Meredith v. Talbot County

GARRITY, Judge. Under the facts specific to this case, we shall determine whether an agreement between a real estate development partnership and a local government entity is binding upon the partnership. FACTS The undisputed facts are substantially as follows: On September 16, 1985, Clifford E. Meredith, an experienced developer of real estate in Talbot County and other Maryland Eastern Shore Counties, was contacted by John Easton, a Talbot County realtor, about purchasing “Ashby,” a 200.67 acre waterfront estate on the upper Miles River in Talbot County. Later that same day, Easton and Meredith drove to Ashby where Meredith walked the property and discussed with the realtor its development potential.

After analyzing the soil maps and the zoning regulations to ascertain the subdivision potential of the property, Meredith signed a contract to purchase Ashby for $1,522,034.00. The contract contained no contingencies of any kind, including any relating to the buyer’s development or subdivision rights. After signing the contract, Meredith contacted various business associates and began the process of forming a general partnership for the acquisition and development of ¹⁷⁷ Ashby. As a result, on September 21, 1985, an agreement was signed creating the “Ashby Partnership.” Meredith was named managing partner in the agreement and was charged with, among other things, the responsibility of representing the Partnership in its efforts to comply with Talbot County regulatory requirements, including subdivision approval.

The Partnership immediately began the task of obtaining subdivision approval for the property. In that regard, on October 8, 1985, representatives of the Partnership met with the Talbot County Planning and Zoning Commission and the Talbot County Planning Officer for a sketch plan review. Two proposals for the subdivision of Ashby, each containing 28 lots, were presented to the Planning Commission. Although neither proposal “appealed” to the Planning Commission, it indicated that one of the proposals was preferable and requested that the Partnership submit an environmental assessment prior to final approval of the subdivision application.

As Ashby bordered a tidal tributary of the Chesapeake Bay, the Partnership’s subdivision application was subject to the requirements imposed by the State’s Chesapeake Bay Critical Area Protection Program, Md.Nat.Res.Code Ann. §§ 8-1801-1816 (1988 Cum.Supp.) (hereinafter cited as the Critical Area Law). That legislation, effective June 1, 1984, generally seeks to effectuate the public policy of protecting the natural resources and habitat of the Chesapeake Bay by controlling the. intensity of human activities within the Bay’s watershed. Nat.Res.Code, § 8-1801. The General Assembly has defined the area in which sensitive development activity is to be fostered — the “Chesapeake Bay Critical Area” — as generally consisting of all waters of and lands under the Chesapeake Bay and its tributaries, including wetlands and all land and water areas within one thousand feet beyond the landward boundaries of wetlands and the heads of tides.

Nat.Res.Code, § 8-1807. Furthermore, and reflective of the sense of urgency which moved the Legislature to enact the Critical Area Law, the law ¹⁷⁸ requires that from June 1, 1984 until an approved critical area program becomes effective in a local jurisdiction (i.e., each county subject to the law), the jurisdiction shall make the following specific findings with respect to any subdivision plat approval or zoning amendment, variance, special exception, conditional use permit or use of a floating zone affecting any land or water area located in the critical area: (1) The proposed development will minimize adverse impacts on water quality that result from pollutants that are discharged from structures or conveyances or that have run off from surrounding lands; and (2) The applicant has identified fish, wildlife, and plant habitat which may be adversely affected by the proposed development and has designed the development so as to protect those identified habitats whose loss would substantially diminish the continued ability of populations of affected species to sustain themselves. Nat.Res.Code, § 8-1813 (hereafter cited as the Interim Findings Requirements). As Talbot County, during the pendency of the Partnership’s subdivision application, had hot adopted an approved critical area program, the Interim Findings Requirements of § 8-1813 were applicable in that jurisdiction.

On November 19, 1985, while the Partnership’s subdivision application was still pending, the Talbot County Council enacted a moratorium on subdivision approvals in the County’s critical area. The moratorium was to be effective from December 1, 1985 until July 1, 1986, or until Talbot County completed its critical area planning process. 1 Also during the pendency of the application, the Planning Commission and the Planning Officer were notified that a portion of Ashby was inhabited by the following two endangered species: a pair of bald eagles nesting near the dividing line ¹⁷⁹ between the Partnership’s proposed lots 11 and 12 and the Delmarva Fox squirrel. 2 On November 26, 1985, the Planning Commission, after considering recommendations from the State Department of Natural Resources and the Department of State Planning regarding the protection of the endangered species’ habitat, recommended to the Planning Officer that, in order to comply with the Interim Findings Requirements of the Critical Area Law and, thus, to obtain subdivision approval, the Partnership would have to subdivide Ashby subject to, among other things, the following conditions: Lots 10, 11, 12, 13 and 14 are to be reserved until four years after there are no eagles using the subdivision property. This must be confirmed by the State of Maryland Department of Natural Resources. Subdivision of lots 10, 11, 12, 13 and 14 is not approved.

