Tidewater/Havre de Grace, Inc. v. Mayor and City Council of Havre de Grace

• Decision Date: 01 September 1993
• Docket Number: No. 461,461
• Citation: 632 A.2d 509,98 Md.App. 218
• Parties: TIDEWATER/HAVRE DE GRACE, INC. et al. v. The MAYOR AND CITY COUNCIL OF HAVRE DE GRACE. ,
• Court: Court of Special Appeals of Maryland

Page 218

98 Md.App. 218

632 A.2d 509

TIDEWATER/HAVRE DE GRACE, INC. et al. v. The MAYOR AND CITY COUNCIL OF HAVRE DE GRACE.

No. 461, Sept. Term, 1993.

Court of Special Appeals of Maryland.

Nov. 4, 1993.

Certiorari Granted Jan. 28, 1994.

Robert J. Carson (Ronald G. Dawson and Smith, Somerville & Case, on the brief), Baltimore, for appellants.

Frederick J. Hatem, Jr. (Dewey Brian Stanley and Reed, Feinberg & Hatem, on the brief), Bel Air, for appellee.

Argued before GARRITY, ALPERT and DAVIS, JJ.

ALPERT, Judge.

Marinas, ¹ as plaintiffs, challenged the validity of a local Havre de Grace tax ordinance. The Circuit Court for Harford County (William O. Carr, J.) upheld the ordinance, and now two of the marinas appeal, asking us to address the following two questions:

I. Whether Ordinance 765 is invalid since it exceeds the City's authority to impose boat slip user fees granted to it by the General Assembly?

II. Whether Ordinance 765 is void for vagueness?

In addition, the Mayor and City Council of Havre de Grace, defendants below and appellees and cross-appellants herein, ² raise a third question:

III. Whether the lower court interpreted [paragraph 6B of Ordinance 765] so as to defeat the intent and purpose of Ordinance No. 765 by allowing a lessee to refuse to pay the user tax?

We answer the first two questions in the negative, and therefore, as to those issues only, we affirm. We answer the third question with a qualified affirmative, and therefore, as to that issue only, we shall modify the trial court's judgment.

I. BACKGROUND

Pursuant to Chapter 261, Laws of 1992 (now codified as Md.Ann.Code art. 24, § 9-605 (Supp.1992)) ³ (hereinafter, "Chapter 261"), the General Assembly of Maryland enacted legislation that permitted municipal corporations to assess user fees not to "exceed 5% of the rental charges for the docking and storage of boats." §§ 9-605(b), (c) (further specifying that the maximum annual user fee shall also not exceed $100 per boat) (emphasis added). This legislation took effect on October 1, 1992.

On October 5, 1992, the Mayor and City Council of Havre de Grace ("the City") enacted local Ordinance No. 765 ("Ordinance 765" or "the Ordinance"). The Ordinance imposed "[a]n annual fee of 5%, not to exceed One Hundred Dollars ($100), of all rental charges for the docking, slip rental and storage, dry or wet, of boats[.]" (Emphasis added.) Ordinance 765 also contained several other provisions that are relevant to the instant appeal: (1) the user fees are to be remitted to the City on a semi-annual basis; (2) the City may, at its option, audit the financial records of any business ⁴ that is required to charge and collect the fees; and, (3) civil penalties were prescribed for any business that fails to comply.

On October 26, 1992, the plaintiffs filed in the Circuit Court for Harford County a Complaint for Declaratory Judgment and Injunctive Relief, in which the plaintiffs sought to have that court (1) declare that the City was without authority to enact Ordinance 765, and (2) enjoin the City from enforcing the Ordinance.

The City answered the Complaint, and eventually both sides filed motions for summary judgment. Following a hearing on these motions, the circuit court, in its 23-page written opinion, found, inter alia, as follows:

1. that, with respect to Chapter 261, the $100 cap applied to "boat slips in the water[,] and manifested an intent not to place the cap on dry storage or moorings";

2. that the City had sufficient authority to pass Ordinance 765;

3. that the Ordinance is not void for vagueness inasmuch as it is clear that, under the Ordinance,

(a) the lessee is required to pay the fee, and "the marinas are merely charged with the duty of collecting the fee,"

(b) the $100 limit per boat applies to "all types of docking and storage, [in contrast to Chapter 261, where the $100 limit] merely [applies to] docking in the water," and

(c) "the [rental] fees [are due to] be paid and collected [only] when the rental charges are paid and collected," and not when the fees are merely earned but not paid; and

4. that the issue as to the City's authority to promulgate any guidelines or regulations pursuant to Ordinance 765 is not yet ripe for a judicial decision, since the City has not yet promulgated either any such guidelines or regulations.

From this judgment, both sides then filed their respective, timely appeals.

II. ANALYSIS

The marinas raise two issues as to the propriety of the trial court's decision. The first involves the authority of the City to pass Ordinance 765 in light of the authorizing language of Chapter 261. To resolve this issue we must examine that authorizing language to determine the General Assembly's intent, and therefore we must invoke the rules of statutory construction.

