Secretary of Health and Mental Hygiene v. Crowder

Gilbert, C. J., delivered the opinion of the Court. On August 13, 1979, following oral argument in this case, we issued the following per curiam order: “This cause, having come before this Court on argument after an order of advancement, it is this 13th day of August, 1979, by the Court of Special Appeals of Maryland, ORDERED, that the judgment hereinbefore entered by the Circuit Court for Frederick County be, and the same is hereby, reversed. The reasons for this per curiam order to be stated in an opinion to be filed at a later date. Costs to be paid by appellee.

The mandate shall issue forthwith.” We now explain why we took that action. This is the story of Treasure Mountain. It is the saga of Jesse T. Crowder’s venture into real estate development of ²⁷⁸ his own small tract of property and his entanglement in the regulations of the Maryland Department of Health and Mental Hygiene. 1 The complex web of governmental rules, the Department’s denial of permission to use septic tank sewage in the venture, together with the resultant administrative appeals, must have at times seemed to Crowder to have removed all expectation of “Treasure” from the Mountain. Indeed, “Treasure Mountain” might be better named “Heartbreak Hill.” The Circuit Court for Frederick County cut through the strands of the regulatory web, reversed the decision of the Secretary of Health and Mental Hygiene as well as that Department’s Board of Review, and placed its judicial stamp of approval on Crowder’s project.

Unmistakably aggrieved by the circuit court’s action, the Secretary appealed. We, after discussion with counsel for the parties litigant, sua sponte advanced the matter for hearing. The Secretary vigorously asserts to us that “the denial of subdivision approval” by the agency over which he presides was “in accordance with legally sufficient regulatory standards,” and that the denial was “supported by substantial evidence.” The facts giving birth to this appeal commenced with plans to subdivide sixteen acres of land located in Frederick County into sixteen residential building lots. 2 Four of the lots failed to pass the necessary percolation test, 3 and two lots were ²⁷⁹ combined into one because of the slope of the lots. The percolation tests were relatively fast. 4 As a result of the tests, the subdivision was reduced to eleven lots on the final revised plat that was submitted to the Supervisor of the Environmental Health Services of the Frederick County Health Department.

The Supervisor disapproved the plat and Crowder set out on his journey to court. ²⁸⁰ First he appealed to the Deputy State Health Officer of Frederick County. Following a lack of success at that level, Crowder appealed to the Secretary of the Maryland Department of Health and Mental Hygiene. The Secretary designated a hearing officer to conduct the hearing and make recommendations to the Secretary. Upon receipt of the hearing officer’s findings and recommendations, the Secretary affirmed the Deputy State Health Officer’s disapproval of the subdivision plan.

Crowder then appealed to the Board of Review of the State Health and Mental Hygiene Department. 5 Following oral argument, the Board of Review affirmed the order of the Secretary and adopted the findings of fact and conclusions of the hearing officer. Once more Crowder appealed. He sought relief in the Frederick County Circuit Court. That tribunal agreed with Crowder.

It found that the hearing officer’s findings of fact were not supported by the record before her, and that “there was no evidence in the case that could reasonably sustain the decision” of the Secretary. Accordingly, the court reversed the Secretary and “approved” the subdivision. Before we begin our discussion of the law, certain fundamental principles applicable to appeals from administrative agencies must be recalled: 1. Judicial review of decisions made by an administrative board is narrow in scope because of the recognized expertise of the board in a particular field of endeavor.

Annapolis v. Annapolis Waterfront Co., 284 Md. 383 . 395, 396 A.2d 1080, 1087 (1979); Finney v. Halle, 241 Md. 224, 241 , 216 A.2d 530, 539 (1966). 2. Decisions of administrative boards carry a presumption of validity and will not be disturbed on appeal if there is a showing within the record of substantial evidence to sustain the findings. Heaps v. Cobb, 185 Md. 372, 378-79 , 45 A.2d 73, 76 (1945); Commissioner v. Cason, 34 Md. App. 487, 499 , 368 A.2d 1067, 1074 , cert. denied, 280 Md. 728 (1977); Toland v. ²⁸¹ State Board of Education, 35 Md. App. 389, 395-96 , 371 A.2d 161, 164-65 (1977). 3. State administrative “agencies are created in order to perform activities which the Legislature deems desirable and necessary” to further the public health, safety, welfare, and morals.

