Montgomery County v. Revere Nat. Corp., Inc., 118

Decision Date01 September 1994
Docket NumberNo. 118,118
Citation671 A.2d 1,341 Md. 366
CourtMaryland Court of Appeals

Frank E. Couper, Senior Assistant County Attorney, (Marc P. Hansen, Acting County Attorney; Alan M. Wright, Senior Assistant County Attorney, on brief), Rockville, for Petitioners.

Walter E. Diercks (Darrin N. Sacks, Eric M. Rubin, Rubin, Winston, Diercks, Harris & Cooke, on brief), Washington, DC, for Respondent.



The issue in this case is whether Montgomery County is bound by the provisions of a settlement agreement incorporated in a circuit court judgment. The agreement, ending sixteen years of litigation between the County and the owner of a billboard company, granted to the owner the right to maintain its billboards within the County for a period of ten years, despite a County zoning regulation prohibiting all billboards. Montgomery County contends that the agreement was void from its inception because it impermissibly undermined legislative and executive discretion in the enactment and enforcement of the County's zoning regulations.


In 1968, the Montgomery County Council, sitting as a district council, amended its zoning regulations concerning outdoor signs and billboards. The new regulatory language governed the placement, height and width of billboards within the County. The 1968 regulations provided that any existing billboards not conforming with the new standards were required to be removed at the end of a period of two years from the effective date of the regulations or four years from the date the billboards were erected, whichever occurred later. After the expirations of the time periods provided for in the regulations, controversies arose between Montgomery County and Rollins Outdoor Advertising, Inc., over billboards owned by Rollins. Montgomery County contended that the billboards did not comply with the standards set forth in the 1968 regulations and that they should be removed.

In 1974, Rollins filed an action against Montgomery County, the County Executive and the Council, 1 in the Circuit Court for Montgomery County, challenging the validity of the 1968 billboard regulations and seeking injunctive and declaratory relief. 2 The bill of complaint alleged that Rollins, which operated and maintained billboards in Montgomery County, had been denied permission to erect a new billboard and that the denial was "based upon the discriminatory setback provisions" of the 1968 regulations. 3 The bill of complaint also alleged that Rollins had been ordered, without an offer of just compensation, to remove numerous existing billboards which did not conform to the location specifications set forth in the 1968 regulations.

Rollins asserted that Montgomery County's enactment and enforcement of the 1968 regulations violated Articles 17 and 24 of the Maryland Declaration of Rights, 4 as well as the Fourteenth Amendment to the United States Constitution. Specifically, Rollins maintained that the billboard regulations constituted prohibited retrospective legislation, that they violated "substantive" due process and equal protection principles, and that they deprived Rollins of property without just compensation.

In 1986, while the above-described litigation was still pending, the district council amended the zoning regulations to prohibit all billboards within the County. 5 Neither the 1986 amendment, nor the 1968 regulations, provided for compensation to the owners of billboards. Rollins amended its bill of complaint, adding contentions that the County's ban on billboards violated state statutes mandating just compensation when a governmental subdivision requires the removal of billboards, as well as Article III, § 40, of the Maryland Constitution. 6 Rollins also maintained that Montgomery County's regulations violated the Fifth and Fourteenth Amendments to the United States Constitution by denying just compensation to Rollins and violated the First Amendment to the United States Constitution by restricting Rollins's ability to disseminate speech.

In April 1990, sixteen years after the filing of the original bill of complaint, Rollins's successor-in-interest, Reagan Outdoor Advertising, Inc., entered into a written settlement agreement with Montgomery County. In addition to being signed by the county attorney and county and Reagan officials, the agreement was signed by the trial judge below the words, "SO ORDERED." The circuit court's docket entry for April 11, 1990, reads as follows: "Stipulated Consent Agreement (McKenna, J.) Granted...."

