Utilities v. WSSC

• Decision Date: 06 December 2000
• Docket Number: No. 101,101
• Citation: Utilities v. WSSC, 362 Md. 37, 763 A.2d 129 (Md. 2000)
• Parties: UTILITIES, INC. OF MARYLAND v. WASHINGTON SUBURBAN SANITARY COMMISSION.
• Court: Maryland Court of Appeals

763 A.2d 129

362 Md. 37

UTILITIES, INC. OF MARYLAND v. WASHINGTON SUBURBAN SANITARY COMMISSION.

No. 101, Sept. Term, 1998.

Court of Appeals of Maryland.

December 6, 2000.

John G. Roberts, Jr., (Steven P. Hollman, Steven A. Robins, Jeffrey D. Pariser, Hogan & Hartson, L.L.P., Washington, DC; William E. Sundstrom, P.A., Rose, Sundstrom & Bently, L.L.P., Tallahassee, FL, on brief), for Appellant.

Paul A. Tiburzi (Kurt J. Fischer, Marta D. Harting, Piper & Marbury, L.L.P., Baltimore, on brief; Nathan J. Greenbaum, Gen. Counsel; Robert H. Drummer, Associate Counsel, WSSC, Laurel, on brief), for Appellee.

Joseph J. Curran, Jr., Atty. Gen. of Md., Baltimore, Robert A. Zarnoch, Asst. Atty. Gen.,Annapolis, for the State of Md., Amicus Curiae.

Margaret Scott Izzo, Morgan, Lewis & Bockius, L.L.P., Washington, DC; Thomas P. Gadsden, Morgan, Lewis & Bockius, L.L.P., Philadelphia, PA, for National Ass'n of Water Companies, Amicus Curiae.

Argued before BELL, C.J., ELDRIDGE, RODOWSKY,¹ CHASANOW,² RAKER, WILNER and CATHELL, JJ.

ELDRIDGE, Judge.

Maryland Code (1957, 1997 Repl. Vol.), Art. 29, § 3-107(a), provides that, in a condemnation action brought by the Washington Suburban Sanitary Commission ("the Commission") against a privately owned water or sewage system, the jury shall deduct from the compensation award any contribution that lot owners or home buyers have made toward the construction of the private utility. These contributions, known as "contributions in aid of construction," are a special kind of capital contributed by the developer of a new residential subdivision and passed through to the home buyer.³

With condemnation of its Prince George's County facility imminent, Utilities, Inc. of Maryland ("Utilities") brought an action for a declaratory judgment pursuant to Code (1974, 1998 Repl.Vol.), § 3-406 et seq. of the Courts and Judicial Proceedings Article, seeking a determination of the applicability of § 3-107(a) to the impending condemnation action, and, if applicable, a determination of the constitutionality of § 3-107(a). Utilities asserted that § 3-107(a) results in compensation that is less than fair market value in violation of Article III, § 40, of the Maryland Constitution, Article 24 of the Maryland Declaration of Rights, and the Fifth and Fourteenth Amendments to United States Constitution.⁴ The Circuit Court issued a declaratory judgment, determining that § 3-107(a) was applicable and was constitutional. We shall vacate that judgment on the ground that Maryland law does not authorize a declaratory judgment action under the circumstances here.

I.

Utilities is the owner of a private facility providing water and sewage service to the Marlboro Meadows Subdivision, an unincorporated community in Prince George's County, Maryland. The Commission, an agency of the State, Katz v. Washington Sub. San. Comm'n, 284 Md. 503, 509-512, 397 A.2d 1027, 1031-1032 (1979), created pursuant to Code (1957, 1997 Repl.Vol.), Art. 29, § 1-102 and § 1-201(a), is authorized to provide water and sewage service to most of Prince George's County and to Montgomery County, Maryland.

This case has its genesis in the Commission's public meeting held on July 30, 1997, at which the Commission voted in favor of filing a petition for condemnation of the Marlboro Meadows facility owned and operated by Utilities. The decision was made after several months of negotiations between the parties and their ultimate failure to reach an agreement on the fair market value of the facility. A major issue underlying the parties' disagreement was, and still is, whether the contributions in aid of construction of the facility constitute property of Utilities for which it is entitled to receive compensation in the condemnation proceeding.⁵

Anticipating the imminent condemnation action, Utilities, on August 29, 1997, filed this declaratory judgment action in the Circuit Court for Prince George's County, seeking a declaration that § 3-107(a) is unconstitutional, both on its face and as applied, because it requires the jury to consider contributions in aid of construction in determining just compensation and directs jurors to completely deduct the value of contributed property from the award, and, alternatively, that the statute by its own express terms is inapplicable to Commission condemnations which do not proceed under Title 2.⁶

On September 8, 1997, the Commission instituted formal condemnation proceedings of the Utilities system by filing a "Petition for Condemnation" in the Circuit Court for Prince George's County. The record indicates that the trial in the condemnation proceeding, Case No. CAL97-17811, was scheduled to begin on January 24, 2000, in the Circuit Court for Prince George's County. We have not been advised of any further proceedings in the condemnation case, and we presume that it is still pending in the Circuit Court.

