P Overlook, LLLP v. Board of County Commissioners

DEBORAH S. EYLER, Judge. This case concerns a nine-lot residential density restriction on certain property owned by P Overlook, LLLP (“Overlook”), the appellant, in Washington County. In 2003, the Board of Commissioners of Washington County (“the Commissioners”), the appellee, granted a piecemeal map amendment to Overlook’s predecessors-in-title, Sylvia and William Martin, rezoning the property in question (“Property”) to the Rural Village (“RV”) district, conditioned upon the nine-lot density restriction. At that time, the RV zone was not yet in existence, but was projected to be once certain rural areas of the County were comprehensively rezoned.

Overlook participated in the map amendment process. Neither it nor the Martins challenged the density restriction. Indeed, they were notified that the map amendment request was being granted conditioned upon the nine-lot density restriction and that, if they did not agree to the condition within five days, they could withdraw their rezoning request. They ²³⁷ did not do so.

Soon after the map amendment was granted, Overlook purchased the Property from the Martins. In the meantime, comprehensive rezoning of certain rural areas, including the Property, was moving forward in Washington County. In 2005, when the comprehensive rezoning ordinance was enacted, the Property in fact was classified as RV. The ordinance itself was silent as to any density restriction for the Property.

A year later, Overlook wrote to the Zoning Administrator for the County asking him to “confirm” that the Property is located in the RV zone but is not subject to a nine-lot density restriction. By letter, the Zoning Administrator replied that, by virtue of the Commissioners’ map amendment decision in 2003, the Property now is in the RV zone with a nine-lot density restriction. Overlook challenged the Zoning Administrator’s letter “determination” before the Washington County Board of Appeals (“Board”). The Board ruled that it was questionable whether the letter was an appealable “determination” and that, if it were, and even if the Zoning Administrator were in error, Overlook was estopped to challenge the density restriction.

In the Circuit Court for Washington County, Overlook filed an action for judicial review. The court upheld the Board’s decision. In this Court, Overlook raises two questions for review, which we have rephrased: I. Did the Board err in determining that the Commissioners had lawfully placed a nine-lot density restriction on Overlook’s property?

II

Did the Board err by failing to find that the Commissioners exceeded their authority by imposing a restriction on the number of lots that could be developed on Overlook’s property, as zoned, after the zone was created? 1 ²³⁸ As we shall explain, the questions Overlook presents do not address the bases for the Board’s decision. We shall affirm the Board’s decision on the grounds on which it was made, and shall not address the issues raised by Overlook on appeal, as they are not properly before us. FACTS AND PROCEEDINGS The Property is slightly less than 24 acres of land situated near Maryland Route 340 and Keep Tryst Road, in Washington County. When Washington County first adopted a Zoning Ordinance, in 1973, the Property was zoned “Conservation” (“C”).

In the early 1980s, the Martins purchased the Property. In 1983, they applied for and obtained a zoning change to “Business-General” (“BG”). The Property as purchased included an existing motel, which the Martins planned to expand or rebuild. That plan never came to fruition, however.

On April 17, 2002, the Martins, through counsel, filed with the Washington County Planning Commission (“Planning ²³⁹ Commission”) a zoning map amendment application, seeking a piecemeal zoning reclassification to the “Residential Suburban” (“RS”) zone. In Washington County, the Commissioners, as the local legislative body, determine amendments to the Zoning Ordinance, whether map or text. Wash. Co., Md., Zoning Ordinance art. 27, § 1 (“Zoning Ordinance” or “Ordinance”).

The Martins alleged that the previous rezoning to the BG district had been a mistake. A hearing on their application was held on June 10, 2002. Before that date, they signed a contract to sell the Property to Overlook. Thus, at all relevant times in this case, Overlook was the contract purchaser or, later, the owner of the Property.

Residential development is not permitted in the BG zone. A zoning change for the Property to RS would have allowed residential development at a density of four single-family houses per acre. A representative of Overlook testified at the June 10, 2002 hearing that, if the Property were rezoned to the RS district, the company was going to develop it with 34 single-family houses. On August 5, 2002, the Planning Commission recommended against the requested map amendment.

