Willow Grove Citizens Association v. County Council Prince George's County

Berger, J. This case is an appeal from a judgment entered on judicial review of a zoning decision in Prince George's County. Appellees Presidential Care, LLC ("Presidential") and Stoddard Baptist Home, Inc. ("Stoddard") applied for a special exception with the Prince George's County Office of Zoning. 1 Upon the recommendation of the Zoning Hearing Examiner ("Examiner"), the Prince George's County Council ("County Council"), sitting as the District Council, voted to approve the special exception. Various persons of record filed a petition for judicial review in the Circuit Court for Prince George's County, which affirmed. Willow Grove Citizens Association, Inc. and other persons of record (collectively, "Willow Grove") subsequently appealed the judgment of the circuit court.

On appeal, Willow Grove presents five questions for our review, which we have rephrased and consolidated as follows: Whether the County Council's decision to grant the application for the special exception was legally correct in light of the fact that a. Presidential had, at the time of filing, forfeited its right to do business in Maryland; b. Stoddard was, at the time of filing, an unregistered foreign corporation; c. People's Zoning Counsel did not recuse himself despite his involvement in the sale of the subject property to Presidential.

For the reasons explained herein, we shall affirm the judgment of the circuit court. FACTS AND PROCEEDINGS The land at the heart of this dispute is a 7.91 acre property located at 3911 Lottsford Vista Road in Bowie, Maryland ("the Property"). Under the Largo-Lottsford Master Plan and Sectional Map Amendment (Zoning Ordinance No. 3-2016), the Property is zoned Rural Residential. The prior owner, William Youngblood ("Youngblood"), obtained a special exception pursuant to Zoning Ordinance 7-2001 to build a 160-person child day care center, a 40-person adult day care center, and a 72-person congregate living facility.

These zoning entitlements were never developed. On August 27, 2001, Youngblood sold the Property to Presidential, a limited liability company organized in Maryland in 2001. Youngblood's attorney at the time of the sale was Stan Brown ("Brown"). Brown conducted the settlement and was engaged in some of the contract work associated with the Property.

On November 1, 2012, Presidential's right to do business in Maryland and use its name was forfeited. Presidential's rights remained forfeited as of February 21, 2014, when it applied for a special exception to operate a 15-person adult day care facility and a 63-unit assisted living facility. The application was accepted by the Maryland National Capital Park and Planning Commission. The applicant was listed as "Presidential Care, LLC, by Stoddard Baptist Home, Inc., Managing Member." Stoddard, a foreign corporation organized in the District of Columbia, is the sole member of Presidential.

At the time of filing, Stoddard was not registered to do business in Maryland. The Examiner conducted a public hearing to consider the application for a special exception. Brown participated in this hearing as People's Zoning Counsel. 2 Brown disclosed his prior involvement in the sale of the Property and asked, on the record, whether anyone present objected to his participation in the proceedings. There were no objections.

The Examiner approved the application for a special exception on October 15, 2014. The Examiner's decision was appealed to the County Council. 3 After hearing oral arguments, the County Council remanded the matter for the Examiner to determine whether Presidential and Stoddard were in good standing with the State Department of Assessments and Taxation ("SDAT"). On May 4, 2015, Presidential's rights were reinstated. On June 2, 2015, Stoddard registered with SDAT and became qualified as a corporation in Maryland.

The Examiner conducted a second public hearing on the application for a special exception in June of 2015. At the second hearing, Presidential and Stoddard provided certificates of good standing from SDAT. Thereafter, the Examiner conditionally recommended approval of the application for a special exception. Willow Grove and other persons of record appealed to the County Council.

After hearing oral arguments, the County Council found that "Presidential was legally authorized to engage in the activity of filing an application for a special exception concerning real or personal property," and that Presidential's forfeiture did not impair the validity of its application. The County Council also found that Stoddard, in applying for a special exception, was not doing business in Maryland. As a result, the County Council approved the application for a special exception on February 8, 2016. The Circuit Court for Prince George's County affirmed the County Council's decision.

