] clearly have demonstrated they have standing to pursue this action. As the other licensed towers in the district, the business that is presently divided between them will be reduced or diminished by decisions which affect the ability of other towers to be licensed in their district. It is clear that they have been disadvantaged by the decision to permit another tower to be licensed in their region.

For this reason, standing has been adequately demonstrated.” We affirm this finding of the Circuit Court that appellees had standing before the Board of Appeals and the Circuit Court challenging the granting of appellant’s license. At the administrative level appellees were “aggrieved” under the relevant Baltimore County Code section because their businesses are directly affected by the issuance of an additional towing license in the geographical area where they alone hold licenses. A party is aggrieved and there is standing if the party suffers some “special damage ... differing in character and kind from that suffered by the general public.” Weinberg v. Kracke, 189 Md. 275, 280 , 55 A.2d 797, 799 (1947); see Sugarloaf Citizens Assn. v. MDE, 344 Md. 271 , 686 A.2d 605 (1996); 2 Inlet Associates v. Assateague House Condo. Assn., ⁴⁴³ 313 Md. 413 , 545 A.2d 1296 (1988); Becker v. Litty, 318 Md. 76 , 566 A.2d 1101 (1989); Bryniarski v. Montgomery County Board of Appeals, 247 Md. 137 , 230 A.2d 289 (1967).

In Sugarloaf 344 Md. at 295 , 686 A.2d at 617 , this Court discussed aggrievement and emphasized that standing does not depend on the type of issue raised or its likelihood of success and stated: “Therefore, standing to challenge governmental action, and the merits of the challenge, are separate and distinct issues .... ‘The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a ... court and not on the issues he wishes to have adjudicated’.” [Citations omitted.] For the reasons stated supra and under the facts of this case, appellees were proper parties to this action and had standing when they appealed the DPM’s decision to the Board of Appeals. We do not directly answer the remaining questions. We shall, however, affirm the decision of the Board of Appeals reversing the issuance of the towing license to appellant. We ⁴⁴⁴ hold that the Baltimore County Code provisions at issue in the case sub judice cannot be interpreted, under the facts here present, in such a way as to permit the granting of a towing license to appellant. 3 I. Facts a.

The Towing Application Process The case sub judice involves an application by appellant for a towing permit, which is regulated under the Baltimore County Code. 4 The provision regarding the license requirement reads in pertinent part: “Sec. 24-226. License required to engage in towing business; storage facilities required. (a) It shall be unlawful for any person to engage in towing disabled vehicles from the scene of a motor vehicle accident occurring within the county without first having obtained a license from the department of permits and licenses to do so as hereinafter provided or during the suspension or revocation thereof.” The DPM is vested with the authority to determine whether to approve an application for a towing license in accordance with section 24-229, which states: “Sec. 24-229. Approval of new license towers; location requirements.

(a) New licensed towers shall be approved by the Department of Permits and Licenses based upon the need for additional service. If the need does not exist, the applica ⁴⁴⁵ tion will not be approved. The transfer of an existing license shall be treated in the same manner as a new license, and any such transfer shall be subject to all provisions applicable thereto.” While the Baltimore County Code does not specify the criteria 5 to be considered in determining the “need for additional [towing] service,” 6 the typical practice within the DPM when a towing license application is submitted for a specific geographical area is to refer the application to the Baltimore County Police Department (BCPD) for investigation and review of the need for additional towers in a particular area. 7 The BCPD then reports back to the DPM and the DPM ultimately issues or declines to issue the license. If a license is issued, a towing business is assigned the specific geographical area within Baltimore County in which it can operate and is notified by the police whenever a disabled vehicle needs to be removed from an accident scene. ⁴⁴⁶ Unlike the Baltimore County Code, which does not define or clarify “need” in the code sections pertaining to new towers, the BCPD does utilize specific “need” criteria to assess the need for additional service when forming its report for the DPM.

