Eller Media Co. v. Montgomery County

• Citation: 143 Md. App. 562,795 A.2d 728
• Decision Date: 30 January 2002
• Docket Number: No. 00571, No. 00867
• Parties: ELLER MEDIA COMPANY v. MONTGOMERY COUNTY, Maryland, et al.
• Court: Court of Special Appeals of Maryland

795 A.2d 728

143 Md. App. 562

ELLER MEDIA COMPANY v. MONTGOMERY COUNTY, Maryland, et al.

Nos. 00571, 00867, Sept. Term, 2000.

Court of Special Appeals of Maryland.

January 30, 2002.

Reconsideration Denied April 17, 2002.

Jeffrey Harris (Jason Sean Garber, Eric M. Rubin, Walter E. Diercks and Rubin, Winston, Diercks, Harris & Cooke, LLP, on the brief), Washington, DC, for appellant.

Karen L. Federman Henry, Principal Counsel for Appeals (Charles W, Thompson, Jr., County Atty. and Clifford L. Royalty, Associate County Atty., on the brief), Rockville, for appellee.

Argued before SALMON, SONNER, and JOHN F. McAULIFFE (Ret., Specially Assigned), JJ. SALMON, Judge.

A useful synopsis of the early history of the litigation involved in this appeal can be found in Montgomery County v. Revere, 341 Md. 366, 369-76, 671 A.2d 1 (1996). The current appeal involves three consolidated cases, one of which was filed in the last year of Richard M. Nixon's presidency.¹ The parties currently involved in these cases are Eller Media Company ("Eller") on one side and the County Executive for Montgomery County, the Montgomery County Council, and Montgomery County, Maryland (collectively, "the County") on the other. The source of controversy is thirty-four billboards (currently owned by Eller), which are affixed to fourteen structures located in the County. The County wants the billboards removed but does not want to pay Eller any monetary compensation for the loss of the signs.

In an effort to have Eller remove the billboards, the County enacted zoning ordinances in 1968, 1986, 1992, and 1997. The last three sign ordinances repealed the sign ordinance that immediately preceded it, leaving only the 1997 ordinance currently in effect.

The 1968 and 1992 sign ordinances allowed lawfully non-conforming signs to stay in place for a period of time (an amortization or grace period) before the signs were required to be removed.² The 1986 sign ordinance did not allow for any amortization period.

The 1997 ordinance (Montgomery County Ordinance No. 13-76, now codified as Chapter 59F of the Montgomery County Zoning Code (1997)), does not distinguish between commercial and non-commercial signs. It provides, in part:

Off-site sign.

Except for signs permitted by this ordinance, a sign must not be used to identify a site other than the site where the sign is erected. Signs or structures that were lawful on July 28, 1986 or were lawfully constructed, structurally altered, or relocated after July 28, 1986 may be continued for a period of 5 years from July 13, 1992. At the end of this amortization period, the signs or structures must be removed within 90 days at the owner's expense.

See Montgomery County Zoning Code, Chapter 59, Section F.1-7.1(i).

For example, under the terms of the 1997 ordinance, if a McDonald's restaurant had on its premises a billboard identifying the site as a McDonald's, that sign would be permitted as an on-premise sign; if a site had a sign that read "McDonald's one mile," it would not be permitted.

The 1997 sign ordinance also limits the size of all signs in Montgomery County. For example, in a residential zone, a sign may not exceed two square feet (section 59F-8(a)) and must not exceed 200 square feet in rural or agricultural zones (section 59F 4.2(d)). All of Eller's signs exceed 200 square feet.

Signs not visible outside the property where erected, signs used by government agencies or utilities erected by order of a police officer or utility official in the performance of its official duties (e.g., to control traffic, warn of danger, etc.) are exempted. Also exempted are signs required to be displayed by law or regulation.

The 1997 ordinance, like the three ordinances that preceded it, did not provide for any monetary payment to be made by the County to reimburse the owners of the billboards for the fair market value of the signs, even though the Maryland General Assembly, in 1983, passed Senate Bill 712, now codified as article 25, section 122E, which provides:

(a) Definitions.—

(1) In this section the following words have the meanings indicated.

(2)(i) "Fair market value" means a value, determined by a schedule adopted by the Department of Transportation, that includes the value of integral parts of an outdoor advertising sign, less depreciation.

(ii) "Fair market value" does not include a value for loss of revenue.

