McHale v. DCW Dutchship Island, LLC

HARRELL, J. We consider here whether a recently amended provision (§ 8-1808(c)(4)) of the Chesapeake and Atlantic Coastal Bays Critical Area Protection Program (“Critical Area Law”), Md. Code (1973, 2007 Repl.Vol. & Supp.2009), Natural Resources Article, §§ 8-1801-8-1817, applies to a variance application filed three and one-half years before the General Assembly amended the statute and where the object of the application was to cure violations of the Critical Area Law occurring prior to the effective date of the amendment. 1 For reasons we shall explain, we affirm the judgment of the Circuit Court for Anne Arundel County and conclude that the amended provision does not apply retrospectively to the subject variance application. 2 In reaching that conclusion, we revisit a line of cases, somewhat peculiar to land use and zoning matters, regarding when statutory enactments have prospective only or retrospective application to pending matters and litigation. See e.g., York- ¹⁵⁰ dale Corp. v. Powell, 237 Md. 121 , 205 A.2d 269 (1964); Layton v. Howard County Bd. of Appeals, 399 Md. 36 , 922 A.2d 576 (2007); and Grasslands Plantation, Inc. v. Frizz-King Enters., LLC, 410 Md. 191 , 978 A.2d 622 (2009). I. FACTUAL AND PROCEDURAL BACKGROUND 3 DCW Dutchship Island, LLC (“DCW”) owns a 1.92 acre (83,635.2 square feet) island, known as Little Dobbins Island (“the Island”), located in the Magothy River in Pasadena, Anne Arundel County (the “County”), Maryland. It is designated as a limited development area (“LDA”) under the County’s Chesapeake Bay Critical Area Program. 4 Because it is surrounded by tidal waters of the Chesapeake Bay and contains slopes of 15% grade or greater, the entirety of the Island lies within either the buffer or the expanded buffer of ¹⁵¹ the Critical Area (the significance of the buffer and expanded buffer designations will be elaborated later in this opinion).

DCW obtained the Island from Dutchship, LLC, in 2000. At that time, the Island contained a three-bedroom summer cottage of about 1,911 square feet of floor area, which had existed on the Island for approximately fifty years (well before the advent of the Critical Area Law). Also located on the Island at that time was a boat house and deck, two small sheds, a pier, a dirt cart path, and some steps. At that time, the total man-made impervious surface area on the Island was approximately 3,005 feet.

In or about 2001, Daryl Wagner, a member of DCW and a Maryland registered home builder, acting on behalf of DCW, demolished the old summer cottage and removed the debris, without the necessary permits or variances required by the Critical Area Law and County ordinances. Then, Wagner constructed the following structures or impervious surface areas on the Island: (1) a new 2,883 square foot home; (2) replacement sheds for the two preexisting sheds; (3) a 66 square foot gazebo; (4) a boat ramp and concrete driveway with approximately 2,668 square feet of surface area to accommodate his amphibious vehicle; (5) 846 square feet of sidewalks; and (6) a pool and deck totaling 1,433 square feet. Some of the aforementioned improvements were located in areas of the Island that, prior to Wagner’s construction activities, contained slopes of 15% or greater. Wagner regraded some of these areas to accommodate the improvements.

He did not obtain any permits or seek approval of the construction or plans for it from the County. 5 In November 2004, the ¹⁵² County authorities discovered the construction activities on the Island and notified DCW of the numerous violations. On 28 December 2004, DCW sought variances from the unobserved requirements of the Critical Area Law for each of the structures and improvements on the Island. 6 DCW sought also an amendment to the critical area buffer map, which prohibits most development activity within 100 feet of the shoreline. A County Administrative Hearing Officer heard the evidence for and against the requests for variances. The Magothy River Association (“MRA”) appeared at the variance hearings on 5 June 2005 and 20 September 2005 to oppose DCW’s requests.

The Hearing Officer granted some of the variances on 27 October 2005. Wagner appealed administratively the denials, and the MRA, the Chesapeake Bay Foundation (“CBF”), and the Maryland Critical Area Commission for the Chesapeake and Atlantic Coastal Bays (the “Commission”) appealed the decision to grant the variances, all to the County Board of Appeals. While the variance case was percolating, on 20 October 2005, the County Planning and Zoning Officer approved in part the buffer map amendment request. MRA and CBF sought judicial review of that decision in the Circuit Court for Anne Arundel County.

