State of Maryland Commission on Human Relations v. Baltimore City Department of Recreation & Parks
ADKINS, J. The State of Maryland Commission on Human Relations (“Commission”), appellant, sought to have the Baltimore City Department of Recreations and Parks (“City”), appellee, found in civil contempt of court for failure to make agreed-upon modifications to a place of public accommodation. The Circuit Court for Baltimore City denied the petition for contempt, and the Commission now challenges several rulings made by the circuit court during the contempt hearing. We shall hold that the settlement agreement sought to be enforced is void, and remand to the circuit court for further remand to the administrative agency. FACTS AND LEGAL PROCEEDINGS On July 25, 1997, Robert Reuter, a disabled individual, filed a complaint of discrimination with the Commission against the City.
Reuter, who is wheelchair-bound, alleged that he could not access several parts of the Cylburn Arboretum and Mansion, a place of public accommodation operated by the City. The Commission investigated the claim, and thereafter issued a written finding of probable cause to believe that the City violated Md.Code (1957, 2003 RepLVol. 2005 Cum.Supp.), Article 49B, section 5(b), by maintaining and operating a place of public accommodation that was inaccessible to those who use wheelchairs. When conciliation efforts between the Commission and the City failed, the matter was certified for public hearing. On May 24, 2000, the Commission filed a Statement of Charges and a Request for Public Hearing with the Office of Administrative Hearings (“OAH”), alleging that the City had engaged in an unlawful public accommodations practice.
OAH then served the City with a copy of the Statement of Charges, 37 along with a notice to appear at a pre-hearing conference. The City was directed to file an answer within fifteen days of service and to file a pre-hearing statement no later than July 28, 2000. The City filed neither. On August 4, 2000, the parties appeared at the scheduled pre-hearing conference.
Because the City had failed to file an answer or a pre-hearing statement, the Commission moved for an order of default. The Administrative Law Judge (“ALJ”) ordered the City to file an answer, and also scheduled a November 1, 2000 hearing on the Commission’s motion for order of default. Finally, a public hearing on the merits was scheduled for December 5-6, 2000. Before the motions hearing, the Commission, Reuter, and the City entered into a settlement agreement.
Under that agreement, the City was required to modify the Arboretum, Mansion, and grounds, including the garden playhouse, to make them wheelchair accessible by April 1, 2001. In addition, the City was required to make the trails and bird collection accessible by June 30, 2002. OAH was notified that the parties had entered into a settlement agreement. The OAH then issued an order adopting the settlement agreement as its final order, and dismissed the Commission’s action with prejudice.
On November 20, 2001, because the City failed to make the required changes to the Arboretum, Mansion, and grounds by the required date, the Commission filed a petition for judicial enforcement of administrative order in the Circuit Court for Baltimore City. The City was served with a copy of the petition for enforcement, but again failed to file an answer within the time allowed. On February 11, 2002, the City filed a late answer, in which it admitted that the Commission was “technically correct” that the alterations were not completed. The next day, the Commission, which had yet to receive the City’s late answer, filed a motion for order of default.
The Commission then moved to strike the City’s late answer, or alternatively, for summary judgment, based on the City’s admission that the required changes had not been 38 made. The City filed no response to the motion. On July 19, 2002, the circuit court issued two orders, one granting the motion to strike the answer, and the other granting the motion for summary judgment. The City did not move to alter or revise the summary judgment order; nor did it note an appeal.
On January 23, 2003, the Commission filed a petition to cite the City for civil contempt because none of the required alterations had been completed. The circuit court issued a show cause order, requiring the City to file an answer by June 2, 2003, and to show cause at a hearing on June 16, 2003, why it should not be adjudged in contempt. On June 2, 2003, the City filed a motion to dismiss the petition for contempt. At the show cause hearing, the circuit court ruled that the settlement agreement was ultra vires, because it had not been approved by the Board of Estimates and the City Solicitor had not endorsed the contract, as required by the Baltimore City Charter.
The court neither granted nor denied the Commission’s petition for contempt, or the City’s motion to dismiss the contempt proceedings, instead holding all matters sub curia. The court then ordered the parties to negotiate a new agreement. The parties conferred as ordered. The City agreed to comply with most provisions of the invalidated settlement agreement.
