Halici v. Gaithersburg

• Decision Date: 30 May 2008
• Docket Number: No. 1048, Sept. Term, 2007.,1048, Sept. Term, 2007.
• Citation: 949 A.2d 85,180 Md. App. 238
• Parties: Hamza HALICI, et al. v. CITY OF GAITHERSBURG, Maryland, et al.
• Court: Court of Special Appeals of Maryland

949 A.2d 85

180 Md. App. 238

Hamza HALICI, et al. v. CITY OF GAITHERSBURG, Maryland, et al.

No. 1048, Sept. Term, 2007.

Court of Special Appeals of Maryland.

May 30, 2008.

Stephen J. Orens (Rebecca D. Walker, Casey L. Moore, Miles & Stockbridge, P.C., on brief), Rockville, for appellant.

Cathy G. Borten, Gaithersburg, for appellee.

Panel: EYLER, DEBORAH S., MEREDITH and RAYMOND G. THIEME, JR. (Ret'd, Specially Assigned) JJ.

DEBORAH S. EYLER, J.

The Mayor and Council of the City of Gaithersburg, sitting as the Historic District Commission ("HDC"), the appellee, denied Historic Area Work Permit Application No. 37-E, filed by Halici, Inc. ("Halici"), the appellant. The application sought to allow demolition of "the Talbott House," owned by Halici and located at 309 North Frederick Avenue, in the City. The denial resulted from a tie vote of the HDC.

In the Circuit Court for Montgomery County, Halici brought an action for judicial review, challenging the HDC's decision. The circuit court affirmed the agency action.

Halici presents four questions for review in this Court, which we have consolidated and rephrased as follows:¹

I. Was the HDC unlawfully constituted under Md.Code (1957, 2003 Repl. Vol.) section 8.03 of Article 66B when it denied the permit application, and, if so, does that render invalid the HDC's decision to deny the permit application?

II. Was there substantial evidence in the agency record to support the HDC's denial of the permit application?

For the following reasons, we shall affirm the judgment of the circuit court.

FACTS AND PROCEEDINGS

The Talbott House was built in 1921, in what was then the subdivision of Realty Park, in the heart of Gaithersburg. It is a two-story modified bungalow style house. Originally, it was zoned R-90, which is a residential classification. It was used as a residence until 1962. At that time, the block on which it is located—North Frederick Avenue between Maryland and Montgomery Avenues—was rezoned C-1 (Local Commercial).

Halici purchased the Talbott House in 1978, as an investment and for commercial use. Since then, it has been used as a hair salon. At the times relevant to this case, "The Hair Bar Salon" operated its business there. Hamza Halici ("Mr. Halici") is the sole shareholder of Halici, which owns and operates The Hair Bar Salon.²

In 1986, Halici purchased the adjacent property at 307 North Frederick Avenue. Pursuant to a subsequent subdivision rezoning, the two addresses were combined into one tract of land, designated as plot 85 in the Montgomery County land records. Halici has since treated 307 North Frederick Avenue and the Talbott House as one tract for purposes of valuation and sale (307 North Frederick Avenue and the Talbott House, together, the "Property").

In March of 1989, Halici filed a petition before the HDC seeking to have the Talbott House designated as a local historic site.³ Although the petition asked that the historic designation for the Talbott House be granted conditionally, it was granted fully, with no conditions. The parties do not dispute that the HDC had the right, on its own motion, to designate the Talbott House a local historic site unconditionally. As a result of the designation, Halici received certain municipal tax credits for renovations it undertook on the Talbott House. Halici demolished the structure that occupied 307 North Frederick Avenue; that part of the Property has remained unimproved to this date. About ten years later, the City enacted the Frederick Avenue Corridor Master Plan, which rezoned the area in which the Property is located to the Corridor Development ("CD") zone.

In 1999, Halici submitted Historic Area Work Permit Application 37C ("HAWP-37C"), seeking permission to demolish the Talbott House on the ground of substantial financial hardship. The Historic Preservation Advisory Committee ("HPAC") considered the application and recommended unanimously that it be denied. Notwithstanding that negative review, the application was granted by resolution of the HDC on June 5, 2003. The resolution was conditional, in that it provided that the demolition permit would not be issued "until an approved site development plan for new construction, which adheres to the Frederick Avenue Corridor Design Code and follows the development review process for the CD (Corridor Development) Zone, has been awarded for" the Property.