The “Need Criteria” memorandum issued to all of its precincts by the BCPD, and presumably available to applicants, 8 reads: “NEED CRITERIA[ 9 ] “The term ‘need’ as presented in Section 24-229 of the Baltimore County Code specifies the Police Department’s need for an additional tower in the applicant’s area. “When determining ‘need’, the following factors shall be considered by the Police Department’s Towing Unit when processing an application [for] a Baltimore County Towing License. “1. The geographical location of the tower with respect to the heavily traveled roadways. 2. The number of accidents with disabled vehicles on these heavily traveled roadways in the applicant’s area. 3. The proximity of other licensed towers, both in terms [of] miles and minutes between the applicant’s location and the licensed towers location that are currently servicing the area. 4.

A history of the previous year; late response times and no response times for the licensed towers currently servicing the area. The number of years experience, number of trucks and number of complaints of the licensed towers currently servicing the area. 5. The growth potential for the particular geographical area in which the applicant is located. ⁴⁴⁷ 6. The average daily traffic count for the heavily traveled roadways in the applicant’s area. 7.

Whether or not the application is for a location where a tow license had previously been in existence. 8. The quality of the operation of the applicant, including the number of trucks, the number of years experience in towing, and whether or not the tower is in a position to furnish specialized services; such as heavy duty.” The criteria are facially race neutral. In the case sub judice, there is no contention otherwise. It has been the longstanding practice of the DPM to interpret need as set forth in the Baltimore County Code by only using the same eight factors which are relied upon by the BCPD.

The DPM has not, in the past, resorted to other definitions of need outside of the listed criteria of the BCPD. b. Appellant’s Towing Application Process On November 3, 1998, appellant first applied for a towing license in the Woodlawn area of Baltimore County where appellees in this case were already licensed to tow. In the ten years prior to appellant’s application, no new towing licenses had been issued by Baltimore County and when appellant applied for his towing license there were no African-American towers licensed in Baltimore County. 10 Appellant’s application was reviewed by Mr. Eugene Freeman, the Chief of the DPM, and sent to the BCPD traffic management unit where it was reviewed by Officer Denker. Prior to appellant’s application being submitted to the DPM, Mr. Freeman and Mr. Earl Jordan 11 discussed the issuance of towing licenses in Baltimore County.

Mr. Freeman advised ⁴⁴⁸ Mr. Jordan about the eight provisions constituting the “Need Criteria” that would have to be considered and indicated that the Baltimore County Code had long been interpreted to require proof of a need for additional tow trucks to satisfy these criteria. Mr. Freeman also told Mr. Jordan that, as things stood, there was no need for additional tow trucks almost anywhere in Baltimore County. Mr. Jordan questioned whether there were any African-American towers in Baltimore County, and, if not, he questioned the fairness of the licensing policy. In response, Mr. Freeman stated, “[a]nd I gave a pause, and I thought, and I said, ‘Frankly, no, I don’t think it’s fair; however, in order to remedy the situation, I think probably what has to be done is is [sic.] that we need to — there' has to be a change in the Baltimore County [C]ode.’ ” After further consideration of the Baltimore County Code and what he perceived to be a problem, Mr. Freeman concluded that because the DPM had the authority pursuant to section 24-229 to approve or disapprove licenses based upon “need,” which is not specifically defined by the Baltimore County Code, he could determine need in other ways or define need beyond the criteria.

Therefore, to define need, Mr. Freemen departed from the criteria and turned to the definition of need in both Black’s Law Dictionary and Webster’s Dictionary.. Based upon these expansive definitions, Mr. Freeman then concluded that need was not to be limited to the stated requirements, i.e., the “Need Criteria” for the approval of additional licensed towers, but rather that need could be based on inclusiveness and diversity. Mr. Freeman acknowledged that the consideration of appellant’s towing license was based on the sole fact that appellant was a minority owned business and that absent concerns for diversity, the license would not be approved because there would be no justification for an additional license pursuant to the criteria typically used. 12 On May 11, ⁴⁴⁹ 1999, in order, allegedly, to be fair and inclusive and to promote diversity in light of Baltimore County’s policy against any form of discrimination, 13 Mr. Freeman granted appellant’s license application. Following the issuance of the license to appellant, a timely appeal 14 was noted by appellants, existing licensed towers in the Woodlawn area, to the Board of Appeals.

