Donnelly v. State
| Decision Date | 12 May 2022 |
| Docket Number | CIVIL 20-3654 PJM |
| Parties | V. CHARLES DONNELLY, et al., Plaintiffs, v. STATE OF MARYLAND, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
This is a case in which, after many decades, Plaintiffs seek to right what they believe is a grievous wrong. Despite having encountered a substantial array of legal hurdles in the past they will be given a chance to try again.
In summary the tale, as told by Plaintiffs, is as follows:
They are (or their predecessors-in-interest were) landowners along the western shore[1] of the Patuxent River in Calvert County Maryland. Years ago, the State of Maryland (State) constructed a road (then known as Route 2, now known as Solomons Island Road) between the landowners' properties and the shoreline of the River. In the mid-1950s, the State determined that it needed to fortify Route 2 by constructing a bulkhead along the shoreline of the landowners' properties. Accordingly, in 1957, by agreements with the then landowners, the State obtained rights of way over the landowners' properties in order to construct the bulkhead. In exchange for the rights of way the State granted to each landowner the right to construct essentially any pier they might wish off the planned bulkhead. The State obtained the rights of way and constructed the bulkhead.[2]
From all that appears, a few landowners got approval and built their piers off the bulkhead. Others, however, took longer to request to build, with the consequence that, by a series of maneuvers over decades, the State and/or the County (which succeeded to the State's interest in the rights of way and bulkhead) repeatedly rejected, first temporarily, then permanently, the requests. In 2012, V. Charles Donnelly and other landowners (Solomons One, LLC; Solomons Two, LLC; DiGiovanni's Dock of the Bay, Inc.; James Seymour; and Prime Island Properties, LLC sued the Board of County Commissioners for Calvert County (County) and the State in Maryland state court for money damages for breach of contract as an alternative to seeking enforcement of the right to erect piers.[3] In the first phase of suit, Donnelly I, the Circuit Court for Calvert County held in favor of those plaintiffs, [4] determining that they indeed had the contractual right to construct piers. The Circuit Court also held that the County and State's denial of Donnelly's and Solomons One, LLC's joint application to construct a pier was a breach of that contractual right.[5] Following an appeal, the Maryland Court of Special Appeals (“CSA”) agreed and sent the case back to the Circuit Court for a trial on money damages. At trial, plaintiffs (again, one of whom was current Plaintiff Donnelly, who was also acting as counsel for all) sought to prove the fair market value (“FMV”) of the piers as of the date of the trial (August 2016), but the trial judge ruled that the breach of contract had in fact occurred on June 13, 2012, when the County last denied Donnelly's and Solomons One, LLC's joint pier application. Accordingly, the trial court held that Plaintiffs had failed in their proof, since they had offered no evidence of FMV as of June 13, 2012.
Plaintiffs appealed again, but this time the CSA ruled against them. Not only, said the appellate court, had there been a failure of proof as to the relevant date of the FMV, but-for the first time and, from all that appears, with minimal briefing by the parties-the CSA ruled that, because the plaintiffs had not actually built piers, they in any event held only unvested riparian rights which the State could supersede at any time without providing compensation.[6] Additionally, the CSA held that the County could not bargain away its zoning authority.
This Court finds it useful to slow walk the key features of how the case progressed in state court. The holding of the CSA came despite the fact that the County and/or State, for years, had continuously denied the requests of the landowners to construct the piers, in effect blocking any effort on their part to erect piers.[7] This, said the CSA, the State and County could do, with the result that the landowners would be entitled to no compensation at all. All the while the CSA seemed to abide the fact that the State and County, at least by implication, could continue to enjoy the benefits of the rights of way and the bulkhead which previously had been part of the landowners' land and which the landowners had delivered to them, in exchange for which the landowners were to get the right to build the piers. As Plaintiffs see things, the protracted history of the County's and State's maneuvers seems to be little more than a governmental shell game. As of this initial phase of the proceedings, the Court is prepared to give them the chance to show why that may be so.