If subdivision is desired after the four year time limit, it may be applied for under the then current subdivision regulations. Before the Planning Officer made a final decision on the Partnership’s unrestricted subdivision plat, however, Meredith, in his capacity as managing partner of the Partnership, contacted the Planning Officer and made a compromise proposal for the development of Ashby. Under the terms of the proposal the Planning Officer would promptly approve the subdivision plat in its original form — including subdivision of lots 10 through 14 — generally subject to the conditions that the Partnership would neither offer lots 10 through 14 for sale to any party other than a conservation organization nor develop the area in contravention of the Planning Commission’s recommendations. ¹⁸⁰ The Planning Officer agreed to the terms of Meredith’s proposal but required that he put it in writing before she would approve the subdivision plat. Thus, on November 27, 1985, Meredith set forth the proposal in a letter to the Planning Officer as follows: The Planning Commission has recommended that the subdivision plat receive final approval, provided it is modified to delete lots 10, 11, 12, 13, and 14 as buildable lots.

The Planning Commission has further recommended that those lots be reflected as a “reserved area,” with all development prohibited until four years after the existing pair of bald eagles has ceased to use the nest site located on the subject property. As Talbot County Planning Officer, you have indicated that you will adhere to the Planning Commission’s recommendation, and will not approve the subdivision plat. I indicated to you that in light of the conditions imposed by your office, the investors whom I represent may wish to donate the lots in question to the Nature Conservancy or some other bona fide conservation organization, and that the tax aspects of such a donation may be adversely affected if we cannot make the donation on a per lot basis. You indicated that you would approve the plat in its present form, provided I would guarantee to you that those lots will not be offered for sale to the public, or to any person or entity other than a bona fide conservation organization, and that there will be no development of those lots except in accordance with the Planning Commission recommendations.

In the event that the donation is not accomplished within one year from the date of your approval, you will require that the subdivision plat be modified to delete the lot lines so as to show the area in question as one parcel, identified as “reserved area.” It is my understanding that this issue must be resolved today, and that after today, I will not be able to secure your approval of the subdivision plat. Please let me know if the foregoing is incorrect in any respect. ¹⁸¹ Based upon the understandings set forth above, I hereby agree to the conditions set forth in the above paragraph, and request that you approve the subdivision plat subject to this letter. Subsequently, on the same day, the Planning Officer gave final approval to the Partnership’s subdivision plat and signed it subject to the statement that “lots 10-14 are approved in accordance with agreement dated 11/27/85.” Thereafter, and prior to December 1, 1985, the Partnership recorded the subdivision plat among the land records of Talbot County. 3 The Partnership began marketing the property as soon as it had obtained subdivision approval. The record indicates that the Partnership has sold, or is offering for sale, approximately 160 acres of the property for upwards of two million dollars.

Several months after the subdivision plat was recorded, the Partnership requested approval for a building permit for the construction of one or two houses on the restricted portion of Ashby. That request was denied. The Partnership later sought a waiver of the restrictions imposed upon the property. That request was also denied.

No appeal was taken from the denial of either of these requests. Thereafter, the Partnership 4 filed this action in the Circuit Court for Talbot County against Talbot County; the Talbot County Planning Officer; the State of Maryland, Department of State Planning and Department of Natural Resources; and the Attorney General for the State of Maryland. The two principal claims for relief were (1) that ¹⁸² the refusal to approve the unrestricted subdivision of lots 10 through 14 constituted a “taking” of those lots without just compensation in violation of the Fifth (and Fourteenth) Amendments to the United States Constitution; 42 U.S.C. § 1983 ; Article III, Section 40, of the Constitution of Maryland; and Title 12 of the Maryland Real Property Code and (2) that the violations of State and local law deprived the Partnership of due process rights guaranteed by the Fourteenth Amendment to the United States Constitution; Article 24 of the Maryland Declaration of Rights;