Case Title: Calvert County v. Howlin

Citation: 364 Md. 301

Docket Number: 61/00

State: maryland

Court: Maryland Supreme Court

Date: 2001-06-04T00:00:00Z

Document:
Calvert County Planning Commission v. Howlin Realty Management, Inc.
No. 61, Sept. Term, 2000
Doctrines emanating from Zoning Board v. McKinney, 174 Md. 551, explained – when
administrative agency may (1) reconsider prior action, and (2) participate in judicial review
litigation concerning its decision.
Circuit Court for Calvert County
Case Nos. 4C98363AA & 4C98388
IN THE COURT OF APPEALS OF MARYLAND
No. 61
September Term, 2000
______________________________________
CALVERT COUNTY
PLANNING COMMISSION
v.
HOWLIN REALTY MANAGEMENT, INC.
______________________________________
Bell, C.J.
Eldridge
Raker
Wilner
Cathell
Harrell
Battaglia,
   JJ.
______________________________________
Opinion by Wilner, J.
______________________________________
Filed:   June 4, 2001
The two issues before us are (1) whether the Calvert County Planning Commission was
a proper party in the Circuit Court for Calvert County, in an action for judicial review of the
Commission’s decision to rescind a subdivision approval it had granted three years earlier, and
(2) whether the Commission provided due process to the owner of the subdivided lots in the
hearing that it conducted on the matter.  The Court of Special Appeals answered the first
question in the affirmative and the second in the negative.  We shall answer both in the
affirmative and therefore reverse the judgment of the intermediate appellate court.
BACKGROUND
The Calvert County Planning Commission was created in 1962, pursuant to the
provisions of Article 66B of the Maryland Code.  Among the powers vested in the Commission
by that Article is the power to approve or disapprove subdivision plats.  See §§ 5.01, 5.02, 5.04
of Article 66B.
We are concerned here with the Hickory Creek Subdivision, which was created in 1993
by Claudette McLaughlin, William McLaughlin, and Eva Roth.  The preliminary plan, approved
by the Commission in August, 1993, showed a 93-acre subdivision divided into 43 lots, with
50% open space and three separate recreation areas.  The approval included a number of
conditions, one of which stipulated that 3.931 acres of recreation area be provided pursuant
to then-current § 5.83 of the Calvert County Subdivision Regulations and that those recreation
areas be dedicated to the lot owners of the proposed subdivision.  In October, 1993, six final
plats were approved by the Commission and recorded among the land records.  Plat One
contained Recreation Area A, consisting of 0.662 acre; Plat Two contained Recreation Area
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B, consisting of 1.643 acres; and Plat Six contained Recreation Area C, consisting of 1.626
acres.
In August, 1994, all of the lots in the subdivision, exclusive of roads, recreation areas,
and common areas, were deeded to Edward Howlin.  The McLaughlins and Roth continued to
own the three  recreation areas.  Four months later, the county adopted a Recreational Fund
Ordinance, which allowed developers of subdivisions containing less than 50 lots to pay a
recreational fee to the county in lieu of providing on-site recreation areas.  In July, 1995, the
McLaughlins and Roth applied to convert the platted recreational areas into residential lots by
paying the recreational fees provided for in the ordinance, in accordance with the revised
provisions of § 5.83 of the Subdivision Regulations.  The Commission granted the request,
subject to the condition that re-subdivision of the recreation areas conform to the county
subdivision requirements.
In September, 1995, Randy Barrett, a surveyor with the firm of Hugh W. Wilkerson &
Assoc., filed an application with the Department of Planning and Zoning, on behalf of the
owners of the three recreation lots, to convert Recreation Area A into one building lot and to
subdivide Recreation Area B into three building lots.  Recreation Area C would remain as an
undeveloped recreation area.  Although the subdivision regulations in effect at the time are not
in the record before us, the parties agree that those regulations required, as a condition of
approval, that the owners of all lots in the Hickory Creek Subdivision consent in writing to the
conversion of Recreation Area A and the re-subdivision of Recreation Area B.  By that time,
Howlin had sold a number of the building lots to other people.  Barrett’s letter noted that some
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lots had already been conveyed and that others were under contract, but he asserted that “[i]n
each case an agreement was signed by the lot owners and contract purchasers acknowledging
that they were aware that the recreation area would be subdivided into buildable lots” and that
“[c]opies of all of the agreements are included with this application.”  He stated that, because
the lot owners and contract purchasers had no actual ownership interest in the recreation area,
their signatures did not appear on the subdivision application, but that “their signed
acknowledgments of the owner/applicants intent is provided in the agreements.”
On April 17, 1996, without any apparent opposition, the Commission approved the
application to re-subdivide Recreation Area B into three new building lots – Lots 44, 45, and
46.  A year later, those lots were sold to Howlin Realty Management, Inc. (HRM).  Soon
thereafter, several of the residents noticed Recreation Area B being staked for building lots
and made inquiry of the Commission, complaining that they had never consented to the re-
subdivision of that area.  The Commission staff responded in August, 1997, that “the required
documentation was provided with the preliminary plan submission package” and that the
documentation “was reviewed and deemed adequate.”