The settlement agreement permitted Reagan to continue "maintain[ing] within the County ... forty-seven [billboards]" for a period of ten years. Reagan could replace and relocate billboards to a new location if either "(i) a lease for the premises on which a sign is located is not to be continued, or (ii) an outdoor advertising structure has been destroyed or has deteriorated to the point that it is no longer in a safe condition." Relocation of billboards was limited to not "more than five signs within any calendar year," with Reagan having the sole discretion as to which signs were to be relocated. The agreement placed certain restrictions on where billboards could be relocated but stated that "in no event shall the County utilize procedures or fees to impair Reagan from exercising its rights under this Agreement." In the contract, the parties expressly agreed upon the "dismissal of any and all pending litigation between the County and Reagan...." Finally, the agreement stated that "[i]n the event either party fails to perform its obligations under this Agreement the other party shall be entitled to seek an order of the Court to enforce the Agreement...."

In March 1992, Revere National Corporation, the successor-in-interest to Reagan, sought the County's permission to construct a replacement billboard pursuant to the provisions of the settlement agreement. The request was denied in May 1992 because, according to the County, the settlement agreement entered into by the parties was "void ab initio," and Revere was requesting "to build a prohibited sign," whereas the county regulations banned all billboards.

Upon the County's denial of its request, Revere filed in the Circuit Court for Montgomery County a "Motion to Adjudicate Defendants In Contempt of Court and For An Order to Enforce Stipulated Consent Agreement." After setting forth the pertinent facts, Revere's Motion asserted that the defendants "have violated the April 11, 1990 Order of this Court." Revere sought to have the defendants adjudicated in contempt, sought an order requiring the defendants to comply with the settlement agreement "which was entered as an order of the [circuit] Court," and requested compensatory damages.

In response, the County filed a "Motion To Vacate The Stipulated Consent Agreement of April 11, 1990," as embodied in the court's order. The County asserted that the settlement agreement "is void ab initio because it purports to permit what the Montgomery County Zoning Ordinance prohibits, namely the existence of 47 billboards in Montgomery County." The County went on to state that it "has no authority to make such an agreement or to consent to a court order which violates the Zoning Ordinance's prohibition on billboards...." The County requested the court to find that the settlement agreement "is void ab initio and order that it be vacated." The County filed a separate answer to Revere's motion, also asserting, inter alia, that the settlement agreement was void.

The circuit court, after a hearing, denied the County's motion to vacate the settlement agreement and, without ruling on Revere's motion, stated that the denial of the County's motion to vacate the settlement agreement, as embodied in the 1990 court order, was final and appealable. Montgomery County then noted an appeal to the Court of Special Appeals. In April 1993, the Court of Special Appeals, in an unreported opinion, dismissed the appeal on the ground that the appeal was premature because the trial court had not yet ruled on the pending motions from Revere and thus a final judgment did not exist. See Maryland Rule 2-602(a).

After receiving additional memoranda and holding another hearing, the circuit court on November 18, 1993, entered an order granting the County's motion to vacate the settlement agreement and denying Revere's motion to enforce the agreement and to hold the defendants in contempt. The circuit court expressed the view that the April 11, 1990, order approving the settlement agreement was not a final judgment terminating the action brought by Revere's predecessor in 1974, and that, therefore, the April 1990 order remained subject to revision at anytime under Maryland Rule 2-602(a). 7 The circuit court further held that the settlement agreement and April 1990 order should be vacated because Montgomery County had no power to enter into an agreement contrary to its zoning regulations.

Revere appealed, and the Court of Special Appeals reversed the circuit court's order in another unreported opinion. The Court of Special Appeals held that the settlement agreement, as embodied in the April 1990 circuit court order, constituted a final judgment terminating the action instituted by Revere's predecessor in 1974. The intermediate appellate court further held that Montgomery County had not shown any valid basis to set aside the 1990 judgment. The Court of Special Appeals explained:

"[Montgomery County] maintains that it had no ability to agree to the terms contained in the agreement because the County Executive and executive branch officials who are obligated to enforce the Zoning Ordinance cannot implement an agreement that violates the Zoning Ordinance. We shall not address that contention, however; it is of no consequence in this...

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