The Honorable Paul F. Harris, Jr. of the Circuit Court, in a separate case from the present one, but arising from the same facts as the present controversy, described the relevant proceedings before the Board of Appeals: 7 ¹⁵³ The Anne Arundel County Board of Appeals (“the Board”) heard the appeals of both the variance decisions and the buffer map amendments. Owing to the complexity of and public interest in the Little Island dispute, the Board scheduled a series of consolidated hearings on both the buffer map amendments and the variance requests. Prior to the first hearing date, [the Commission] moved to bifurcate the hearings into separate proceedings because it had not participated in the buffer map appeal. The Board denied the motion to bifurcate.

Thereafter, in hearings scattered over 24 days in 2006, the Board heard testimony from 80 witnesses, and considered ... hundreds of pieces of evidence. On January 3, 2007, the Board issued a written Memorandum of Opinion and Order ... that mapped Little Island “as partially buffer modified”, and revised the Hearing Officer’s decision in order to impose certain conditions on the grant of the variances. (Footnotes omitted). Pursuant to § 604 of the Anne Arundel County Charter, the Commission filed a Petition for Judicial Review of the grant of the variances on 16 January 2007.

The CBA and the MRA each sought judicial review on 31 January 2007 and 2 February 2007, respectively. DCW and Wagner filed a cross-petition in the Circuit Court on 2 February 2007. While the foregoing battles were ongoing, on 25 September 2008, Margaret McHale, Chair of the Commission, filed another action (the present one) in the Circuit Court, a Complaint for Restoration and Mitigation against DCW and Wagner pursuant to an amendment to the Critical Area Law, Md. Code, Nat. Res.

Art. § 8-1815(a)(2)(i)(l), enacted earlier in 2008. 8 She filed this action for restoration and mitigation ¹⁵⁴ based on amendments made to the Critical Area Program statutory scheme by the General Assembly during the 2008 Legislative Session. The General Assembly enacted an amendment to § 8-1808(c) of the Natural Resources Article, which provides the minimum standards for a local (in this case, the County) program sufficient to meet the goals of the Critical Area Program. The amendment at issue here required that, before a local jurisdiction could issue a permit, approval, variance, or special exception, the applicant shall prepare, and the local jurisdiction shall approve, a “restoration or mitigation plan ... to abate the impacts to water quality or natural resources as a result of the violation; ----” § 8-1808(c)(4)(ii). The applicant, before the local jurisdiction may take action, for example, on a variance application seeking relief from the Law’s requirements, also must perform the abatement measures in the approved version of the mitigation/abatement plan. § 8-1808(c)(4)(iii).

Because DCW had not prepared or carried out an approved restoration or mitigation plan, McHale alleged in her complaint that the variances granted by the Board of Appeals were null and void by operation of § 8—1808(c)(4), as amended. She sought relief in the form of the “deconstruction,” removal, and abatement of the structures and improvements erected by Wagner and that the court order Wagner and DCW to restore and provide mitigation in accordance with a mitigation plan to be approved by the County. The defendants filed a motion to dismiss arguing that the Complaint failed to state a claim upon which relief could be granted because the 2008 amendment should not be applied retrospectively to the variance application, which, by the time the Complaint was filed by McHale, had been granted (in part) by the Board of Appeals. Judge Silkworth, in a written Memorandum Opinion and Order, granted the defense motion to dismiss, with prejudice, finding (1) that the Legislature ¹⁵⁵ intended for the 2008 amendment to be applied prospectively only and (2) that the changes made to the statute were procedural and not substantive, and, therefore, the Act should not be applied retrospectively. 9 McHale noted a timely appeal to the Court of Special Appeals.