In September, 1997, John Jones, an attorney retained by two of the residents, Mr. and
Mrs. Bennett, informed the Commission that, in response to the August letter, he had inspected
the Commission file and found that, although there were some written consents to the
conversion of Recreation Area A, there were none to be found regarding the re-subdivision of
Recreation Area B.  The Bennetts, he said, had reviewed their own files and had not located any
documents indicating their consent to the re-subdivision of Recreation Area B.  The attorney
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further advised that, while at the Commission office, a call had been placed to Mr. Wilkerson’s
office, asking that Mr. Barrett review his file for the missing consents, and that no response
had been forthcoming.  Jones asked that his letter be treated as a formal request that the
Commission (1) void or set aside the re-subdivision plat of Recreation Area B, based on the
failure to provide evidence of the consent of all parties whose interest in that area vested prior
to the submission, and (2) refrain from issuing any building permits on the lots created by the
re-subdivision plat.  At Jones’s request, the Commission scheduled a hearing on the matter for
the evening of October 15, 1997.
On the morning of the 15th, HRM filed an action in the Circuit Court for Calvert
County to enjoin the proceeding.  The record in that case is not in the record now before us,
but it appears that, among other things, HRM complained that (1) the Commission had no
authority to reopen the matter, the Bennetts only remedy having been to seek judicial review
of the initial decision, and (2) it was likely to be denied due process because it was not aware
of how the Commission intended to proceed, in part because the Commission had failed to
adopt any rules that would govern the proceeding.  The court denied the requested injunction.
At the commencement of the hearing later that evening, counsel to the Commission
attempted to deal with some of the procedural issues.  He advised the Commission that,
because the previous approval was presumed to be valid, the burden would be on the Bennetts
to prove otherwise, to show that there was some fraud, mistake, or irregularity in the approval
in that required written consents had not been obtained.  He observed that, if the Commission
were so to find, it might then have to deal with the rights of any intervening bona fide
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purchasers of the re-subdivided lots.  Counsel told the Commission that “fair play has to be
accorded to everyone” – that there was no rule book, but that there were requirements of
“fundamental fairness in due process of law.”  Witnesses, if any, were to be sworn, and would
be subject to direct and cross-examination.  HRM asked the Commission not to proceed
because it was unaware of what the procedure would be – whether the hearing would be
informal or involve the taking of evidence – and that “we have no clue as to what’s going on.”
He complained again that the Commission had failed to adopt regulations or rules of procedure
and that the Commission had no authority to reopen the matter.  In response to a formal request
from HRM, the Commission determined that it intended to conduct an evidentiary hearing on
the merits of the issue and would first hear from Mr. Jones, counsel for the Bennetts.
Prior to any testimony, the relevant plats and Mr. Barrett’s letter were placed into
evidence, along with several deeds and agreements that were found in the Commission’s file.
The deeds were for the conveyance of lots in the Hickory Creek subdivision to Gilchrist and
Dredger, Johnson, Stone, Dickerson, and the Bennetts.  The agreements were from Gilchrist,
Dredger, and Dickerson, each of whom consented to any future subdivision of Recreation Area
A.  John Bennett testified that he and his wife purchased Lot 23 – three lots away from
Recreation Area B – in July, 1995, that he had no recollection of ever consenting to a re-
subdivision of that Area, and that, although he asked about that area during the contract
negotiations, he did not recall any discussion about Recreation Area B being re-subdivided.
Bennett acknowledged that it was possible that one of the several documents he signed at
settlement was a consent to the re-subdivision of Recreation Area B, but he said he had no
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recollection of any such document and that it was not discussed.  Mrs. Bennett gave similar
testimony.  Mr. Dickerson identified his deed, conveying Lot 38 to him in March, 1995, and
his agreement consenting to the re-subdivision of Recreation Area A, but testified that he never
consented to the re-subdivision of Recreation Area B.  Like the Bennetts, he acknowledged
that it was possible that, among the various documents he signed, there was a consent regarding
Recreation Area B.
Frank Jaklitsch, the Secretary to the Commission, advised that the staff does not check
to see if all required consents are obtained but usually relies on the owner’s representation:
“when they come in, and they represent and they’re saying that they got everybody agreeing to
this, we take them on their face value.”  Mr. Barrett, the author of the application, stated that
he did not, himself, collect the signatures.  Rather, he said, representatives from one of the
Howlin entities, in the person of one John Weeks, “were in charge of getting the signatures on
those forms.”  Barrett never met with the lot owners and could not state whether a consent had
ever been obtained from the Bennetts or from Dickerson.  He added that he would never
intentionally submit an incorrect document to the Commission.  In response to Mr. Barrett’s
testimony, Mr. Bennett and Mr. Dickerson stated that no one, including John Weeks, ever
approached them with regard to Recreation Area B.  At that point, the hearing was continued
until February 18, 1998, supposedly to allow HRM time to prepare further cross-examination.
When the hearing reconvened, HRM waived further cross-examination but renewed its
motion to dismiss the proceeding on the grounds that no regulations were in effect making
clear that the Commission had authority to reopen the matter or specifying the procedure to
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be followed.  A particular complaint in that regard was that it was uncertain whether the
Bennetts were required to prove their case by clear and convincing evidence or only by a
preponderance of the evidence.  When that motion was denied, HRM made another, based on
an alleged insufficiency of Mr. Jones’s letter to state a cause of action; it too was denied.
Mr. Jaklitsch, recalled by HRM, testified that Travis Clark was the Commission
employee who reviewed the application in question and that he was a very diligent person who
would not process an application that was not fully documented.  Jaklitsch again noted,
however, that  the staff had “no real way of checking to see that all of the owners have signed
it” and that Clark “would have to take the surveyor or applicant’s word.”  He could verify that
the owners had signed the consents submitted but not whether consents had been obtained from
all of the owners.  Michael Rodevick, an engineer with a company called Advanced Surveys,
testified that he had been asked to resubmit documents previously submitted to the
Commission, the inference presumably being that the Commission had misplaced the original
documents.  Mr. Barrett testified that he had searched through his files and had been unable to
locate either a copy of the letter he had sent to the Commission or copies of any attachments
to that letter.  He, too, stated that he had been asked to resubmit documents to the
Commission.  The last item taken up was a dispute over the standard of proof required of the
Bennetts: HRM contended that the standard was clear and convincing evidence; the Bennetts
asserted that, whatever the standard was, they had met it.  The Commission did not announce
any decision on that issue.
