Court of Special Appeals Bats .500 in Appeal of Planning Board Actions

By Alan B. Sternstein

At some time during their ownership, real property owners are likely to be concerned with local or state regulatory proceedings related to nearby property. These proceedings take various forms, from rezoning requests, to requests for variances from zoning requirements or special zoning uses, to requests for approval of preliminary subdivision or development plans. This blog writer has had first-hand experience with many of these actions, as a member for years of a board of zoning appeals and, at other times, as counsel representing property owners.

Two administrative law aspects of the decision of the Court of Special Appeals in West Montgomery Co. Citizens Ass’n v. Montgomery Co. Planning Bd., No. CSA-REG-0579 2019 (“West Montgomery”), bear comment, at least from the perspective of this blog writer’s experience. First is the content of the written support that regulatory bodies are required to provide by statute, regulation or law for their decisions approving or disapproving the administrative actions they take. Second, in the case of real property proceedings, is whether these regulatory bodies have the authority to require, as a condition of approvals within their jurisdiction, compliance with private agreements between applicants for actions and nearby property owners related to such administrative actions.[1]

In West Montgomery, a property owner (the “Applicant”) had obtained from the Montgomery County Planning Board approval of a preliminary subdivision plan to divide a 2.77 acre parcel zoned residential into two residential lots. The parcel was located in a portion of Montgomery County generally referred to as “Potomac.” The Board adopted a formal written resolution (“Resolution”) setting forth the grounds for its approval.

West Montgomery County Citizens Association (“WMCCA”) and the owners of eight neighboring parcels separately petitioned in the Circuit Court for Montgomery County for judicial review of the Board’s approval.  On petition for judicial review, the Circuit Court ultimately affirmed the Board’s approval, and WMCCA alone appealed the Circuit Court’s decision.

On appeal, WMCCA challenged the Board’s Resolution as itself lacking findings adequate to permit judicial review of the grounds for the Board’s approval, in particular, whether certain environmental regulatory requirements for approval had been satisfied. WMCCA also challenged the Board’s approval for failing to require the Applicant’s compliance with a private agreement involving other property owners and regarding protection from sewer connections.

Adequacy of the Planning Board’s Findings

The subject matter with which regulatory bodies deal, such as the Planning Board here, typically and unavoidably requires the professional expertise of a support staff familiar with the statutory and regulatory requirements that implement legislative objectives and that govern the decisions and authorization that regulators are empowered to make. In the case of an application for authorizations regarding the development or use of real property, this expertise involves, but is not limited to, legal advice, civil engineering advice, and knowledge of and the ability to apply environmental requirements, lot and building construction requirements imposed by zoning, forest conservation requirements and public facilities requirements. See Slip Op. at 7-9. In West Montgomery, as the Court of Special Appeals explained, the statutes and regulations governing the applicant’s subdivision request required the Board to consider sediment control of construction activities on the site, conformity of the requested authorization to regional development plans, the adequacy of public facilities to support the density increase the subdivision would cause, and water quality impacts. Id. at 26-27.

Typically, in the writer’s experience, the product of the professional staff’s work on an application is a staff report. Based on information from the applicant, public input solicited in notice of the application, and investigation and analysis by support staff, a report to the board or commission is prepared, setting forth proposed findings and conclusions, with explanation and substantiation therefor, and recommended official actions.

The staff report is made available to the applicant and the public, in addition to the regulators, and, if required by law, a public hearing is thereafter conducted. At the public hearing, often on the record, as the law may require, the applicant and other interested parties may present testimony and evidence and raise issues concerning the staff report and its recommendations. Questions may be addressed to the parties or staff at any time during the hearing by regulators. Acting in a quasi-judicial capacity, the regulators then render their decision and reasoning, either at the conclusion of the hearing or, after taking the matter under consideration, in a written decision.

The fundamental requirements for valid administrative action are (i) substantial evidence supporting findings and conclusions and (ii) decisions based on the conclusions and in accordance with law.  These requirements permit parties to proceedings before regulatory bodies to be protected from arbitrary action. Assessing whether these requirements have been satisfied and parties, thereby, so protected is the purpose of providing for judicial review of the actions of regulatory bodies. See Clarksville Residents Against Mortuary Def. Fund, Inc. v. Donaldson Props., 453 Md. 516, 532, 162 A.3d 929, 938 (Md. App. 2017) (As with other administrative agencies, including planning boards, “[j]udicial review of an administrative agency decision is ‘limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised on an erroneous conclusion of law.’”).

