120 W. Fayette v. Baltimore

• Decision Date: 09 February 2009
• Docket Number: No. 49 September Term, 2008.,49 September Term, 2008.
• Citation: 964 A.2d 662,407 Md. 253
• Parties: 120 WEST FAYETTE STREET, LLLP v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.
• Court: Court of Special Appeals of Maryland

964 A.2d 662

407 Md. 253

120 WEST FAYETTE STREET, LLLP v. MAYOR AND CITY COUNCIL OF BALTIMORE et al.

No. 49 September Term, 2008.

Court of Appeals of Maryland.

February 9, 2009.

M. Albert Figinski (Paul D. Raschke of Law Offices of Peter G. Angelos, Baltimore), on brief, for appellant.

David E. Ralph (George A. Nilson and William R. Phelan, Jr., Charles S. Hirsch and Mark Pollak of Ballard Spahr Andrews & Ingersoll, LLP, Baltimore), on brief; Brian L. Moffet (Catherine A. Bledsoe of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC., Baltimore), on brief, for appellees.

ARGUED BEFORE BELL, C.J., HARRELL, GREENE, MURPHY, ADKINS, BARBERA, and JOHN C. ELDRIDGE (Retired, Specially Assigned), JJ.

GREENE, Judge.

120 West Fayette Street LLP, et al. ("120 West Fayette"), seeking a declaratory judgment, filed a complaint in the Circuit Court for Baltimore City against the Mayor and City Council of Baltimore et al. ("the City"). The complaint alleged that the City violated its Charter and laws by entering into an illegal Land Disposition Agreement ("LDA") with an entity seeking to purchase and develop an area in Baltimore's westside, known as the "Superblock." The City made a motion to dismiss the complaint and the Circuit Court granted that motion. We shall hold that the Circuit Court erred in concluding that 120 West Fayette lacked standing and erred in failing to render a declaratory judgment. We shall also hold that the Circuit Court did not comply with Maryland Rule 2-322 in treating the City's motion to dismiss as a motion for summary judgment. The Circuit Court did not provide all parties a reasonable opportunity to present material pertinent to the summary judgment motion.

I.

In 1999, the Baltimore City Council enacted an urban renewal plan¹ for the westside of downtown Baltimore. The renewal plan, known as the "Market Center Urban Renewal Plan," has been advertised as Baltimore's largest urban renewal plan since the plan to revitalize the city's Inner Harbor. To implement the plan, the Baltimore Board of Estimates ("BOE") delegated "ministerial and administrative" functions to a nonprofit corporation known as the Baltimore Development Corporation, Inc. ("BDC"). The City asserts that it instructed the BDC to "work with developers and interested groups regarding the development of the westside, prepare and issue requests for development proposals, arrange and attend meetings between developers and business owners, and coordinate financial assistance."

On October 27, 2003, the BDC issued a Request for Proposals ("RFP") that invited developers to submit proposals for developing the "Superblock." The "Superblock" encompasses five blocks and is bound by Fayette Street, Howard Street, Lexington Street, Clay Street, and Park Avenue. The RFP provided for use of an Exclusive Negotiating Privilege ("ENP") that would aid the City to "[set] out specific requirements and deadlines for fulfilling said requirements of [the] RFP." Four entities, including Next Generation Chera, LLC ("Next Generation"), responded to the RFP and on June 24, 2005, the BDC offered an ENP to an affiliate of Next Generation, known as Lexington Square Partners, LLC ("Lexington Square"). Ultimately, the City and Lexington Square entered into a LDA, that provided for the sale and subsequent development of the "Superblock."

120 West Fayette is an entity that pays taxes in Baltimore City. It is located adjacent to the "Superblock." As a taxpayer and neighboring landowner, 120 West Fayette filed a declaratory judgment action against the City to challenge the validity of the LDA on the basis that it is illegal and ultra vires. The gist of 120 West Fayette's complaint was that the City, and its agent, the BDC, unlawfully violated and manipulated the RFP process, in violation of the City's Charter and laws, to award the LDA to a favored developer. As previously noted, the City made a motion to dismiss 120 West Fayette's complaint, and the Circuit Court granted the City's motion.

