Prince George's County v. Blumberg

Digges, J., delivered the opinion of the Court. We granted certiorari in the present case to consider the multifarious issues generated by the revocation of respondents Marvin and Herschel Blumbergs’ building and water-sewer permits by petitioners Prince George’s County and the Washington Suburban Sanitary Commission ²⁷⁸ (WSSC), respectively. Since we conclude, however, that the respondents failed to exhaust the available administrative remedies, we do not reach the merits of the case but reverse in part the judgment of the Court of Special Appeals, and direct that court to likewise reverse in part the judgment entered by the Circuit Court for Prince George’s County. The factual backdrop to this litigation is both extensive and complex, but, because of the view we take, may be somewhat condensed here.

Respondents own approximately forty acres of ground in the Hyattsville area of Prince George’s County on which they had planned to construct a high-rise residential building consisting of two towers, twenty-seven and thirty-five stories high. Aware that their land was situated in an area of restricted sewer service, the Blumbergs began, in the summer of 1971, to make inquiries of the WSSC as to whether such service would be available for their project. 1 Assured that it was still available, the Blumbergs began preparing final plans for their building, and in April 1972 made a formal application to the WSSC for water and sewer service. The commission approved the application on October 25, 1972, and issued the permits on November 13 of that year. Prior to receiving the necessary WSSC authorizations, respondents applied to Prince George’s County for a building permit, listing themselves as both owners and contractors of the proposed structure.

Approval was granted by the county’s Department of Licenses and Permits, which in January 1973 issued a building permit for the thirty-five story tower, in February issued a second permit for the twenty-seven story tower, and subsequently, consolidated the two permits into a third one on March 14,1973. With all necessary authorizations in hand, the Blumbergs made their ²⁷⁹ final preparations to begin construction; however, their problems were just beginning. A few days before the actual construction commenced, respondents learned that the county was considering a revocation of their building permit because their application had failed to list a licensed builder as required by a recently enacted county law. 2 This law became effective January 1, 1973, and established a licensing requirement for all building contractors within the county, see Prince George’s County Code §§ 2-253.6 to 2-253.18 (1975). 3 In doing so, the ordinance specifically provided that a building permit "shall not be issued to any person except a duly licensed building contractor . . ..” Id. § 2-253.15. Although the Blumbergs’ building permit application had been filed prior to the new law’s effective date, it was not approved and the permit issued until after that date.

While respondents believed, as both builder and owner, that this law did not apply to them because of the manner in which the act defines "building contractor”, 4 they nevertheless filed an application for a contractor’s license on March 28,1973, with the Department of Licenses and Permits. A temporary contractor’s license was issued to the respondents on April 5,1973, and a permanent one was delivered on April 17. While their application for a contractor’s license was pending, the Blumbergs on March 29 began construction of the building because of a condition imposed by the WSSC ²⁸⁰ when it issued the water and sewer permits requiring that the footings of the proposed building be completed and pass county inspection within six months of their issue date (here by May 10), otherwise the sewer and water permits would become void. The work continued until April 12,1973, when the county’s Chief Building Inspector, Mr. James R. Novak, issued a stop work order directing the respondents to cease further construction.

In an accompanying letter, Mr. Novak explained that "[r]eview of [your building] permit reveals that it was illegally issued because the contractor listed on the permit application does not possess a valid residential Building Contractor’s License .... The permit is, therefore, null and void.” Respondents, having already received their temporary contractor’s license prior to the inspector’s order, immediately notified the county of this fact, and asked that their building permit be revalidated and the stop work order rescinded. Before the county could rectify its error, however, the Blumbergs’ problem was compounded by actions of the WSSC. Upon being notified by the county (which was the normal practice) that the respondents’ building permit had been withdrawn, the WSSC, on April 11, 1973, suspended the efficacy of its water and sewer permits.

This, in turn, led the county, on April 19, 1973, to notify the Blumbergs that until the WSSC’s suspension was removed, the building permit could not legally be reissued. The Blumbergs, perceiving the predicament which was developing, arranged a meeting with William W. Gullett, the then Prince George’s County Executive, in an attempt to solve the problem. Mr. Gullett informed respondents that due to its height, considerable opposition to the building had developed in the residential neighborhoods surrounding the project; however, the county executive further indicated that if the Blumbergs would reduce the thirty-five story tower to twenty-seven stories the building permit could be reissued. As a result of this meeting, respondents altered their plans and submitted to the county, on May 8,1973, a revised application for a building permit, this time to construct twin twenty-seven story towers.

