Steuart Petroleum Co. v. Board of County Com'rs of St. Mary's County

• Decision Date: 03 December 1975
• Docket Number: No. 41,41
• Citation: 347 A.2d 854,276 Md. 435
• Parties: STEUART PETROLEUM COMPANY et al. v. BOARD OF COUNTY COMMISSIONERS OF ST. MARY'S COUNTY et al.
• Court: Maryland Court of Appeals

Page 435

276 Md. 435

347 A.2d 854

STEUART PETROLEUM COMPANY et al. v. BOARD OF COUNTY COMMISSIONERS OF ST. MARY'S COUNTY et al.

No. 41.

Court of Appeals of Maryland.

Dec. 3, 1975.

Emanuel H. Horn, Baltimore (Melvin J. Sykes, Baltimore, Robert V. Smith, Washington, D. C., and Oliver R. Guyther, Leonardtown, on the brief), for appellants.

James P. Salmon, Upper Marlboro (Joseph D. Weiner and Paul J. Bailey, Leonardtown, on the brief), for Board of County Commissioners of St. Mary's County, part of appellees.

Henry R. Lord, Deputy Atty. Gen. (Francis B. Burch, Atty. Gen., and George A. Nilson, Asst. Atty. Gen., Baltimore, and Warren K. Rich, Asst. Atty. Gen., Annapolis, on the brief), for The Maryland Historical Trust and Tri-County Council for Southern Maryland, appellees.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and O'DONNELL, JJ.

SINGLEY, Judge.

Steuart Investment Company and Steuart Petroleum Company (collectively referred to in this opinion as Steuart) have respectively owned and operated an oil storage terminal at Piney Point in St. Mary's County (the County) since 1949. ¹ The terminal has the capability of storing 200,000,000 gallons of fuel oil which is off-loaded from tankers and delivered to customers in the District of Columbia, Maryland and Virginia Principally either by pipeline or barge, primarily for use as boiler fuel. Some aviation fuel is also stored for the Department of Defense.

Steuart appealed to the Court of Special Appeals from an order and a decree entered against it by the Circuit Court for the County in a proceeding in which three different actions had been consolidated for trial. We granted certiorari in order that the matter might be considered by us prior to argument in the Court of Special Appeals.

In 1968, Steuart had announced and later deferred plans to build a topping plant at Piney Point. ² On 25 October 1973, Steuart made a public announcement of its intention to go forward with the construction of a refinery which would occupy four and one-half acres of its 350-acre tract; would have a capability of producing 100,000 barrels of fuel oil per day, and would cost $160,000,000.00. On 1 November 1973, Steuart's contractor applied for, and the County granted, building permit No. 6166 which authorized the construction of a steel and concrete 'Warehouse and shop storage' building to cost $200,000.00. One day later, the same contractor applied for, and was granted, building permit No. 6173 which covered the construction of a 'Foundation pad for processing and utility area' at a cost of $800,000.00. Neither of the applications nor the single site plan, offered in support of both applications, made any allusion to the proposed refinery. The site plan indicated a foundation pad area of 780,000 square feet, but the application described the pad as occupying 78,000 square feet.

The County, on 7 November, revoked permit No. 6173 on the ground that Steuart, by failing to disclose the purpose for which the foundation pad was to be used and the nature of the structures which were to be placed upon it, understated the cost of the project. After a conference on 12 November between County officials and representatives of Steuart, the permit was reinstated on 21 November with a caveat by the County that: 'The permit can in no way be construed as pertaining to the construction of anything except the said foundation pad. Any structure to be erected thereon would necessarily require application for a separate building permit.'

On 1 November, Ordinance No. 73-25 covering the issuance of County building permits had become effective, implementing Section 217 of the Public Local Laws of St. Mary's County as amended in 1969, which had granted to the County Commissioners broader discretionary powers than had theretofore existed. In pursuance of this grant, the new County building permit ordinance required that construction should commence within four months of the grant of a permit, a condition which applied to both permits held by Steuart. ³ While Steuart challenged the regularity of the proceeding with respect to the enactment of the ordinance and the County's power to impose the four month limitation, the court below concluded that the ordinance had been regularly adopted and that the time limitation was a valid and reasonable corollary to the power to grant the permit. We agree.