It refused, however, to install a hard surface on the Circle Trail and stated that it planned to close the garden playhouse rather than install a ramp as previously agreed. On July 22, 2003, the judge who was hearing the matter met with both parties, then all adjourned to tour the Arboretum grounds. The next day, the hearing reconvened, and the City recited for the record those requirements it agreed to complete, and those to which it objected. Both parties submitted post-hearing memoranda of law, and the City also filed a motion to vacate the order of summary judgment.
On January 14, 2004, the hearing reconvened. After argument, the circuit court reiterated that the settlement agreement was invalid and found that the construction of a hard surface on the Circle Trail was not a reasonable accommoda 39 tion, because it would impose an undue hardship. The court then (1) denied the Commission’s petition for contempt, (2) vacated the summary judgment order, and (3) ordered the Commission to pay costs. The Commission noted this timely appeal and presents the following questions for our review: I. Did the circuit court err in invalidating the settlement agreement, which was agreed to by all parties and halted the administrative process?
II
Did the circuit court err in vacating the order for summary judgment when there was neither appeal of that order nor any timely motion to vacate?
III
Did the circuit court err in finding that installing a hard surface on one trail at the Arboretum was not a reasonable accommodation?
IV
Did the circuit court abuse its discretion in assessing costs against the Commission? We answer questions I and IV in the negative. We answer questions II and III in the affirmative, however, and accordingly, reverse the judgment on those issues. DISCUSSION As a threshold matter, we must address the City’s motion to dismiss the Commission’s appeal.
The City argues that under Pack Shack, Inc. v. Howard County, 371 Md. 243 , 808 A.2d 795 (2002), the Commission has no right of appeal, because it failed in its attempt to have the City adjudged in contempt. In Pack Shack, 371 Md. at 254 , 808 A.2d 795 , the Court of Appeals held that Md.Code (1973, 2002 Repl.Vol.), section 12-304 of the Courts & Judicial Proceedings Article 1 “clearly 40 and unambiguously limits the right to appeal in contempt cases to persons adjudged in contempt.” Therefore, as the “ ‘party who unsuccessfully [sought] to have another party held in contempt,’ ” the Commission has no right to appeal the circuit court’s denial of its petition for contempt. See id. (citation omitted).
Accordingly, we will not review the circuit court’s denial of the petition for contempt. The court, however, did not just deny the Commission’s motion for contempt. It also invalidated the settlement agreement, vacated the summary judgment order, and found that installing a hard surface on the Circle Trail was not a reasonable accommodation. We shall review the Commission’s arguments regarding the propriety of these additional rulings.
Because “a party who is aggrieved by a final judgment of a circuit court under [the Administrative Procedure Act] may appeal to [this Court] in the manner that law provides for appeal of civil cases,” Md.Code (1984, 2004 Repl. Vol.), section 10-223(b) of the State Government Article (“APA”), our standard of review is governed by Md. Rule 8-131(c). Accordingly, [a]s to the circuit court’s factual findings, we look to whether those findings were supported by “substantial evidence” in the record. When “ ‘there is any competent, material evidence to support the factual findings below, we cannot hold those findings to be clearly erroneous.’ ” “Although the factual determinations of the circuit court are afforded significant deference on review, its legal determinations are not.” “Indeed, the appropriate inquiry for such determinations is whether the circuit court was ‘legally correct.’ ” Stansbury v. MDR Dev., L.L.C., 161 Md.App. 594, 603 , 871 A.2d 612 , cert. granted, 388 Md. 97 , 879 A.2d 42 (2005) (citations omitted). 41 I. Invalidation Of Settlement Agreement At the show cause hearing, the circuit court found that the settlement agreement had not been: (1) submitted to and approved by the City’s Board of Estimates as required by the Baltimore City Charter, Art. VI, section 17; 2 or (2) endorsed by the City Solicitor as required by the Baltimore City Charter, Art. VII, section 24(b). 3 Based on these findings, the circuit court ruled that the settlement agreement was ultra vires, and hence invalid.