The approval for HAWP-37C did not specify a time frame for the completion of work. Pursuant to section 24-228.1(f) of the City of Gaithersburg Code ("Code"), the absence of a time frame created a presumption of a one-year time period. On October 20, 2003, the HDC voted to amend the approval to allow for a two-year time frame for completion, i.e., until June 2, 2005. By that date, Halici had not commenced work. It sought a one-year extension of HAWP-37C, until June 2, 2006, which was granted. When it did not complete work by that date, HAWP-37C expired. (In fact, work was never begun.)

Within days after HAWP-37C expired, Halici filed a new application: Historic Area Work Permit application 37E ("HAWP-37E"). The ultimate decision to deny that application is the subject of this appeal.

On July 6 and August 3, 2006, the HPAC held a public hearing on HAWP-37E. Testimony was given by witnesses for Halici, in favor of the application, and by witnesses opposed to the application. At the conclusion of the August 3 hearing, the HPAC members made oral findings on the record and voted unanimously to recommend that the HDC deny the application. On October 9, 2006, the HDC held a public hearing on the application. Testimony was taken at that hearing as well.

On January 2, 2007, the HDC held a "policy discussion" and vote on the application. Three of the six members of the HDC voted to deny the application and three voted to approve it. Because the vote was tied, the application failed. On January 16, 2007, the HDC issued a written opinion stating the reasons for the votes against and the votes in favor of HAW P-37E.

As noted above, Halici pursued an action for judicial review in the circuit court. In a reply memorandum, Halici asserted for the first time that one member of the HDC did not meet the eligibility requirements to sit on that commission. The circuit court rejected that argument on its merits and further ruled that the HDC's decision was supported by substantial evidence. This appeal followed.

We shall include additional facts as necessary to our discussion of the issues.

DISCUSSION

I.

The City of Gaithersburg's zoning authority is derived from Md.Code Art. 66B. See Trail v. Terrapin Run, LLC, 403 Md. 523, 943 A.2d 1192 (2008) (Art. 66B empowers local governments to impose zoning regulations). Sections 8.01 et seq. of that article govern "Historic Area Zoning." The City's HDC was created pursuant to section 8.03(a), which, with respect to the qualifications of members, provides in pertinent part:

(2)(ii) Each member of a historic district commission ... shall possess a demonstrated special interest, specific knowledge, or professional or academic training in such fields as history, architecture, architectural history, planning, archeology, anthropology, curation, conservation, landscape architecture, historic preservation, urban design, or related disciplines.

* * * * * *

(iv) Each local jurisdiction that creates a historic district commission ... under this subtitle shall establish and publicly adopt criteria for qualifying as a member of the commission.

Article 66B, section 8.03(a)(2)(ii) and (iv).

The City's Historic Preservation Ordinance provides:

Historic district commission. The mayor and city council shall appoint a commission of six (6) members, all of whom are qualified consistent with the provisions of Article 66B, § 8.03, MD. CODE ANN., as established by the following criteria:

(a) Persons who have previously served on a local legislative body exercising planning and zoning powers; or

(b) Persons who have previously served on a planning commission, board of appeals or historic preservation commission or advisory body; or

(c) Persons who have demonstrated special interest, participation, specific knowledge or professional training in such fields as history, architecture, architectural history, planning, archaeology, anthropology, curation, conservation, landscape architecture, historic preservation, urban design or related disciplines;

and agree to serve on this commission and a majority of whom are residents of the city.... The mayor and members of the city council shall be eligible for appointment to the commission, provided they possess the qualifications described hereinabove ....

Code § 24-224.

At all times relevant to this case, the City's HDC was comprised of the Mayor and the five members of the City Council.

(a)

Halici contends that the HDC was not constituted lawfully because one of its members, Michael A. Sesma, did not meet the qualification criteria established in section 8.03(a)(2)(ii) of Article 66B when he was appointed, in 2005.⁴ The City maintains that this issue is not properly before this Court on appellate review because Halici did not raise it before the HDC. On the merits, the City asserts that Sesma was qualified when the vote on HAWP-37E was taken, which was sufficient, and, even if he was not qualified, the HDC's decision still stands under the de facto officer doctrine.

On the preservation issue, Halici responds that the question of Sesma's qualifications and thus the HDC's authority, as comprised, to render a decision is an issue of "subject matter jurisdiction" that can be raised at any time. In support, he cites Nguyen v. U.S., 539 U.S. 69, 123 S.Ct. 2130, 156 L.Ed.2d 64 (2003), for the proposition that this Court should consider "at least on direct review, violations of a statutory provision that `embodies a strong policy concerning the proper administration of judicial business' even though the defect was not raised in a...