Pollard's Towing, Inc. v. Berman's Body Frame & Mechanical, Inc.

MOYLAN, Judge. In this appeal, the appellants, Pollard’s Towing, Inc.; Bud and Jeff Dansicker, Inc.; Pikesville Auto and Body Repair, Inc.; and Baltimore County Organized Licensed Towers, Inc., challenge a ruling in the Circuit Court for Baltimore County which reversed the Baltimore County Board of Appeals’s denial of a towing license to the appellee, Berman’s Towing. ²⁷⁹ The appellants present the following issues for our consideration: 1. Did the circuit court err in holding that the Board of Appeals improperly relied on “unpublished” criteria when reversing the decision of the Department of Permits and Development Management to issue the appellee a towing license? 2. Even if the circuit court properly reversed the decision of the Board of Appeals, did the circuit court err in ordering that the appellee’s towing license be reinstated instead of remanding the action to the Board of Appeals for further proceedings?

As we reframe the critical issue before us, our focus will be on whether the County Board of Appeals had substantial evidence before it to support its ultimate conclusion that no adequate need had been shown for the towing license in issue. Although the Board’s Opinion of December 31, 1998, at times reads like an appellate review of the earlier decision of the Department of Permits and Development Management to issue the license, the bottom line is that on November 5, 1998, the Board conducted an extensive de novo hearing “regarding the approval of a towing license permit.” As counsel for the appellants framed the issue before the Board: As aggrieved parties, [we] would like to produce evidence and testimony to establish that the need criteria which is probably the second most important issue in this case, has not been met, and that on that basis the license should not be issued. (Emphasis supplied). Five witnesses testified before the Board on the subject of need.

Eugene Freeman, the Director of the Department, testified as to what the Department had relied upon to issue the license. The net effect of the language in the Board’s Opinion criticizing the actions of the Department as “arbitrary” was to establish the complete insubstantiality of any evidence of need: ²⁸⁰ The basic problem area present in this case is not the reliance of the permits department in granting the license based on need expressed by the Maryland State Police, but that the “need” requirement has not substantive backup. Had the Maryland State Police provided information documenting the need, the permits department was free to grant such a regular license with limitations, provided that criteria is known to the public and other towers relative to such specific criteria. (Emphasis supplied).

The Opinion of the Board then went on to recite the testimony of four other witnesses, each of whom testified that there was no need. Our inquiry will focus on whether the evidence before the Board gave it a substantial basis for concluding that there had not been an adequate showing of a need for the towing license. Title 24, Article VI of the Baltimore County Code Title 24, Article VI of the Baltimore County Code generally explains the rights and sets forth the procedural requirements of businesses engaged in the practice of towing vehicles on Baltimore County roadways. Section 24-226(a) provides: It shall be unlawful for any person to engage in towing disabled vehicles from the scene of a motor vehicle accident occurring within the county without first having obtained a license from the department of permits and licenses to do so____ The Department of Permits and Development Management (“the Department”) 1 is vested with the authority either to approve or to deny applications for such towing licenses.

The Department’s determination of whether to approve an application for a towing license is governed by section 24-229 of the County Code, which provides that ²⁸¹ new licensed towers shall be approved by the Department of Permits and Licenses based upon the need for additional service. If the need does not exist, the application will not be approved. (Emphasis supplied). Once a license is obtained, a towing business is assigned a specific geographical area within the County in which it can operate and it is notified by the police whenever a disabled vehicle needs to be removed from an accident scene.

The Appellee’s First Application for a Towing License In February of 1994 the appellee, a private towing business located in Baltimore City and operating in the City and surrounding areas, applied for a license to tow disabled vehicles from accident scenes in the southwest portion of Baltimore County. On July 7, 1994, the Department denied the appellee’s application. The appellee appealed the denial of the towing permit to the Baltimore County Board of Appeals (“the Board”). The sole issue before the Board was whether a new towing license should be issued to the appellee based on the need for such services under § 24-229 of the County Code.