The court’s factual findings that the settlement agreement failed to follow the approval process mandated by the Baltimore City Charter are supported by competent, material evidence in the record, and therefore, are not clearly erroneous. The question, then, is whether the circuit court’s ruling that the settlement agreement was ultra vires was legally correct. Contract Validity It is well settled that “a county or municipality can make a contract only in the manner prescribed by the legislature!.]” Tuxedo Cheverly Volunteer Fire Co. v. Prince George’s County, 39 Md.App. 322, 330 , 385 A.2d 819 (1978)(em-phasis -a.d&ed)(“Tuxedo”). See also Alternatives Unlimited, Inc. v. New Balt.
City Bd. of Sch. Comm’rs, 155 Md.App. 415, 425 , 843 A.2d 252 (2004)(“a governmental entity, unlike a 42 private corporation, may never have an obligation imposed upon it to expend public funds except in the formal manner expressly provided by law”). This rule is strict; if the municipality’s charter provisions are not precisely followed during the contracting process, the contract is ultra vires, or outside the power of the municipal corporation to make,-and void ab initio. See Tuxedo Cheverly, 39 Md.App. at 330 , 385 A.2d 819 .
The Commission asserts four reasons why the settlement agreement is valid despite the failures to abide by the Charter: (1) an assistant solicitor of the City negotiated the settlement agreement; (2) the director of the Department of Recreations and Parks signed the agreement; (3) the assistant solicitor “affirmatively misled” the Commission by assuring the Commission that the funds needed to make the modifications were in the budget; and (4) the City ratified the contract when it began to make the modifications required under the settlement agreement. We are not persuaded that any or all of these reasons cure the defects in the approval process. Maryland appellate courts have repeatedly stated: No principle of the law relating to municipal corporations is more firmly established than that those who deal with their agents or officers must, at their peril, take notice of the limits of the powers of both the municipality and of those who assume to act as its agents and officers; and in no State has this principle been more frequently applied or more rigidly enforced than in Maryland. Alternatives Unlimited, 155 Md.App. at 427 , 843 A.2d 252 (citations omitted).
See also Hanna v. Bd. of Educ. of Wicomico County, 200 Md. 49, 57 , 87 A.2d 846 (1952)(“The rule is firmly established that one who makes a contract with a municipal corporation ... is bound to take notice of the limitations of its powers to contract”). Because the limitations on the City’s power to contract are a matter of public record, the assistant solicitor’s involvement in contract negotiations and the director’s signature on the settlement agreement are immaterial. See Gontrum v. Mayor & City Council of Balt., 182 Md. 370, 375-76 , 35 A.2d 128 (1943)(“the law makes a 43 distinction between the effect of the acts of an officer of a [municipal] corporation, and those of an agent for a principal in common cases; in the latter the extent of authority is necessarily known only to the principal and the agent, while, in the former, it is a matter of ... public law”). The Commission’s contention regarding misrepresentation by the assistant solicitor fails for similar reasons. “Everyone dealing with officers and agents of a municipality is charged with knowledge of the nature of their duties and the extent of their powers, and therefore such a person cannot be considered to have been deceived or misled by their acts when done without legal authority.” Lipsitz v. Parr, 164 Md. 222, 227-28 , 164 A. 743 (1933)(emphasis added).
The rule is equally rigid regarding allegations of contract ratification by the municipality. “Ratification of a void contract may occur only if the authority empowered by charter or statute to make the contract subsequently performs the prescribed acts of authorization.” 4 Tuxedo Cheverly, 39 Md. App. at 331 , 385 A.2d 819 (emphasis added and citation omitted). See also Packard v. Hayes, 94 Md. 233, 252 , 51 A. 32 (1902)(“the city corporation cannot attempt to do an act which is void, and subsequently make the act valid by ratification”). We must now analyze what effect, if any, the OAH’s adoption of the ultra vires settlement agreement as the final administrative order has on the Commission’s ability to enforce the terms of the settlement agreement. 44 Consent Judgment After entering into the settlement agreement with the City, the Commission filed a motion to dismiss the statement of charges with the OAH. The ALJ, having found that “the agreement ... dispose[d] of the issues,” adopted the
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