Bd. of Pub. Works v. K. Hovnanian's Four Seasons at Kent Island, LLC.

• Decision Date: 03 June 2015
• Docket Number: No. 57, Sept. Term, 2014.,57, Sept. Term, 2014.
• Citation: 115 A.3d 634,443 Md. 199
• Parties: BOARD OF PUBLIC WORKS, et al. v. K. HOVNANIAN'S FOUR SEASONS AT KENT ISLAND, LLC.
• Court: Court of Special Appeals of Maryland

443 Md. 199

115 A.3d 634

BOARD OF PUBLIC WORKS, et al.

v.K. HOVNANIAN'S FOUR SEASONS AT KENT ISLAND, LLC.

No. 57, Sept. Term, 2014.

Court of Appeals of Maryland.

June 3, 2015.

Julia Doyle Bernhardt, Asst. Atty. Gen. (Patrick B. Hughes, Asst. Atty. Gen., John B. Howard, Jr., Chief Deputy Atty. Gen., Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore, MD), on brief, for Appellants.

John H. Zink, III (James & Zink, Bel Air, MD; Joseph A. Stevens, Stevens Palmer, LLC, Centreville, MD; Charles R. Schaller, Jr., Linowes and Blocher, LLP, Annapolis, MD), on brief, for Appellee.

Argued before: BARBERA, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, WATTS, and LAWRENCE F. RODOWSKY (Retired, Specially Assigned), JJ.

Opinion

GREENE, J.

This is the fourth time this Court has dealt with proceedings surrounding the development project spearheaded by K. Hovnanian's Four Seasons at Kent Island, LLC (“Appellee” or “Hovnanian”).¹ At issue in the underlying administrative proceedings is a State wetlands license. Although we previously addressed the merits of the Board of Public Works's (“Appellant” or “the Board”) review of Hovnanian's application for a State wetlands license, see Maryland Board of Public Works v. K. Hovnanian's Four Seasons at Kent Island, LLC, 425 Md. 482, 42 A.3d 40 (2012) (“Hovnanian I ”), the issue presently before us is procedural. Hovnanian initiated this latest litigation by filing a complaint for declaratory and injunctive relief and for a writ of mandamus against the Board, seeking an order compelling the Board to vote promptly on Hovnanian's long-outstanding application for a State wetlands permit following delays resulting from a perceived conflict of interest involving a Board employee. On Hovnanian's motion for summary judgment, the Circuit Court for Queen Anne's County granted the relief requested by Hovnanian and ordered the Board to hold a final vote on the application, notwithstanding any perceived appearance of impropriety. The Board noted an appeal to the Court of Special Appeals. Prior to any proceedings in that court, we granted the Board's petition for certiorari to consider the following questions:

I. Was Hovnanian required to await a final administrative decision and exhaust statutory administrative remedies before bringing an action for mandamus, injunction, and declaratory judgment to challenge the administrative procedure adopted to evaluate Hovnanian's application for a State wetlands license?

II. Did the trial court err in substituting its judgment for that of the Board with respect to remediating the Wetlands Administrator's conflict of interest, which involved a previously undisclosed relationship with one of Hovnanian's attorneys and his law firm?

III. Did the trial court err in entering a writ of mandamus directing the Board to issue a decision on Hovnanian's application for a State wetlands license by October 6, 2014, confining the facts that the Board may consider to those contained in that portion of the administrative record that existed on July 24, 2013, and limiting what the Board may consider in any future action on the project?

We shall vacate the judgment of the Circuit Court for Queen Anne's County and hold that the Circuit Court's order was improper (1) for want of a prior final administrative decision; and (2) because mandamus is unavailable under these circumstances.

Accordingly, we need not and do not address the remaining questions which relate to the appearance of a conflict of interest and limitations on the Board's consideration of the administrative record.

FACTUAL AND PROCEDURAL HISTORY

The development project underlying these proceedings has been in the works for nearly two decades. The project involves the construction of a mixed-use adult community on Kent Island in Queen Anne's County known as Four Seasons at Kent Island (“the project”). As described in our 2012 decision, “the project envisions 1,350 single and multifamily dwelling units, an assisted living facility, and related community and recreational facilities, to be erected on two tracts comprising 562 acres that lie on the north side of U.S. Route 50 between the towns of Chester and Stevensville.” Hovnanian I, 425 Md. at 495, 42 A.3d at 47. As a result of the location's proximity to several bodies of tidal water as well as the Chesapeake Bay Critical Area,² Hovnanian was required to obtain numerous permits and approvals from state and local agencies. Despite significant opposition, administrative appeals, and several lawsuits over the years since the inception of this project, Hovnanian has obtained all of the necessary permits and approvals, except one. Hovnanian I, 425 Md. at 495, 42 A.3d at 47.

