Litz v. Md. Dep't of the Env't

• Decision Date: 22 January 2016
• Docket Number: No. 23, Sept. Term, 2015.,23, Sept. Term, 2015.
• Citation: 446 Md. 254,131 A.3d 923
• Parties: Gail B. LITZ v. MARYLAND DEPARTMENT OF the ENVIRONMENT, et al.
• Court: Court of Special Appeals of Maryland

446 Md. 254

131 A.3d 923

Gail B. LITZ

v.MARYLAND DEPARTMENT OF the ENVIRONMENT, et al.,

No. 23, Sept. Term, 2015.

Court of Appeals of Maryland.

Jan. 22, 2016.

Motions for Reconsideration Denied March 24, 2016.

G. Macy Nelson (Law Office of G. Macy Nelson, LLC, Towson, MD; Philip W. Hoon, Hoon & Associates, LLC, Chestertown, MD), on brief, for Petitioner.

Steven R. Johnson, Asst. Atty. Gen. (Brian E. Frosh, Atty. Gen. of Maryland, Baltimore, MD), on brief, for Respondents.

K. Nichole Nesbitt (Goodell, DeVries, Leech & Dann, LLP, Baltimore, MD), on brief, for Respondents.

ARGUED BEFORE: BARBERA, C.J., BATTAGLIA, GREENE, ADKINS, McDONALD, WATTS, and GLENN T. HARRELL, JR. (Retired, Specially Assigned), JJ.

GLENN T. HARRELL, JR.

, J. (Retired, Specially Assigned).

"The nine most terrifying words in the English language are, ‘I'm from the government and I'm here to help.’ "

—Ronald Reagan, 40th President of the United States, News Conference (12 August 1986).

Petitioner, Gail B. Litz, might have welcomed hearing those nine words spoken to her, but, according to her Third Amended Complaint, they were not forthcoming. In this litigation, Ms. Litz makes a second appearance before this Court regarding a parcel of real property (containing a lake) in Caroline County, Maryland, that was contaminated allegedly by run-off from failed septic systems serving homes and businesses in the Town of Goldsboro. The human sewage seeped out of the septic fields into ground and surface water flowing into drainage swales, which drained into streams flowing into Ms. Litz's lake. Ms. Litz operated a popular lake-front recreational campground on her property in Goldsboro. Unable to operate the campground because of the pollution to her lake, Ms. Litz lost the property through foreclosure by the bank holding the mortgage.

She filed a complaint in the Circuit Court for Caroline County. After two prior trips to the Court of Special Appeals and one to this Court, Ms. Litz's remaining claims against Respondents, the State of Maryland, the Maryland Department of the Environment ("MDE"), the Department of Health and Mental Hygiene (in the guise of the Caroline County Health Department) (collectively referred to in this opinion sometimes as the "State" or the " State Respondents"), and the Town of Goldsboro, the case reaches us for the second time regarding her claims of inverse condemnation against all Respondents and trespass against the Town. We issued a writ of certiorari to consider questions regarding Ms. Litz's relative success in stating these claims and the applicability of the Local Government Tort Claims Act and the Maryland Tort Claims Act. After determining in our first encounter with this litigation that Ms. Litz filed suit within applicable statutes of limitations, we hold now that, at the preliminary motion stage of the litigation, Ms. Litz provided sufficient factual averments to state claims for inverse condemnation against Respondents.¹

ALLEGATIONS IN THE THIRD AMENDED COMPLAINT ²

The 140 acre Litz property is located in the Town of Goldsboro in Caroline County, Maryland. When Ms. Litz's parents purchased the property in 1948, it contained a pond and grist mill. The Litz family constructed a dam in the mid–1950s to create originally a 28–acre lake, known as "Lake Bonnie," to assist with irrigation of the fields. The Litz family opened also a recreational campground business on the property, which had campsites, swimming, fishing, and boating—centered around Lake Bonnie. Ms. Litz inherited the property in 2001 and became the owner of the campground business. It was her "intention and expectation that she would continue to own and operate the Campground as her primary occupation and source of income."

Lake Bonnie "receives its water from two local streams, the Oldtown Branch and the Broadway Branch, and [the lake] discharges a constant overflow of water [through a spillway] directly into the Choptank River," a tributary of the Chesapeake Bay. Because Goldsboro was a small town³ , there was no public water or sewer service available. The residents and businesses in the Town relied on individual wells and septic systems. Both of the local streams receive groundwater and surface water from roads maintained by the Maryland State Highway Administration and flow into Lake Bonnie. Two local drainage associations⁴ were created along these streams. The municipal surface water open drainage collection system flows also into the streams and ultimately into Lake Bonnie.