In West Montgomery, the Board conducted a public hearing on June 7, 2018 and rendered its decision, on motion from the Board, at the conclusion of the hearing. Slip Op. at 11-13. The Board thereafter provided its authorization and formal findings to the Applicant in a written “Resolution.”  Id. at 13-15. “The Resolution stated that the Planning Board ‘considered the recommendations and findings of its Staff as presented in the hearing and as set forth in the Staff Report,’ and adopted and incorporated the Staff Report by reference.” Id. at 28. The action recommended in the staff report and rendered by the Board was approval of the Applicant’s two-lot preliminary subdivision plan, but with conditions. Id. at 8-10.

Noting that the Board’s Resolution expressly incorporated its planning staff’s report and that the report addressed and made recommended determinations on the matters for which WMCCA argued that the Board’s Resolution was deficient, the Court of Special Appeals held that, absent a statute or regulation expressly requiring that the Board itself make findings within its own written decision, the record, including the Staff Report, was sufficient to permit judicial review of the Board’s decision, including determining whether or not the Board had thereby considered all factors it was required to consider, before rendering its decision. Id. at 20-23. According to the court, “the Staff Report … contained findings that specifically addressed WMCCA’s concerns,” Id. at 23, citing Maryland-Nat’l Capital Park & Planning Comm’n v. Greater Baden-Aquasco Citizens Ass’n, 412 Md. 73, 110, 985 A.2d 1160, 1182 (2009) (“It is not unreasonable for the Planning Board to rely on a Staff Report, as the Planning Board did in this case, if the Staff Report is thorough, well conceived, and contains adequate findings of fact.”). Absent any express regulatory or statutory requirement contrary, the Planning Board was not itself required to make point-by-point findings and reasoning to each of WMCCA’s specified arguments. Slip Op. at 22-23.

Given the complexity and breadth of the subject matter involved and the volume of applications in an urban or even semi-rural area, a privilege of regulators to rely on the work of professional support staff is essential to avoiding both errors and backlogs in acting on applications. For these reasons, staff reports are often, as in West Montgomery, appropriately and formally incorporated into the record of proceedings on applications, as all or part of the justification for the administrative decisions made. In this blog writer’s viewpoint from both sides of the fence, decisions such as that of the Court of Special Appeals in West Montgomery not only will allow meaningful judicial control of administrative actions but also serve the essential and practical needs of administrative agencies.

Planning Board Enforcement of Agreements Between Applicants and Private Parties

In addition to its claim that the Planning Board failed adequately to set forth its findings and conclusions and the bases therefor, WMCCA also challenged the Planning Board’s action for failing to assure compliance with a private agreement to which the Applicant’s parcel was subject. Specifically, the Applicant had obtained a sewer connection for its property.  However, due to certain restrictions, the Applicant could not obtain approval for an additional sewer hookup for the proposed second lot, without signing a private sewer agreement, which the Applicant, therefore, signed. Planning staff advised the Board during the public hearing that the agreement only “encouraged” compliance with its terms, suggesting that it was not legally enforceable. Id. at 12. It appears from the opinion of the Court of Special Appeals that the Board’s Resolution, therefore, did not address the agreement. See id. at 16-17. Apparently, however, WMCCA continued to press the issue on judicial review and subsequent appeal.

On appeal, the Planning Board, opposing WMCCA, argued to the Court of Special Appeals:

“’Given that nothing in the Covenant or the attached “Piney Branch Sewer Agreement Recommendations” states that the Planning Board is responsible for enforcing the instrument, … it was entirely proper, and supported by substantial evidence in the record, for the Board to incorporate the Planning Department’s analysis of the issue into the Resolution by reference and otherwise refrain from attempting to arbitrate what amounts to a third party agreement.’”

Id. at 25. The Court of Special Appeals essentially agreed, stating “it was outside of the Board’s scope of review to determine whether the Applicant complied with the actions ‘encouraged’ by the [a]greement’s  terms. The Planning Board was required to do no more than determine whether the Preliminary Plan fulfilled the requirements of … the Subdivision Regulations.” Id. at 30.[2]

As for regulatory body enforcement of agreements between applicants and private property owners, this blog writer’s perspective, as counsel occasionally representing interested homeowners, is from a side of the fence opposite that of a member of a regulatory body, and his opinion in disagreement with the decision of the Court of Special Appeals, for two reasons. First, the court went further than it needed to go, for it suggests, if not holds, that enforcement of such agreements is beyond the purview of real property boards and commissions. The court need only have held that, whether or not enforcement of such agreements were within the jurisdiction of such regulatory bodies, it need only have ruled that the terms of the particular agreement in West Montgomery, being only precatory (that is, only “encouraged” compliance), were not legally enforceable.

