Halle Development v. ANNE ARUNDEL CTY.

• Decision Date: 10 October 2002
• Docket Number: No. 1,1
• Citation: 808 A.2d 1280,371 Md. 312
• Parties: HALLE DEVELOPMENT, INC., et al., v. ANNE ARUNDEL COUNTY, Maryland.
• Court: Maryland Court of Appeals

808 A.2d 1280

371 Md. 312

HALLE DEVELOPMENT, INC., et al., v. ANNE ARUNDEL COUNTY, Maryland.

No. 1, Sept. Term, 2002.

Court of Appeals of Maryland.

October 10, 2002.

John R. Greiber, Jr., Glen Burnie, for petitioners/cross-respondent.

Hamilton F. Tyler, Sr. Asst. County Atty. (Linda M. Schuett, County Atty., on brief), Annapolis, for respondent/cross-petitioners.

Argued before BELL, C.J., and ELDRIDGE, RAKER, WILNER, CATHELL, HARRELL, and BATTAGLIA, JJ.

CATHELL, Judge.

This case concerns waiver agreements entered into between Halle Development, Inc., Halle Enterprises, Inc., and Arundel Homes, Inc. (petitioners)¹ and Anne Arundel County (respondent) on four occasions between 1989 and 1999. Respondent entered into agreements with petitioners to waive the application of the school capacity requirements of respondent's Adequacy of Public Facilities Ordinance in respect to petitioners' proposed subdivisions in exchange for the payment of money to respondent and, in one instance, the conveyance of land to respondent by petitioners. On September 5, 2000, petitioners brought suit against respondent in the Circuit Court for Anne Arundel County for class action relief seeking a refund of the monies paid and a return of the land conveyed² based upon the allegedly unlawful procedure used by respondent of contracting with petitioners for waivers regarding the Adequacy of Public Facilities Ordinance.

On February 16, 2001, the Circuit Court issued a written decision and granted summary judgment for respondents.³ On March 1, 2001, petitioners filed their Notice of Appeal to the Court of Special Appeals. On December 4, 2001, the intermediate appellate court affirmed, on other grounds, the decision of the trial court in a reported opinion Halle Development, Inc., et al. v. Anne Arundel County, Maryland, 141 Md.App. 542, 786 A.2d 48 (2001). On December 18, 2001, petitioners filed a Petition for Writ of Certiorari to this Court. On January 18, 2002, respondent filed its Opposition to Petition for Writ of Certiorari and Conditional Cross-Petition for Writ of Certiorari. On March 6, 2002, we granted both petitions. Halle v. Anne Arundel County, 368 Md. 239, 792 A.2d 1177 (2002). Petitioners have presented two questions for our review:⁴

"1. When a chartered County government, without the consent of the legislature, admits to `... develop[ing] a "School Fee Agreement"` as a predicate to granting a waiver of Adequacy of Facilities Ordinance, has that County rated or levied an aid, charge, tax, burthen or fee under `pretense of contract in violation of Article 14 of the Maryland Declaration of Rights?'

"2. Did the Court of Special Appeals engage in judicial legislation when it found that the County has the power under Article 26, § 2-411(b)(1)[Anne Arundel County Code] to grant a waiver for financial considerations, holding that this section's prohibition in granting a waiver for financial considerations `... refers to the developers basis for claiming a waiver and does not refer to [the County's] ability to negotiate a waiver in exchange for compensation?'" [Alteration added.] Respondent has presented two questions for our review in its Conditional Cross-Petition for Writ of Certiorari:⁵

"1. Did the Court of Special Appeals err when it declined to address the issues raised in AACO's Cross-Appeal?

A. Did Plaintiffs [petitioners] fail to comply with the notice requirements of the Local Government Tort Claims Act?

B. Did Plaintiffs fail to exhaust their administrative remedies?

C. Did Plaintiffs' claim pursuant to 42 U.S.C. § 1983 fail to state a claim upon which relief can be granted?

D. Were Plaintiffs' claims barred by laches?

"2. Was it necessary for the Court of Special Appeals to reach the merits of Plaintiffs' claims, which included constitutional claims, when it could have decided the case based upon the issues of limitations and res judicata?" [Alteration added.]

