Neifert v. Dept. of Environment

• Decision Date: 14 November 2006
• Docket Number: No. 10, September Term, 2006.,10, September Term, 2006.
• Parties: Eugenia M. NEIFERT, et al. v. DEPARTMENT OF THE ENVIRONMENT, et al.
• Court: Court of Special Appeals of Maryland

910 A.2d 1100

395 Md. 486

Eugenia M. NEIFERT, et al. v. DEPARTMENT OF THE ENVIRONMENT, et al.

No. 10, September Term, 2006.

Court of Appeals of Maryland.

November 14, 2006.

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Raymond S. Smethurst, Jr. (Matthew T. Mills, Adkins, Potts & Smethurst, LLP, Salisbury) on brief, for Appellants.

Adam D. Snyder, Asst. Atty. General (J. Joseph Curran, Jr., Atty. General, Matthew Zimmerman, Asst. Atty. General, Baltimore) on brief, for Appellees.

Argued Before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

RAKER, Judge.

Eugenia M. Neifert, Melvin D. Krolczyk, and Teresa A. Krolczyk, appellants, own four lots in the Cape Isle of Wight subdivision in Worcester County. Appellants have been denied sewer service and wetland fill permits and therefore are unable to develop their lots. We must decide whether the Maryland Department of the Environment violated appellants' equal protection rights by denying sewer service and whether the denial of sewer and wetland fill permits constitutes an unconstitutional taking. We shall hold that the denial of sewer service under the 1992 Policy satisfies rational basis review under equal protection analysis and that appellants did not suffer an unconstitutional taking.

I.

Appellants own four contiguous lots within the Cape Isle of Wight subdivision in Worcester County. Eugenia M. Neifert owns in fee simple lots 9, 10, and 11 and Melvin D. Krolczyk and Teresa A. Krolczyk own in fee simple Lot 8. Eugenia Neifert acquired her lots by gift from her mother in 1975; her parents acquired title to the lots in 1962. The Krolczyks purchased their lot in 1974. The deed to each lot contains a restriction requiring that any "[s]eptic tanks, sewage disposal systems and drinking water facilities shall conform to all requirements established by the Maryland State Department of Health and the Worcester County Maryland Health authorities." Each of appellants' lots also abut Marlowe Road, a dedicated but unimproved 40-foot wide street.

The Cape Isle of Wight subdivision was established in the early 1950's and is comprised of land created by excavating canals in a tidal marsh and sidecasting the excavated material on both sides to cover the marsh and create uplands. Cape Isle of Wight contains 625 lots and, as of 1972, approximately 128 homes existed in the subdivision. Each of these homes used a septic system that was approved based on percolation tests that could be completed at any time throughout the year.¹

In the mid-1970's, a sewage disposal problem developed in the West Ocean City area of Worcester County, Maryland.² See Department of Environment v. Showell, 316 Md. 259, 558 A.2d 391 (1989). Approximately half of the septic systems actively used in the area failed.³ Id. at 260, 558 A.2d at 391. Untreated sewage leaked into drinking water supplies and created a public health hazard. Id. Worcester County responded to the situation by requiring that lots pass a seasonal percolation test conducted during January through April, the wettest months of the year and when the water table was at its highest.⁴ As a result, eighty to ninety percent of new applications for septic permits in West Ocean City were denied. Id. In the Cape Isle of Wight subdivision, approximately 150 lot owners requested septic tank permits from 1976-1979 and 148 of those requests were denied because the lots were unable to pass the seasonal percolation testing. Appellants' lots were among those denied on-site septic system permits in 1979 and they did not appeal this decision.⁵

A central sewage collection system was proposed for the West Ocean City area to allow for the development of new homes and businesses. Each of appellants' four lots are located in the sewer system district. The considerable expense associated with the project required the County to seek additional funding from the State of Maryland and the U.S. Environmental Protection Agency (EPA). EPA's 1983 Final Environmental Impact Statement (EIS) concluded that EPA could only provide a construction grant if certain restrictions were met. EPA's funds were conditioned on the system not providing sewer service to any parcel of land within any wetlands, as defined by the U.S. Fish and Wildlife Service, or to any parcel of land within the 100 year floodplain if it was platted as a building lot after May 31, 1977.⁶ EPA also required the Worcester County Sanitary Commission ("Sanitary Commission") to submit maps that clearly delineated all non-service areas. The Maryland Department of Health and Mental Hygiene (DHMH) and the Sanitary Commission formalized their commitment to these restrictions in a Consent Order on June 28, 1983.⁷ The total sewer system cost was funded by the EPA (75%), the State of Maryland (12.5%), and Worcester County (12.5%).