DISCUSSION I. Standard of Review When reviewing "the decision of an administrative agency, this Court reviews the agency's decision, not the circuit court's decision." Long Green Valley Ass'n v. Prigel Family Creamery , 206 Md. App. 264 , 273, 47 A.3d 1087 (2012) (quoting Halici v. City of Gaithersburg , 180 Md. App. 238 , 248, 949 A.2d 85 (2008) ); Ware v. People's Counsel for Balt. Cnty. , 223 Md. App. 669 , 680, 117 A.3d 628 (2015) ("In an appeal from a judgment entered on judicial review of a final agency decision, we look 'through' the decision of the circuit court to review the agency decision itself."). We are "limited to determining if there is substantial evidence in the record as a whole to support the agency's findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law." Halici v. City of Gaithersburg , 180 Md. App. 238 , 248, 949 A.2d 85 (2008) (internal quotation marks and citations omitted). Although we generally defer to the factual findings of an administrative agency, "[w]e review an agency's decisions as to matters of law de novo for correctness." Wallace H. Campbell & Co. v. Md. Comm'n on Human Relations , 202 Md. App. 650 , 663, 33 A.3d 1042 (2011).

Nevertheless, "[e]ven with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency. Thus, an administrative agency's interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts." Grasslands Plantation, Inc. v. Frizz-King Enters., LLC , 410 Md. 191 , 204, 978 A.2d 622 (2009) (quoting Bd. of Physician Quality Assurance v. Banks , 354 Md. 59 , 69, 729 A.2d 376 (1999) ). Willow Grove objects to the decision of the County Council on purely legal grounds. The only question, then, is whether the approval of the application for a special exception was premised on legally erroneous conclusions of law.

Because the County Council does not administer the statutory provisions governing the rights of corporate entities, we will give no deference to the County Council's legal conclusions.

II

The Decision of the County Council Was Legally Correct. A. Presidential's Application for a Special Exception Was Valid. Willow Grove argues that Presidential's application for the special exception was "a nullity" because Presidential had forfeited its right to do business in Maryland and use its name. We disagree.

The County Council correctly concluded that Presidential's application was valid under Maryland law. When a Maryland LLC fails to pay its taxes, SDAT may issue a proclamation declaring that the LLC has forfeited the right to do business in Maryland and the right to use its name. Md. Code (1975, 2014 Repl. Vol., 2016 Supp.), § 4A-911 of the Corporations & Associations Article ("Corps. & Ass'ns").

Unlike a corporation, an LLC does not become a non-entity after forfeiture. Price v. Upper Chesapeake Health Ventures , 192 Md. App. 695 , 705-09, 995 A.2d 1054 (2010). Critically, forfeiture has no effect on the validity of an LLC's contracts or other acts: The forfeiture of the right to do business in Maryland and the right to the use of the name of the limited liability company under this title does not impair the validity of a contract or act of the limited liability company entered into or done either before or after the forfeiture, or prevent the limited liability company from defending any action, suit, or proceeding in a court of this State. Corps. & Ass'ns § 4A-920 (emphasis added).

Here, Willow Grove's claim that "Presidential's actions were a nullity" is contrary to the express language of § 4A-920. It is undisputed that Presidential was an LLC when it applied for a special exception. As such, Presidential was a legal entity with the power to enter into binding contracts, and its acts were at all times legally valid. We hold, therefore, that Presidential's application was valid and that, consequently, the County Council did not err in approving the application for a special exception.

Willow Grove contends that, in applying for a special exception, Presidential was actually initiating a judicial proceeding. When an LLC forfeits the right to do business in Maryland, it also loses the right to bring a lawsuit in Maryland court. As we explained in Price v. Upper Chesapeake Health Ventures , Nevertheless, with respect to court proceedings, [ § 4A-920 ] expressly provides that a forfeited LLC may only defend an action in court. The negative implication of such language, and the sweep of the "doing business" and name "using" prohibition is that the company may not file or maintain a lawsuit after its rights have been forfeited. 192 Md. App. at 708 , 995 A.2d 1054 ; see also Bayly Crossing, LLC v. Consumer Prot.

Div., Office of Atty. Gen. , 188 Md. App. 299 , 319, 981 A.2d 777 (2009), aff'd in part, rev'd in part , 417 Md. 128 , 9 A.3d 4 (2010). Willow Grove contends that Presidential's application was invalid under the prohibition against bringing lawsuits embodied in Corps. & Ass'ns § 4A-920. In our view, Willow Grove's interpretation of § 4A-920 is contrary to the plain meaning of that statute.

Our reasoning in Price was based on the "negative implication" of the final phrase of § 4A-920, which provides that an LLC may defend any lawsuit after forfeiture. Id. There is no such implication in the first part of § 4A-920, which broadly affirms the validity of "a contract or act of the limited liability company entered into or done either before or after the forfeiture." Indeed,