Department of Natural Resources v. Linchester, 274 Md. 211, 222 , 334 A.2d 514, 522 (1975); Commissioner v. Cason, supra. 4. With or without legislative enactment, courts have an inherent constitutional duty to review, within limits, 6 decisions of administrative bodies. Department of Natural Resources v. Linchester, supra; Baltimore Import Car v. Maryland Port Authority, 258 Md. 335, 342-43 , 265 A.2d 866, 869-70 (1970); Commissioner v. Cason, supra. 5. The powers vested in the courts, by statute or inherence, to review administrative decisions does not carry with it the right to substitute its fact finding process for that of an agency.

Oxon Hill Recreation Club v. Water Resources Administration, 281 Md. 110, 114 , 375 A.2d 567, 569 (1977); Insurance Commissioner v. National Bureau, 248 Md. 292, 309-10 , 236 A .2d 282, 291-92 (1967); Snowden v. Mayor and City Council of Baltimore, 224 Md. 443, 445 , 168 A.2d 390, 391 (1961); Toland v. State Board of Education, supra; Nelson v. Real Estate Commission, 35 Md. App. 334, 344-45 , 370 A.2d 608, 615 , cert. denied, 280 Md. 733 (1977); Commissioner v. Cason, supra. See also, Prof. E. A. Tomlinson, Constitutional Limits on the Decisional Powers of Courts and Administrative Agencies in Maryland, 35 Md. L. R. 414 (1976). 6. The court will correct illegal, arbitrary, and unreasonable acts of the administrative agencies “because those acts are not based on substantial evidence.” Snowden v. Mayor and City Council of Baltimore, supra, 224 Md. at 445 ; Commissioner v. Cason, supra. 7.

The court may not set aside a decision of an administrative agency merely because the court might weigh ²⁸² the evidence differently. Johnstown Coal & Coke Co. v. Dishong, 198 Md. 467 . 476, 84 A.2d 847 . 851 (1951). See also Board v. Oak Hill Farms, 232 Md. 274 , 192 A.2d 761 (1963). An excellent and relatively brief summary of the functions of the courts in reviewing a decision of an administrative agency was penned by Judge Jerrold V. Powers for this Court in the Cason case: “A reviewing court may, and should, examine any inference, drawn by an agency, of the existence of a fact not shown by direct proof, to see if that inference reasonably follows from other facts which are shown by direct proof.

If it does, even though the agency might reasonably have drawn a different inference, the court has no power to disagree with the fact so inferred. A reviewing court may, and should, examine any conclusion reached by an agency, to see whether reasoning minds could reasonably reach that conclusion from facts in the record before the agency, by direct proof, or by permissible inference. If the conclusion could be so reached, then it is based upon substantial evidence, and the court has no power to reject that conclusion. A reviewing court may, and should, examine facts found by an agency, to see if there was evidence to support each fact found.

If there was evidence of the fact in the record before the agency, no matter how conflicting, or how questionable the credibility, of the source of the evidence, the court has no power to substitute its assessment of credibility for that made by the agency, and by doing so, reject the fact.” 34 Md. App. at 508 . We turn now to the case sub judice. While the hearing examiner's findings are not, in our view, as factually comprehensive as they should have been and, thus, invited the circuit court’s reversal, the record, when reviewed, shows that the examiner was correct, even if for the wrong reason. ²⁸³ There was evidence that, although the majority of the lots passed the percolation test, 7 the “rock formulation” in the area where the septic systems were to be located would not fulfill the expectations of a septic system. In short the sewage would not be properly attenuated before it reached ground water.

Mr. Robert T. Dutrow, Supervisor of the Environmental Health Department for Frederick County, testified that he had been performing that “sort of work” for “[nineteen and a half years.” He personally examined Treasure Mountain on several occasions. It was Mr. Dutrow’s judgment that the septic