Plaintiffs Donnelly; DiGiovanni's Dock of the Bay, Inc.; Prime Island Properties, LLC; Conner LLC; Solomons Island Yacht Club, Inc.; and Christopher J. Moore for themselves and/or as successors in interest to owners of shoreline property along Solomons Island Road[8] bring the present suit against Defendants Board of County Commissioners of Calvert County (“County”) and the State of Maryland (“State”). They contend that Defendants have deprived them of constitutionally protected property rights, specifically alleging, among others, claims for the unconstitutional taking of property without just compensation as well as breach of contract. As indicated, in the 2000s and 2010s, some of the Plaintiffs-Donnelly, DiGiovanni's Dock of the Bay, Inc. and Prime Island Properties LLC-sought compensation for the loss of their pier rights through state administrative proceedings and state court actions. Having failed to obtain money damages for breach of contract from the County in state court, those three Plaintiffs, plus three new ones (Conner, LLC, Solomons Island Yacht Club, Inc., and Christopher J. Moore), come to federal court seeking compensation for-in addition to their main claims for regulatory taking/inverse condemnation and breach of contract-substantive due process and equal protection violations under 42 U.S.C. § 1983, constitutional impairment of contract, and breach of the implied covenant of good faith and fair dealing.
First and foremost, the relatively recent decision by the U.S. Supreme Court in Knick v. Township of Scott, 139 S.Ct. 2162 (2019), represents the outer layer of the onion that needs to be peeled to analyze what might otherwise seem to be a straightforward application of the doctrine of res judicata, at least as to the three Plaintiffs who were plaintiffs in the state proceedings (Donnelly; DiGiovanni's Dock of the Bay, Inc.; and Prime Island Properties, LLC). But while allowing the present case to proceed as to all Plaintiffs, including the three original state court plaintiffs, may seem at odds with the application of that doctrine, this case presents a number of unique circumstances. After engaging with Knick and peeling away several other layers of the case's complicated history, the Court holds that Plaintiffs are entitled to go forward in this Court as to some, if not all, of their claims.
For the reasons that follow, then, the County's Motion to Dismiss, or in the Alternative for Summary Judgment, ECF No. 16, will be GRANTED IN PART and DENIED IN PART. The State's Motion to Dismiss, ECF No. 17, will be GRANTED IN PART and DEFERRED IN PART.
Solomons, Maryland, also known as Solomons Island, is located at the mouth of the Patuxent River in southern Calvert County, Maryland. Plaintiffs are similarly situated property owners on Solomons Island who claim that by contract they (or their predecessors in interest) hold or at least held, rights to construct piers into the Patuxent River. Compl. ¶ 2, ECF No. 1. According to Plaintiffs, each of them has or at least had the right to construct a pier of their choosing into the river by virtue of 1957 contracts that the State Roads Commission (“SRC”) (predecessor in interest to the State Highway Administration) and Plaintiffs' predecessors in interest executed as part of a state highway project intended to expand the western shoreline of Solomons Island. Id. By virtue of these contracts, SRC acquired from the landowners rights of way along the shoreline of Solomons Island so that it might extend the shoreline and build a bulkhead to run parallel to the highway then known as Route 2, now known as Solomons Island Road. Id. About 30 property owners who owned land along Route 2 extending from the edge of Route 2 to the Patuxent River shoreline signed contracts with the State. In exchange for the release of their “water rights, including oyster rights leased from the State and other unspecified riparian rights, the SRC granted Plaintiffs the “right to construct, maintain or repair any pier structure they may desire to erect outside the proposed bulkhead.” Id. ¶ 2, 17. The SRC subsequently signed deeds to the property owners memorializing the transaction that were recorded among the Calvert County land records. Id. ¶ 2.
According to Plaintiffs, in the 1960s, 1970s, and early 1980s, a few commercial piers were permitted to be built off the bulkhead. Id. ¶ 18. But in February 1986, things changed. As summarized by the CSA in Donnelly II:
“. . . Solomons Island was subject to a 1986 zoning ordinance that imposed a moratorium on the construction of new commercial piers. In 2009, Calvert County enacted the Solomons Town Center Master Plan (“2009 Master Plan”) and Zoning Ordinance (“2009 Zoning Ordinance”). The 2009 Master Plan adopted a general policy against “the proliferation and duplication of private commercial piers along the public bulkhead” on the Patuxent River. In...
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