We shall not reach these issues or address any of the questions presented in the Certiorari Petitions or in the briefs. The trial court should have dismissed this case and not decided the merits of any of the claims presented by the parties because petitioners have failed to set out a proper cause of action. We hold that under the "voluntary payment rule"⁶ petitioners cannot, at this point in time, dispute the school waiver agreements at issue in the case sub judice and seek relief in the Courts.⁷

I. Facts

a. Anne Arundel County Code Provisions

In 1967, the Anne Arundel County Council adopted the Anne Arundel County Adequacy of Public Facilities Ordinance, codified in the Anne Arundel County Code (AACC), Article 26, sections 2-409 through 2—420.⁸ The purpose of the ordinance was to protect the citizens of the county and the environment from proposed residential subdivision developments that failed to demonstrate adequate fire suppression facilities, roads, schools, water supply systems, sewerage systems and storm drainage systems. Article 26 is entitled "SUBDIVISIONS"; Title 2 is entitled "Plat Submission and Approval Procedures"; Subtitle 4 is entitled "Final Plan Review"; and Part 2 is entitled "Adequacy of Facilities." Article 26, section 2-413 states that a final subdivision plat cannot be approved until the ordinance's requirements have been satisfied.

Article 26, section 2-416(b) provides that, "Within two years following approval of a final subdivision plat, elementary and secondary schools in the service area of the proposed subdivision shall be adequate to accommodate the school population projected to be generated from the proposed subdivision." Thus, if the existing schools will not be adequate within two years of the approval of the final subdivision plat, the process of subdivision may not move forward; however, Article 26, section 2-411 permits a waiver of any of the requirements of the Adequacy of Public Facilities Ordinance, including the adequacy of schools requirement. Specifically, Article 26, section 2-411(b) reads:

"On request by a subdivider, the Planning and Zoning Officer may waive the application of one or more of the requirements of Part 2 of this subtitle to a proposed subdivision, if the Planning and Zoning Officer finds that:

(1) the application of the requirement to the proposed subdivision would result in peculiar and exceptional practical difficulty to or exceptional and demonstrable undue hardship on the subdivider, other than financial considerations;

(2) the physical features and other characteristics of the proposed subdivision are such that the waiver may be granted without impairing the intent and purpose of the requirement for which the waiver has been requested, the other provision of this article, the Zoning Article, and the General Development Plan;

(3) the grant of the waiver will not endanger or present a threat to the public health, safety, or welfare; and

(4) the waiver is the minimum relief available and necessary to relieve the difficulty or hardship to the subdivider."

With regard to such a request by a subdivider, Article 26, section 2-411(c) provides that "The Planning and Zoning Officer may impose such conditions on the grant of the waiver as are reasonably necessary to further the intent of the requirement for which the waiver was requested and to ensure the protection of the public health, safety, and welfare." Apparently, respondent, based upon this last provision, concluded that it had the authority to require the payment of additional fees above and beyond State authorized development impact fees⁹ as a "condition" for the granting of waivers. While we note that impact fees are the method that the Legislature has devised that authorizes local governments to recoup the costs of developmental impact and that the Legislature has not expressly authorized the additional imposition of waiver fees, that also address developmental impacts under the guise of contractual agreements, we shall not directly address the challenged legality of this Anne Arundel County practice in this case, in that, because of the "voluntary payment rule," petitioners cannot maintain this cause of action.

b. The School Waiver Agreements

In the case sub judice, respondent and petitioners entered into written agreements whereby respondent agreed to issue a waiver of the school capacity requirements of the Adequacy of Public Facilities Ordinance in return for petitioners agreeing to convey land or contribute funds to help alleviate the alleged school capacity problems caused by their residential developments.¹⁰ The four "School Waiver Agreements" at issue and discussed hereafter were executed between 1989 and 1999. Without these agreements, petitioners would not have been able to move forward with the recordation of their subdivisions because respondent would not have waived the requirements of Article 26.¹¹

The first of the school waiver agreements was effectuated in 1989 in connection with petitioners' proposed subdivision known as Seven Oaks. Respondent advised petitioners that existing school facilities were not adequate and that a school waiver fee agreement would be necessary in order to gain approval of petitioners' proposed subdivision. An agreement, entitled "Seven Oaks School Agreement," dated March 22, 1989, was entered into between petitioners and respondent. Pursuant to the terms of this agreement, petitioners agreed to pay $4,700,000, in installments, to respondent. Then in February of 1995, petitioners and respondent entered into a second agreement called the "Old Mill High School Agreement." Pursuant to the terms of this agreement, petitioners agreed to pay respondent $124,000 in exchange for a waiver of the Adequacy of Public Facilities Ordinance's requirements with respect to adequate school facilities, which were, allegedly, lacking for the Cantor Farms Subdivision. Thereafter on March 30, 1995, in connection with a proposed development in the Crofton area, Crofton Farms Development Corp., Severn...