As time passed, the septic systems within the Town began to fail, the septic fields overflowed into the open drainage system, and contaminated the two streams, which led to the contamination of Lake Bonnie. Following failed attempts to fix the problem in the 1970s, the Caroline County Health Department conducted studies in the 1980s.⁵ A study conducted in 1985 by Lester A. Coble, Jr., then Director of the Caroline County Department of Health, "found that between 70% and 80% of the Town had at least one of the three following problems: (1) confirmed sewage pits; (2) raw sewage or waste water; or (3) shallow wells less than one hundred feet or deep wells less than fifty feet from a source of contamination."

By 1988, the Caroline County Health Department reported to the Maryland Department of the Environment that the shallow wells tested in Goldsboro contained "elevated levels of fecal coliform," i.e., pathogens found in human bodily waste. On 18 September 1995, the Caroline County Health Department concluded that the "use of the stormwater management system in the Town as a sewage system has gotten to crisis proportions." A 1 December 1995 letter from the Maryland Department of the Environment stated that "[t]here are actual water quality impacts on Lake Bonnie ... It now appears that the situation has deteriorated and created environmental concerns that will need to be addressed."

On 8 August 1996, MDE and Goldsboro's then-Mayor William H. Bartin signed an administrative consent order which "explain[ed] the problems, order[ed] Goldsboro to take certain actions, impose[d] mandatory reporting obligations and specifie[d] penalties for non-compliance." Some of the specific requirements of the agreement between MDE and Goldsboro included:

1. Within 60 days ... (Goldsboro will) identify the private sewage disposal systems located in and around Goldsboro which are discharging pollutants to surface or ground water ...

2. By October 30, 1996, complete a study to identify and characterize the construction of a public sewer system ...

3. By January 1, 1997, submit (to MDE) for review and approval a plan and schedule ... for construction of a public sewer system (the "Compliance Plan")4. Within 30 days of approval of the Compliance Plan, begin implementation of the Compliance Plan.

Meeting the timetable and remedies contemplated by this Consent Order did not come to pass.

In 2004, the Caroline County Health Department issued warnings to multiple towns, including Goldsboro, about issuing additional building permits for areas with water and sewage concerns. Even with these warnings, "the Town has failed to comply with any of the material terms of the Consent Order and MDE has enforced no part of it."

Because Lake Bonnie was being polluted continually by the pollutants in the water flowing through the drainage system into the Oldtown Branch and the Broadway Branch and then into Lake Bonnie, Ms. Litz alleges that "the campground has been destroyed, and Litz's property has been substantially devalued," which left her "unable to pay the mortgage on the Litz property because the campground was generating no income." A foreclosure action resulted and the property was sold to Provident State Bank on 14 May 2010 for $364,000.

PROCEDURAL HISTORY

Ms. Litz's original complaint, filed on 8 March 2010, sought a permanent injunction and alleged negligence, trespass, private and public nuisance, and inverse condemnation against the Town of Goldsboro and Caroline County (the Health Department⁶ ) and negligence and inverse condemnation against MDE. An amendment later added a count for mandamus or equitable relief under the Environmental Standing Act. Ms. Litz's second amended complaint added the Department of Health and Mental Hygiene ("DHMH") and the State of Maryland as defendants, seeking a permanent injunction and alleging negligence, trespass, private and public nuisance, and inverse condemnation against the newly added defendants.

On 13 September 2010, a hearing was conducted in the Circuit Court on motions to dismiss (based on a host of defenses, including applicable statutes of limitation) filed by MDE, DHMH, the State, the County, and Goldsboro. The Circuit Court granted the motions to dismiss as to all defendants⁷ , save the Town, reserving ruling as to the Town to allow for a response to be filed. On 22 September 2010, Ms. Litz filed a Motion for Reconsideration in the Circuit Court and, a few days later, filed her opposition to Goldsboro's Motion to Dismiss. On the same day, Ms. Litz filed her Third Amended Complaint, which added some factual allegations, but stated no additional claims.

The trial judge denied Ms. Litz's Motion for Reconsideration and dismissed her claims against all of the defendants, with prejudice and without leave to amend. Ms. Litz appealed to the Court of Special Appeals⁸ , which affirmed, in an unreported opinion, the Circuit Court's dismissal based on its narrow conclusion that Ms. Litz's claims were barred by the relevant statutes of limitation.

We granted Ms. Litz's first Petition for Certiorari, Litz v. Maryland Dep't of Env't, 429 Md. 81, 54 A.3d 759 (2012)

. We concluded ultimately that "it was error to affirm the grant of the motions to dismiss Litz's causes of action for negligence, trespass, and inverse condemnation on the grounds of limitations, but we affirm the judgments of the Circuit Court and the intermediate appellate court in dismissing Litz's nuisance counts." Litz v. Maryland...