In a "Memorandum and Opinion accompanying its Order Granting [the City's] Motion to Dismiss ("Memorandum and Opinion")," the Circuit Court concluded that it was appropriate to dismiss the complaint because, 120 West Fayette "failed to establish standing as a taxpayer plaintiff and failed to establish an actual or potential pecuniary loss, increase of taxes, special damages, the City's illegal expenditure of public funds or ultra vires acts in the selection of a developer for the Superblock." The Circuit Court also made the following conclusions based upon the pleadings and facts presented:

1) There is no expenditure of public funds in connection with the development of the Superblock, 2) the Defendant City acted according to the City's Code in authorizing the BDC to act on its behalf, 3) the Superblock is not a public work subject to the competitive bidding process outlined in the City's Charter, and 4) the Defendant City did not engage in any illegal or ultra vires acts in the LDA or ENP.

120 West Fayette filed a timely appeal to the Court of Special Appeals, but before that court could consider the case, we issued a writ of certiorari, 120 West Fayette v. Baltimore, 405 Md. 290, 950 A.2d 828 (2008).² For the reasons stated herein, we shall reverse the judgment of the Circuit Court for Baltimore City.

II.

As a preliminary matter, we shall consider whether the Circuit Court treated the City's motion to dismiss as a motion for summary judgment. 120 West Fayette contends that the Circuit Court relied on facts outside of the pleadings to arrive at the conclusions set forth in its Memorandum and Opinion accompanying the order granting the City's motion to dismiss. 120 West Fayette asserts that, in relying on matters outside of the pleadings, the Circuit Court converted the City's motion to dismiss into a motion for summary judgment. 120 West Fayette further asserts that the court violated Maryland Rule 2-322 because the court failed to provide 120 West Fayette the opportunity it was entitled to under Maryland Rule 2-501. The City counters that all of the Circuit Court's conclusions were supported by 120 West Fayette's complaint and attached exhibits.

When considering a motion to dismiss, a trial court is required to assume the truth of all of the well-pled facts in the complaint and attached exhibits, and the "reasonable inferences drawn from them, in a light most favorable to the non-moving party." Converge v. Curran, 383 Md. 462, 475, 860 A.2d 871, 878 (2004). Maryland Rule 2-322(c) provides in part:

If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 2-501.

The record reveals that the Circuit Court did rely on matters outside of the pleadings when granting the City's motion to dismiss. In its Memorandum and Opinion, the Circuit Court concluded that the City had made "no expenditure of public funds in connection with the development of the Superblock." The Court stated:

Upon reviewing the pleadings and facts, this Court finds that the property subject to the LDA is not a public work and was a disposition of property that did not require competitive bidding as a result of the expansion of the project. Competitive bidding is not necessary because there is no expenditure of public funds (See Plaintiffs Affidavit 4B, Paul Rashke), and the Superblock is not a public work that requires competitive bidding.

In the above statement, the Circuit Court cites the affidavit of 120 West Fayette's Attorney, Paul Rashke, to support its conclusion that the City had made no expenditure of public funds. Mr. Rashke's affidavit, however, was not a part of the pleadings and yet, was considered by the court when granting the order of dismissal.³ See Converge, 383 Md. at 475, 860 A.2d at 879 (noting that "the universe of facts" pertinent to a motion to dismiss "are limited generally to the four corners of the complaint and its incorporated exhibits, if any"); Green v. H & R Block, 355 Md. 488, 501, 735 A.2d 1039, 1046 (1999) ("The granting of a motion to dismiss ... depends solely on the adequacy of plaintiff's complaint."); see also Young v. Medlantic Lab., 125 Md.App. 299, 303, 725 A.2d 572, 574 (1999) ("It is clearly inappropriate in the context of a motion to dismiss for the judge to make a finding of fact.").

By relying on material outside of the pleadings when granting the City's motion to dismiss, the Circuit Court, in effect, converted the motion to dismiss into a motion for summary judgment. See Converge, 383 Md. at 476, 860 A.2d at 879 ("Because the Circuit Court ... did not state, in its order of dismissal or otherwise, that, in granting the [Defendant's] motion to dismiss, it did not consider the factual allegations and exhibits beyond those in [Plaintiff's] complaint, the default provision established by the pertinent Rules and our cases interpreting them dictate that we review the action as the grant of summary judgment."); Dual v. Lockheed Martin, 383 Md. 151, 161, 857 A.2d 1095, 1100 (2004) (holding that a defendant's motion to dismiss amounted to a motion for summary judgment when the record revealed that the trial court "considered factual matters, placed before it by the parties, beyond those alleged in the complaint or amended complaint"). Although such conversion is permissible under Maryland Rule 2-322, the court failed to abide by that Rule's requirement that the court provide all parties "reasonable opportunity to present all material made pertinent" to a motion for summary judgment. See Antigua v. Melba Investors, 307 Md. 700, 719, 517 A.2d 75, 85 (1986) (noting that when a court considers matters outside of the...