Before consideration of the appeal in the intermediate appellate court, we, on our initiative, issued a writ of certiorari, 411 Md. 598 , 984 A.2d 243 (2009), to consider the following question: Did the trial court err in concluding that the provision of the 2008 Amendments to the Critical Area law requiring restoration, mitigation and abatement of Critical Area violations prior to receipt of a critical area variance does not apply to critical area violations in litigation at the time that the amendments took effect? We answer that question “No” and hold that the trial court did not err.

II

ANALYSIS A Standard of Review When considering on appellate review the grant of a motion to dismiss a complaint for failure to state a claim upon which relief may be granted, a court must assume the truth of, and view in a light most favorable to the non-moving party, all well-pleaded facts and allegations contained in the complaint, as well as all inferences that may reasonably be drawn from them, and order dismissal only if the allegations and permissible inferences, ¹⁵⁶ if true, would not afford relief to the plaintiff, i.e., the allegations do not state a cause of action for which relief may be granted. RRC Northeast, LLC v. BAA Md., Inc., 413 Md. 638, 643 , 994 A. 2d 430, 433 (2010). “Upon appellate review, the trial court’s decision to grant such a motion is analyzed to determine whether the court was legally correct.” Id. at 644 , 994 A.2d at 434 . We will uphold the dismissal only “ ‘if the alleged facts and permissible inferences, so viewed, would, if proven, nonetheless fail to afford relief to the plaintiff.’ ” Sprenger v. Pub. Serv.

Comm’n, 400 Md. 1, 21 , 926 A.2d 238, 250 (2007) (quoting Pendleton v. State, 398 Md. 447, 459 , 921 A.2d 196, 203 (2007)). B. Relevant Critical Area Program Statutory Framework In 1984, the General Assembly enacted the Critical Area Law “[t]o establish a Resource Protection Program for the Chesapeake and the Atlantic Coastal Bays and their tributaries by fostering more sensitive development activity for certain shoreline areas so as to minimize damage to water quality and natural habitats ....”§ 8-1801(b)(l). The passage of the Critical Area Law was based on the Legislature’s recognition that the quality and productivity of the waters of the Chesapeake Bay “have declined due to the cumulative effects of human activity that have caused increased levels of pollutants, nutrients, and toxics in the Bay System and declines in more protective land uses such as forestland and agricultural land in the Bay region____” § 8-1801(a)(5). The Legislature found also that “[t]he cumulative impact of current development and of each new development activity in the buffer is inimical to [the restoration of the Bays and their tributaries and minimizing further impact to water quality and the shoreline], and it is therefore imperative that State law protect irreplaceable State buffer resources from unpermitted activity ____” § 8-1801(a)(9).

The “critical area” includes “all land and water areas within 1,000 feet beyond the landward boundaries of State or private wetlands and the heads of tide designated under Title 16 of the Environment Article.” § 8-1807(a)(2). ¹⁵⁷ The General Assembly vested the Commission with “all powers necessary for carrying out the purposes” of the Critical Area Law, including the authority to promulgate regulations for the administration and enforcement of the program, including regulations governing the establishment of comprehensive standards and procedures for buffer establishment and the protection and conservation of the buffer. § 8-1806(a)-(b). The “buffer” “means an existing, naturally vegetated area, or an area established in vegetation and managed to protect aquatic, wetlands, shoreline, and terrestrial environments from manmade disturbances.” § 8-1802(a)(4). At the time of the operative facts of this case, the “buffer” was, at minimum, a 100-foot area “landward from the mean high water line of tidal waters, tributary streams, and tidal wetlands.” 10 COMAR 27.01.09.01 C(l) (2007). With certain exceptions, “[n]ew development activities, including structures, roads, parking areas, and other impervious surfaces, mining and related facilities, or septic systems may not be permitted in the Buffer....” COMAR 27.01.09.01 C(2).

The General Assembly charged the local jurisdictions, however, with the primary responsibility of developing and implementing a critical area program, subject to review and approval by the Commission. § 8-1808(a). The local jurisdiction may grant a variance to the Critical Area criteria when a “literal enforcement of provisions within the jurisdiction’s Critical Area program would result in unwarranted hardship to an applicant.” 11 ¹⁵⁸ COMAR 27.01.11.01 A. The Anne Arundel County Code extends the buffer “to include contiguous sensitive areas, such as slopes of 15% or greater----” Anne Arundel County, Md., Code, § 18-13-104(a) (2005). The contiguous sensitive areas are known as the “expanded buffers.” § 18-13-104. All of those provisions were in place before Wagner commenced his extra-legal demolition and construction activities on the Island.

