Permanent Financial Corp. v. Montgomery County

McAULIFFE, Judge. Pursuant to the authority of a building permit issued by Montgomery County, a developer undertook construction of an office building in Silver Spring, Maryland. Eight and one-half months and more than two million dollars later, when the shell of the building was complete, the County suspended the building permit and issued a stop work order on the grounds that the building violated statutory height ²⁴² limitations, set-back requirements, and floor area ratio restrictions. The developer appealed to the Montgomery County Board of Appeals (“the Board”) and concurrently filed with that body an application for variances to exempt the building from any requirements of the Zoning Code with which it might not comply.

The Board denied relief from the suspension and stop work order and refused to grant any variance. The Circuit Court for Montgomery County affirmed, and that action was affirmed by the Court of Special Appeals in an unreported per curiam opinion. We granted certiorari principally to consider the developer’s contention that the doctrine of equitable estoppel should be applied against the County. We conclude the County is estopped from contending that the fourth floor of the building violates the height limitations of the Montgomery County Code.

We further conclude, however, that the building as constructed is otherwise in violation of the code and that the Board did not err in refusing to set aside the suspension and stop work order or in refusing to grant the requested variances. Permanent Financial Corporation (“Permanent”), as trustee for others, began the development of this commercial office building by obtaining a building permit from the Montgomery County Department of Environmental Protection (DEP) on January 11, 1982. Six months later Permanent obtained a revision of the permit by which DEP approved an increase in the size of the first floor. The building as erected is on a rectangular lot that comprises an area of 18,750 square feet and has no unusual topographical features.

The land is zoned CBD-1, which is a central business district zone intended for use in areas where high densities are not appropriate. Montgomery County Code (1972, 1977 Repl.Vol.) § 59-CN6.211(b). 1 The building contains four floors of above ground office space and a “penthouse” or fifth floor designed primarily to house mechanical ²⁴³ equipment. Each of the second, third, and fourth floors is larger than the floor beneath it, giving the building a trapezoidal shape. The Height Limitation The height limitation for a building erected in the CBD-1 zone under the method of development utilized here is established by § 59-C-6.235.

Ordinarily, the maximum permissible building height is 60 feet. However, where the property adjoins or is directly across the street from certain residential zones, as is the case here, the maximum building height is “35 [feet] plus an additional 8 feet for nonhabitable structures.” Section 59-A-2.1 specifies how the height of a building is to be determined: The vertical distance measured from the level of approved street grade opposite the middle of the front of a building to the highest point of roof surface of a flat roof; to the deck line of a mansard floor; and to the mean height level between eaves and ridge of a gable, hip or gambrel roof; except, that if a building is located on a terrace, the height above the street grade may be increased by the height of the terrace____ Permanent appears to have abandoned its earlier claim that the building is located on a terrace. In any event, the evidence was sufficient to support the Board’s finding that the building is not, and that the beginning point of the measurement is the level of the approved street grade opposite the middle of the front of the building. Using that point of reference, the building measures 43 feet to the top of the fourth floor and 53 feet to the highest point of the roof of the penthouse.

Permanent persists in its claim that the penthouse has a mansard roof, and that the measurement must therefore be made to “the deck line of [the] mansard floor” which Permanent says is coincident with the roof of the fourth floor. We need not consider Permanent’s strained interpretation of what constitutes the deck line of a mansard floor, because the record fully supports the finding of the Board ²⁴⁴ that the penthouse does not have a mansard roof. The Montgomery County Zoning Code did not at the time define a mansard roof; 2 however, there was testimony that it is a roof having a double slope on all four sides, the lower slope usually being steeper. The gambrel roof often seen on barns exemplifies the double slope of a mansard roof — the difference being that the gambrel roof has two gable ends as opposed to the double slope configuration of all sides of a mansard roof.

The testimony and exhibits within this record show the penthouse roof as essentially flat, and having a parapet similar to the one on the flat roof of the fourth floor. Any slope that the penthouse roof does have is negative, and appears no greater than might be desired for drainage. Although the four walls of the penthouse have a positive slope, it requires at the very least a creative imagination to envision them as the lower slopes of a roof. The Board was not clearly wrong in finding that this penthouse does not have a mansard roof.

