Smith v. Edwards

Davidson, J., delivered the opinion of the Court. Friendship Heights Citizens’ Committee (Committee) 1 is an elected body which administers a special tax district, 2 located in Montgomery County, composed of the villages of Friendship Heights and The Hills. This case concerns the powers of the Committee under §§ 66-1 through 66-12 of the Montgomery County Code (1972 & 1974 Cum.Supp.). The question presented is whether the Committee had the implied power to engage in administrative and judicial proceedings in an effort to oppose intensification of development in Friendship Heights and The Hills.

More particularly, the question presented is whether the Committee expended pub- ⁶² lie funds for purposes beyond the scope of its authority and, therefore, its individual members should be held personally liable. In 1973, individual petitioners, Robert G. Smith, Irene L. Murphy, Howard M. Shlefstein, Barbara A. Hendley, Andrew G. DeRocco, Barbara G. Tauben, and Cleonice Tavani were elected as members of the Committee. In 1973, the Committee authorized the expenditure of $1,200 for attorney’s fees for representation in pending litigation for the purpose of challenging the issuance of a building permit for the development of a 353 unit high-rise condominium within Friendship Heights for which allegedly there was inadequate sewer capacity. In 1974, the Committee authorized the expenditure of $3,336.67 for attorney’s fees for representation in administrative and judicial proceedings for the purpose of opposing the construction of a two-level retail store and office complex in Friendship Heights that required an exemption from a sewer moratorium then in effect.

In 1974, the Committee authorized the expenditure of $4,425.00 for attorney’s fees for representation in judicial proceedings for the purpose of supporting the Montgomery County Council’s (Council) down-zoning (less intensive development) of various properties in Friendship Heights. In addition, the Committee authorized the expenditure of $8,000.00 for a study utilized to support those down-zonings. On 11 December 1974, in the Circuit Court for Montgomery County, respondents, Thelma T. Edwards, Vivian G. Carter, and Lawrence Myers (taxpayers), filed a bill of complaint. The bill of complaint, as amended, alleged that individual petitioners as members of the Committee "authorized and expended, and have budgeted to expend, sums for legal fees ... not authorized by Chapter 66 ... [to]: a.

Intervene in zoning proceedings; b. Participate in sewer proceedings; and c. Bring suits in the name of the Friendship Heights Citizens’ Committee.” ⁶³ The amended bill also alleged that the individual petitioners had expended unauthorized sums to conduct development studies. The amended bill sought injunctive relief, an accounting of funds, a judgment against the individuals in the amount of the unauthorized funds expended, and reasonable attorney’s fees.

The trial court granted a motion to intervene filed by Friendship Heights and The Hills. Hearings were held on 6 March 1978 and 21 September 1978. In a memorandum opinion, the trial court held that the Committee had "acted in an ultra vires manner in the four specific instances” involving "the budgeting and expenditure of tax monies in connection with litigation in which the Citizens Committee chose to get involved,” and that the "individual defendants did illegally authorize expenditures of public funds totalling $16,961.67.” On 29 October 1979, the trial court entered a decree awarding $16,961.67 jointly and severally against the defendants, $15,000 in attorney’s fees, and enjoining defendants "from budgeting, appropriating or expending any further sums, including legal expenses, for any of the four activities....” The Court of Special Appeals affirmed the judgment of the trial court. Smith v. Edwards, 46 Md. App. 452 , 418 A.2d 1227 (1980).