On June 31, 2001, the Board of Appeals issued an opinion and order reversing the DPM’s approval of the license and denying appellant’s license application. The Board of Appeals determined that the DPM was arbitrary, capricious and discriminatory in issuing appellant’s license and found that the granting of the license violated the “Equal Protection clause.” Appellant sought judicial review of the Board of Appeals’ decision in the Circuit Court for Baltimore County. On July 7, 2001, the Circuit Court affirmed the decision of the Board of Appeals. Appellant then filed a Notice of Appeal with the Court of Special Appeals.

As we have indicated, we granted certiorari on our own motion prior to this case being heard by the Court of Special Appeals.

II

Standard of Review In our recent case of Gigeous v. ECI, 363 Md. 481 , 769 A.2d 912 (2001), Judge Harrell, writing for the Court, discussed the review of an administrative agency’s decision: ⁴⁵⁰ “We review an administrative agency’s decision under the same statutory standards as the Circuit Court. Therefore, we reevaluate the decision of the agency, not the decision of the lower court. Public Serv. Comm’n v. Baltimore Gas & Elec.

Co., 273 Md. 357, 362 , 329 A.2d 691, 694-95 (1974). Moreover, in United Parcel Service, Inc. v. People’s Counsel for Baltimore County, 336 Md. 569 , 650 A.2d 226 (1994), we stated generally that ‘[jjudicial review of administrative agency action is narrow. The court’s task on review is not to substitute its judgment for the expertise of those persons who constitute the administrative agency.’ 336 Md. at 576-77 , 650 A.2d at 230 (internal quotation marks omitted) (quoting Bulluck v. Pelham Wood Apts., 283 Md. 505, 513 , 390 A.2d 1119, 1124 (1978)); see also Liberty Nursing Center, Inc. v. Department of Health and Mental Hygiene, 330 Md. 433, 442 , 624 A.2d 941, 945 (1993) (“Judicial review of agency fact finding is narrow in scope and requires the exercise of a restrained and disciplined judicial judgment.” (Citing Supervisor v. Asbury Methodist Home, 313 Md. 614, 626 , 547 A.2d 190, 195 (1988))). “We expounded upon this doctrine in Board of Physician v. Banks, 354 Md. 59 , 729 A.2d 376 (1999): Despite some unfortunate language that has crept into a few of our opinions, a ‘court’s task in review is not to substitute its judgment for the expertise of those persons who constitute the administrative agency.’ ... Even with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency.

Thus, an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts.... Furthermore, the expertise of the agency in its own field should be respected.’ Banks, 354 Md. at 68-69 , 729 A.2d at 381 .... “We, however, ‘may always determine whether the administrative agency made an error of law. Therefore, ordinarily the court reviewing a final decision of an administrative agency shall determine (1) the legality of the decision and ⁴⁵¹ (2) whether there was substantial evidence from the record as a whole to support the decision.’ Baltimore Lutheran High Sch. v. Employment Sec. Admin., 302 Md. 649, 662 , 490 A.2d 701, 708 (1985). Regarding the substantial evidence test, we explained in Baltimore Lutheran High School, supra: That is to say, a reviewing court, be it a circuit court or an appellate court, shall apply the substantial evidence test to the final decisions of an administrative agency, but it must not itself make independent findings of fact or substitute its judgment for that of the agency.

Baltimore Lutheran High Sch., 302 Md. at 662 , 490 A.2d at 708 . Substantial evidence is defined as ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512 , 390 A.2d 1119, 1123 (1978) (internal quotation marks omitted) (quoting Snowden v. Mayor and City Council of Baltimore, 224 Md. 443, 448 , 168 A.2d 390 (1961)). In Baltimore Lutheran High Sch., supra, we further explained: The scope of review is limited to whether a reasoning mind could have reached the factual conclusion the agency reached. In applying the substantial evidence test, the reviewing court should not substitute its judgment for the expertise of those persons who constitute the administrative agency from which the appeal is taken.