Second, it is at least arguable that although real property boards and commissions are not required to enforce private agreements, they may consider and, barring terms of an agreement that are contrary to the public interest, may and should generally enforce such agreements. At least in Montgomery County, strong emphasis is placed on early and affirmative solicitation of public input on matters that come before boards and commissions, as well as, importantly, on early resolution of any disputes.[3] Agreements between applicants and interested private parties can obviate opposition to proposed uses, advancing both the public and applicant interests, in keeping with regulatory objectives. Likewise, the bad faith use of such agreements by applicants is possible where an applicant expediently enters into such an agreement but then breaches it after obtaining regulatory approvals, leaving interested parties to burdensome litigation.[4] Public participation in administrative processes related to real property would only be discouraged where early and constructive public participation and cooperation is thereafter disregarded in the grant of administrative approvals.

(Editor’s Note: Blog Manager Diane Feuerherd was not involved in the preparation of this post.)

[1] The decision of the Court of Special Appeals also involved the “undue hardship” that an applicant for a zoning variance is required to show, in order to justify a variance. This blog article does not address that matter.

[2] In light of the court’s and the Board’s reasonings, the prudent land use practitioner representing private parties to an agreement with an applicant should be sure that the agreement contains unambiguously enforceable terms and provides for compliance with it as a condition of the approvals an applicant seeks.

[3] Specifically, in the case of development reviews, including subdivision developments, the Montgomery County Planning Board has special Administrative Procedures whose objective is providing for “participation by interested parties, such as owners of properties adjoining the project site, so that their issues and concerns can be submitted to staff and the Board for consideration during the review process before the Board decides and acts on the proposed land development project.” COMCOR The procedures require the Planning Department staff to “[w]ork with all parties to present a recommendation to the Board that complies with the applicable standards of review,” to “[a]ttempt to identify issues early in the process and strive to resolve them as early as possible,” and to “[c]ooperate with other agency and utility company staffs, the applicant, and the public to seek a mutually satisfactory resolution when issues arise.” COMCOR – (6).

Applicants, in particular, “must … [w]ork with review staff and the public in a cooperative manner to seek a mutually satisfactory resolution when issues arise.” COMCOR To this end, an “applicant must hold at least one pre-submittal community meeting before submitting a project plan, sketch plan, preliminary plan, or site plan” and “must take meeting minutes that include a summary of any issues or concerns raised by attendees.” COMCOR, (A)(1)(a)(iv). If these procedures are to have any meaning with respect to the public and to encourage the public to buy into and cooperate in the planning process, then private agreements between applicants and the public achieved in the prescribed preliminary efforts must be within the consideration of the Planning Board and compliance with such agreements an appropriate condition of development approvals, including, as in West Montgomery, subdivision developments.

Montgomery County ordinances and regulations also arguably support regulatory power to condition approvals on compliance with private agreements.  In particular, in addition to obtaining the approvals of other specified agencies before approving a subdivision preliminary plan, Montgomery County ordinances and regulations require the Planning Board to make several findings on which adjacent land owning interests could bear. Mont. Co. Code Ch. 50, §§ 4.2(B), (D) and § 4.3; Mont. Co. Reg. §§ 4.2(B), (D) and § 4.3. Where a private agreement resolves any dispute that would otherwise preclude or call into question any such finding, the Planning Board certainly has the power to make compliance with such an agreement a condition of plan approval. Indeed, the Board has the express power to grant an approval “with any conditions or modifications necessary to bring the proposed development into compliance with all applicable requirements.” Mont. Co. Code Ch. 50, § 4.2(C)(1)(b); Mont. Co. Reg. § 4.2(C)(1)(b).

[4] In one administrative matter in which this blog writer was involved, as counsel to homeowners, the developer applicant repeatedly made representations in pre-submission public meetings as to an aspect of the applicant’s intentions quite material to the interests of numerous homeowners in the vicinity of the applicant’s property. The representations were even memorialized in writing in minutes of the meetings that regulations required the applicant to keep. See discussion, supra, n.3. When, however, the homeowners sought to have the representations incorporated as a condition of the approval that the applicant sought, the applicant resisted and regulators acceded to the applicant’s position, rejecting the condition.

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