Powell v. Calvert County

⁴⁰² CATHELL, Judge. James W. Graner, respondent, 1 filed an application for a special exception with the Calvert County Board of Appeals (hereinafter Board). In February of 1997 the Board granted the special exception over the protests of various neighbors, including Larry Powell and Susan Mulvaney, petitioners. Petitioners filed a petition for judicial review in the Circuit Court for Calvert County, which affirmed the decision of the Board.

Petitioners then filed an appeal with the Court of Special Appeals, which reversed the decision of the Circuit Court, vacated the decision of the Board, and remanded the case to the Board for further proceedings. On September 12, 1999, the Board, after making a statement on the record, once again granted the special exception applied for by respondent. Petitioners filed a petition for judicial review in the Circuit Court. After a hearing was held, the Circuit Court affirmed the Board in part and remanded part of the case to the Board for further proceedings.

Petitioners filed an appeal with the Court of Special Appeals. The Court of Special Appeals affirmed all of the decisions of the Board, thereby, affirming in part and reversing in part the decision of the Circuit Court. Petitioners filed a Petition for Writ of Certiorari to this Court, which we granted. Petitioners present two questions for our review: “I. Did the lower court err by holding that when an administrative agency decision granting a special exception is vacated, the use of the property pursuant to the ultimately vacated special exception served to vest the rights to that use under the doctrine of vested rights?

II

Did the lower court err by affirming the administrative agency grant of a special exception based on the lower ⁴⁰³ court’s finding that prescribing a condition to the grant of the special exception was a substitute for substantial evidence of a required finding, when there was no evidence in the record to support the finding?” We answer yes to question I and reverse the decision of the Court of Special Appeals. We hold that respondent had not obtained a vested right to use his property for the storage of materials. Facts Respondent owns a fourteen-acre parcel of land in Calvert County that is zoned RUR — Rural District. 2 An excavating business has been conducted on a portion of the property for more than twenty years and respondent has been running the business since 1981. In 1984, respondent received a home occupation permit under the Calvert County Zoning Ordinance (hereinafter Zoning Ordinance) that permitted respondent to locate the office for his business on the property.

In 1986, respondent was granted a special exception by the Board that permitted him to park excavation equipment on the premises. Subsequently, ⁴⁰⁴ respondent began to store construction equipment and materials such as top soil and gravel. After complaints from respondent’s neighbors, Calvert County issued several citations to respondent claiming violation of the Zoning Ordinance. In 1994, the Board of County Commissioners for Calvert County brought an action seeking injunctive relief in the District Court of Maryland sitting in Calvert County.

The District Court found that the land use associated with the excavating business was a valid nonconforming use; therefore, the injunctive relief requested was denied. The County appealed to the Circuit Court for Calvert County. The Circuit Court reversed the decision of the District Court, finding that the screening of topsoil and the storage of materials were not valid nonconforming uses. 3 The Circuit Court found the storage of materials to be a use allowed only by way of a special exception in a RUR zone, and granted respondent thirty days to file for the special exception. Respondent filed an application for a special exception with the Board.

In February of 1997 a hearing was held before the Board. 4 At the end of the hearing, the Board granted the special exception. A petition for judicial review was filed by petitioners in the Circuit Court for Calvert County. The Circuit Court affirmed the decision of the Board and petitioners filed an appeal with the Court of Special Appeals. ⁴⁰⁵ On December 5, 1998, while the appeal was pending with the Court of Special Appeals, the Board of County Commissioners of Calvert County amended the Zoning Ordinance. Resolution Number 47-98 5 amended the Zoning Ordinance so that a special exception was not allowed for “outdoor storage in connection with commercial and/or industrial uses” and “machinery and equipment in connection with excavating and/or contracting businesses” in a RUR district.