Board of Educ., Mont. County v. Paynter, 303 Md. 22 , 491 A.2d 1186 (1985); Ramsay, Scarlett & Co. v. Comptroller, 302 Md. 825 , 490 A.2d 1296 (1985). Permanent next contends that even if the measurements show the height of the building to be 53 feet to the top of the penthouse and 43 feet to the top of the fourth floor, there is no violation of the code. Concerning the penthouse, Permanent argues that as a roof structure housing mechanical equipment incident to the use of the building, the penthouse is exempt from height controls.

Concerning the fourth floor, Permanent argues that the code permits 35 feet plus 8 feet for nonhabitable structures, and that because the fourth floor will be used for offices rather than ²⁴⁵ living space it is “nonhabitable” within the meaning of the code. We shall examine the contentions separately. The exemptions from height control existing at the time of the issuance of the building permit in this case were contained in § 59-B-l.l as follows: The building height limits set forth in this chapter shall not apply to belfries, chimneys, cupolas, domes, flagpoles, flues, monuments, radio towers, television antennae or aerials, spires, tanks, water towers, water tanks, air conditioning units or similar roof structures and mechanical appurtenances, except where such structures are located within an airport approach area, as designated on the zoning map. No such roof structure, however, shall have a total area greater than twenty-five percent of the roof area; nor shall such structure be used for any purpose other than a use incidental to the main use of the building.

The penthouse fails to qualify for an exemption in at least two respects. First, the plans show an office in the penthouse for janitorial or security personnel, and an office is not an exempt roof structure. Second, the penthouse occupies forty-six percent of the roof area, nearly double the twenty-five percent coverage permitted by the code. 3 The penthouse, as built, does not conform with the requirements of the code. The problem presented by the fourth floor is entirely different.

As we have noted, § 59-C-6.235 permits a height of 35 feet “plus an additional 8 feet for nonhabitable structures.” Permanent views “nonhabitable structures” as the converse of “habitable space,” and draws its defini ²⁴⁶ tion of the latter from § 201.0 of the BOCA Basic Building Code, 1981: Habitable space: Space in a structure for living, sleeping, eating, or cooking. Bathrooms, toilet compartments, closets, halls, storage or utility spaces and similar areas are not considered habitable space. The BOCA Basic Building Code has been adopted by Montgomery County as its Building Code, Montgomery County Code (1972, 1977 Repl.Vol.) § 8-14, and definitions contained in the BOCA Code therefore apply in the interpretation of the Montgomery County Building code. This does not mean, as Permanent suggests, that the BOCA Code definitions apply to every other portion of the Montgomery County Code.

While the officials of DEP might reasonably be expected to look to a definition contained in other sections of the code for guidance, that definition is not binding. Appellees, on the other hand, contend that the term “nonhabitable structures” is intended to include only space occupied by water towers, water tanks, air conditioning units or similar mechanical appurtenances, 4 and that office space cannot properly be considered “nonhabitable.” The record before the Board discloses that the County had consistently applied the interpretation urged by Permanent, and had uniformly permitted a height of 43 feet for office buildings in these circumstances. It further discloses, however, that the Montgomery County Planning Board of the Maryland National Capital Park and Planning Commission held quite a different view. The Board of Appeals concluded that the definition urged by Appellees and the Planning Board was correct, and determined the maximum permitted height of this building to be 35 feet.

Abandoning its long standing prior position, the County ²⁴⁷ now adopts the Board’s interpretation as the correct one, and has amended its code accordingly. 5 We will not disturb the Board’s determination of the correct meaning of “nonhabitable structures” as that term is used in § 59-C-6.235. We do not, however, agree with the Board’s observation that the section is “quite clear and unambiguous.” The ambiguity vel non of the section is an important consideration in assessing the validity of Permanent’s claim of equitable estoppel, to which we now turn. As we pointed out in Salisbury Beauty Schools v. St. Bd., 268 Md. 32, 62 , 300 A.2d 367 (1973), we have adopted and continually applied the definition of equitable estoppel set forth at 3 J. Pomeroy, Equity Jurisprudence, § 804 (5th ed., 1941), as follows: Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might have otherwise existed, either of property, or contract or of remedy, as against another person who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse and who on his part acquires some corresponding right, either of property, of contract, or of remedy. In Fitch v. Double “U” Sales Corp., 212 Md. 324, 339 , 129 A.2d 93 (1957), we said: Equitable estoppel operates to prevent a party from asserting his rights under a general technical rule of law, when that party has so conducted himself that it would be contrary to equity and good conscience to allow him to do so.