Petitioners filed a petition for a writ of certiorari that we granted. We shall reverse the judgment of the Court of Special Appeals. The relevant provisions, then applicable, of §§ 66-1 through 66-12, expressly delineating the powers and responsibilities of the Committee were as follows: Section 66-2 provided in pertinent part: "The county council for Montgomery County is hereby authorized, empowered and directed to levy and cause to be collected from the property owners at the time of the county tax levy... within the said villages known as 'Friendship Heights’ and 'The Hills’ ... ten cents on each one hundred dollars of the assessable value of the real and personal prop ⁶⁴ erty in said villages ... to be paid over by said county council to the treasurer of the committee .. . and said county council shall also order and have paid over to said treasurer the proportion of the county road tax to be levied and collected in the same manner as though the said villages of 'Friendship Heights’ and 'The Hills’ were an incorporated town, and said villages shall, for the purpose, be considered by said county council as an incorporated town of said county; all of said funds to be used directly by or through said .committee, exclusively for opening, improving, widening, maintaining, 'repairing and lighting the streets, roads, lanes, alleys, sidewalks, parking, drainage, sewerage, sanitation and other village improvements, and for furnishing police and ñire protection, clerical and other public service, including the removal of ashes, garbage and other refuse and the disposal thereof.” 3 (Emphasis added.) Section 66-3 provided in pertinent part: "If the majority of the said 'Friendship Heights Citizens’ Committee’ decide the sum hereinbefore authorized to be taxed and levied is an insufficient amount for the ensuing year. .. the said committee, or resident taxpayers . .. may... petition in writing the county council of Montgomery County to make an additional special levy and tax of not more than thirty cents on each one hundred dollars of the assessable value of said real and personal property in said villages ... but in no case shall said additional special levy be greater than thirty cents on each one hundred dollars of the assessable value of real and ⁶⁵ personal property, as aforesaid, in any one year.” (Emphasis added.) Section 66-4 provided in pertinent part: "[The members of the Committee] each .. . shall qualify ... by taking an oath ... to diligently and faithfully discharge the duties of the office.” Section 66-6 provided in pertinent part: "Said 'Friendship Heights Citizens’ Committee’ ... in connection with any one undertaking . .. may purchase such material or make contract for such work, or for such work done by employed labor, or otherwise, as it may deem best.” (Emphasis added.) Section 66-7 provided: "The said county council may, upon recommendation of the Friendship Heights Citizens’ Committee’adopt such regulations with respect to dumping of garbage, sanitation, erection of buildings, care of property or other police or health regulations, and provide penalties for the violation thereof, as said council may deem proper, which regulations may be enforced by or through said committee.” (Emphasis added.) Section 66-9 provided in pertinent part: "(a) The Friendship Heights Citizens’ Committee’ is empowered to grade, pave, macadamize or otherwise improve any existing dedicated street, road or lane, or any county road, street or lane, within the said special taxing area which has been or which may hereafter be acquired and opened for public use and to lay sidewalks and curbs thereon, and, subject to the approval of the county council of Montgomery County and after due publication of cost thereof, to assess the cost of said grading, paving, macadamizing, laying sidewalks and curbs, or otherwise improving, against the property abutting on that portion of the said street, road, lane or sidewalks so improved, in proportion to the ⁶⁶ frontage of said abutting property on the same; provided, the consent to the proposed improvements of the owners of two-thirds of said abutting property to be first had and obtained.... All taxes assessed as provided in this section shall be paid over by the treasurer of said county to the treasurer of the 'Friendship Heights Citizens’ Committee,’ who shall devote such funds to the exclusive purpose of paying for special improvements herein provided for or any indebtedness which may be incurred therefor.” (Emphasis added.) Section 66-11 provided: "For the purpose of making improvements, provided for in the aforegoing sections or for the purpose of making improvements other than maintenance, the said citizens’ committee is hereby authorized and empowered to borrow money and otherwise contract indebtedness and obligate the said taxable area in amounts not exceeding in total at any time ten percent of the assessed valuation of real property within the said taxable area, and for these purposes said taxable area shall be and is hereby constituted a corporation, and said citizens’ committee is authorized to act for said corporation.” (Emphasis added.) On two previous occasions, this Court considered the extent of the Committee’s powers.

In Friendship Heights and The Hills v. Funger, 265 Md. 339 , 289 A.2d 329 (1972), the owner of an 18-acre tract of land entered into agreements with Somerset and Chevy Chase in which they agreed to support and not oppose the owner’s application for R-CBD zoning (multiple-family, central business district residential) in return for concessions made by the owner that would benefit these communities by limiting vehicular ingress and egress from the tract. Friendship Heights concluded that its interests were being jeopardized by these agreements because they would result in traffic being routed onto the streets of Friendship Heights. In an action for ⁶⁷ declaratory and injunctive relief, the Committee sought to have these agreements declared invalid and to enjoin the Council from adopting any zoning map or text amendment based in whole or in part upon these agreements. This Court, focusing on §§ 66-2 and 66-9 as delineating the Committee’s express powers, held that it lacked the capacity to bring the action.

In reaching this conclusion, this Court said: " While the Committee is empowered to make certain public improvements, nowhere is it expressly given the power to sue and be sued. It is not vested with any planning or zoning function nor are regulatory powers conferred upon it. It is a special tax district, specifically excluded by Art. 23A, § 9 (a) from the definition of a municipal corporation, which has an unlimited power to sue and be sued only because it is expressly so empowered by Art. 23A, § 1. We are not to be understood, however, as passing on the question whether the Committee has the power to sue for the breach of a contract to construct a road, which might be implied from the express power which was granted it, or whether it could sue or be sued under Code (1957, 1966 Repl.

Vol.) Art. 23, § 138 in an action affecting the tax moneys paid to it.” Funger, 265 Md. at 342-43 , 289 A.2d at 331 (emphasis added) (citations omitted). The Court additionally held that the Committee had failed to exhaust an administrative remedy. In reaching this result, the Court stated: "It is not alleged that the agreements under attack or that the master plan or zoning text amendment which might allow the zoning reclassification have been implemented by a zoning map amendment, or that Funger’s application for a reclassification has been approved by the County Council. If and when an application is considered, Friendship Heights and its residents will have ⁶⁸ ample opportunity to be heard, as provided by § 70-90 of the Montgomery County Code (1965, as amended by Ch. 177 of the Laws of 1967).

In the interim, their position does not rise above that of apprehension, and apprehension is not ordinarily the stuff of which declaratory or injunctive relief is made in zoning matters, where the question may never arise if statutory remedies are followed.” Funger, 265 Md. at