The Commission met again on the matter on March 18, 1998, at which time a motion
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was made and carried to rescind the earlier approval, based on a finding that one or more of the
homeowners had not given the required consent.  Nothing was said by any of the
Commissioners about the standard of proof or about any fraud; they all simply said that their
decision was based on their conclusion that the consents had not been given.  Counsel to the
Commission added, after announcement of the result,  that “based on that factual finding, that
the board has made, that the prior approval was based on a misrepresentation of fact, whether
intentional or negligent isn’t important for this purpose, but a misrepresentation of which, in
a general sense, provides a ground for you to revoke the prior decision.”  He added that, “[i]n
a general sense, it amounts to fraud, although I had indicated to you, it’s not criminal fraud, or
civil fraud, but a misrepresentation.”  Counsel agreed to prepare a written document, although
he advised that the motion just granted was effective.
On April 17, 1998, the Commission approved a formal resolution, presumably prepared
by its attorney, in which, after reciting some of the procedural history, it found as facts that:
(1)  “[a]ll of the property owners within the subdivision did not consent to the creation of a
Transfer Zone, as required for the subdivision of Recreation Area B,” (2) the September, 1995
letter from Barrett contained “a misrepresentation of a material fact, i.e.,  that all owners had,
in fact, consented,” that although that misrepresentation may well have been negligent rather
than intentional, arising out of misplaced reliance on Mr. Weeks, it nonetheless was relied on
by the Planning & Zoning staff and by the Planning Commission in approving the re-
subdivision, (3) the approval was therefore caused by misrepresentation constituting fraud
within the meaning of Zoning Appeals Board v. McKinney, 174 Md. 551, 199 A. 540 (1938)
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and Schultze v. Montgomery Co. Bd., 230 Md. 76, 185 A.2d 502 (1962),  and (4) there were
no intervening rights of innocent third parties.  Upon those findings and conclusions, it was
resolved that the approval of the re-subdivision of Recreation Area B be rescinded and revoked.
HRM sought judicial review of that ruling in the Circuit Court for Calvert County.  Both
the Commission and the Bennetts opposed HRM’s petition and indicated their intent to
participate in the proceeding.  Relying largely on Zoning Appeals Board v. McKinney, supra,
and Howard County v. Mangione, 47 Md. App. 350, 423 A.2d 263 (1980), HRM moved to
strike the Commission as a party on the ground that it had no standing to be a party to the
review of one of its “quasi judicial decisions.”  The Commission responded that the McKinney
doctrine had been limited to agencies exercising only quasi-judicial functions, which was not
the case with the Commission, and that, in any event, McKinney and Mangione merely
precluded an agency from appealing a judgment of the Circuit Court reversing its decision, not
from being a party in the Circuit Court.
The Circuit Court was not impressed with the Commission’s response and entered an
order striking it as a party.  That victory proved to be a hollow one for HRM, however, as the
court later affirmed the Commission’s decision on the merits.  The Court concluded that
proceeding in the absence of adopted rules presented no due process violation, as urged by
HRM, and that a finding of fraud justified the Commission in reopening and rescinding its
earlier approval.
The Court of Special Appeals, as noted, reached exactly opposite conclusions, holding
that (1) the Commission was a proper party to the Circuit Court action, but (2) it had not
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afforded HRM due process of law.  The first holding was premised on a finding that the
Commission was not acting solely as a quasi-judicial body but had a strong public policy
interest in the integrity of its subdivision approval.  As to the due process claim, the
intermediate appellate court held that, although the lack of written rules of procedure alone did
not suffice to constitute a Constitutional violation, the lack of clarity up front regarding the
standard of proof did have that effect.  In that regard, the court held that “[a]s a party to the
hearing, Howlin was entitled to know what facts the property owners needed to prove to obtain
a revocation of the resubdivision approval and the measure of proof by which they were
required to prove those facts.”
We granted the Commission’s petition for certiorari to determine whether the Court
of Special Appeals erred in concluding that it had violated HRM’s due process rights, and we
granted HRM’s petition to determine whether that court erred (1) in concluding that reversal
was not justified by the Commission’s failure to adopt written regulations or rules of
procedure, and (2) in holding that the Commission was a proper party in the Circuit Court.
DISCUSSION
Standing of the Commission
HRM’s objection to the standing of the Commission in the Circuit Court stems from
this Court’s pronouncements in McKinney, supra, a case, as we shall see, that has a dual
significance in this appeal.  In McKinney, the Baltimore City Board of Zoning Appeals denied
an application for a permit to build a service station because the station would be located
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within 300 feet of a “building or structure used as a church,” which the zoning law prohibited.
The church in question was located in the front room of a building that also contained a number
of residential apartments.  After the board made its decision, but before written confirmation
of it was mailed to the parties, the applicant leased the building in which the church was located
and evicted the church.  He then asked the board to reconsider its denial of the application,
asserting that the impediment no longer existed.  In fact, the impediment remained, as the
church rented space in a loft across the street and was still within 300 feet of the proposed
service station.  The board, with new members, nonetheless, did reconsider its action and,
reversing its earlier view, concluded that neither building was a “building or structure used as
a church,” within the meaning of the zoning ordinance, and therefore entered an order
approving the application.