On 1 March 1974, the day before the expiration of the four month period applicable to permit No. 6173, Steuart's employees, rather than its contractor, poured six concrete footings for a pad on which a transformer was to be located. As work proceeded on the warehouse, it was determined that the footings had been improperly sited, and they were ultimately incorporated in the foundation for the warehouse and shop storage building. In August, 1974, a concrete pad eight feet square was poured for the transformer at a location different from that shown on the application for permit No. 6173. Steuart asserts that the four month time limitation in building permit No. 6173 did not begin to run until 11 February 1974, the date on which a grading permit was issued by the County. This assertion is predicated on the fact that the County Commissioners had informed Steuart in the letter of 21 November 1973 that 'prior to the commencement of any construction of the foundation pad, application must be made to and approved by this office (of the County Engineer) for a grading permit . . ..' Assuming, for the purposes of this opinion, that the delay in the issuance of the grading permit until February suspended the four month time limitation on the building permit, Steuart still failed to commence construction under permit No. 6173 within four months because the concrete pad was not poured until August, 1974. And, as we will develop later, the pouring of six footings for the pad in March could not, as it turned out, constitute the commencement of construction.

Meanwhile, on 28 May 1974, the County's new zoning ordinance had become effective. An oil refinery is not a permitted use in property classified as I-1 (General Industrial) or as PD-IP (Planned Development-Industrial Park), which allow industrial uses in the St. Mary's County zoning scheme. These are the classifications which appear to apply to Steuart's Piney Point tract. Storage of petroleum products, however, is a permitted use in a General Industrial District under § 9.4 B 3 of the ordinance and in a Planned Development-Industrial Park District under § 10.19 B 4.

At its 1974 session, the General Assembly had enacted Chapter 583 of the Laws of 1974, referred to by the parties as the Bailey Bill, ⁴ which would add a new section 4.01(c) to Maryland Code (1957, 1970 Repl.Vol., 1975 Cum.Supp.) Art. 66B, subject, however, to referendum by the voters of the County:

'In St. Mary's County, land and buildings may not be used for chemical or catalytic manufacturing, chemical fabrication, gasoline processing, or refining of petroleum or petroleum products. This prohibition does not apply to land and buildings used for these purposes on July 23, 1974.'

After the Bailey Bill was approved by the voters on 23 July 1974, the County, on 15 August 1974, revoked permit No. 6173 covering the foundation pad because construction had not commenced within four months from the date the permit was issued. The County then sought, in an action in equity, in injunction prohibiting the construction of the refinery, relying on the prohibition contained in the Bailey Bill and Steuart's failure to commence construction of the foundation pad within four months after the issuance of a permit. Soon after, Steuart entered an appeal from the revocation of the permit in an action at law in the Circuit Court for the County.

The two cases came on for hearing and were consolidated with a third, a bill of complaint filed by the Water Resources Administration of the State's Department of Natural Resources, which sought to enjoin the construction of the refinery because necessary permits for the use and discharge of water had not been obtained by Steuart from the State. ⁵

The trial court (Ralph W. Powers, J.) entered a decree upholding the revocation of the permit for the foundation pad because construction had not been commenced within four months, a limitation which the court held to be valid, and declaring that the Bailey Bill was constitutional and valid. Steuart's appeal from the revocation of the building permit was dismissed as having been mooted by the equity decree, and the State's bill of complaint for injunctive relief was dismissed as premature without prejudice to the State's right to institute an action at a later date. This appeal was entered from the order dismissing the law action as well as the decree upholding the revocation of the permit and the validity of the Bailey Bill. No appeal was taken by the State.

Steuart bottoms its argument on three points with which we have taken some editorial liberty:

(i) It acquired vested rights of which it could not be deprived by the revocation of building permit No. 6173, by the Bailey Bill or by any other legislation because it had timely commenced construction of a warehouse, a part of an integrated refinery project;

(ii) The Bailey Bill is invalid because it amounted to zoning by plebiscite and because its scope was too broad for it to be properly submitted to local referendum; and,

(iii) The Bailey Bill and the St. Mary's County zoning ordinance are invalid because they are arbitrary and beyond the police power of the State and its subdivisions.

(i)

Vested rights

The argument that Steuart had acquired a vested right to build an oil refinery because it was permitted to complete a warehouse and shop storage building is largely negated by the testimony of William R. Saul, vice president of Steuart Petroleum, who admitted that during the course of the conference with the County Commissioners on 12 November...