Ethics Commission v. Dvorak, 2714 September Term, 2007.

• Citation: 983 A.2d 557,189 Md. App. 46
• Decision Date: 24 November 2009
• Docket Number: No. 2714 September Term, 2007.,2714 September Term, 2007.
• Parties: ANNE ARUNDEL COUNTY ETHICS COMMISSION v. Robert J. DVORAK, et al.
• Court: Court of Special Appeals of Maryland

983 A.2d 557

189 Md. App. 46

ANNE ARUNDEL COUNTY ETHICS COMMISSION v. Robert J. DVORAK, et al.

No. 2714 September Term, 2007.

Court of Special Appeals of Maryland.

November 24, 2009.

Betsy K. Dawson (Douglas C. Hollmann, on the brief), Annapolis, MD, for Appellant.

Phillip F. Scheibe and John R. Greiber, Jr., Millersville, MD, for Appellee.

Panel: HOLLANDER, WRIGHT and JOHN F. McAULIFFE (retired, specially assigned), JJ.

HOLLANDER, Judge.

This appeal arises from a seemingly endless battle between the Anne Arundel County Ethics Commission (the "Commission"), appellant, and Phillip Scheibe, Esquire and Robert Dvorak, appellees, who are former senior level employees of Anne Arundel County (the "County").¹ The appeal concerns appellees' involvement, after they left County employment, in class action litigation instituted against the County by various property owners, pertaining to the County's development impact fees. To some extent, the issues are muddled because we have two judicial trains running largely on parallel tracks, with different engineers. As we shall see, however, in this matter the tracks have crossed.

On June 4, 2004, the County Executive of Anne Arundel County filed a Complaint with the Commission against appellees, claiming that they violated Public Ethics Law, Article 9, § 5-105 ("§ 9-5-105") of the Anne Arundel County Code (the predecessor to § 7-5-105 of the County Code).² Following a hearing that began in November 2005, the Commission found in the County's favor. It issued an Order on March 13, 2006 (the "Order"), requiring appellees to cease their participation in the litigation against the County and to accept no further compensation for their work. The circuit court subsequently affirmed (Harris, Jr., J.). However, in related litigation, the circuit court (Caroom, J.) denied the County's motion to disqualify Scheibe from his role as counsel for the plaintiffs.

Because appellees allegedly failed to comply with the Commission's Order, the Commission filed in the circuit court a "Petition for Permanent Injunctive Relief, Imposition of Fines and Other Appropriate Relief" (the "Petition"). At issue here is the circuit court's ruling on December 28, 2007, denying the Petition (Harris, Jr., J.).

Appellant presents three questions for our review, which we quote:

I. Did the circuit court err by applying traditional equitable principles in a case involving a statutory injunction?

II. Did the circuit court err by reconsidering and relying upon matters that are barred by res judicata?

III. Did the circuit court abuse its discretion or err as a matter of law by relying on laches, hardship to private litigants, the failure of the Ethics Commission to pursue alternative remedies through the Attorney Grievance Commission, and other factors set forth in its decision?

For the reasons that follow, we shall reverse in part, vacate in part, and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND³

Scheibe and Dvorak each worked for the County for many years, in various capacities. Among other positions, Scheibe served as County Attorney for three years, beginning in 1967, and again from December 1994 until May 1999, when he retired. Dvorak worked for the County for about 23 years, including service as the Director of the Department of Planning and Code Enforcement. He also served as the Chief Administrative Officer from 1994 until his retirement in 1997.

The underlying matter is rooted in the case of Halle Development, Inc., et al. v. Anne Arundel County, Case No. C-2001-69418-AA, a class action suit. Suit was filed on February 21, 2001, in the Circuit Court for Anne Arundel County, by Greiber & Scheibe, the law firm in which Scheibe is a principal (sometimes referred to as the "Halle litigation" or "the impact fee" litigation).⁴ Scheibe entered his appearance as co-counsel for the Halle plaintiffs on December 13, 2002. The suit alleged that, between 1988 and 1996, Anne Arundel County mishandled and unlawfully used the development impact fees it collected. Greiber & Scheibe hired Dvorak in 2000, before filing the impact fee suit, to examine the County's public financial records. See Dvorak, 400 Md. at 447-48, 929 A.2d 185.

On December 15, 2006, in the Halle case, the circuit court entered judgment against the County in the amount of $4,719,359, with five percent interest, measured from the date of payment of each fee. The circuit court also awarded attorneys' fees, equal to thirty percent of the total recovery.

