Opinion ID: 2049120
Heading Depth: 1
Heading Rank: 18

Heading: Prior Consideration of the Doctrine of Zoning Estoppel in Maryland

Text: In general, Maryland courts have utilized exclusively the doctrine of vested rights in analyzing allegations of local government reneging on prior approvals of land use proposals such as the present one. See, e.g., Rockville Fuel & Feed Co. v. City of Gaithersburg, 266 Md. 117, 124, 291 A.2d 672, 675-76 (1972) (noting that, under the traditional vested rights test, which would have the effect of constitutionally protecting a property owner against subsequent changes in the zoning laws prohibiting or limiting [a particular] use, the owner must (1) obtain a permit or occupancy certificate where required by applicable ordinance and (2) must proceed under that permit or certificate to exercise it on the land involved so that the neighborhood may be advised that the land is being devoted to that use) (quoting Richmond Corp. v. Bd. of County Commr's, 254 Md. 244, 255-56, 255 A.2d 398, 404 (1969)). Although we have not adopted previously the doctrine of zoning estoppel, the principles of equitable estoppel have been considered and applied by both Maryland appellate courts in claims brought against local governments in land use contexts. See Permanent Fin. Corp. v. Montgomery County, 308 Md. 239, 251-53, 518 A.2d 123, 129-130 (1986) (holding that, where a contractor relied on Montgomery County's prior reasonable and debatable interpretation of the statutory phrase nonhabitable structures and constructed its building based on that interpretation and with a valid permit, it would be inequitable for the County Board of Appeals to apply a changed interpretation to require removal of the building's fourth floor); Bd. of County Comm'rs v. East Prince Frederick Corp., 80 Md.App. 78, 88, 559 A.2d 822, 827 (1989) (noting that, in order to demonstrate the reliance element of an equitable estoppel claim against a municipality, the party relying must be misled and change his or her position for the worse, believing and relying on the representations of the party sought to be estopped); Biser v. Town of Bel Air, 991 F.2d 100, 104 (4th Cir.1993) (Under Maryland law, equitable estoppel of a municipal corporation requires (1) an official act taken within the scope of authority; (2) an ambiguous statute or ordinance; and (3) detrimental reliance by a third party.). At least one Maryland case recognized the significant distinction between the law of vested rights and the related but clearly distinct law of zoning estoppel. Town of Sykesville v. West Shore Commc'ns, Inc., 110 Md.App. 300, 330, 677 A.2d 102, 116 (1996). Without adopting the doctrine of zoning estoppel, this Court nonetheless acknowledged a possible definition of the concept. In County Council of Prince George's County v. Offen, 334 Md. 499, 639 A.2d 1070 (1994), we stated in a footnote: Zoning estoppel is a doctrine under which, according to the jurisdictions that have embraced it, a local government will be estopped from exercising its zoning powers over subject property when a property owner, (1) relying in good faith, (2) upon some act or omission of the government, (3) has made such a substantial change in position or incurred such extensive expenses that it would be manifestly unjust to permit the government to destroy the rights of the property owner by subsequent regulation. We have never considered whether the doctrine should be applied in Maryland, and because of the limited scope of review of this case, we need not do so today. Id. at 506 n. 4, 639 A.2d at 1073 (internal citation omitted). In Offen, we held that the Court of Special Appeals abused its discretion in raising, sua sponte, the doctrine of zoning estoppel (then an issue of first impression in Maryland), where it neither had been briefed nor argued in the trial or intermediate appellate court. Id. at 511, 639 A.2d at 1076. Thus, we did not reject for all time the doctrine of zoning estoppel in Maryland; rather, we stated that reaching a decision on its merits was inappropriate in the procedural posture of that case. One year after Offen, the Court of Special Appeals attempted to resuscitate the doctrine of zoning estoppel as part of Maryland's land use law. In Relay Improvement Assoc. v. Sycamore Realty Co., 105 Md.App. 701, 661 A.2d 182 (1995), the intermediate appellate court held that the doctrine of zoning estoppel is applicable in Maryland and adopted a narrow version