This amendment repealed the section under which respondent had obtained initial approval from the Board of Appeals and the Circuit Court for his special exception. On April 23, 1999, after the County had amended the ordinance deleting the special exception provision at issue, the Court of Special Appeals, in an unreported opinion (Powell I), held that “[bjecause the state of the record prevents us from concluding whether there was substantial evidence supporting the Board’s decision, we shall reverse the circuit court’s judgment and instruct the court to vacate the Board’s decision and remand the case to the Board for further proceedings.” Specifically, the Court of Special Appeals held that there was insufficient evidence in the record about a site visit to respondent’s property prior to the hearing before the Board. There was not any evidence in the record about “when the inspection occurred, who attended, what was said or observed, and whether the parties were advised of the visit.” The Court of Special Appeals held that this lack of evidence resulted in a deficient record from which the court was unable to determine if the Board’s decision was based on substantial evidence. The court reversed the judgment of the Circuit Court for Calvert County with instructions to vacate the decision of the Board.

Apparently, the Circuit Court then vacated the Board’s decision. On September 2, 1999, the Board, at its regular public meeting, addressed respondent’s request for a special excep ⁴⁰⁶ tion. The Board, stating that it was strictly following the Court of Special Appeals’s opinion, did not reopen the record for new evidence or allow any party to comment on the proceedings. Instead, the Board made some statements about the circumstances surrounding its site visit to respondent’s property and then proposed to adopt its previous findings of fact with amendments.

The findings of fact were adopted and the special exception was then approved by the Board pursuant to the law as it existed at the time of the original hearing. The Board did not consider the ordinance as it existed at the time of its final decision, which was that the special exception granted was no longer available. On October 18, 1999, the Board filed revised findings of fact and conclusions, which included the clarifications that the Board felt were required by the opinion of the Court of Special Appeals. On November 16, 1999, petitioners filed, in the Circuit Court for Calvert County, a Petition Requesting Judicial Review of the September 2, 1999 decision of the Board to grant the special exception.

The Circuit Court filed an Opinion and Order on June 2, 2000. In its opinion, the Circuit Court found that although there was a change to the Zoning Ordinance so that a special exception could not have been granted, respondent had obtained a vested right which protected him from the intervening change in the Zoning Ordinance. The Circuit Court also found that respondent had provided ample evidence so that there was substantial evidence in the record to support the Board’s granting of the special exception under the prior law. The last issue presented to the Circuit Court by petitioners was whether the Board had properly considered whether respondent resided on the premises, which was a condition for the previous granting of the home occupation permit and the special exception.

The Circuit Court found that the Board failed to properly consider this issue. Therefore, the Circuit Court affirmed the Board on the first two issues and remanded the case to the Board for the purpose of addressing the home occupation permit. Petitioners appealed the decision of the Circuit Court to the Court of Special Appeals. On March 9, 2001, the Court of ⁴⁰⁷ Special Appeals filed an opinion (Powell v. Calvert County, 137 Md.App. 425 , 768 A.2d 750 (2001) (Powell II) 6 which affirmed all of the decisions of the Board, thereby affirming in part and reversing in part the Circuit Court.

Petitioners filed a Petition for Writ of Certiorari to this Court, which we granted. Powell v. Calvert County, 364 Md. 534 , 774 A.2d 408 (2001). Discussion Petitioners contend that the 1998 amendment to the Zoning Ordinance should have been applied to respondent’s application for a special exception after the Court of Special Appeals (Powell I) reversed the decision of the Circuit Court with instructions for that court to vacate the decision of the Board and remand the case to the Board for further proceedings. On remand, the Board, even though the 1998 amendment was in effect, still granted the special exception based on the Zoning Ordinance prior to the 1998 amendment.

The Court of Special Appeals, in examining the prospective versus the retroactive application of the 1998 amendment determined that the 1998 amendment had a retroactive application, making it effective against pending cases from the date of its inception. The Court of Special Appeals stated: “In the case before us, the amendment provided that it was effective as of December 8, 1998. As was true in Holland,[ 7 ] it contained no other provision with respect to prospective or retroactive application. Unlike the amendment in Holland, however, the amendment before us does ⁴⁰⁸ by its terms operate retroactively.

We cautioned in Holland that while zoning cases are not exempt from the principles of construction set forth in Riverdale Fire Company, changes in zoning laws, such as zoning reclassifications, ordinarily will apply retrospectively by their, very terms. Such in rem changes to the status of property necessarily will raise the question of whether the changes interfere with the property owner’s vested rights. Holland, 113 Md.App. at 286-87, 687 A.2d 699 (emphasis in original) (citations omitted). The amendment in this case was tantamount to a change in zoning classification.