On June 4, 2004, some three years after the Halle case began, and about eighteen months after Scheibe entered his appearance, the County Executive, Janet Owens, filed an ethics complaint with the Commission (the "Complaint"),⁵ alleging violations of Public Ethics Law § 9-5-105 of the County Code, based on appellees' participation in the Halle litigation. Owens averred:

In my opinion, the actions of former County Attorney Phillip F. Scheibe and former Chief Administrative Officer and Director of Planning & Code Enforcement Robert Dvorak in assisting and representing plaintiffs in certain cases against the County, constitute violations of the Anne Arundel County Public Ethics Law. While employed by the county, [appellees] participated substantially in matters that are now the subject of the litigation, and both had information not generally available to the public when they undertook the assistance and the representation of the plaintiffs.[⁶]

Section 9-5-105, on which Owens relied, provided, in part:

§ 5-105. Representation by former employees.

(a) A former employee may not assist or represent a party other than the County in a case, contract, or other specific matter for compensation if the matter involves the County and:

(1) the former employee participated significantly in the matter as an employee; or

(2) the former employee had information not generally available to the public when the former employee undertook the assistance or representation.

Notably, § 9-5-105 became effective on November 5, 2003, after appellees had retired from County service.⁷ However, it replaced § 9-3-109 of the County's Public Ethics Law, which was in effect during the time that appellees were employed by the County. Section 9-3-109 provided, in part:

§ 3-109. Representation by former employees.

(a) A former employee may not assist or represent a person in connection with a specific matter in which the former employee, as a County employee:

(1) acted on behalf of or represented the County in a matter involving substantial responsibility on the part of the employee; or

(2) with reference to which the former employee acquired information not generally available to the public when the former employee undertakes the assistance or representation.

Based on the ethics Complaint, the Agency issued subpoenas duces tecum to appellees, requiring them to appear for a deposition and produce documents. Scheibe and Dvorak responded with a "Motion for Protective Order" on August 20, 2004, claiming, inter alia, that the Commission lacked jurisdiction over them and that it sought information relating to attorney work product that was "not subject to discovery." The Commission denied the motion on August 23, 2004.

Thereafter, on August 26, 2004, the Agency filed in the circuit court a "Petition to Enforce a Subpoena." On August 30, 2004, appellees filed a "Petition For Appeal" in the circuit court, challenging the Commission's denial of their motion for protective order. They argued that Dvorak was hired "for the sole purpose of examining and reporting his findings only as regards the financial records of Anne Arundel County, which are public records and are readily available to any citizen"; that the Complaint "as it relates to Phillip F. Scheibe [was] specious"; and that the Complaint was "politically motivated." Following a hearing on March 3, 2005, the court (Lerner, J.) issued an Order of that date, granting the Agency's petition to enforce the subpoenas and directing appellees to comply. When appellees failed to appear, the Agency filed a "Petition for Civil Contempt." By Order dated June 16, 2005, the court (Hackner, J.) found Scheibe and Dvorak in constructive civil contempt of the Order of March 3, 2005.

As to the ethics Complaint, Dvorak and Scheibe filed a motion with the Commission on November 10, 2005, seeking its dismissal. They argued that the documents on which the Complaint was based are public and are not "privileged or confidential." They also averred that "it was not possible for them to receive a fair and impartial hearing before the Commission"; that the Commission lacked jurisdiction over matters of professional misconduct applicable to Scheibe; and that § 9-5-105 is "vague, arbitrary and capacious [sic] in that it is devoid of any reasonable provisions that limit the amount of time the Commission may exercise its jurisdiction [after] a former employee's departure from County service...."

The Commission held an evidentiary hearing over the course of several days in November 2005, December 2005, and January 2006, pursuant to the County's Public Ethics Law, Article 9, § 4-102(d) (stating that "the Commission shall proceed to a hearing on the complaint, conducted in accordance with this title"). James Cannelli, an employee of the Planning and Zoning Department; Yolanda Takesian, a former Planning and Zoning Department employee; Gregory Nourse, a former Budget Office employee; and Raymond Elwell, the assistant Budget Officer who worked with Dvorak on the capital budget when Dvorak became Chief Administrative Officer, testified regarding Dvorak's work with the County and his involvement in the impact fee program. In addition, Robert Pollock, Assistant County Attorney, testified that when Scheibe was County Attorney, he asked Pollock to research and present him with a written opinion concerning the County's impact fee law. The parties also introduced numerous exhibits.

At the...