of the zoning estoppel doctrine ... best... understood as a `bad faith' exception to the vested rights rule. Id. at 716, 721, 661 A.2d at 189, 192. In articulating its conceptualization of the doctrine, the court held that a zoning estoppel may not be found unless (1) the local government acts, or fails to act, in an arbitrary and unreasonable manner, (2) with deliberate intent to delay construction, and (3) the conduct at issue is the primary and proximate cause of the landowner's inability to vest his or her rights before a change in zoning occurs. Id. at 736, 661 A.2d at 199. Regarding the first two elements, the panel noted that the fact finder must conclude that the actor omissions of government officials were deliberately calculated `to deny a property owner his [or her] right to use this land in a currently lawful manner.' Id. (quoting Pokoik v. Silsdorf, 40 N.Y.2d 769, 390 N.Y.S.2d 49, 358 N.E.2d 874, 876 (1976)). In explaining its decision to adopt this particular rationale in Sycamore Realty, the intermediate appellate court posited that Heeter's definition of zoning estoppel conflicted with Maryland's stringent vested rights rule, which provides that a landowner may rely on nothing less than a properly-issued permit, and that a substantial change in circumstances will not be found unless the landowner begins actual, above-ground construction. Id. at 725, 661 A.2d at 194. The court, however, also observed that strict application of the vested rights rule may sometimes be unjust or unreasonable. Id. at 727, 661 A.2d at 194. Thus, the court explained it would adopt, as a supplement to the vested rights doctrine, a narrow zoning estoppel doctrine which would focus not on the landowner's good faith reliance, but on the government's arbitrary and unreasonable conduct, as well as the causal relationship between the government's conduct and the landowner's inability to proceed to actual construction. Id. Regretfully, in my judgment, this Court reversed, rejecting the narrow theory of zoning estoppel announced by the Court of Special Appeals. See Sycamore Realty Co., Inc. v. People's Counsel of Baltimore County, 344 Md. 57, 684 A.2d 1331 (1996). The Court noted that [a]ny decision whether we should enunciate some, still narrower theory of zoning estoppel need not be decided in the instant case. Id. at 63, 684 A.2d at 1334. We stated that we, like all of the other courts that have declined to adopt zoning estoppel `recognize a legal defense cast in terms of whether the property owner acquired `vested rights' to use his land without governmental interference.' Id. at 66-67, 684 A.2d at 1336 (quoting Heeter, supra, at 64). The zoning estoppel rule announced by the Court of Special Appeals, despite being narrower than the broader definition posited by Heeter, was not compatible, in the Court's opinion, with Maryland's vested rights rule. Id. at 69, 684 A.2d at 1337. The door was left ajar, however, for future consideration of zoning estoppel when we stated that [w]hile there may be some, still narrower theory of zoning estoppel that may be compatible with our vested rights rule, we need not decide that issue today because the facts in this case do not raise any form of zoning estoppel that this Court would recognize. Id. In the next most recent consideration before the present one by a Maryland court of a zoning estoppel argument, the Court of Special Appeals (perhaps dis-spirited by this Court's earlier rebuffs) noted simply, in a footnote, that zoning estoppel is not recognized in Maryland. P Overlook, LLLP v. Board of County Comm'rs, 183 Md.App. 233, 255 n. 4, 960 A.2d 1241, 1253 (2008). Rather, the court found, citing our decision in Sycamore Realty, that Maryland courts analyze such issues in terms of vested rights, not zoning estoppel. P Overlook, 183 Md.App. at 255 n. 4, 960 A.2d at 1253. The court nonetheless noted the earlier possible definition of zoning estoppel in Offen when it observed that: [u]nder the doctrine of zoning estoppel, a local government, acting in a governmental capacity, will be estopped to exercise its zoning powers over property when the property owner relied in good faith upon an act or omission of the local government and made `such a substantial change in position or incurred such extensive expenses that it would be manifestly unjust to permit the government to destroy the rights of the property owners by subsequent regulation.' Id. (quoting Offen, 334 Md. at 505 n. 4, 639 A.2d at 1073).