Thereafter, the Commissioners denied the application. Throughout this same time period, the Commissioners were in the process of revising Washington County’s Comprehensive Plan. Effective August 27, 2002, they adopted a new Comprehensive Plan (“the Plan”). It was expected that, once the Plan was adopted, comprehensive rezoning to implement it would follow shortly and new zoning classifications would be adopted based upon the Plan’s recommendations.

One such recommendation was to eliminate the Residential Rural (“RR”) district and create a new Rural Village (“RV”) district. The Plan laid out 55 areas designated as Rural Village Policy Areas. The recommended new RV district would encompass those areas. The “Sandy Hook Rural Village” district is adjacent to the Property.

Before 2002, when the Plan was being developed but before it was finalized, the Martins had asked the Planning Commission to place the Property in that part of the RV ²⁴⁰ district, with a residential use designation. The Planning Commission declined, advising the Martins to make their request through the piecemeal rezoning process, i.e., by requesting a zoning map amendment. On January 15, 2003, again through counsel, the Martins filed another zoning map amendment application, this time seeking a reclassification to the RR zone. 2 Such a change would have permitted a residential density of 2 single-family houses per acre. On March 10, 2003, the Commissioners held a public hearing on the application.

Testimony revealed that Overlook still was planning to develop 34 single-family residential lots on the Property, and wished to obtain a zoning change that would allow that level of development. On April 2, 2003, the Planning Commission issued a Staff Report and Analysis recommending against the Martins’ piecemeal rezoning application. The Staff Report acknowledged that there was merit in the Martins’ argument that the Property had been zoned BG by mistake, in 1983, and that reverting to the prior “C” zoning would not be appropriate. It expressed concern, however, about the density of any residential development of the Property.

Five days later, the Planning Commission issued its Report and Recommendation against the rezoning application. It stated: [T]he proposed Rural Residential designation for this property was not appropriate for the area and that the commercial designation could provide opportunities for retail services for the citizens of the area. If it were to be rezoned for residential development, then [the Planning Commission] would recommend a classification that would limit the amount of future development. (Emphasis added.) On August 5, 2003, with the County Attorney in attendance, the Commissioners reviewed the Martins’ zoning map amend ²⁴¹ ment application.

The County Attorney pointed out that the rezoning request was to the RR zone, which would not exist under the new zoning classifications proposed under the Plan. Individual commissioners expressed concern about the application, including about the density of any future residential development. Thereafter, on August 26, 2003, the Commissioners considered and granted a request by counsel for the Martins to remove the application from the agenda and send it to the Planning Commission “for consideration of the appropriate density of single-family residential development, which may be established by the attachment of a condition to rezoning.” The Commissioners noted that the County Attorney “advised the Board that the Zoning Ordinance allows the attachment of conditions to the granting of rezoning. The Planning Commission would then make a recommendation on the proposed density to the Commissioners.” See Excerpt of Board of County Commissioners Meeting, August 26, 2003, Hagerstown, Maryland.

At the same time, the comprehensive zoning process for Washington County was moving forward. On September 15, 2003, the Planning Commission issued a Staff Report and Analysis respecting “Comprehensive Rezoning of the Rural Area of Washington County” (“the CRRA Report”). The CRRA Report included a proposed draft of a text amendment to the Zoning Ordinance, including adoption of the RV district as a new zoning classification. It did not place the Property in the RV district.

Rather, it designated the Property in the “Environmental Conservation” (“EC”) zone. An EC zoning classification would have allowed residential development but would have greatly limited it, to one single-family house per 20 acres. On the day the CRRA Report was issued and then on October 8, 2003, public hearings were held on the proposed zoning changes. The record was then held open for ten days for further public comment.

On October 20, 2003, with the Martins’ zoning map amendment application still pending, their lawyer wrote to the Commissioners about the zoning status of the Property vis a ²⁴² vis the upcoming comprehensive rezoning anticipated by the Plan. The letter states, in pertinent part: After conferring with the County Attorney, in the event the County determines to proceed with the comprehensive rezoning proposal now pending, the classification proposed to be assigned comprehensively may undermine any favorable action you may take upon the pending petition for “RR” rezoning. A year or so ago, the Martin family requested inclusion in the Rural Village defined in the [Plan]. The Planning Commission recommended, instead, that [the Martins] initiate a piecemeal rezoning request, and [they] have pursued that recommended course of conduct ever since.