The pastor of the church, McKinney, sought judicial review, naming as defendants the
board and  the building engineer.  The applicant was permitted to intervene.  After an
evidentiary hearing, which was permitted under the then-current statute, the court reversed the
board’s decision, holding (1) that the buildings did constitute buildings used as a church, in that
the religious use was not required to be an exclusive one, and (2) that the board had no
authority to reopen the matter after having finally decided the issue.  The board, which, as
noted, was a named party in the Circuit Court, noted an appeal to this Court.  McKinney moved
to dismiss that appeal on the ground that the statute allowed only a party aggrieved by the
court’s judgment to appeal and that the board could not be aggrieved by the reversal of its
decision.  The only person aggrieved, he argued, was the applicant, who had not joined the
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appeal.
This Court found merit in that motion and dismissed the appeal.  Although noting that
the board exercised both quasi-judicial and legislative functions, we concluded that its
principal duties were to hear and decide appeals from decisions of the building engineer and
determine whether to grant special exceptions and variances.  After examining the laws
governing its jurisdiction and operation, we concluded that the board “has no executive duties,
it formulates no policies, its function is merely to find facts, to apply to those facts rules of
law prescribed by the Legislature, and to announce the result,” and that, accordingly, “[i]t has
no interest, personal or official, in the matters which come before it other than to decide them
according to the law and the proved fact, and it is in no sense a party to such proceedings.”
McKinney, supra, 174 Md. at 560-61, 199 A. at 544.
We observed that there were some administrative agencies, such as the Public Service
Commission and the former State Tax Commission, “the functions of which are so identified
with the execution of some definite public policy as the representative of the State, that their
participation in litigation affecting their decisions is regarded by the Legislature as essential
to the adequate protection of the State’s interests,” but that, in those instances, the Legislature,
by “clear and unmistakable language,” had conferred on them the right and duty to take part in
such litigation.  Id. at 561, 199 A. at 545.  The zoning board, we held, was not such an agency,
as no provision existed in the legislation authorizing it “to defend its own decisions on appeal
or to take part in litigation concerning them.”  Id. at 561-62, 199 A. at 545.  It had no more
right to appeal than a justice of the peace or Worker’s Compensation Commission would have
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to appeal from the reversal of one of its decisions.
The holding in McKinney, and its conceptual underpinning, held sway in this Court for
more than 40 years, being confirmed in numerous cases.  See, for example, Roeder v. Brown,
192 Md. 639, 65 A.2d 333 (1949); Md. Pharmacy Board v. Peco, 234 Md. 200, 198 A.2d 273
(1964); Subsequent Injury Fund v. Pack, 250 Md. 306, 242 A.2d 506 (1968);  Bd. of Ex. of
Land, Arch. v. McWilliams, 270 Md. 383, 311 A.2d 792 (1973); Maryland Board v.
Armacost, 286 Md. 353, 407 A.2d 1148 (1979); see also Insurance Comm’r v. Allstate Ins.,
268 Md. 428, 302 A.2d 200 (1973); Real Estate Comm’n v. Tyler, 268 Md. 641, 303 A.2d
778 (1973).  In more recent times, however, both this Court and the General Assembly have
significantly constrained that doctrine.
As we pointed out in Consumer Protection v. Consumer Pub., 304 Md. 731, 743, 501
A.2d 48, 54 (1985), the McKinney doctrine had never been applied to governing bodies or
constitutional officers in the Executive Branch of the State Government, and, in that case, we
declined to apply it to the Consumer Protection Division of the Attorney General’s Office,
notwithstanding the lack of any specific statutory authority for the Division to appeal from a
reversal or modification of its decision by a trial court.  We concluded, in that regard, that the
Consumer Protection Division, though clearly exercising quasi-judicial, adjudicative functions,
was “not the kind of non-adversarial, quasi-judicial agency contemplated by McKinney, Peco
and their progeny.”  Consumer Protection, 304 Md. at 744, 501 A.2d at 55.  The Division, we
said, exercised a broad range of functions that were closely identified with the execution of
public policy, and “[w]ith its many different functions, its mandate to protect consumers and
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its role as a representative of the interests of the State, the Division is not the type of agency
to which the rationale of McKinney applies.”  Id. at 746, 501 A.2d at 56.  It had a strong
interest in the outcome of its case and was therefore aggrieved by the reversal of its order.
The criterion enunciated in Consumer Protection, though not conceptually different
from that stated in McKinney, clearly constituted a refocusing on how the McKinney doctrine
would be applied.  In McKinney, we noted that the zoning board did have quasi-legislative
functions and was charged with studying the zoning laws and municipal development in
Baltimore City and making recommendations for changes in the laws.  Our view was that those
broader functions were essentially subservient to the board’s principal function of deciding
appeals, special exceptions, and variances, which we treated as more or less exclusively quasi-
judicial.  The Consumer Protection Division of the Attorney General’s Office also performed
quasi-judicial functions, and, indeed, the order at issue was entered after a contested case
hearing and had a quasi-judicial quality to it.  We looked, however, at the broader mission of
the agency as one of implementing legislative public policy and regarded that as more
important than whether the implementation happened to be in the form of a quasi-judicial
determination.  As noted, our holding was not based on any specific statutory authority to
appeal, as alluded to in McKinney, but rather that, with the various policy functions performed
by the Division, it was “not the type of agency to which the rationale of McKinney applies.”
Consumer Protection, 304 Md. at 746, 501 A.2d at 56.