(3)(i) "Outdoor advertising sign" means an off-premises outdoor sign:

1. Commercially owned and maintained; and

2. Used to advertise goods or services for sale in a location other than that on which the sign is placed.

(ii) "Outdoor advertising sign" includes signs composed of painted bulletin or poster panel, and usually referred to as billboards.

(b) In general.—A county or municipality shall pay the fair market value of an outdoor advertising sign, removed or required to be removed by the county or municipality, that was lawfully erected and maintained under any State, county, or municipal law or ordinance.

See Md. Ann.Code art. 25, § 122E (1999 Repl.Vol.) (emphasis added).

On December 31, 1998, Revere National Corporation, Inc. (one of Eller's predecessors in interest) filed a second amended complaint in the Circuit Court for Montgomery County, in which it sought

to have the Court declare unlawful and enjoin ... the ... County ..., from enforcing Article 59 F of the Montgomery County Zoning Ordinance (the "Sign Regulations"), which makes nonconforming and requires the removal of certain existing lawfully erected signs used for the dissemination of noncommercial and commercial messages, while permitting the continued existence of a substantially greater number of signs that are used for commercial purposes; Revere also seeks compensatory and punitive damages, attorneys fees pursuant to 42 U.S.C. § 1988 and such other relief as the Court deems just and proper.

Montgomery County filed a motion to dismiss the second amended complaint and a motion for summary judgment. The motions court granted summary judgment in favor of Montgomery County as to all counts in the second amended complaint, except for the counts in which the plaintiff claimed (1) entitlement to the fair market value of the billboards under article 25, section 122E or (2) that the sign ordinance, as written, constituted a "taking," without compensation, as prohibited by both the United States and the Maryland constitutions. After hearing evidence as to the fair market value issue, the trial judge, in an apparent change of position, held that the County was not required to pay Eller any monetary compensation for the removal of the signs under section 122E.

In the court's opinion, the amortization provisions set forth in the 1997 ordinance adequately compensated Eller. Moreover, the trial court expressed the opinion that the 1997 ordinance did not constitute a "taking" under either the Maryland or federal constitution. Nevertheless, as a precautionary matter, in case an appellate court was to disagree with his opinion regarding section 122E or the "taking" issue, the trial judge concluded that the fair market value of the signs (using the methodology set forth in article 25, section 122E(a)(2)(i)) was $470,000. In arriving at this damage figure, the trial judge did not include the fair market value of Eller's leasehold interest in the real property on which the signs were located. Eller filed this timely appeal and raises seven issues.

I.

ISSUE 1

Did the trial court err in holding that amortization was a lawful substitute for the monetary payment required by article 25, § 122E?

In an oral opinion, the trial court characterized the issue to be resolved as follows:

[D]oes the concept of amortization contained in the Montgomery County ordinance trump the requirement of 122(E) that a County pay the fair market value, or vice versa, does 122(E) trump the County ordinance and require payment of fair market value, even though there may have been an amortization[?]

The lower court, relying exclusively on an opinion by this Court in Chesapeake Outdoor Enterprises, Inc. v. Mayor and City Council of Baltimore, 89 Md.App. 54, 597 A.2d 503 (1991), concluded that section 122E was inapplicable if a county provided for a reasonable amortization period for the removal of the signs. The court concluded that the amortization period set forth in the 1997 sign ordinance was reasonable.³

A. Legislative History of Article 25, Section 122E

In 1982, the Maryland General Assembly had before it Senate Bill 702, which, insofar as is here relevant, is substantively identical to the statute that later was codified as article 25, section 122E. Senate Bill 702 passed the General Assembly, but Governor Harry Hughes vetoed it. His veto message included the following language:

This bill prohibits any county or principality from removing or requiring the removal of an "off-premises outdoor advertising sign" unless it pays the "fair market value" of the sign in accordance with a schedule of the State Department of Transportation used in conjunction with its highway beautification program. The effect of the bill would be to eliminate the phasing out or "amortization" of certain signs by a local jurisdiction without requiring payment as a sign regulation and removal strategy.

The amortization approach has been employed "by" local government in Maryland for at least 25 years to promote traffic safety and the economic well being, natural beauty, and esthetic features of the particular jurisdiction within certain constitutional limitations, the Maryland courts have recognized amortization as a valid exercise of the governmental police power which does not amount to an unconstitutional "taking" for which the owner of the sign is entitled to compensation. Grant v. City of Baltimore, 212 Md. 301, 129 A.2d 363 (1957); Donnelly Adv. Corp. v. City of Baltimore, 279 Md. 660, 370 A.2d 1127 (1977).

* * *

That this bill fundamentally changes that which has

...