Board of Public Works v. Larmar Corp., 345

Decision Date10 May 1971
Docket NumberNo. 345,345
Citation277 A.2d 427,262 Md. 24
Parties, 2 ERC 1544, 1 Envtl. L. Rep. 20,230 BOARD OF PUBLIC WORKS of Maryland et al. v. LARMAR CORPORATION et al.
CourtMaryland Court of Appeals

Jon F. Oster, Asst. Atty. Gen. (Francis B. Burch, Atty. Gen., Baltimore, on the brief), and Richard M. Pollitt, Sp. Atty., Salisbury, for appellants.

Victor H. Laws, Salisbury, for appellee and cross-appellant, Larmar Corp.

Raymond S. Smethurst, Jr., Salisbury (Henry M. Rutledge and Adkins, Potts & Smethurst, Salisbury, on the brief), for appellee, The Adkins Co. of Ocean City, Inc.

Argued March 8, 1971 before HAMMOND, C. J., and FINAN, SINGLEY, SMITH and DIGGES, JJ.

Reargued April 5, 1971 before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN, SINGLEY, SMITH and DIGGES, JJ.

FINAN, Judge.

Although collateral issues will be discussed, the two paramount questions before this Court concern, (1) the rights of riparian owners to reclaim land by filling in navigable waters in front of their shoreline, making new fast land, within the scope and intent of Maryland Code (1968 Repl.Vol.), Art. 54, §§ 45, 46, and 48, hereinafter referred to as the Act of 1862, and (2) the question of whether such riparian rights may be restricted, and if so to what extent, by the provisions of Sections 15A and 15B of the Public Local Laws of Worcester County (Chs. 757 and 690 of the Laws of 1965) establishing the Worcester County Shoreline Commission and Ch. 241 of the Laws of 1970 (Code (1970 Repl. Vol.), Art. 66C, §§ 718 through 731), titled 'Natural Resources,' sub-titled 'Wetlands,' which we shall hereafter refer to as the 1970 Wetlands Act. The Act of 1862, §§ 15A and 15B of the Public Local Laws of Worcester County, and the 1970 Wetlands Act are the three legislative enactments with which we shall primarily be concerned in this opinion.

This appeal was taken by the Board of Public Works and the Maryland Water Resources Commission from an order passed on August 31, 1970, by Judge Daniel T. Prettyman in the Circuit Court for Worcester County in a declaratory judgment proceeding brought by the Larmar Corporation (Larmar) against the Worcester County Shoreline Commission, the Board of Public Works and the Maryland Water Resources Commission. After Larmar had filed its petition The Adkins Company of Ocean City, Inc. (Adkins) was granted leave to intervene as a party plaintiff. Both Larmar and Adkins have filed cross appeals. The Worcester County Shoreline Commission did not file an appeal from the order of the circuit court and is not a party to this appeal.

Larmar filed its petition on October 3, 1969, seeking a declaratory judgment of its contractual and legal rights in, and title to, five parcels of property which it owned and which it described as 'wetlands' and filled or partially filled lands along the shorelines of the navigable waters of Worcester County. Larmar also sought a declaratory judgment of its legal rights with respect to a parcel of property that it had recently held as lessee with option to purchase. This property, which is referred to as the 'Hoddinott-Richards Property,' is located in Ocean City along the shorelines of the navigable waters of the Isle of Wight Bay in Worcester County. The circuit court's opinion was limited to a determination of the issues raised with respect to the Hoddinott-Richards Property; however, the circuit court observed that resolution of the issues with respect to the Hoddinott-Richards Property would resolve all similar issues arising, at least with respect to the four other parcels of property owned by Larmar which are located in Ocean City.

In 1964 Larmar was seeking a site for an amusement park in Ocean City and selected the Hoddinott-Richards Property as a desirable location. Larmar procured the purchase of the property by Lura A. Richards, Ind. and the lease-back thereof to Larmar's subsidiary, Ocean Playland, Inc., by an unrecorded lease agreement for five years expiring March 23, 1969, with a renewal option and a purchase option.

The lease agreement contained a covenant by which Larmar's subsidiary, as tenant, agreed to fill the property to approximately 400 to 425 feet westerly into the waters of the Bay from Seabay Drive at the elevation of the highway. Such work was done by hauling truckloads of fill from the mainland which was dumped on the property, raising the elevation of the fast land, covering the marsh, and filling a gut or inlet and land under the waters of the Bay. Larmar's subsidiary obtained from The Title Guarantee Company of Baltimore, Maryland, a title insurance policy for the land without exception as to such filling or the filled-in area. After the filling the tax assessment on the land was raised and Larmar's subsidiary paid real estate taxes on the land to Worcester County, the Town of Ocean City, and the State of Maryland through the term of the lease up to April 14, 1969, when Larmar traded the property.