The reviewing court also must review the agency’s decision in the light most favorable to the agency, since decisions of administrative agencies are prima facie correct and carry with them the presumption of validity. Furthermore, not only is it the province of the agency to resolve conflicting evidence, but where inconsistent inferences from the same evidence can be drawn, it is for the agency to draw the inferences. Baltimore Lutheran High Sch., 302 Md. at 662-63 , 490 A.2d at 708 (citing Bulluck, 283 Md. at 512-13 , 390 A.2d 1119 ); see Motor Vehicle Administration v. Karwacki, 340 Md. 271, 283-84 , 666 A.2d 511, 516-17 (1995); Liberty Nursing, ⁴⁵² 330 Md. at 442-43 , 624 A.2d at 945-46 ; Bulluck, 283 Md. at 512-13 , 390 A.2d at 1124 .” Id. at 495-97, 769 A.2d at 921-22 (footnote omitted) (alteration in original).

III

Discussion In the case sub judice, the Board of Appeals, the administrative agency whose decision is being reviewed, reached the proper result in that appellant’s license should not have been granted. The record before the Board of Appeals establishes that the DPM did not apply the proper need standards as interpreted under the Baltimore County Code when granting appellant’s towing license. The proper basic need standards for the DPM, or Mr. Freeman, to have applied when considering appellant’s towing license should have been the “Need Criteria” detailed supra. This is how the Baltimore County Code need provisions have consistently been interpreted. 15 Therefore, the outcome of the case sub judice rests upon the error of the DPM in not applying the proper standards to appellant’s towing license application.

The Board of Appeals was correct in finding the actions of the DPM to be unlawful. In Pollard’s, supra, a towing license case arising out of Baltimore County, the intermediate appellate court recently and clearly indicated the proper standards to apply when issuing licenses to conduct towing operations in Baltimore County. The court in Pollard’s discussed the “eight need criteria” and established that the criteria, even though unpublished in the Baltimore County Code, 16 are the standards to be used in a towing license case. Judge Moylan, writing for that court, specifically referenced the Board of Appeals’ opinion in that case where the Board of Appeals noted “based upon prior ⁴⁵³ practices, these eight criteria have become established criteria in which the department [DPM] has established the ‘need’ factor, and upon which the towing companies have relied in filing for a towing license.” Pollard’s, 137 Md.App. at 294, 768 A.2d at 140.

There have also been towing cases before the County Board of Appeals for Baltimore County 17 where the Board of Appeals either reversed the DPM granting of a towing license or upheld the denial of a towing license because the need criteria were not satisfied. In order for a new license to issue, it must first be established that any license issued results from, or would result from, the satisfaction of a need proven by an assessment of the eight need criteria related to population, growth potential, number of accidents, response times, complaints, etc. It is the submission of the application which triggers the DPM and, in turn, the BCPD to assess the need for additional towing services in that particular geographical area pursuant to the established “Need Criteria.” Mr. Freeman acknowledged to Mr. Jordan, and in his testimony before the Board of Appeals, that these criteria have become established standards for the DPM to use when assessing the “need” factor under section 24-229, which states that “new licensed towers shall be approved by the department of permits and licenses based upon the need for additional service.” (Emphasis added.) The record that was before the Board of Appeals establishes that the license approval in the instant case was flawed from the start. Appellant, when presenting its license application to the DPM, based its claim of need not upon actual need for additional towers in Baltimore County, but solely upon its minority status as an African-American business ⁴⁵⁴ wanting to serve a district with a substantial African-American population currently without a minority-owned towing company and that this lack of minority participation was unfair. Thereafter, the record reflects that when appellant’s application, basing need solely upon its minority status, was submitted to the DPM, Mr. Freeman stated that there was no need as traditionally interpreted.

The only party initially involved in appellant’s licensing application to apply the proper need standards was the BCPD. When appellant’s application was submitted to the BCPD, Officer Denker’s report not only summarized the facts bearing on need for additional service, but his report also stated that there were four existing towing companies making responses, nearly twenty tow trucks, zero complaints in the previous record year, and a small projection of population increase for the next decade. Then again at the hearing before the Board of Appeals, Officer Denker repeated that his facts and figures showed appellant did not meet the “Need Criteria” consistently