That shift in focus is now well-established.  In Department v. Bo Peep, 317 Md. 573,
565 A.2d 1015 (1989), cert. denied, Cassilly v. Maryland Dep’t of Human Resources, 494
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U.S. 1067, 110 S. Ct. 1784, 108 L. Ed. 2d 786 (1990), we applied the reasoning of Consumer
Protection to the child care licensing function of the State Department of Human Resources
and found standing on the Department’s part to appeal the vacation of its decision to revoke Bo
Peep’s day care license.  The role of the Department in that regard, we held, was not “a passive
one of quasi-judicial adjudication, but is an active one of policy formulation and protection of
children.”  Id. at 586, 565 A.2d at 1021.  In Real Estate Comm’n v. Johnson, 320 Md. 91, 576
A.2d 760 (1990), we held that the State Real Estate Commission had standing under the
Consumer Protection analysis to appeal the reversal of its decision denying claims against the
Real Estate Guaranty Fund.  We confirmed that, absent statutory authority, zoning boards have
no interest in the outcome of their decisions but held that the Real Estate Commission,
charged with administering the Guaranty Fund, is aggrieved by a reversal of its decision on
claims against the Fund.  We noted as well the rule-making authority of the Commission and
its authority to investigate complaints and punish its licensees.
In Board v. Haberlin, 320 Md. 399, 404, 578 A.2d 215, 217 (1990), involving an
appeal by a county liquor license board from the reversal of its decision to grant an application
for the transfer of a beer and wine license, we questioned whether cases strictly applying the
McKinney doctrine “remain viable in light of our recent cases,” although, because there was
another party to the appeal with clear standing, we did not need to decide that issue.  In
Maryland Racing Com’n v. Castrenze, 335 Md. 284, 643 A.2d 412 (1994), the Racing
Commission disqualified a winning horse on the ground that the trainer was ineligible, because
of a suspension in Delaware, to enter the horse.  Applying broadly the principles stated in
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Consumer Protection, we found standing on the part of the Commission to appeal from a
judgment reversing that ruling.  After iterating that the McKinney doctrine “does not apply to
all agencies or to all adjudicative administrative proceedings,” we confirmed again that “under
the general statutory authorizations for appeal, agencies are entitled to appeal from adverse
circuit court judgments where the functions of the agencies ‘are so identified with the
execution of some definite public policy as the representative of the State, that their
participation in litigation affecting their decisions is regarded by the Legislature as essential
to the adequate protection of the State’s interests.’” Id. at 294, 643 A.2d at 416 (quoting
Consumer Protection v. Consumer Pub., supra, 304 Md. at 743, 501 A.2d at 54).
That approach was followed as well in Board of Liquor v. Hollywood, 344 Md. 2, 684
A.2d 837 (1996), where we overruled Liquor License Board v. Leone, 249 Md. 263, 239 A.2d
82 (1968) (holding that a county liquor license board had no standing to appeal the reversal of
its decision) and found standing to appeal.  We could have based our decision in Hollywood
solely on a change in the statute dealing with appeals from Circuit Court judgments in liquor
board cases (id. at 7-8, 684 A.2d at 840), but we noted as well that the “common law
underpinnings” of Leone and McKinney had evolved and were “now of more limited
application.”  Id. at 8, 684 A.2d at 840.  Under the current approach, we said, “we consider
characteristics such as the authority to adopt rules, investigate complaints, prosecute violators,
and issue orders in furtherance of the public interest in determining whether the McKinney
limitation on the right to appeal is applicable to an agency.”  Id.  See also Carroll County v.
Lennon, 119 Md. App. 49, 703 A.2d 1338 (1998) (county ethics commission had standing to
1This common law development has been matched by legislative action.  In rewriting the
contested case provisions of the Administrative Procedure Act in 1993, the General Assembly
expressly declared that an agency subject to that Act that was a party in the Circuit Court may,
if aggrieved by a final judgment of that court, appeal to the Court of Special Appeals.  See
Maryland Code, § 10-223(b) of the State Government Article.  See Maryland Racing Com’n
v. Castrenze, supra, 335 Md. 284, 295 n.4, 643 A.2d 412, 417 n.4.
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appeal trial court decision reversing ruling that appellee violated county ethics ordinance).
This more recent case law recognizes that the principal function of many administrative
agencies goes beyond merely resolving disputes in which they have no independent interest and
that their contested case adjudicatory function is but one mechanism for carrying out their
general responsibility to implement broader legislative policy.  The decision in a contested
case can often have a significant impact on the ability of the agency to implement that
legislative policy and, indeed, on the substance of the policy itself.
Although the fundamental precept of McKinney has never been expressly overruled,
the point of the recent case law is that, when the agency’s decision does or can have
significance in terms of the agency’s broader responsibilities, the confining limitations of
McKinney are not applicable.  In such a case, the agency must be free to intervene in judicial
review actions and contest in the appellate courts judgments that may hamper it from
effectively implementing the policies ordained by the Legislature.1 
With this backdrop, we look to the functions of the Calvert County Planning
Commission which, as noted, was created pursuant to Article 66B of the Maryland Code and
has the powers and duties set forth therein.  Section 3.05 of Art. 66B makes it the function and
duty of the Commission to develop an overall plan to serve as a guide to the development of
2Chapter 426, Acts of 2000, effective as of October 1, 2000, rewrote various sections
of Article 66B, including § 3.01, et seq. and § 5.01, et seq.  The Commission’s
recommendation of boundaries is now found in § 3.06(a), and the general purpose of the plan
is found in § 3.05(c).