Because of the convergence of your deliberations and the approaching time of enactment of comprehensive rezoning, the County Attorney has suggested that [the Martins] renew their request for inclusion of their property within the boundary of the designated Sandy Hook Rural Village. Accordingly, on behalf of [the Martins], I submit the enclosed Formal Request to Review Zoning Change, in order that it may be considered with other map amendments prior to adoption of the comprehensive rezoning of the County now under consideration. The attached “Formal Request to Review Zoning Change,” signed by counsel for the Martins on their behalf, included the following form language: Request is hereby made by the current and true owner(s) of the afore mentioned [sic] property for review of the proposed zoning changes. I/We request the following changes to the property listed above: Current proposed zoning: BG Requested zoning: Rural Village By signing this request I/We do certify that I/We are the legal and true owner(s) of the above mentioned property and hereby assent to Planning Commission review of this ²⁴³ request for the purposes of the Comprehensive Rezoning of Washington County.

((Written additions to form in bold) (emphasis added).) On October 28, 2003, the Commissioners met about the Martins’ zoning map amendment application. The County Attorney appeared and recited the history of the application, adding that the Planning Commission had failed to make any recommendation about appropriate residential density and had returned the matter to the Commissioners for further action. The minutes state: [The County Attorney] stated that he has met with the Martin’s [sic] legal counsel and discussed that a possible alternative would be to rezone the property to Rural Village with the consent of the property owner. He indicated that this would involve the rezoning and expansion of the Rural Village boundary to include the Martin property. [He] also stated that the new Comprehensive Plan does not contain the Rural Residential zoning classification that was originally requested by the [Martins], and that rezoning to the RS classification would otherwise be consumed by the comprehensive rezoning, absent the execution of a development rights easement.

The Commissioners discussed the alternatives. Commissioner Snook expressed concerns about the “bartering” taking place about the number of lots allowed and the proposed zoning classifications. [The County Attorney] suggested that [the Martins] be given five working days after the decision is rendered to request that the case be withdrawn. The Commissioners voted in favor of a motion to grant the map amendment application to rezone the Property from BG to RV, “with the condition of a nine-lot maximum density.” Thereafter, the Commissioners issued a 19-page opinion entitled “Findings of Fact and Articulation of Reasons for Decision” in the Martins’ zoning map amendment application case. They found that the 1983 rezoning to BG was a mistake; that rezoning to RR would not be “appropriate and logical” because the Plan called for that zone to be eliminated and, if ²⁴⁴ the Property were rezoned RR, then when the comprehensive rezoning took place, it would be assigned another zoning district, “which in all likelihood would be Rural Village”; that the density of the proposed 34 lot single-family residential development of the Property would not be compatible with the scale of the adjacent Sandy Hook Rural Village; and that a density limited to nine lots (2.65 acres per lot) “would be an appropriate transition between the smaller lots on Sandy Hook Road and the slightly larger ones that are now zoned Conservation.” The decision authorized an amendment to the Plan to add the Property to the adjacent Sandy Hook Rural Village Policy Area to be adopted as part of the CRRA Report “with the condition that not more than nine (9) lots may be developed on the subject property.” The decision gave the Martins 5 days to withdraw their rezoning application if they did not agree to the density limit condition; otherwise, they would be deemed to have consented.

There is nothing in the agency record to suggest that either the Martins or Overlook did not have actual knowledge of the decision to rezone the Property to the RV district, conditioned upon a nine-lot density restriction. It is undisputed that the Martins received the Commissioners’ written decision, including the language informing them that they could withdraw their application if they objected to the nine-lot density restriction. They did not withdraw their application. Nor did they challenge in an action for judicial review the Commissioners’ imposition of a density limit condition on the grant of their rezoning request.

A few months later, the Commissioners began the comprehensive rezoning process of deciding 37 requests by property owners to review or change zoning classifications proposed in the CRRA Report. The Martins’ “Formal Request to Review Zoning” was one of them. Overlook closed on the purchase of the Property from the Martins on February 4, 2004. On September 14, 2004, the Commissioners held a public hearing on the 37 individual zoning requests.