The new application, as are all building applications, was routinely forwarded to the WSSC ²⁸¹ in order that it might review the project for sewer and water availability. The commission, having received a request from the Blumbergs for an extension of the six month time limit on their previously issued but now suspended water and sewer permits, as well as update information concerning sewage disposal conditions in the Anacostia Basin, 5 set for a hearing all matters then pending with regard to respondents’ permits. In the meantime, the county delayed taking action on the revised application for a building permit. On May 23, 1973, the hearing scheduled by the commission took place with the Blumbergs and other interested citizens present and represented by counsel.

The commissioners heard argument from all desiring to be heard after receiving evidence concerning not only the prior commission action with regard to respondents’ applications, but also the present availability of sewer service in the Anacostia Basin area. Following this hearing, the WSSC passed, on May 30, 1973, an order: (i) revoking the previously issued water and sewer permits because they had been granted in contravention of the commission’s own rules, as well as on mistaken information; (ii) declaring that the outstanding permits, even if validly issued, had "expired ... on May 10, 1973 because the County footings inspection for the buildings to which the permits pertain had not been completed;” and (iii) denying the request for a new permit because of the inability, at that time, of the commission’s sewage treatment system to handle the increase which the building would generate. Following this series of events, the controversy entered the courts when the Blumbergs, on July 10,1973, filed a bill of complaint in the Circuit Court for Prince George’s County seeking injunctive and declaratory relief against Prince ²⁸² George’s County, County Executive Gullett, and the WSSC. In essence, respondents requested that the court declare that the county’s stop work order and WSSC’s suspension of their permits was void and unenforceable, and that it enter an order "prohibiting the Defendants .. . from refusing to reissue Plaintiffs’ building permit, ... continuing the suspension of the sewer or water permits, or ... otherwise interfering with the construction by Plaintiffs of the Plaza Towers Apartments ....” More than three years later, respondents amended their bill of complaint by joining Winfield M. Kelley, Jr., then County Executive, as an additional defendant, and requesting as a codicil to the previously sought relief, an award of $4.5 million in compensatory damages and $500,000 in punitive damages — the former representing the cost of delaying construction, and the latter "for Defendants’ willful and deliberate misuse of government power.” Two years later, the case finally went to trial (more than five years after it was initially instituted) 6 and the Circuit Court for Prince George’s County (Bowen, J.) ordered, on January 30, 1979, that the county and WSSC reissue the revoked permits; awarded $3,673,919 in compensatory damages against the county; dismissed the damage action against the WSSC on the ground of sovereign immunity; and sustained demurrers filed by the two former County Executives (Gullett and Kelley), dismissing them from the case.

All parties, except Gullett and Kelley, appealed the trial court’s decision to the Court of Special Appeals, which affirmed all aspects of Judge Bowen’s order, except for his calculation as to the monetary amount due and his determination that the WSSC was entitled to claim immunity from responding in damages. Prince George’s Co. v. Blumberg, 44 Md. App. 79 , 407 A.2d 1151 (1979). We granted certiorari. ²⁸³ Before this Court, the petitioners, as well as the respondents as cross-petitioners, raised numerous issues (nine in all) regarding the decision below, including, among others, whether Prince George’s County and the WSSC have immunity from monetary liability for their actions here, whether the claim of damages is barred by limitations or laches, whether the petitioners’ revocations of the permits was lawful, whether an award of damages for the increased cost of capital due to delay in resolving this dispute is proper and whether the bill of complaint stated a cause of action against County Executives Gullett and Kelley in their individual rather than official capacities. However, the question which we find dispositive of the present case as it pertains to Prince George’s County, and which renders it unnecessary that we examine any of the other issues presented concerning it, is the contention of the county that the circuit court lacked jurisdiction over this action because of the Blumbergs’ failure to exhaust the statutorily prescribed administrative remedy for its complained of action here.

Since we determine that this impediment is equally applicable to the claim against the WSSC, we will direct dismissal of the action as it pertains to each of these governmental entities. Further, since we agree with both the trial and intermediate appellate courts that no cause of action was stated against the two Prince George’s County Executives, we will affirm the judgment entered in their favor. An examination of the decisions of this Court over the last four or five decades will supply ample support for the statement that there are few legal tenets which have received greater acceptance into the jurisprudential law of this State than the one announcing: [A] claimant ordinarily must seek to redress the wrong of which he complains by using the statutory procedure the legislature has established for that kind of case, if it is adequate and available, and that if he is unsuccessful and wishes aid from the courts, he must take judicial appeals in the manner the legislature has specified rather than by seeking to ²⁸⁴ invoke the ordinary general jurisdiction of the courts .... [Consequently, we] have consistently held that where a special form of remedy is provided, the litigant must adopt that form and must not bypass the administrative body or official, by pursuing other remedies. [Agrarian, Inc. v. Zoning Inspector, 262 Md. 329, 332 , 277 A.2d 591, 592 (1971).] See in addition, e.g., Harbor Island Marina v. Calvert Co., 286 Md. 303, 308 , 407 A.2d 738, 741 (1979); Klein v. Colonial Pipeline Company, 285 Md. 76, 83 , 400 A.2d 768, 772 (1979); White v. Prince George’s Co., 282 Md. 641, 649 , 387 A.2d 260, 265 (1978); DuBois v. City of College Park, 280 Md. 525, 533 , 375 A.2d 1098, 1104 (1977); Comm’n on Med. Discipline v. Bendler, 280 Md. 326, 330 , 373 A.2d 1232, 1234 (1977); Comm’rs of Cambridge v. Henry, 263 Md. 370, 373-74 , 283 A.2d 415, 417 (1971).