The final outstanding permit application, at issue in these proceedings, is Hovnanian's application for a State wetlands license pursuant to Maryland Code (1982, 2014 Repl.Vol.), § 16–202 of the Environment Article (“Env.”). Under the statute, the authority to grant licenses for the “dredging” or “filling” of State-owned wetlands rests with the Board, which is comprised of three members: the Governor, the State Comptroller, and the State Treasurer. In relevant part, Env. § 16–202(g)(1) provides that “the Board shall decide if issuance of the license is in the best interest of the State, taking into account the varying ecological, economic, developmental, recreational, and aesthetic values each application presents.” As we stated previously, “under Env. § 16–202, the Board possesses a great deal of largely unguided discretion in determining whether to issue a license and on what terms and conditions [.]” Hovnanian I, 425 Md. at 515, 42 A.3d at 59.

Briefly, the State wetlands license application process typically begins with a review by the Maryland Department of the Environment (“the Department” or “DOE”), and terminates with the Board's decision following receipt of a report and recommendation from the Department.³

The Board also employs a Wetlands Administrator, who evaluates the Department's report and makes an independent recommendation to the Board. See COMAR 23.02.04.08. In deciding whether to grant a license, the Board has broad discretion to consider the reports and recommendations of both the Department and the Wetlands Administrator, as well as public testimony at any hearing and any other information available in the public record.

Hovnanian's wetlands license application originally included four infrastructure development elements: (1) a bridge over Cox Creek; (2) a stormwater management system; (3) utility lines drilled underneath Cox Creek; and (4) a community pier. After conducting an extensive review of the project, both the Department and then-Wetlands Administrator Doldon Moore recommended granting the license. At the Board's May 23, 2007, meeting, however, the Board denied the application, on a two to one vote, based on the majority's view that the environmental impact of the project as a whole was too great and not in the best interest of the State.

Thereafter, Hovnanian filed in the Circuit Court for Queen Anne's County a petition for judicial review of the Board's denial of the application. The Circuit Court reversed the Board's decision, “conclud[ing] that the Board did err, by basing its decision on considerations outside the lawful scope of its discretion,” to wit, the entirety of the proposed project, rather than just the four infrastructure elements forming the application. Hovnanian I, 425 Md. at 485, 42 A.3d at 41. The Board appealed and we granted certiorari prior to any significant proceedings in the Court of Special Appeals. Id. We agreed with the Circuit Court and held that the Board applied an incorrect legal standard by considering the broader environmental impact of the project as a whole, where the statutes and regulations governing wetlands permits confine the Board's review to the impacts on State wetlands. Hovnanian I, 425 Md. at 517–19, 42 A.3d at 60–61. In other words, the Board's focus was too broad. We explained:

[I]n deciding whether to issue a wetlands license, the Board does not act—is not authorized to act—as a super land use authority. Its own regulation, COMAR 23.02.04.10, limits its focus to considering the recommendations of DOE and the Wetlands Administrator and taking into account the ecological, economic, developmental, recreational, and aesthetic values ‘to preserve the wetlands and prevent their despoliation and destruction,’ not to determine whether the project as a whole is environmentally sound at its particular location. That authority lies elsewhere.

The decision to allow a development to proceed within the Chesapeake Bay or Atlantic Coastal Bays Critical Area is specifically committed by law to the jurisdiction of the affected counties and the Critical Area Commission for the Chesapeake and Atlantic Coastal Bays, created by Md.Code, § 8–1803 of the Natural Resources Article....

* * *

The language of Env. § 16–202(c)(1) [now § 16–202(g)(1) ] cannot reasonably be read to broaden the jurisdiction of the Board in such a manner as to trump the clear commitment of land use policy to the local governments and, in part, to the Critical Area Commission and other State agencies. The requirement that the Board consider the ecological, economic, developmental, recreational, and aesthetic values presented in the application in determining whether issuance of the license is in the State's interest has reference to the impact of the proposed dredging or filling on the affected wetlands. Section 16–102(b), which declares the public policy behind the Wetlands Law, makes abundantly clear that those considerations are tied to the desire ‘to preserve the wetlands and prevent their despoliation and destruction,’ not to control all development near the Chesapeake Bay, and the Board's own regulation confirms that narrower focus.

Hovnanian I, 425 Md. at 517–19, 42 A.3d at 60–61. What the Board should have considered, and indeed was required to consider, we stated, “was whether the impact...