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public and private property.  The plan is to contain a statement of goals and policies for the
development and economic and social well-being of the county as well as specific land use,
transportation, community facilities, and mineral resource plans.  The Commission is to
recommend as well zoning boundary lines.  Section 3.06 provides that the plan shall be made
for the general purpose of guiding coordinated and harmonious development that will best
promote health, safety, morals, order, convenience, prosperity, and efficiency, including,
among other things, provisions for traffic, public safety, light and air, conservation of natural
resources, prevention of environmental pollution, and public utilities.2
Apart from their planning responsibilities, planning commissions are given substantial
control over the subdivision of land within the county.  Section 5.03 directs planning
commissions to recommend to the local legislative body regulations governing the subdivision
of land within the county.  Those proposed regulations are to include provisions for shore
erosion control, sediment control, arrangement of streets, placement of public school sites
and open spaces for traffic, utilities, fire-fighting apparatus, and recreation, light and air,
avoidance of population congestion, and minimum lot widths and areas.  Section 5.02 of
Article 66B provides that, if the county has adopted and certified the transportation element
of the commission’s plan, a plat of subdivision may not be filed or recorded until the
commission, or its authorized designee, approves the plat.  Approval of a subdivision plat
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constitutes an amendment to and part of the plan. § 5.04.
It is evident from these provisions that planning commissions do far more than act as
neutral arbiters of disputes in which they have no independent interest.  They have been charged
by the General Assembly and by their respective local legislative bodies with implementing
important public policy – with guiding the economic development and public welfare of the
county.  The approval of subdivision plats is a significant part of that responsibility and involves
much more than a dispute between neighboring landowners.  In deciding whether to approve
a proposed subdivision, the commission must consider whether it conforms to the overall plan
and meets both the substantive and procedural requirements established by law.  That is
unquestionably a function that is “so identified with the execution of some definite public
policy as the representative of the State, that their participation in litigation affecting their
decision is regarded by the Legislature as essential to the adequate protection of the State’s
interests.”  Consumer Protection, supra, 304 Md. at 743, 501 A.2d at 54 (quoting McKinney,
174 Md. at 561, 199 A. at 545).  For this reason, we agree with the Court of Special Appeals
that the Commission had proper standing in the Circuit Court.  The Commission concluded that
the re-subdivision of Recreation Area B was not in conformance with the substantive and
procedural requirements of the law; if a court were to overturn that decision, the
Commission’s ability to perform its legislatively-mandated role could be adversely impacted.
Due Process
Planning commissions are provided for by §§ 3.01 through 3.09 of Article 66B,
3This language is now contained in § 3.03(c).
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although, as noted, some of their duties and responsibilities are specified in other sections of
that Article and in implementing local legislation.  Section 3.03 provides generally for the
organization of the commissions – election of a chairperson, frequency and openness of
meetings.  That section states that a planning commission “shall adopt rules for transactions
of business and shall keep records of its resolutions, transactions, findings, and
determinations.”
3  At the time this matter was presented to and heard by the Commission, it had
not adopted any formal, written rules, at least not any dealing with the reconsideration of an
earlier approval of a subdivision.  HRM complained about that lack, arguing (1) that the
statutory violation alone precluded the Commission from proceeding, and (2) that apart from
the statutory violation, the absence of rules dealing with such things as (i) whether the
Commission had the power to reconsider a former action, and (ii) if so, who had the burden
of proof, what the standard of proof would be, and what procedure would be followed, left it
unable to protect its interests and thus deprived it of procedural due process.
As noted, the Court of Special Appeals found no due process violation based solely  on
the alleged statutory violation but did find such a violation from the absence of procedural
guidelines.  HRM complains about the first aspect of that ruling, and the Commission
complains about the second.  Mixed in with their arguments are the more substantive questions
of whether, in fact, the Commission had the authority to reconsider its earlier approval and
whether it wrongfully applied a preponderance of the evidence standard as the quantum of proof
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required of the Bennetts.
The Court of Special Appeals determined that there was, in fact, no violation of the
statutory requirement to adopt rules, in that the statute did not require the adoption of written
rules, and some basic rules were announced by counsel to the Commission at the
commencement of the hearing.  We do not agree with that analysis.  In directing planning
commissions to “adopt rules for transactions of business,” we do not believe that the
Legislature anticipated ad hoc oral rules determined and announced by counsel to the
Commission.  Rules for the transaction of business by public agencies are intended to be
normative principles formally adopted by the agency in written form, in accordance with
whatever procedural requirements may apply, and, upon request, made available in advance to
persons dealing with the agency.  Only then can there be some assurance against arbitrary and
capricious conduct on the part of the agency.
The failure of the Commission to have such rules in place did constitute a violation of
the statutory mandate.  That violation, by itself, however, did not constitute a lack of due
process or preclude the Commission from proceeding to carry out its public duties.  Due
process is concerned with fundamental fairness in the proceeding, not with whether the agency
has failed in some way to comply with a statutory requirement.  See Maryland State Police
v. Zeigler, 330 Md. 540, 559, 625 A.2d 914, 923 (1993); also Hyson v. Montgomery County,
242 Md. 55, 69, 217 A.2d 578, 587 (1966).  A statutory violation may, in some instances,
suffice to create an unfairness or arbitrariness in the proceeding that would be of
Constitutional significance, but the Constitutional deficiency would then be in the effect of
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the statutory violation, not in the violation itself.  The Constitutional issue in this case thus
turns on what occurred at the two hearings.
In this regard, our focus is on the three principal complaints made by HRM – the lack
of any rule (1) authorizing the Commission to reconsider its earlier approval of the re-
subdivision, (2) determining who had the burden of proof, and (3) establishing the standard of
proof.