The principal reasons for this exhaustion requirement with respect to administrative bodies are manifest — (i) the issues are largely within the expertise of the involved agency to hear the evidence and determine the propriety of the request; (ii) the courts would be undertaking functions the legislature thought could best be performed by an agency; and (iii) courts might be called upon to decide matters that would never arise if the prescribed administrative remedy, was followed. Gingell v. County Commissioners, 249 Md. 374, 376-77 , 239 A.2d 903, 905 (1968). However, and as our decisions also make clear, there are exceptions to the administrative agency exhaustion rule that have been recognized. Among them are: 1.

When the legislative body has indicated an intention that exhaustion of administrative remedies was not a precondition to the institution of normal judicial action. White v. Prince George’s Co., 282 Md. 641, 649, 387 A.2d 260, 265 (1978). 2. When there is a direct attack, constitutional or otherwise, upon the power or authority (including whether it was validly enacted) of the legislative body to pass the legislation from which relief is ²⁸⁵ sought, as contrasted with a constitutional or other type issue that goes to the application of a general statute to a particular situation. Harbor Island Marina v. Calvert Co., 286 Md. 303, 308 , 407 A.2d 738, 741 (1979). 3.

When an agency requires a party to follow, in a manner and to a degree that is significant, an unauthorized procedure. Stark v. Board of Registration, 179 Md. 276, 284-85 , 19 A.2d 716, 720 (1941). 4. Where the administrative agency cannot provide to any substantial degree a remedy. Poe v. Baltimore City, 241 Md. 303, 308-09 , 216 A.2d 707, 709 (1966). 5.

When the object of, as well as the issues presented by, a judicial proceeding only tangentially or incidentally concern matters which the administrative agency was legislatively created to solve, and do not, in any meaningful way, call for or involve applications of its expertise. Md.-Nat’l Cap. P. & P. v. Wash. Nat’l Area, 282 Md. 588, 594-604 , 386 A.2d 1216, 1222-27 (1978).

Of these, the Blumbergs only rely on the fourth as having any bearing on the case now before us, a contention which we discuss later. In order to explain why we believe the Blumbergs had an administrative procedure available for substantially addressing their grievances against petitioners, which, as a prerequisite to judicial relief, they were obliged to follow, it is desirable that we outline the statutory schemes establishing this remedy. Turning first to the actions of the county, we begin by noting that Prince George’s County, being a charter county established pursuant to Article XI-A of the Maryland Constitution, may exercise only those legislative powers expressly granted to such political subdivisions by the General Assembly. Md. Const., Art. XI-A, § 3; e.g., Ritchmount Partnership v. Board, 283 Md. 48, 56-57 , 388 A.2d 523, 529-30 (1978); Mont.

Citizens ²⁸⁶ League v. Greenhalgh, 253 Md. 151, 158 , 252 A.2d 242, 245 (1969). One such power specifically delegated to charter counties by the legislature in the Express Powers Act, Md. Code (1957, 1973 Repl. Vol., 1979 Cum. Supp.), Art. 25A, § 5, is the authority: [t]o enact local laws ... establishing] a county board of appeals whose members shall be appointed by the county council;... and for the decision by the board on petition by any interested person and after notice and opportunity for hearing ..., of such of the following matters arising (either originally or on review of the action of an administrative officer or agency) under any law, ordinance, or regulation of... the county council, as shall be specified from time to time ...: the issuance, renewal, denial, revocation, suspension, annulment, or modification of any license, permit... or other form of permission or of any adjudicatory order .... [Id. § 5(U) (emphasis added).] If a county establishes a board of appeals in conformance with this section, then "any person aggrieved by the decision of the board . .. may appeal to the circuit court for the county” to seek review of this decision, and the circuit court’s action is reviewable by appeal to the Court of Special Appeals.