A hearing was held on the matter, and on December 14, 1995, the Board issued an Opinion in which it affirmed the decision of the Department to deny the appellee’s request for a towing license, holding that “there is no demonstrated need for an additional licensed tower in the area.” No further action was taken by the appellee. The Appellee’s Second Application for a Towing License On November 6, 1997, the appellee again sought a towing license by filing an application with the Department. In preparing its request, the appellee communicated directly with the Maryland State Police to determine whether a need existed for additional towing companies to operate in the Baltimore County area. On May 13, 1997, Lieutenant Commander Michael J. Fisher of the Golden Ring Barrack informed the appellee: ²⁸² [T]his letter will serve as an official request for you to become a licensed tow service provider in Baltimore County, Maryland....

I am requesting that the Baltimore County Department of Licenses and Permits issue you said permit as a need exists for your services by the Maryland State Police, Golden Ring Barrack. The Office of the Attorney General has expressed in writing that the State Police need does not supercede the County’s requirements to issue the aforementioned permit. This letter should serve as additional documentation for you to present to the Baltimore County Executive Office in your attempt to secure said license. (Emphasis supplied).

Some time after that letter was received by the appellee, Lieutenant Commander Fisher was replaced at the Golden Ring Barrack by Lieutenant Commander Michael E. Davey. Although initially disagreeing with Fisher’s determination that a need existed for additional towing services, Davey ultimately changed his position and notified the appellee by a letter dated October 29, 1997, that a need, indeed, existed for his towing services. The letter was identical to the one sent to the appellee by Lieutenant Commander Fisher on May 13, 1997, with the sole exception of the signature of the commanding officer. On October 29, 1997, the appellee faxed a copy of Lieutenant Commander Davey’s letter to Arnold Jablon, the Director of the Department, along with a request to “please call me and let me know what I need to do next.” On November 3, 1997, the appellee received the following letter from Eugene Freeman, Chief of the Permits and Licenses Division of the Department: The purpose of this letter is to inform you that Baltimore County will issue you a towing license.

The license will be issued based upon a written expression of need by the Maryland State Police in a later dated October 29, 1997, from Lieutenant Michael E. Davey. The State Police request for your services within Baltimore County is deemed ²⁸³ sufficient justification to satisfy the “need” criteria established by ... Section 24-229 of the Baltimore County Code. However, please be advised that this license is being issued only to enable you to receive calls from the Maryland State Police relative to the Interstate.

To initiate the issuance process, complete the enclosed towing license application and return it with the appropriate fee. In accordance with that letter, the appellee submitted his application for a towing license along with the required fee. In the meantime, the Baltimore County Police Department Towing Unit had conducted its own investigation into whether there was a “need” for the appellee to be a licensed tow operator. The involvement of the County Police Department was appropriate because of the ongoing coordination between the County and State Police with respect to how the two departments were to handle enforcement of the laws on interstate highways in Baltimore County.

Before a towing license may be issued, the County Police must conduct an inspection to determine whether there is an adequate “storage location” and adequate “towing vehicles.” In a Memo to the Department dated February 12, 1998, the County Police Department set forth eight criteria which it used to determine whether a “need” for the appellees services existed. Those criteria were: 1. The geographical location of the tower with respect to heavily traveled roadways; 2. The number of accidents with disabled vehicles on these heavily traveled roadways in the applicant’s area; 8.

The proximity of other licensed towers, both in terms of miles and minutes between the applicant’s location and the licensed towers’ locations that are currently servicing the area; ²⁸⁴ 4. A history of the previous year; late response times, no response times, number of trucks and complaints of the current licensed towers; 5. The growth potential for the particular geographical area in which the applicant is located; 6. The average daily traffic count for the heavily traveled roadways in the applicant’s area; 7.