The Worcester County Sanitary Commission hired the engineering firm of George, Miles & Buhr to create a set of maps ("1984 Maps") identifying non-service areas, i.e. those parcels that fell within wetlands as defined by the Fish and Wildlife Service or were located in the 100-year floodplain and were platted after 1977. The 1983 EIS maps were not relied upon because lot lines were not visible. Instead, George, Miles & Buhr created the 1984 Maps by enlarging National Wetland Inventory maps developed by the Fish and Wildlife Service from large-scale aerial photography and superimposing them onto a map of the sewer service area. The 1984 Maps provided approximate wetland delineations and were used as general guidance in granting sewer service.⁸

According to the 1984 Maps, lots 8, 9, and 10 and much of the portions of Marlowe Road adjacent to the lots contained wetlands.⁹ Appellants applied to Dr. Donald Harting, the Health Officer of Worcester County, for sewer connections in 1985 and their request was denied.¹⁰ Dr. Harting's September 10, 1985 letter denied sewer system access because "the southerly portion of Marlowe Road and lots 8, 9, 10, and 11 were classified as wetlands ... [A]ll lots which are classified as wetlands are prohibited from connecting to the sewerage system."

Appellants requested a review of Dr. Harting's decision by Richard B. Sellars, Jr., Director of the Water Management Administration at DHMH. Director Sellars affirmed Dr. Harting's decision to deny service because the Consent Order prohibited service for any lots within wetlands as defined by the Fish and Wildlife Service. Appellants appealed to the DHMH's Office of Hearings. On December 23, 1986, Arthur E. Cohen, a DHMH hearing examiner, affirmed Dr. Harting's decision to deny sewer service to Lots 9 and 10, but reversed the decision with regard to Lots 8 and 11. The Final Decision Maker, Timmerman T. Daugherty, issued a Final Decision and Order on July 16, 1990 affirming Dr. Harting's denial of sewer service to all of appellants' lots.¹¹

Appellants sought judicial review in the Circuit Court for Worcester County. On July 16, 1991, the Circuit Court held that it was not error to base a wetland determination upon additional evidence which conflicts with the 1984 Maps as the maps were not binding and held that Dr. Harting's decision to deny sewer service to appellants was not supported by substantial evidence. The Circuit Court remanded the case for the County to re-consider whether appellants' lots qualified as wetlands. Appellants held the sewer service appeal in abeyance while they pursued wetland permits and did not readdress the sewer service proceedings until 1998.

By 1986, the Sanitary Commission was concerned that the 1984 Maps did not accurately show nontidal wetlands. At a meeting on February 7, 1986, representatives from the Worcester County Sanitary District, the Department of Natural Resources and the U.S. Army Corps of Engineers ("Corps of Engineers") met to identify lots, not then mapped as wetlands, that needed on-site investigations to determine accurate wetland delineations for a set of revised maps ("1986 Maps").¹² Appellants' lots were included in the list for on-site investigation. Appellants' lots had also been inspected in April of 1985 by individuals from the Corps of Engineers, the Department of Natural Resources, and the Worcester County Health Department.¹³ As a result of these visits and investigations, appellants' lots on the 1986 Maps were reclassified as containing 60-100% mapped wetlands.¹⁴ The County continued to use the 1986 Maps as guidance, but sewer service was denied to any property mapped as a wetland or any property defined as a wetland under the applicable Fish and Wildlife Service delineation. Thus, up until 1992, any property within wetlands was denied sewer service, whether mapped or not.¹⁵

In 1991, the Maryland Department of the Environment ("Department") became aware that many lot owners who had invested in the purchase of lots in reliance on the wetland guidance maps felt that their investment-backed expectations were frustrated by the application of new wetland delineation methodologies.¹⁶ As a result, the Department requested that EPA reconsider the Consent Order's prohibition of sewer service for lots within wetlands in light of the recent implementation of the Corps of Engineers' "Federal Manual for Identifying and Delineating Jurisdictional Wetlands" ("1989 Federal Manual"). Interior lots were classified as wetlands even though they were identified on the guidance maps as entirely non-wetland as a result of the application of the 1989 Federal Manual in West Ocean City.¹⁷ In response, the Department, after consulting with the Worcester County Sanitary Commission, proposed a change in how the Consent Order would be implemented. The Department wrote EPA on November 20, 1991, seeking its concurrence with the proposed policy change. In its letter, the Department summarized the difficulties the 1989 Federal Manual had caused as follows:

"Cases have arisen of late where lot owners relied on the maps of record and determined...