Id. Moreover, the General Assembly has directed that "[t]he review proceedings provided by this subsection shall be exclusive.” Id. (emphasis added). Pursuant to this authorization, Prince George’s County created, by ordinance, a Board of Appeals "to hear and determine all administrative appeals allowed by ordinance or law,” with the exception of three matters not here relevant.

Prince George’s County Code §§ 2-117; 2-118 (1975). More particularly, county law provides: The owner or occupant of a building or structure or any directly aggrieved person may appeal to the Board of Appeals from a fínal decision of the Building Official refusing to grant a modiGcation of the ²⁸⁷ provisions of the Basic Code or of this Ordinance[ 7 ] Application for appeal may be made when it is claimed that: The true intent of the Basic Code or of this Ordinance has been incorrectly interpreted or applied. Notice of such appeal shall be in writing and filed within thirty (30) days after the decision is rendered by the Building Official. [Id. § 4-140 (emphasis added).] Furthermore, the Board of Appeals, in reviewing decisions of the Building Official, is given by the "Ordinance” wide-ranging authority: The Board of Appeals .. . may vary the application of any provision of the Basic Code or Ordinance to any particular case when, in its opinion, the enforcement thereof would do manifest injustice, and/or would be contrary to the spirit and purpose of the provisions herein or the public interest, or when, in its opinion, the interpretation of the Building Official should be modified or reversed. [Id. § 4-141 (emphasis added).] Primarily raised in the present case is the question of whether the actions of the county here — declaring the building permit void, issuing a stop work order and refusing to grant a new permit (or reissue an amended old one) providing for towers of fewer stories — are to any extent reviewable under this statutory framework, and if so, whether the review procedures outlined above were required to be followed. The county contends that its actions in this case are reviewable by the Board of Appeals because they were based on an interpretation and application of the county building code (including the BOCA Basic Code), and ²⁸⁸ accordingly, under Md. Code (1957, 1973 Repl.

Vol., 1979 Cum. Supp.), Art. 25A, § 5 (U), this appeal procedure was the exclusive remedy. Specifically, Prince George’s County points to the fact that the Blumbergs’ complaint is that the Chief Building Inspector (Mr. Novak) had no authority to revoke or refuse to reissue the building permit; that the relief sought, aside from damages, is the obtaining of an order directing the reissuance of the permit; and that Mr. Novak acted in the belief that because the Blumbergs had failed to comply with the contractor’s license law, and because the WSSC had suspended and then revoked the water and sewer permits, issuance of a building permit was prohibited by section 4-230 of the Prince George’s County Code. 8 Thus in the county’s view, the Blumbergs’ complaint was clearly within the Board of Appeals jurisdiction, since its actions were based on an interpretation and application of the Basic Code and the building subtitle of the county code. Consequently, they argue the legal and factual issues involved were ones which the Board was designed to resolve.

The respondents, on the other hand, assert that the Board’s review authority is limited to refusals by the Building Official "to grant a modification of the provisions of the Basic Code or of this Ordinance.” Prince George’s County Code § 4-140 (1975). So, in their view, since what is at issue is not a modification of the building code, but rather a determination that the building permit was void for the alleged failure to comply with applicable county law, as well as whether the county’s actions constituted an unlawful interference with a vested property right, there was no administrative remedy to exhaust. 9 Moreover, even if the Board does have jurisdic ²⁸⁹ tion, respondents contend that the failure to exhaust this administrative remedy is excused (i) because it would be inadequate and (ii) because of the allegation that there existed a tortious conspiracy to harm them. The circuit court, as well as the Court of Special Appeals, rejected the county’s argument. The trial court ruled that there was no administrative remedy to exhaust because the Board of Appeals was without power to decide the validity of a building permit or to order the Building Official to change his position with regard to the law.

Additionally, that court believed that the Blumbergs were entitled to by-pass the Board since they alleged the existence of a conspiracy, sought damages, and because "pursuit of this matter in the administrative area would have been totally fruitless.” The Court of Special Appeals affirmed the trial judge’s resolution of this issue, although on slightly different grounds. While recognizing that the respondents could have appealed the April 12 determination of Mr. Novak that the permit was "null and void” for failure to obtain a contractor’s license, the intermediate appellate court believed that there existed no need for respondents to do so, since the letter annulling the permit indicated that it would be reissued as soon as proof of licensure was established. Prince George’s Co. v. Blumberg, 44 Md. App. 79, 97-98 , 407 A.2d 1151, 1164 (1979). Further, the intermediate appellate court concluded the action of Mr. Novak did not amount to a "final decision of the Building Official refusing to grant a modification of the provisions of the Basic Code or of [Subtitle 4]” because the revocation