As of its effective date, the outside storage of construction materials was not a use permitted by special exception, absent vested rights.” Powell v. Calvert County, 137 Md.App. 425, 435-36 , 768 A.2d 750, 756 (2001). The Court of Special Appeals then examined whether respondent had obtained a vested right to use his property for outdoor storage. The Court of Special Appeals stated: “In the case before us, the Board’s decision issuing the special exception was vacated. Thus, even though the result in [Town of Sykesville v.] West Shore [Communications, Inc.] was the same as the result we reach in this case, its holding is not on point.

The use, originally unlawful, became lawful when the Board approved the special exception. It did not thereafter become‘unlawful’ because the Board acted within its powers and there was no violation of the zoning ordinance. We see no difference, for purposes of the issue before us, between a use that only comes into existence pursuant to and after issuance of a special exception, on the one hand, and an existing illegal use that becomes legal when a special exception is issued and the use continues in existence. In each case, there was a lawful use in existence prior to the amendment of the zoning ordinance.

When the case was before us on the prior occasion, we did not rule on the ⁴⁰⁹ sufficiency of the evidence. As we shall explain below, the evidence was legally sufficient to support the Board’s decision and its amended opinion that is now before us complies with the standard for appellate review. The special exception was never declared invalid. In the case before us, on the first appeal, we held that the record was insufficient for meaningful appellate review.

On remand to the circuit court, we could have, and perhaps should have, directed the court to remand the case to the Board without vacating its existing decision. In any event, we hold that the special exception was never declared unlawful or invalid within the meaning of the rule of vested rights. The applicant did proceed at his own risk, however, in that had we reversed the Board’s action on this appeal based on an error of law, his rights would not have vested.” Powell, 137 Md.App. at 440-42 , 768 A.2d at 758-59 (citations omitted). In instances where there is ongoing litigation, there is no different “rule of vested rights” for special exceptions and the like.

Until all necessary approvals, including all final court approvals, are obtained, nothing can vest or even begin to vest. Additionally, even after final court appróval is reached, additional actions must sometimes be taken in order for rights to vest. In Sykesville v. West Shore Communications, Inc., 110 Md.App. 300, 305 , 677 A.2d 102, 104 (1996), a case in which rights were found to have vested, the Court of Special Appeals noted the standard for “vesting” in the zoning context: “1) there must be the actual physical commencement of some significant and visible construction; 2) the commencement must be undertaken in good faith, to wit, with the intention to continue with the construction and to carry it through to completion; and 3) the commencement of construction must be pursuant to- a validly issued building permit.” ⁴¹⁰ In the case sub judice, a special exception approval, whose validity is being litigated, is not finally valid until all litigation concerning the special exception is final. Persons proceeding under it prior to finality are not “vesting” rights; they are commencing at “their own risk” so that they will be required to undo what they have done if they ultimately fail in the litigation process.

We hold that respondent never obtained a final valid exception prior to the change in the law and, therefore, never obtained a vested right. In our recent case of Marzullo v. Kahl, 366 Md. 158 , 783 A.2d 169 (2001), we further examined the doctrine of vested rights when we quoted Prince George’s County v. Sunrise Development Limited Partnership, 330 Md. 297, 312-13 , 623 A.2d 1296, 1303-04 (1993): “The third stream of cases involves the issue of vested rights, per se. By a per se vested rights case we mean one invoking ‘[t]hat doctrine, which has a constitutional foundation [and which] rests upon the legal theory that when a property owner obtains a lawful building permit, commences to build in good faith, and completes substantial construction on the property, his right to complete and use that structure cannot be affected by any subsequent change of the applicable building or zoning regulations.’ Prince George’s County v. Equitable Trust Co., 44 Md.App. 272, 278 , 408 A.2d 737, 741 (1979). The first case in this Court squarely raising that doctrine is Richmond Corp. v. Board of County Comm’rs for Prince George’s County, 254 Md. 244 , 255 A.2d 398 (1969).

There the developer owned commercially zoned land abutting resi-dentially zoned land. The developer had expended large sums of money in acquisition of the property and in preparing plans, leases and specifications for a shopping center on the commercially zoned tract that would utilize the residen-tiary zoned tract for parking. Before there was any construction on