Woodmont Country Club v. Mayor and City Council of Rockville

• Decision Date: 01 September 1994
• Docket Number: No. 1186,1186
• Citation: 670 A.2d 968,107 Md.App. 696
• Parties: WOODMONT COUNTRY CLUB v. MAYOR AND CITY COUNCIL OF ROCKVILLE. ,
• Court: Court of Special Appeals of Maryland

Page 696

107 Md.App. 696

670 A.2d 968

WOODMONT COUNTRY CLUB v. MAYOR AND CITY COUNCIL OF ROCKVILLE.

No. 1186, Sept. Term, 1994.

Court of Special Appeals of Maryland.

Jan. 31, 1996.

Appeal from the Circuit Court for Montgomery County, D. Warren Donohue, Judge.

Stephens J. Orens (Wendy D. Pullano and Conroy, Ballman & Dameron, Chtd., on the brief), Gaithersburg, for appellant.

Sondra Harans Block, Assistant City Attorney (Paul T. Glasgow, City Attorney, on the brief), Rockville, for appellee.

Argued before MURPHY and HOLLANDER, JJ., and JOHN W. SAUSE, Jr., Judge Specially Assigned.

SAUSE, Judge.

On October 4, 1993, Woodmont Country Club (Woodmont) filed petitions in the Circuit Court for Montgomery County requesting judicial review "pursuant to Maryland Rules 7-201 et seq." and Article XI(d) of the Charter of Rockville of certain special assessments made by the City of Rockville (the City) in connection with the construction of Wootton Parkway ¹ and an appurtenant water transmission system. ² After hearing, the Court entered a memorandum and order by which "the appeals ... are hereby dismissed." ³ This appeal is from that order.

The facts

On May 14, 1990, the City adopted an ordinance (# 12-90) whose primary effect was to establish a June 4, 1990, hearing in connection with proposals for "extension of Ritchie Parkway between Seven Locks Road and Rockville Pike" and "that the abutting properties specially benefited by said improvements be assessed according to the front foot rule of apportionment or some other equitable basis." A companion ordinance (# 13-90) established a concurrent hearing in connection with "construction of a water transmission main, fire hydrants, valves and related work and appurtenances" within the new roadway, again with a proposal that a portion of the cost be paid by way of special assessment upon abutting landowners.

The proposed route of Wootton Parkway lay largely through property owned by appellant Woodmont. ⁴ Three weeks after the hearing on June 4, 1990, Woodmont conveyed to the City a total of 20.3 acres. ⁵ The purchase price, arrived at after negotiations which seem to have been ongoing for some time, was $6,400,000, together with a number of other undertakings by the City. ⁶ Woodmont "waive[d], quitclaim[ed] and surrender[ed] any and all rights ... against the City for severance or other damages to the remainder of ... [the Club's] property."

A second set of ordinances, authorizing construction of the road (# 18-90) and the water main (# 19-90), were adopted on July 9, 1990. Both ordinances directed the City Manager "to cause appraisals of the properties specially benefitted by the proposed public improvements to be made prior to the commencement of the construction of the improvements ... and, in addition, to cause appraisals to be made upon completion of the improvements."

Upon completion of the projects--the road and water main were completed, for costs said to be $24,060,725 and $946,952.79, respectively--public hearings were held on May 17 and June 21, 1993, with respect to the assessments to be levied in accordance with the ordinances of July 9, 1990. By a third set of ordinances, adopted on September 27, 1993, the Mayor and Council "accepted and approved" the road and water main and "found and declared" that they were "of special benefit to ... properties shown on ... [an attached] list in the amounts assessed on said list", such amounts being, as to Woodmont, $2,943,000, as a result of the road (# 13-93), and $61,319.38, resulting from construction of the water main (# 14-93). ⁷ If paid with interest over a period of 20 years, as allowed by the ordinances, the Club's total obligations would be $5,212,297.27 and $108,601.71, respectively. The parties' contentions

The Circuit Court synthesized the parties' contentions into 5 issues:

1. Has the Club waived its right to complain about the special assessments because it made the first of 20 annual payments?

2. In determining the special benefit to the Club property, was the City correct in appraising the property at its highest and best use?

3. Was the Club afforded due process in connection with the levy of special assessments against its property?

4. Has the Club met its burden of overcoming the presumption of validity attached to the City's actions in determining a special benefit?