The second of the marinas' issues involves whether Ordinance 765 is void for vagueness. To resolve this issue we determine whether the terms of Ordinance 765 are so vague that persons of ordinary intelligence must guess at their meaning.

We discuss these two issues below, respectively.

A. AUTHORITY

It is axiomatic that Article XI-E, § 5, of the Maryland Constitution prohibits a municipality from levying "any type of tax, license fee, franchise tax or fee" unless the imposition of such a charge is expressly authorized by the Maryland General Assembly. The marinas' first contention is simply that Chapter 261 authorized a municipality to impose user fees on "boat slips" (so-called "wet storage") only; therefore Ordinance 765 exceeded the City's authority under Chapter 261 by imposing user fees on "dry storage" (i.e., the on-land storage of boats) as well.

The marinas support this contention by positing that:

(1) Chapter 261 does not contain the word "dry" or the phrase "dry storage" anywhere within its text; "[i]nstead, Chapter 261 alternatively uses the specific phrase 'boat slip' and the general phrase 'the docking and storage of boats' when referring to a user fee";

(2) the title of Chapter 261 is "Municipal Corporations--Boat Slip User Fee," thereby indicating that the Act applied to wet storage fees only (emphasis added). See also Smelser v. Criterion Insurance Co., 293 Md. 384, 390, 444 A.2d 1024 (1982) (the title of an act is relevant in ascertaining the legislative intent and purpose);

(3) Under Maryland common law, where the meaning of a tax statute appears unclear, the statute is to be construed most strongly against the government and in favor of the citizens (citing Comptroller of the Treasury v. John C. Louis Co., 285 Md. 527, 539, 404 A.2d 1045 (1979));

(4) Also under Maryland common law, it is a well-settled principle of statutory interpretation that specific terms [such as "boat slips"] in a statute prevail over general language that might otherwise prove controlling [such as "docking and storage"]. Id. (citing Perryman v. Suburban Development Corp., 33 Md.App. 589, 598, 365 A.2d 570 (1976), rev'd on other grounds, 281 Md. 168, 377 A.2d 1164 (1977));

(5) The legislative history of Chapter 261 indicates that the fees were to apply to wet storage only. Specifically, the Budget and Taxation Committee of the General Assembly apparently recommended (and the General Assembly subsequently adopted) the inclusion of the "$100 per boat slip" (emphasis added) limit to the bill as then-existed; this implicitly demonstrates (according to appellants) the General Assembly's concern with wet storage only; and, finally,

(6) When the General Assembly had previously wanted to impose a user tax on every form of boat storage, it had used the allegedly broader phrase "space rentals" to do so, and not the more narrow phrase "boat slip" (citing § 9- 602 (Anne Arundel County tax); Reinhardt v. Anne Arundel County, 31 Md.App. 355, 356 A.2d 917, cert. denied, 278 Md. 731 (1976)).

The trial court, of course, must construe a statute so as to ascertain and give effect to the intention of the legislature. See, e.g., Washington Suburban Sanitary Commission v. Elgin, 53 Md.App. 452, 460, 454 A.2d 408 (1983). This "cardinal rule" is the "polestar of statutory interpretation." Smelser, 293 Md. at 389, 444 A.2d 1024 (quoting Harbor Island Marina v. Calvert Co., 286 Md. 303, 311, 407 A.2d 738 (1979)). As the Court of Appeals has noted, in determining the intent of the legislature

the [trial] Court considers the language of an enactment in its natural and ordinary signification. A corollary to this rule is that if no ambiguity or obscurity appears in the language of the statute, there is usually no need to look elsewhere to ascertain the General Assembly's intent.

Id. See also Washington Suburban, 53 Md.App. at 460, 454 A.2d 408 (the court must confine itself to ordinary meanings and not strain to find some subtle or forced interpretation of the law). The phrase "look[ing] elsewhere" (as used in Smelser 293 Md. at 389, 444 A.2d 1024) refers to the employment of the rules of statutory construction, which rules are never to be used to create an ambiguity, only to remove one. See Murphy v. Stuart M. Smith, Inc., 53 Md.App. 640, 644, 455 A.2d 69 (1983) (citing John McShain, Inc. v. State, 287 Md. 297, 301, 411 A.2d 1048 (1980)).

Finally, we note that

[a]bsent a clear indication to the contrary and if reasonably possible, a statute is to be read so that no word, clause, sentence, or phrase is rendered surplusage, superfluous, meaningless, or nugatory.

Smelser, 293 Md. at 389, 444 A.2d 1024 (citations omitted).

As did the trial court before us, we examine the statutory language sub judice in light of these principles.

Chapter 261 provides in relevant part:

Municipal Corporations--Boat Slip User Fee

FOR the purpose of authorizing a municipal corporation to impose a user fee on charges for the docking and storage of boats; limiting the total user fees collected per year to a certain amount; limiting the rate of the user fee to a certain percentage; ... and generally relating to authorization for a...