Critical to the present case, in 2008, the General Assembly adopted House Bill 1253, which amended the Critical Area Law to include a new provision restricting a local jurisdiction from issuing “a permit, approval, variance, or special exception unless the person seeking the permit, approval, variance, or special exception has ... prepared a restoration or mitigation plan, approved by the local jurisdiction, to abate impacts to water quality or natural resources as a result of the violation” and “[performed the abatement measures in the approved plan in accordance with the local critical area program.” § 8-1808(c)(4)(ii)(iii). We shall elaborate on relevant portions of the Session Law of this enactment shortly. ¹⁵⁹ C. Retrospective Application of Statutes Whether the application of a newly enacted statutory provision may be applied in a retrospective manner to given situations has proven tricky business in the appellate reports over the years. The conundrum sometimes presented by this query becomes more complex when the given situation implicates a land use or zoning context. This is so because of a somewhat anachronistic line of cases that carve out a special rule for such contexts.

See infra note 14. Generally, all “statutes are presumed to operate prospectively.” Layton v. Howard County Bd. of Appeals, 399 Md. 36, 51 , 922 A.2d 576, 585 (2007). See also Wash. Suburban Sanitary Comm’n v. Riverdale Heights Volunteer Fire Co., 308 Md. 556, 560 , 520 A.2d 1319, 1321 (1987).

This presumption is based on the “fundamental principle of jurisprudence ... that retroactive application of new laws is usually unfair.” Norman J. Singer & J.D. Shambie Singer, Sutherland Statutory Construction § 41:2 (7th ed. 2009). “The rationale underlying the general rule provides that retrospective application, which attempts to determine the legal significance of acts that occurred prior to the statute’s effective date, increases the potential for interference with persons’ substantive rights.” Riverdale Heights, 308 Md. at 561 , 520 A.2d at 1322 . There is, however “ ‘no absolute prohibition against retroactive application of a statute.’ ” Grasslands Plantation, Inc. v. Frizz-King Enters., LLC, 410 Md. 191, 218 , 978 A.2d 622, 638 (2009) (quoting Langston v. Riffe, 359 Md. 396, 406 , 754 A.2d 389, 394 (2000)). “The presumption against retrospectivity is rebutted only where there are clear expressions in the statute to the contrary.” Riverdale Heights, 308 Md. at 561 , 520 A.2d at 1322 . Where it is clear that the Legislature intended the statute to be applied retrospectively, we will construe the law in such a manner. Grasslands, 410 Md. at 218 , 978 A.2d at 638 .

See also Singer, supra, § 41:4 (“[A] law is not construed as retroactive unless the act clearly, by ¹⁶⁰ express language or necessary implication, indicates that the legislature intended a retroactive application.”). 12 If retrospective construction of a statute would interfere, impair, or divest a vested right, a court should construe prospectively the statute. Singer, supra, § 41:6. The converse is that the court may construe a statute as applying retrospectively that affects a non-vested right or mere expectancy, if there is a demonstrated legislative intent to that end. Id.

See also Grasslands, 410 Md. at 220 , 978 A.2d at 638 (“Another exception [to the presumption against retroactive application of statutes] is for remedial enactments that do not impair vested rights.”); Janda v. Gen. Motors Corp., 237 Md. 161, 169 , 205 A.2d 228, 232 (1964) (“A statute, even if the Legislature so intended, will not be applied retrospectively to divest or adversely affect vested rights.... ”). The distinction between vested rights and mere expectancies is perhaps the principal reason this Court identified and continues to recognize an exception in the context of land use and zoning cases to the general presumption in favor of prospective applications of statutes. In Yorkdale Corp. v. Powell, 237 Md. 121, 126 , 205 A.2d 269, 272 (1964), we stated that “an applicant for rezoning to a more intense use of his property, who has been successful before the zoning authorities and the circuit court does not acquire a vested or substantive right which may not be wiped out by legislation which takes effect during the pendency in this Court of the appeal from the actions below.” We held that, in the context of a zoning or land use matter, we will apply a substantive change to a statute during the course of litigation.