Whether or not the application is for a location where a tow license had previously existed; and 8. The quality of the operation of the applicant, including the number of trucks, the number of years experience in towing, and whether or not the tower is in a position to furnish specialized services. The County Police Department in its Memo discussed in detail each of those eight factors, but it made no formal recommendation as to whether, in its opinion, a towing license should be issued to the appellee. On March 4, 1998, the Department approved the appellee’s application, and it issued the appellee a towing license for State Police towing only.

On April 1, 1998, the appellants, all of which operated towing businesses in the geographical area for which the appellee had been approved to operate his towing business for the State Police, appealed the Department’s decision to issue the appellee a permit. On November 5, 1998, a hearing was held before the Board of Appeals. On December 31, 1998, a fifteen-page Opinion was issued by the Board in which it explained: The issue involved concerns the issuance of a towing permit to the Applicant, which the Appellants contend is in violation of statute since the Applicant did not satisfy the “need” requirement of the law; and, in the alleged “illegal” issuance, the Appellants have been “aggrieved.” The Board, in its assessment of this case, clearly believes the permit department acted in an arbitrary manner in ²⁸⁵ permitting the Maryland State Police to finally determine if a “need” existed. This functions as a delegation of authority and confers upon a State agency an improper responsibility because the agency expresses a “need” without any statistical data, background or substantive basis for ascertaining such “need.” Such actions do substantial injustice to other towers who are required to justify such licenses in compliance with the previously required eight criteria; and creates doubt and suspicion as to other separate and distinct factors that may have been present in such consideration ....

At the conclusion of the Opinion, the Board then ORDERED that the decision of the Department of Permits & Licenses granting the Applicant’s (Berman’s Towing) request for a towing license be and the same is hereby REVERSED; and it is further ORDERED that the Applicant’s (Berman’s Towing) request for a towing license be and is hereby DENIED. The appellee thereafter sought judicial review of the Board’s decision in the Circuit Court for Baltimore County. Although the case was originally scheduled for a hearing, the parties later agreed to submit the case to the court without a hearing based on substantive memoranda filed by each party. On March 1, 2000, the circuit court issued the following Memorandum Opinion: On judicial review this Court has reviewed the memoranda, exhibits and testimony and finds that the Department of Permits and Development Management properly issued a permit to the Petitioner to conduct the towing operations pursuant to the request of the Maryland State Police, and that the decision of the County Board of Appeals of Baltimore County reversing the decision of the Department of Permits and Development Management and revoking the permit to the Petitioner was based on unpublished criteria.

This Court finds that the County Board of Appeals relied upon matters and cases previously brought before it, and ²⁸⁶ considered these matters to be the equivalent of published criteria on which it could rely in arriving at its decision.... ORDERED, that the Order of December 31, 1998, of the County Board of Appeals is hereby reversed, and this matter is remanded to the County Board of Appeals to reinstate the Petitioner’s license as established and granted by the Department of Permits and Development Management to tow disabled vehicles “for the State Police only.” (Emphasis supplied). From that decision the appellants appealed. Standard of Review When asked to consider the validity of the ruling of an administrative agency, a reviewing court, be it a circuit court or an appellate court, shall apply the substantial evidence test to the final decisions of an administrative agency, but it must not itself substitute its judgment for that of the agency.

Baltimore Lutheran High School v. Employment Security Admin., 302 Md. 649, 662 , 490 A.2d 701 (1985). We are bound by the agency’s findings of fact and may not substitute our judgment for that of the agency unless no “reasoning mind reasonably could have reach the factual conclusion the agency reached.” Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512 , 390 A.2d 1119 (1978). We further view the agency’s decision in the light most favorable to the agency, “since the decisions of administrative agencies are prima facie correct, and carry with them the presumption of validity.” Id. at 513 , 390 A.2d 1119 . In Eger v. Stone, 253 Md. 533, 542 , 253 A.2d 372 (1969), the Court of Appeals further elaborated on the deference given