HRM seems to argue that, in the absence of a rule specifically allowing the
Commission to reconsider the earlier approval, it had no authority to do so.  That is not the
case.  We first dealt with that issue in McKinney.  Although our holding there was that the
zoning board had no standing to appeal from the circuit court judgment, and as a result we
dismissed the appeal, we nonetheless found it expedient to address some of the substantive
issues presented in the appeal for the guidance of the board.  One of those issues was whether
the zoning board had the authority to reconsider its earlier denial of the application.  The only
law bearing on that issue was the provision in the ordinance stating that the board may not
consider and approve an application for a permit within two years after rejection of an
application for a similar permit for the same premises.  We framed the issue as follows:
“It may be conceded without discussion that the Board has the
right to correct errors in its decisions caused by fraud, surprise,
mistake or inadvertence, which any agency exercising judicial
functions must have, to adequately perform its duties.  Whether
it has the right to reconsider its decision in a case which it has
heard and decided, reopen the case and try it again, where there is
no fraud, mistake, surprise, or inadvertence, is another question.”
McKinney, supra, 174 Md. at 564, 199 A. at 546.  In the particular case, we concluded that
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there was no basis for reopening the case – no fraud, mistake, surprise, or inadvertence – and,
for that reason, we concluded that the action of the board was beyond its power and therefore
void.  Id. at 566, 199 A. at 547.  Nothing of significance had changed – although the church had
moved from one building to another, it was still within 300 feet of the proposed service
station.
In Kay Const. Co. v. County Council, 227 Md. 479, 485, 177 A.2d 694, 697 (1962),
we construed McKinney as essentially requiring a showing of “good cause” to justify the
reopening of a zoning case by a quasi-judicial zoning agency.  Although we were dealing there
with the reconsideration of a zoning action by the Montgomery County Council, sitting in a
legislative capacity, we found the McKinney precept instructive.  As in McKinney, we found
no basis for the reconsideration, noting that the Council “did not allege that there was any
fraud, surprise, mistake or inadvertence as to the facts which were before it for consideration
at the time of its original deliberation on the request for rezoning, or as to any other factor, or
that any new facts had been developed.”  Id. at 488, 177 A.2d at 699.  See also Md. Clothing
Mfng. v. Baltimore, 207 Md. 165, 113 A.2d 743 (1955); Redding v. Bd. of County Commr’s,
263 Md. 94, 282 A.2d 136 (1971).
Most instructive is Schultze v. Montgomery Co. Bd., 230 Md. 76, 185 A.2d 502
(1962).  The county planning board denied a request to re-subdivide a residential lot on the
sole ground that the new lots would not be of substantially the same character as to suitability
for residential use as other land within the subdivision.  That was a permitted ground under the
zoning law for disapproval.  The applicant sought reconsideration of that ruling, contending that
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the board had permitted the re-subdivision of lots within the same subdivision and even on the
same block.  Eventually, after being advised that the staff had failed to inform the board of the
previous re-subdivisions, the board authorized a resubmission of the subdivision plat and
approved it.  When the applicant submitted a final plan for the two lots, however, several
neighbors protested and, after another hearing, the board reversed itself again and disapproved
the final plan, assigning the same reason it had relied upon in the initial disapproval – that the
lots would not be of the same character as to suitability as other lots in the subdivision.  In an
action for judicial review, the Circuit Court sustained the board’s decision, but we reversed.
Applying McKinney, we concluded that “while the reversal from the original disapproval to
approval of the preliminary plan was based on the existence of mistake or inadvertence, i.e.,
ignorance of information later supplied by an assistant engineer that there had been
resubdivisions in the same block in which is located the property under consideration, the
disapproval of the final plan amounted to a mere change of mind on the part of the board as it
is apparent from the record that it was not founded upon fraud, surprise, mistake or
inadvertence, or indeed upon any new or different factual situation.”  Schultze, 230 Md. at 81,
185 A.2d at 505.
These cases make clear that a statute (or rule) expressly permitting a reconsideration
or setting the standard for reconsideration is not necessary, and that, in the absence of such a
statute, the McKinney analysis applies.  An agency, including a planning commission, not
otherwise constrained, may reconsider an action previously taken and come to a different
conclusion upon a showing that the original action was the product of fraud, surprise, mistake,
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or inadvertence, or that some new or different factual situation exists that justifies the
different conclusion.  What is not permitted is a “mere change of mind” on the part of the
agency.
Although counsel for the Commission attempted to justify the reconsideration here on
the ground of some kind of fraud that was neither civil nor criminal fraud, it is apparent that the
basis of the Commission’s decision was simply its conclusion, founded on substantial
evidence, that it had been misled in 1996 into believing that all existing property owners in the
subdivision had given written consent to the re-subdivision of Recreation Area B, as required
by law, when, in fact, that was not the case.  The substantial allegation of that defect fully
justified the Commission in setting the matter for hearing, to determine, from evidence,
whether a mistake had been made.  Upon a finding that the earlier approval was, in fact, based
on a mistaken belief, induced by the applicant’s representation that proper consents had been
obtained, the Commission was fully justified, under McKinney and its progeny, in rescinding
that approval.
HRM’s complaint about the lack of a rule setting forth who had the burden of proof is
likewise without merit.  It was announced at the commencement of the hearing that the earlier
approval was to be presumed correct and that the Bennetts would have the burden of
establishing otherwise, and that, indeed, was the approach followed.  Apart from the fact that
it was the correct approach, it obviously benefitted HRM, so there was neither error nor harm.
Finally, we turn to the complaint regarding the standard of proof.  Relying largely on
a statement from Santosky v. Kramer, 455 U.S. 745, 757, 102 S. Ct. 1388, 1397, 71 L. Ed.