There is no settled rule in this country as to when, and under what circumstances, equitable estoppel is available against a municipal corporation. More than a century ago, in Rogers v. Burlington, 70 U.S. (3 Wall) 654, 18 L.Ed. 79 (1865), the United States Supreme Court approved the appli ²⁴⁸ cation of an equitable estoppel against the city of Burlington, Iowa. In that case, for the purpose of making a loan in aid of development to the Burlington and Missouri River Railroad Company, the city issued bonds having a face amount of $75,000 which provided for payment of ten percent per annum interest, and payment of the principal amount after twenty years. Instead of selling the bonds and making a loan of the proceeds to the railroad company, the city elected to issue the bonds to the railroad company for it to sell, and took first mortgage bonds of the company as collateral.

Thereafter, when the city refused payment of interest to Rogers, a bona fide purchaser of some of the bonds, he brought suit. The city demurred, claiming it was without authority to issue the bonds, and the issuance was void because it was not for any municipal purpose. Finding against the city, Mr. Justice Clifford said for the Supreme Court: [T]he rule that a corporation quite as much as an individual is held to fair dealing with other parties, applies with all its force, and we repeat, that corporations cannot by their acts, representations, or silence, involve others in onerous engagements, and be permitted to defeat the calculations and claims which their own conduct has superinduced. Id. at 667.

A collection of cases dealing with the applicability of the doctrine of estoppel against a municipal corporation may be found at 9A McQuillin, Municipal Corporations § 27.56 (3rd ed. rev.), where it is stated: Although there is authority to the effect that the doctrine of estoppel does not apply as against a city, many decisions have held that the doctrine may be applied to municipal, as well as to private, corporations and citizens, when appropriate circumstances, justice and right so require. The assertion of the doctrine in proceedings to enjoin the violation or the enforcement of municipal ordinances ... is common. However, mere nonaction of municipal officers is not enough to establish an estoppel; ²⁴⁹ there must have been some positive acts by such officers that have induced the action of the adverse party. It must appear, moreover, that the party asserting the doctrine incurred a substantial change of position or made extensive expenditures in reliance on the act.

See also 9A McQuillin, supra, §§ 26.213 and 26.214. For a more activist position, as well as criticism of this Court and of other courts for imposing certain restrictions upon the use of equitable estoppel against municipal corporations, see 2 Antieau, Municipal Corporation Law ch. 16A (1986). Although our predecessors said in Gaver v. Frederick Cty., 175 Md. 639, 649 , 3 A.2d 463 (1939), that “[t]here is nothing in the nature of a municipal corporation to exempt it from the application of the doctrine of estoppel as it would apply to a natural person or a business corporation,” in practice we have applied the doctrine more narrowly. See City of Hagerstown v. Long Meadow, 264 Md. 481, 287 A.2d 242 (1972); Kent County v. Abel, 246 Md. 395, 228 A.2d 247 (1967); Berwyn Heights v. Rogers, 228 Md. 271 , 179 A.2d 712 (1962); Lipsitz v. Parr, 164 Md. 222 , 164 A. 743 (1933).

Judge Prescott summarized the principles of law applicable to this type of case in Berwyn Heights v. Rogers, supra, 228 Md. at 279-80 , 179 A.2d 712 : Some authorities hold that the principle of estoppel does not apply against a city, but the majority rule is to the effect that the doctrine of estoppel in pais is applied to municipal, as well as to private, corporations and individuals at least where the acts of its officers are within the scope of their authority and justice and right require that the public be estopped____ And it has been held that municipalities may be estopped by reason of the issuance of permits____ However, the cases and text writers very generally state that a municipality is not estopped to set up the illegality of a permit____ And the issuance of an illegal permit creates no “vested rights” in the permit-tee ____ (citations omitted). In discussing the spectrum of problems that may arise from the revocation of a permit, Judge Weintraub, speaking for ²⁵⁰ the Superior Court of New Jersey in Jantausch v. Borough of Verona, 41 N.J. Super. 89 , 124 A.2d 14, 16-17 (1956), aff'd, 24 N.J. 326 , 131 A.2d 881 (1957), said: Our cases clearly settle the controlling principles at the extreme poles of the problem. Where the permit is regularly issued in accordance with the ordinance, it may not be revoked after reliance unless there be fraud____ On the other hand, where there is no semblance of compliance with or authorization in the ordinance, the deficiency is deemed jurisdictional and reliance will not bar even a collateral attack____ But what of the intermediate situation in which the administrative official in good faith and within the ambit of his duty makes an erroneous and debatable interpretation of the ordinance and the property owner in like good faith relies thereon? Although the