5. Was the special assessment for the construction of a water transmission main valid?

The Court directly addressed only the first two issues. The City's claim that payment of a portion of the special assessment precluded Woodmont's right to make any objection to the entire assessment process was found to be only "partially correct." ⁸ After extended discussion of the second question, it was squarely held that "it was proper for the City to base its valuation of the special benefit on the properties' 'highest and best' use." The remaining matters were given shorter shrift: "Questions 3, 4 and 5 can be disposed of in short order ... [because] for the reasons set forth in the City's brief, the Club's contentions with respect to these questions are without merit."

For reasons hereafter stated, we agree with the lower court's conclusion that this appeal is not precluded by Woodmont's having paid installments of the assessments due under the ordinances ⁹ and affirm its decision with respect to the second. In our view of the case, however, Woodmont's contention of denial of due process and the allied issue concerning the absence of any presumption to be accorded the City's action under that circumstance (the third and fourth questions framed, although not directly addressed below) have controlling merit and require reversal of the action of the Circuit Court. As this will involve further hearings and findings impossible to anticipate, we do not reach other, somewhat hyperbolic arguments here advanced by Woodmont--principally, the supposed applicability of the Supreme Court's recent decision in Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994).

Partial payment as affecting judicial review

The City argued below that, as stated by the Circuit Court, "the Club's payment of a portion of the special assessments precluded it from challenging the assessments." As noted, the Court ruled that "the City's argument in this regard is partially correct", in that Woodmont was not entitled to a refund of amounts already paid, but "The simple fact of the matter is that ... [the remaining installments] have not been paid", and "there is simply a question of whether or not they should be paid." The City here narrows the scope of its original argument: "The Club is barred from recovering that portion of the special assessments it paid prior to taking this appeal"--a clear adoption of the finding below and recognition of the propriety of at least some judicial review. ¹⁰

While we agree that judicial review is proper in this case, we should not be understood as endorsing the reasoning of the lower court. The case relied upon by it and the City is Wash. Sub. Sanitary Comm'n v. C.I. Mitchell & Best Co., 303 Md. 544, 495 A.2d 30 (1985), where the Court stated "the Maryland common law rule under which voluntary payments, made under a mistake of law, of taxes or other public charges are not recoverable" by quoting (at 572, 495 A.2d 30) from Apostol v. Anne Arundel County, 288 Md. 667, 672, 421 A.2d 582 (1980):

It is firmly established in this State that once a taxpayer voluntarily pays a tax or other governmental charge, under a mistake of law or under what he regards as an illegal imposition, no common law action lies for the recovery of the tax absent a special statutory provision sanctioning a refund. This is true even if payment is made under protest. Moreover, in these circumstances, no common law or declaratory judgment action lies to challenge the validity of a tax so paid. Where there is a special statutory provision sanctioning a refund, although no particular statutory remedy is provided, an action in assumpsit is available. However, where there is statutory authorization for a refund and a special statutory remedy set forth, that remedy is exclusive.

As made clear elsewhere in the Mitchell & Best opinion, the rule is not without exception, albeit such is extremely limited and involves factual determination of whether the payment was made under compulsion. ¹¹ We need not explore the matter here. The rule involved is one which involves the existence of a cause of action for recovery of money which has been paid. This is a proceeding for judicial review of the action taken at the hearings in May and June 1993. Neither the Circuit Court (Rule 7-209) nor this Court (Rule 8-604) has any authority to direct repayment in this proceeding, and we have not been asked to do so. Matters relating to repayment will await determination in such proper proceeding as may hereafter be instituted for that purpose.

Presumption of correctness

Here, the City first asks that we spare ourselves the exercise of undertaking more than superficial examination of its action, since it claims that "the method by which a governmental entity assesses and apportions the cost for a public improvement is a legislative question subject only to constitutional limitations, and the exercise of such legislative discretion will not be reviewed by courts when there appears to be neither fraud nor mistake", citing, inter alia, Williams v. Anne Arundel County, 334 Md. 109, 123, 638 A.2d 74 (1994) where it is said that:

The legislative judgment in levying benefit assessments ... is entitled to the highest deference. 'In the absence of a showing of arbitrary action and plain abuse of power,' the legislative body's decision is final.... 'And an assessment, if imposed according to a definite and just plan, will not be disturbed where neither fraud nor mistake appears' ... [citations omitted]. ¹²

Numerous other cases (including virtually all of those...