Id. at 126-27 , 205 A.2d at 272. ¹⁶¹ “Yorkdale, as an exception to the general rule, provides for the retrospective application of changes to statutes that impact land use issues made during the course of litigation in land use and zoning cases.” Layton, 399 Md. at 51 , 922 A.2d at 585 . In Yorkdale, the Baltimore County Zoning Commissioner granted a residential density variance to a landowner. A neighbor appealed to the Circuit Court for Baltimore County, which reversed the Zoning Commissioner’s decision. Yorkdale obtained review by this Court.

After oral argument, but before we rendered a decision, the Baltimore County Council passed a bill which provided that “ ‘no increase in residential density ... shall be permitted as a result of any grant of a variance from height or area regulations.’ ” 237 Md. at 124, 205 A.2d at 270-71. Upon being apprised of this fact, we set the case for re-argument on whether the change in the law mooted the case. Id. at 124, 205 A.2d at 271. In deciding that question, we stated first that “Maryland has consistently followed the rule that ‘an appellate court is bound to decide a case according to existing laws, even though a judgment rightful when rendered by the court below should be reversed as a consequence.’ ” Id.

(quoting Woman’s Club v. State Tax Comm’n, 195 Md. 16, 19 , 72 A.2d 742, 743 (1950)). An appellate court will apply a change in the law “after a decision below ... unless vested or accrued substantive rights would be disturbed or unless the legislature shows a contrary intent.” Id. We distinguished, however, a substantive change in the law versus a procedural one, for purposes of this application. Where the change in the law during the pendency of the zoning or land use litigation works only a procedural change to the law, we will not construe that law as applying retrospectively to the case before the Court.

Id. at 126-27 , 205 A.2d at 272. Finding no contrary legislative intent in Yorkdale, and thus the case to be moot, we dismissed the appeal. Id. at 133, 205 A.2d at 276. In reaching that conclusion, we relied upon several cases where we held that a material zoning change that occurred during pending litigation of a petition for a zoning reclassification superseded any decision made before the legislative body made the change. ¹⁶² See Grau v. Bd. of Zoning Appeals, 210 Md. 19, 23 , 122 A.2d 824, 826 (1956); Lake Falls Ass’n v. Bd. of Zoning Appeals, 209 Md. 561, 565-66 , 121 A.2d 809, 811 (1956); Banner v. Home Sales Co. D., 201 Md. 425 , 94 A.2d 264 (1953). 13 We re-affirmed the principles of Yorkdale in Layton .

Lay-ton operated an exotic wildlife refuge and sanctuary in Howard County for six years before the County issued a notice to Layton that she was in violation of a zoning regulation by operating a charitable and philanthropic institution without an approved special exception. Layton filed a petition for a special exception to operate the existing wildlife rehabilitation center and primate sanctuary. The Board of Appeals granted in part and denied in part the petition. Specifically, the Board granted a special exception to operate as a charitable and philanthropic institution, including the permitting of an animal rehabilitation center on the property, but denied an exception to operate a primate or other exotic wildlife sanctuary.

Lay-ton appealed to the Circuit Court for Howard County. Prior to even a hearing before the Circuit Court, Howard County amended the County Code to allow an exotic or wild animal sanctuary as a permitted use. Thus, under the new law, as amended, Layton’s sanctuary may have been allowed. The Circuit Court, however, declined to apply the new law retrospectively to Layton’s petition.

Layton appealed to this Court and we held that the Yorkdale rule applied because the change to the Howard County zoning law was a substantive change. Id. at 70 , 922 A.2d at 596 . We re-affirmed Yorkdale expressly and highlighted that in Yorkdale, after Howard County changed the ordinance, we set that case for re-argument: It is clear that the Court realized the importance of what it was doing. The Court had already heard the case, then directed that it be reargued based upon the possible retrospective applicability of a change in law.