With respect to ²⁴⁵ the Martins’ request, they determined that they previously (on October 28, 2003) had authorized the change in zoning of the Property to the RV zone, with a nine-lot density restriction, and for that reason no further action was required. Specifically, the “Staff Analysis” for the Martins’ formal request states, NO * * A rezoning request from BG to RR was pending on the Martin property (RZ-03-001). On 10/28/03 the BOCC Reviewed & App’d Request for RV, with a 9-lot Density. About ten months later, after public hearings, the Commissioners adopted the CRRA Report, thereby establishing the RV zone (and others).

An ordinance effectuating that decision, a resolution adopting a revised Comprehensive Plan Map for the rural areas of Washington County, and an ordinance repealing certain provisions of the Zoning Ordinance and reenacting them with changes were adopted on July 26, 2005, all effective retroactive to July 12, 2005. On July 14, 2006, almost three years after the Commissioners granted the Martins’ zoning map amendment application and a year after the amendments to the Zoning Ordinance were enacted, Overlook’s lawyer wrote a letter to the County Zoning Administrator seeking confirmation that the Property now was in the RV zone without a nine-lot residential density restriction. Overlook asserted that, because the RV zone did not exist on October 28, 2003, when the Commissioners voted to rezone the Property to RV subject to the nine-lot density restriction, their action had no effect; only when the RV zone actually was created by the Commissioners, effective July 12, 2005, and the County updated its Plan and zoning maps in accordance with the CRRA Report, did that zone become available for designation. “By adoption of the comprehensive rezoning map ... the [Commissioners] legally rezoned the [Property to the Rural Village category, but by such action [they] did not condition or restrict the development of the [Property to a nine (9) lot limit.” The Zoning Administrator responded by letter of September 13, 2006, stating that the Property indeed was zoned RV ²⁴⁶ but with a nine-lot residential density restriction because the Commissioners and the Martins had agreed to that as a condition to the grant of the Martins’ zoning map amendment application. The Zoning Administrator explained: Considering the actions of the [Commissioners], and the consent and approval of the [Martins], whose legal counsel was intimately involved in all phases of the rezoning, it is my position the density limit still applies to the Property.

This was a piecemeal zoning request, approved after much discussion, debate and compromise by all parties. The [Martins were] given the opportunity to withdraw the request if the condition regarding density was not acceptable. The [Martins], who fully participated in the rezoning process by and through [their] attorney, chose not to withdraw the application. On October 2, 2006, Overlook appealed the Zoning Administrator’s letter “determination” to the Board.

The Board held a public hearing on the matter on October 25, 2006. It voted to deny the appeal. On November 22, 2006, it issued a written opinion making findings of fact and explaining its denial decision. The factual findings were as we have recounted the facts above.

The Board also found that, at all relevant times, as far back as 2002, Overlook or a related entity was a party to all proceedings concerning the Property. In its analysis, the Board expressed “serious doubts as to whether the Zoning Administrator’s letter [of September 13, 2006] was an appealable ‘determination’ pursuant to the reasoning set forth in United Parcel Service, Inc. v. People’s Counsel for Baltimore County, Maryland et al., 336 Md. 569 , 650 A.2d 226 (1994).” The Board went on to reason that, even if the letter were an appealable determination, Overlook was barred, by equitable estoppel principles, to challenge the Zoning Administrator’s decision: This seems to us to be a clear instance where a party’s complicity in obtaining a zoning classification, with conditions, cannot later allow the same party to attempt to disclaim the validity of those conditions. In fact, given the ²⁴⁷ circumstances presented here, if any error was committed by the County, [Overlook] (and its predecessor in title) invited it. The [Property owner-at all times represented by counsel-requested that the Rural Village designation be applied to the [P]roperty.

The Comprehensive Plan, in 2002, clearly reflected the intention of the County to implement an RV zoning classification. The staff reports, Commissioners meeting minutes, and the Findings of Fact and Articulation of Reasons for a Decision clearly indicate that the Commissioners heard (at public hearing) and addressed 37 requests by property owners-including this one-for reclassification as part of the comprehensive rezoning, each of which clearly indicate the intention to place a density limit on the subject [Pjroperty. The [Pjropcrty owner asked for the designation and, when they got it, failed to withdraw their application and were deemed to have consented to the reclassification and its conditions. They were intimately involved throughout the rezoning process which resulted in their receiving what they asked for.

