Millison v. Wilzack

ROBERT M. BELL, Judge. This appeal presents squarely, for the first time, the question of which, if any, statute of limitations applies to an action of inverse condemnation. 1 We hold that the three year general statute of limitations prescribed by Maryland Courts and Jud.Proc.Code Ann. § 5-101 applies; consequently, we will affirm the judgment of the Circuit Court for St. Mary’s County. While this renders it unnecessary that we decide whether appellant’s action was also barred by res judicata, we will address his claim that the court erred in refusing to permit him to amend his complaint. This is a continuation of the controversy which erupted between J. Laurence Millison, appellant, and the Secretary of Health and Mental Hygiene, one of the appellees herein, in the 1970’s, resulted in litigation in 1974.

The first round, at least, was resolved by this Court’s Opinion in Millison v. ⁶⁷⁹ Secretary of Health and Mental Hygiene, 32 Md.App. 165 , 359 A.2d 247 , cert. denied, 278 Md. 728 (1976) (Millison I). As Millison I details, the genesis of the controversy was May, 1966, when appellant purchased a tract of land in St. Mary’s County. Part of the land had previously been subdivided into 32 lots and the subdivision plan had been approved by the County Health Officer. Although appellant had the subdivision plan reapproved after the purchase, he did not cause it to be recorded in the St. Mary’s Land Records until June 7, 1974. 32 Md.App. at 166-67 , 359 A.2d 247 .

Appellee Maryland State Department of Health and Mental Hygiene promulgated, pursuant to Maryland Code Ann. Art. 43, § lF(d), 2 and adopted, effective March 3, 1972, “Regulations Governing Water Supply and Sewage Systems in the Subdivision of Land”, designed to assure that acceptable provisions would be made for water supply and sewage disposal in subdivisions under the direction of the Secretary. See COMAR 10.03.28 (effective July 15, 1988, recodified as COMAR 26.04.03.) Subsection .02J (at present, COMAR 26.04.03.02J) of the regulation provided that a preliminary plan would become null and void if a record plat or subdivision plan is not filed within six months of its approval. Subsection .07 (present COMAR 26.04.03.08) provided: Any preliminary plan or record plat of a subdivision which has been submitted to the approving authority before the date of adoption may not be required to comply with these regulations, if final approval and recordation, when required by law, is completed no later than 6 months from the date of adoption. Appellant having failed to file the subdivision plan within the six month period, the Secretary filed an action for declaratory and injunctive relief against him.

Following a trial, the court enjoined the sale or conveyance of lots in the subject property without the prior approval of the Secre ⁶⁸⁰ tary; declared that the regulations set out above were inapplicable to the subject property; and declared that appellant’s subdivision plan was valid. Both parties appealed. This Court reversed the order enjoining the sale or conveyance of the lots and modified the declaratory relief to reflect that the subdivision plan was subject to the Regulations and, further, to order that its recordation, being null and void, be expunged from the plat book records for St. Mary’s County. 32 Md.App. at 173-74 , 359 A.2d 247 . Appellant’s petition for Writ of Certiorari was denied by the Court of Appeals on September 20, 1976.

The controversy apparently lay dormant until 1987 when, by letter dated October 20, 1987 and citing Millison I, appellant sought from the Maryland State Department of the Environment “compensation or damages” for the “taking” of his property. Having been informed in a letter dated November 2,1987 of the Attorney’s General’s opinion that the application of COMAR 10.03.28.07 to appellant's property did not “amount to a ‘taking’ in the constitutional sense” and, therefore, that appellant was not due any compensation or damages, appellant filed a suit, 3 sounding in inverse condemnation, against Adele Wilzack, Secretary, Maryland State Department of Health and Mental Hygiene, Martin W. Walsh, Jr., Secretary, Maryland State Department of the Environment, and the Maryland State Department of the Environment, appellees. Having alleged, essentially as it are set out in the Opinion, the sequence of events that culminated in Millison /, he averred: ⁶⁸¹ That as a direct and proximate result of the aforegoing, the plaintiff has been denied all reasonable beneficial and economical use of the land known as the Tarkhill Subdivision, aforesaid, and has been denied his expected economic investment by not being able to continue with the sale of said lots, amounting to a taking of property without just compensation, in violation of the Fifth Amendment of the Constitution of the United States of America; as extended and applied to the States through the Fourteenth Amendment of the United States Constitution____ He sought “just compensation” in the amount of Three Million Dollars ($3,000,000.00) from the defendants. Appellees moved for summary judgment on two grounds: (1) that the action was barred by limitations and (2) that it was barred by the doctrine of res judicata.

After a hearing on the motions, the trial court agreed with appellees and granted their motions on both grounds. This appeal followed. As he did below, appellant argues that the three-year statute of limitations does not apply; alternatively, he asserts that his cause of action did not accrue until appellees denied his request for “just compensation” or until a court of competent jurisdiction has determined that there had been a taking in the constitutional sense. The former argument proceeds on appellant’s perception that there is no distinction between an eminent domain proceeding and one for inverse condemnation and, therefore, is designed to avoid the application of any statute of limitations to his cause of action.

Although the latter arguments assume the applicability of a statute of limitations to his action, they seek to forestall the application of that statute to bar his action. We will address each argument in turn. Contrary to appellant’s contention, there is a real, and not an illusory, distinction between eminent domain proceedings and proceedings in inverse condemnation. And the distinction is well-settled.