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2d 599, 609 (1982) that “[s]ince the litigants and the fact finder must know at the outset of a
given proceeding how the risk of error will be allocated, the standard of proof necessarily must
be calibrated in advance,” the Court of Special Appeals concluded that HRM asked about and
was entitled to know at the outset what the standard of proof would be and that “a proceeding
that is conducted without the parties having knowledge of the standard of proof applicable to
the fact finder’s decision-making is not a fair proceeding and does not comport with due
process.”  Although as a general proposition, that is a correct statement, it does not mandate
the result reached by the Court of Special Appeals in this case.
The issue needs to be considered in context.  At the outset of the first hearing, on
October 15, 1997, HRM complained generally about the lack of written rules, noting “we don’t
know what to expect; we don’t know whether you have the authority under the proper state of
irregularity, to come forward tonight to do anything; we don’t know what the procedures are;
we don’t know what the burden of proof is here, is it preponderance of the evidence, is it clear,
convincing evidence – I don’t know, you want an answer?”  Counsel for the Commission
responded, “If you want an answer, it’s the same answer I gave you today.”  We assume that
counsel had reference to the injunction proceeding heard earlier that day in the Circuit Court,
in which, according to counsel for the Bennetts, “the arguments that [HRM] presented were the
same arguments that we presented today, in front of Judge Clagett, as the motion was to
restrain the Commission from acting on this.”  Whether, in fact, the standard of proof was
resolved in the court proceeding is unclear, as the record in that case is not before us, but it
may well be that the issue was resolved in that proceeding.
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As noted, the other procedural uncertainties complained of were resolved at that point
– it was agreed that the Bennetts had the burden of proof and that they would proceed first with
their evidence regarding the lack of consent, subject to cross-examination and rebutting
evidence by HRM.  Indeed, that is the way the matter proceeded.  At the commencement of the
February, 1998 hearing, HRM again complained about the lack of any rules specifying the
standard of proof, to which Commission counsel again retorted that the same issue had been
presented to the court prior to the first hearing.  At the end of the hearing, HRM argued that
the standard had to be clear and convincing evidence, because the burden was on the Bennetts
to overcome a decision that was presumed to be correct, although counsel cited no authority
for that proposition.  As we indicated, the Bennetts urged that, whatever the standard was, they
had met it.  The Commission never ruled upon the matter.  It simply found as a fact that the
required consents had not been obtained, and that was the sole basis for its decision to rescind
the approval.
It is true that there are some factual issues that impinge so directly and significantly on
fundamental rights as to require more than mere preponderance of the evidence to resolve
adversely to the person affected.  See Addington v. Texas, 441 U.S. 418, 99 S. Ct. 1804, 60
L. Ed. 2d 323 (1979) (civil commitment of person to mental institution); Santosky v. Kramer,
supra, 455 U.S. 745, 102 S. Ct. 1388, 71 L. Ed. 2d 599 (termination of parental rights);
Woodby v. Immigration Service, 385 U.S. 276, 87 S. Ct. 483, 17 L. Ed. 2d 362 (1966)
(deportation proceeding); Everett v. Baltimore Gas & Elec., 307 Md. 286, 513 A.2d 882
(1986) (allegations of fraudulent or dishonest conduct).  The standard of proof normally
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applicable in civil and administrative proceedings, however, is the preponderance of evidence.
Bernstein v. Real Estate Comm., 221 Md. 221, 232, 156 A.2d 657, 663 (1959), appeal
dismissed, 363 U.S. 419, 80 S. Ct. 1257, 4 L. Ed. 2d 1515 (1960); Everett v. Baltimore Gas
& Elec., supra, 307 Md. at 301, 513 A.2d at 890.  We see no reason why that general standard
should not apply in this case.  The issue was simply whether the required written consents had
been obtained for the re-subdivision of Recreation Area B.  No fundamental liberty interests
were at stake, and the issue was not really one of fraud, although that word had been mentioned
on several occasions.
We cannot tell from this record what standard the Commission applied.  Even if it
applied the lowest standard, however – that of preponderance of the evidence – it would have
been correct in doing so.  The lack of clarity on that point, therefore, was in no way harmful
to HRM.  There is no indication that it was, in any way, misled or prevented from producing
or challenging evidence that, had the preponderance standard been clearly announced at the
outset, it otherwise would have produced or challenged.  The only defense it had to the
complaint by the Bennetts was to produce evidence that written consents had, in fact, been
obtained, and it was unable to do so.  The Commission had before it the sworn testimony of the
Bennetts and Dickerson that they had not consented, the fact that no consents appeared in the
Commission file, the testimony of Mr. Barrett that he did not personally obtain any consents,
and the testimony of Mr. Jaklitsch that the Commission staff does not check whether all
required consents have been obtained but relies instead on the representations of the applicant.
On that evidence, the Commission’s finding would be readily sustainable whether the standard
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was preponderance or clear and convincing evidence.
JUDGMENT OF COURT OF SPECIAL APPEALS
REVERSED; CASE REMANDED TO THAT COURT
WITH INSTRUCTIONS TO VACATE THE RULING OF
CIRCUIT 
COURT 
FOR 
CALVERT 
COUNTY
DISMISSING THE COMMISSION AS A PARTY BUT TO
OTHERWISE AFFIRM THE JUDGMENT OF THE
CIRCUIT COURT; COSTS IN THIS COURT AND COURT
OF SPECIAL APPEALS TO BE PAID BY HOWLIN
REALTY MANAGEMENT, INC.