For them to be allowed to now attack that action would be to reward their unclean hands. As noted, in the Circuit Court for Washington County, Overlook filed an action for judicial review, challenging the agency’s decision. On June 29, 2007, the court issued an opinion affirming the Board’s decision made on the basis of estoppel. STANDARD OF REVIEW On appellate review of an administrative agency’s decision, this Court reviews the agency’s decision, and not that of the circuit court.

Anderson v. General Cas. Ins. Co., 402 Md. 236, 244 , 935 A.2d 746 (2007). Appellate review of an agency’s factual findings is limited to “determining] whether the agency decision is supported by substantial evidence in the record.” Id.

The appellate court “ ‘must not itself make independent findings of fact or substitute its judgment for that of the agency.’ ” Maryland-National Capital Park and ²⁴⁸ Planning Comm’n v. Anderson, 395 Md. 172, 180-81 , 909 A.2d 694 (2006) (quoting Baltimore Lutheran High School Ass’n v. Employment Sec. Admin., 302 Md. 649, 662 , 490 A.2d 701 (1985)). With regard to the agency’s legal conclusions, however, appellate review is less deferential; this Court can reverse the agency’s legal decisions “where the legal conclusions reached by that body are based on an erroneous interpretation or application of the zoning statutes, regulations, and ordinances relevant and applicable to the property that is the subject of the dispute.” People’s Counsel for Balt. County v. Surina, 400 Md. 662, 682 , 929 A.2d 899 (2007). Nonetheless, in determining whether the agency was erroneous in its legal conclusion, some deference is given to the agency and its expertise in administering the law is considered.

Id. at 682-83 , 929 A.2d 899 (quoting Marzullo v. Kahl, 366 Md. 158, 172 , 783 A.2d 169 (2001)). DISCUSSION In its two questions presented, Overlook advances several legal arguments as to why, in its view, the Property now is zoned RV without any density restriction. In support of its first contention, that the Board erred in ruling that the Commissioners lawfully placed a nine-lot density restriction on the Property, Overlook maintains that 1) the Commissioners’ October 28, 2003 decision granting the Martins’ zoning map amendment application by reclassifying the Property to the RV zone conditioned on a nine-lot density restriction was illegal contract zoning, and therefore was “null and void”; and 2) that same decision also was “null and void” because the Commissioners lacked authority in 2003 to rezone the Property to a zone that did not yet exist (and did not come to exist until 2005). In support of its second contention, that the Board erred by not finding that the Commissioners exceeded their authority by rezoning the Property, Overlook argues 1) that, if the Commissioners intended to impose a lot density restriction on the Property when it was comprehensively rezoned, they failed to give notice as required by Article 66B of the Mary ²⁴⁹ land Code, and, in any event, the Zoning Ordinance as enacted effective July 12, 2005 did not impose a condition limiting the number of lots in its RV zoned Property; and 2) the Commissioners had no authority under Article 66B to impose a density condition on the Property as part of the comprehensive rezoning process.

In fact, the Board did not decide any of these issues. Interesting as some of them are, they were not considered and resolved by the Board. Rather, the Board decided, as we have stated above, that it was questionable whether Overlook had any right to appeal the Zoning Administrator’s September 13, 2006 letter and, if it did have such a right and there was any error, Overlook was precluded, by equitable estoppel principles, from attacking the Zoning Administrator’s letter statement that a nine-lot density restriction applies to the now RV-zoned Property. The only question properly before this Court, then, is whether the Board’s decision, on the grounds on which it was made, was supported by substantial evidence in the agency record and was not founded upon legal error.

As previously mentioned, in its decision, the Board found questionable any right of Overlook to challenge through the zoning appeals process the Zoning Administrator’s September 13, 2006 letter. In that letter, the Zoning Administrator recounted the history of the Martins’ various zoning map amendment applications for the Property, the Commissioners’