The Yorkdale rule was not an unintended holding related to some larger issue. ¹⁶³ It was specifically considered by the Court and it was the major holding of the case. It is a holding that has stood the test of time. 399 Md. at 54 n. 15, 922 A.2d at 586 n. 15. We noted that, following Yorkdale, “we have reaffirmed those principles in relation to land use and zoning cases several times.” Id. at 56 , 922 A.2d at 587 (citing Anne Arundel County v. Maragousis, 268 Md. 131 , 299 A.2d 797 (1973); Dal Maso v. Bd. of County Comm’rs, 264 Md. 691 , 288 A.2d 119 (1972); Springloch Area Citizens Group v. Montgomery County Bd. of Appeals, 252 Md. 717 , 251 A.2d 357 (1969); Marathon Builders, Inc. v. Montgomery County Planning Bd., 246 Md. 187 , 227 A.2d 755 (1967); Mandel v. Board of County Comm’rs, 238 Md. 208 , 208 A.2d 710 (1965)). We stated: Yorkdale and its progeny have never been overruled.

They are still good law and are determinative in evaluating whether, in a land use or zoning case, a change in statutory law taking place during the course of a litigated issue should have retrospective application. As discussed supra, we shall consider zoning cases based upon the law as it exists at the time the case is before us. 399 Md. at 58 , 922 A.2d at 589 (footnote omitted). Although the Court included a quotation from the Court of Special Appeals’s decision in Layton indicating that the intermediate appellate did not find any legislative intent expressed in the statute, it does not appear from the decision whether the amendment expressed any intent with regard to prospective versus retrospective application. Id. at 46 , 922 A.2d at 582 (quoting Layton v. Howard County Bd. of Appeals, 171 Md. App. 137, 172-73 , 908 A.2d 724, 744 (2006)).

We held that the amendments applied retrospectively to Layton’s situation. Id. at 70, 922 A.2d at 596 . We remanded the ease to the Board of Appeals with directions that it shall apply the law as it existed at the time of our decision. Id. 14 ¹⁶⁴ We revisited the Yorkdale rule most recently in Grasslands, a case involving a challenge to a subdivision application by an adjacent property owner.

In that case, the County passed ordinances during the pendency of a subdivision application appeal in a circuit court and the Court of Special Appeals. The new ordinances required the local Planning Commission, when considering whether to approve a proposed subdivision or site plan, to determine (1) whether the proposed development conforms to the visions, objective, and policies of the County’s Comprehensive Plan Conformity Ordinance (“Conformity Ordinance”) and (2) whether the plan provides for public safety through compliance with the State Fire Code and with any applicable County or municipal fire codes (“Emergency Service Ordinance”). The new ordinances did not contain clear expressions of legislative intent regarding prospective versus retrospective application. 410 Md. at 218 , 978 A.2d ¹⁶⁵ at 638. The issue by which the case was disposed of, however, was whether the Board of Appeals applied correctly the burden of proof in the administrative proceeding.

We held that the Board erred in imposing the burden on the landowner-protestant. Id. at 194 , 978 A.2d at 623 . As to whether the new ordinances should be applied on remand, we reaffirmed in considered dicta the principle enunciated in Yorkdale and Layton that there is a “general presumption in favor of retroactivity in zoning and land use cases.” Id. at 220, 978 A.2d at 639 (emphasis in original). We expressed our disapproval, however, of “imprecise” language in Luxmanor Citizens Ass’n, Inc. v. Burkart, 266 Md. 631, 644-45 , 296 A.2d 403, 410 (1972), 15 where we expressed the following reasoning: “This Court has decided that a legislative change in the law in regard to procedure, rather than in regard to substance, will be applied to matters and proceedings taking place after the effective date of the change in the law.” We concluded in Grasslands, however, that that language was “imprecise” and “problematic.” 410 Md. at 223, 224 , 978 A.2d at 640, 641 .

We opined that “Luxmanor’s imprecision lay in articulating the rule about legislative changes in procedural laws as if there were a wholesale distinction between modification of a procedural land use law and modification of a substantive land use law.” Id. at 224 , 978 A.2d at 641 . We, thus, could “fathom no sensible reason for drawing a wholesale distinction between new procedural zoning/land use legislation and new substantive zoning/land use