Indeed, it was eloquently stated in Agins v. Tiburon, 447 U.S. 255 , 258 n. 2, 100 S.Ct. 2138 , 2140 n. 2, 65 L.Ed.2d 106 (1980), citing and quoting United ⁶⁸² States v. Clarke, 445 U.S. 253, 255-258, 257 , 100 S.Ct. 1127, 2139-40, 2140 , 63 L.Ed.2d 373 (1980): Inverse condemnation should be distinguished from eminent domain. Eminent domain refers to a legal proceeding in which a government asserts its authority to condemn property____ Inverse condemnation is “a shorthand description of the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted.” (Citations omitted) This distinction has been recognized in Maryland. See QC Corp. v. Maryland Port Admin., 68 Md.App. 181, 202 , 510 A.2d 1101 (1986), rev’d on other grounds, 310 Md. 379 , 529 A.2d 829 (1987); Ungar, 63 Md.App. at 481-82, 492 A.2d 1336 . The distinction between eminent domain and inverse condemnation is also implicit in Title 12 of Maryland Real Property Code Ann. and Subtitle U of the Maryland Rules of Procedure.

Thus, § 12-101 is explicit in providing that “all proceedings for the acquisition of private property for public use by condemnation are governed by the provisions of this title and of Subtitle U of the Maryland Rules.” (Emphasis added). Similarly, Rule Ul. states that: “All proceedings for acquisition of property by condemnation shall be conducted in conformity with this subtitle.” (Emphasis Added) Rule U2. goes on to define the parties to a condemnation proceeding as: a. Plaintiff. A proceeding for condemnation shall be brought by the state, municipal or other corporation, commission, board, body or person seeking to have the property condemned, and a party seeking condemnation shall be designated as plaintiff. b.

Defendants. A proceeding for condemnation shall be brought against all persons whose interest in the property is sought to be condemned, including any spouses having an inchoate right of dower, whether such persons are ⁶⁸³ known or unknown, and such persons shall be designated as defendants. (Emphasis Added) Neither Title 12, nor the U Rules provides that proceedings may be initiated by a property owner who believes that his property has been taken, either by condemnation or by virtue of proceedings or governmental action short of condemnation. Despite the difference noted, the critical elements of both actions are essentially the same.

In eminent domain proceedings, “[t]he government files suit against the property owner to condemn the property; the property owner obtains judgment for the fair value of what is taken.” QC Corp., 68 Md.App. at 202 , 510 A.2d 1101 . On the other hand, in inverse condemnation proceedings, the government does not file suit; rather, the property owner, because of governmental action which he perceives results in a taking of his property, as, for example, the application of a governmental regulation upon his property, sues the government to recover compensation for the taking. Id. In the case of eminent domain proceedings, the filing of suit acknowledges that the property has been, or will be, taken; thus, except in those cases where the property owner challenges the condemnation authority of the government, the only issue to be determined in an eminent domain case is what constitutes “just compensation”.

In inverse condemnation proceedings, whether the property has been taken and what constitutes “just compensation” are both at issue: to recover “just compensation” for his property, the property owner must necessarily establish that his property has been taken. 4 ⁶⁸⁴ The analysis of the distinction between eminent domain and inverse condemnation proceedings, and, in particular, the Agins characterization of the latter proceedings, provides a framework in which to determine the applicability of statutes of limitations to such proceedings. As we have already pointed out, we recognized in Ungar, see n. 1 supra, that it is not the manner in which an action is characterized, but, rather, its essential characteristic, that determines whether a statute of limitations applies. We continue to adhere to that view. Moreover, notwithstanding the differences between the allegations in Ungar and those in the instant case, we now make explicit that which was mere suggestion in Ungar , that “when reduced to its simplest form” a claim for inverse condemnation is no more than a claim for damages.

We are persuaded that the requirement, implicit in an inverse condemnation action, that the property owner prove that his property has been taken as a precondition to his entitlement to just compensation does not make the action any less one for damages; in any action for damages, the plaintiff must prove that upon which his claim for damages is predicated. Nor are we persuaded that couching the action in constitutional terms somehow changes its nature. See Board of Regents v. Tomanio, 446 U.S. 478, 485-93 , 100 S.Ct. 1790, 1795-1800 , 64 L.Ed.2d 440 (1980); United States v. Dickinson, 331 U.S. 745, 748 , 67 S.Ct. 1382, 1384 , 91 L.Ed. 1789 (1949); Horn v. City of Chicago, 402 Ill. 549 , 87 N.E.2d 642, 649 (1949); Ranch 57 v. City of Yuma, 152 Ariz. 218 , 731 P.2d 113, 117 (App.1986). See also Burnette v. Grattan, 468 U.S. 42, 45-6 , 104 S.Ct. 2924, 2927 , 82 L.Ed.2d 36 (1984); ⁶⁸⁵ Widgeon v. Eastern Shore Hospital Center, 300 Md. 520, 531 , 479 A.2d 921 (1984).

We hold that an action in inverse condemnation may be barred by limitations and, further, given its essential nature, there being no specific statute applicable to such actions, the limitations period prescribed by § 5-101 applies. 5 In so doing, we find unpersuasive appellant’s attempt to fit an inverse condemnation action into an eminent domain one and, necessarily, the rationale of those cases in which it has been held that there is no statute of limitations pertaining to cases involving the question of