In the present declaratory judgment action, both sides filed motions for summary judgment. After a hearing, the Circuit Court granted the Commission's motion for summary judgment, denied Utilities' motion for summary judgment, and issued a declaratory judgment that § 3-107(a) does, indeed, apply to the condemnation action against Utilities' property and that the statute violates neither the Maryland Constitution nor the United States Constitution. Utilities filed a motion for reconsideration which the Circuit Court denied, and thereafter Utilities took an appeal to the Court of Special Appeals. Before the case was heard by the Court of Special Appeals, this Court issued a writ of certiorari. Utilities, Inc. of Maryland v. Washington Suburban Sanitary Commission, 351 Md. 161, 717 A.2d 385 (1998).

II.

The issues raised by the parties to this appeal concern the interpretation of Art. 29, § 3-107(a), and, if interpreted to be applicable to the Commission's condemnation action, the constitutionality of § 3-107(a). Neither side has raised any question concerning the propriety of the declaratory judgment action. Nevertheless, whether a case is or is not appropriate for a declaratory judgment is an issue which, on public policy grounds, this Court will ordinarily address sua sponte. See, e.g., Waicker v. Colbert, 347 Md. 108, 113-117, 699 A.2d 426, 428-430 (1997); Harford Mutual v. Woodfin, 344 Md. 399, 414, 687 A.2d 652, 659 (1997); Ashton v. Brown, 339 Md. 70, 86-87, 660 A.2d 447, 455 (1995); Turnpike Farm v. Curran, 316 Md. 47, 49, 557 A.2d 225, 226 (1989); Haynie v. Gold Bond Bldg. Products, 306 Md. 644, 649-654, 511 A.2d 40, 43-45 (1986).

As earlier indicated, we hold that Maryland law did not authorize the present declaratory judgment action. Instead, the statutory interpretation and constitutional issues, all relating to just compensation, must be resolved in the pending condemnation case.

Section 3-409(b) of the Declaratory Judgment Act, Code (1974, 1998 Repl. Vol.), § 3-409(b) of the Courts and Judicial Proceedings Article, states:

"(b) Special form of remedy provided by statute.—If a statute provides a special form of remedy for a specific type of case, that statutory remedy shall be followed in lieu of a proceeding under this subtitle."

It is well settled in Maryland that when there is a special statutory remedy for a specific type of case, and that remedy is intended to be exclusive or primary, a party "may not circumvent those [special statutory] proceedings by a declaratory judgment ... action...." Montgomery County v. Broadcast Equities, 360 Md. 438, 456-461, 758 A.2d 995, 1005-1008 (2000). See, e.g., Josephson v. Annapolis, 353 Md. 667, 674-681, 728 A.2d 690, 693-696 (1998); Holiday v. Anne Arundel, 349 Md. 190, 201-203, 707 A.2d 829, 834-836 (1998); Zappone v. Liberty Life, 349 Md. 45, 60-64, 706 A.2d 1060, 1067-1069 (1998), and cases there cited. Although most cases applying this principle have involved special statutory remedies for specific types of cases which initially begin with adjudicatory administrative proceedings, nevertheless, as shown by the broad language of § 3-409(b) of the Declaratory Judgment Act, the principle is equally applicable to special statutory remedies which begin with judicial proceedings. See, e.g., Quinan v. Schneider, 247 Md. 310, 231 A.2d 37 (1967); Tanner v. McKeldin, 202 Md. 569, 577-578, 97 A.2d 449, 452-453 (1953).

When a governmental agency entitled to exercise the power of eminent domain decides to acquire particular property in return for "just compensation," a statutorily authorized condemnation action is "a special form of remedy for a specific type of case." A judicial determination of "just compensation" should be made in the condemnation proceeding. Neither the governmental agency nor the property owner may select particular issues relating to just compensation and have them resolved in declaratory judgment actions. Under circumstances such as existed in this case, we believe that the General Assembly intended the condemnation proceeding to be the exclusive remedy.

The right of a Maryland governmental entity to utilize the power of eminent domain is limited by Article III, § 40, of the Maryland Constitution and the Fifth and Fourteenth Amendments to the United States Constitution which require that the taking of private property be for public use and that just compensation be paid. Green v. High Ridge, 346 Md. 65, 72, 695 A.2d 125, 128-129 (1997). In addition, many statutory provisions applicable to eminent domain provide that there be a "necessity" for the taking. Ibid. The principal issues peculiar to a condemnation action are the government's right to condemn, public purpose, necessity, and the amount of compensation for the property owner. See Bouton v. Potomac Edison Co., 288 Md. 305, 418 A.2d 1168 (1980).

As pointed out by this Court many years ago, "[t]he mode and manner of the exercise of the power of Eminent Domain is exclusively vested in the judgment and discretion of the Legislature...." Ridgely v. Mayor and City Council of...