Larmar's subsidiary was forced to abandon its plan to construct an amusement park on the Hoddinott-Richards Property because the necessary zoning permits could not be obtained. Larmar then acquired the Playland Property by deed dated October 22, 1964. This property is bounded on the east by Seabay Drive, and on the north and south by the westerly extensions of 66th Street and 65th Street respectively, and on the west by the Bay. At the time of its acquisition it had approximately 400 to 500 feet of marsh west of Seabay Drive with an elevation approximately 2 1/2 feet above mean low water which was crisscrossed by drainage ditches. After obtaining a permit from the Army Corps of Engineers, Larmar and its subsidiary had the property filled and extended west a distance of approximately 1,400 feet at a width of approximately 350 feet. Such filling was done by the bulkheading-dredging method, whereby the area to be filled is enclosed by bulkheads, and earth fill dredged by a floating hydraulic dredge from surrounding bay bottoms (the borrow area) is pumped into the enclosure until the level of the enclosed area is raised to the top of the bulkheads. Approximately 103,000 cubic yards of dredged material were deposited at a cost of $55,000. The dredging was completed about December 15, 1964, and thereafter Playland Amusement Park was constructed on the filled-in land. The park opened for business on or about June 1, 1965. The construction of the amusement park cost in excess of $1,000,000 and Larmar and its subsidiary have paid real estate taxes to Worcester County, the Town of Ocean City and the State of Maryland on the Playland Property and the amusement park structures from 1965 to date.

In the case of both the Hoddinott-Richards Property and the Playland Property, the filling was completed before May 4, 1965, when bulkhead lines and borrow area limit lines were established in Isle of Wight Bay and Assawoman Bay to the west of the properties by Chapter 757 of the Laws of 1965. Additionally, on June 1, 1965, the Worcester County Shoreline Commission was created by Chapter 690 of the Laws of 1965. The Commission regulates and determines 'bulkhead lines, shorelines and fill lines along the shorelines of Worcester County.' A permit from the Commission is required for construction or reconstruction of bulkheads; changing a shoreline, or making a fill along the shoreline.

Another development that occurred after the filling of the two properties was the issuance of an opinion of the Attorney General of Maryland, reported in 50 Opinions of the Attorney General 452, dated February 14, 1965 in which the Attorney General concluded that an owner of riparian land bordering on Assawoman Bay did not have an unlimited right under existing law and the Act of 1862 to fill in areas covered by the waters of Assawoman Bay at mean high tide and that if the owner of such riparian land bordering on Assawoman Bay desired to extend his land by filling in areas covered by the waters of the Bay he must first submit his plans to the Board of Public Works. The Attorney General stated that the Board of Public Works had the authority to review any such plan in detail, determine whether the plan would bring greater public benefit to the area affected, fix an adequate consideration upon the State's property interest affected and contract with the riparian owner in a manner permitting the project to be undertaken. 50 Opinions of the Attorney General 452, 475.

Thereafter, the Board of Public Works began to exercise such authority and at its meeting held on August 1, 1968, adopted as a matter of State policy the following conditions with respect to applications before the Corps of Engineers and the Department of Water Resources for permits to dredge materials from the bottom of navigable waterways within the State for the purpose of filling to make new fast land:

(1) The applicant would agree to pay to the State of Maryland 10cents per ton (dry weight) for fill material dredged from the bottom of navigable waterways beyond any approved bulkhead line or pre-1862 land grant line.

(2) In exchange for a quit-claim deed from the State of land lying between the mean high tide water or pre-1862 land grant line and the bulkheads to be constructed, the applicant would convey to the State of Maryland marshland of equal ecological value and of a kind and location suitable to the Board of Natural Resources on an approximate ratio of 2 acres of such marshland for every 1 acre of land deeded by the State of Maryland to the applicant.

(3) The applicant would provide a surety bond to the State in an amount equal to the estimated payments to be made to the State.

In 1968, Larmar opened negotiations with Adkins to exchange the Hoddinott-Richards Property for property owned by Adkins lying between the Playland Property and the Ocean Highway. Larmar and Adkins agreed to make an even trade of their respective lands provided that Larmar would pay Adkins a penalty of $75,000 if Larmar proved unable...

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