Opinion ID: 1995280
Heading Depth: 1
Heading Rank: 4

Heading: (b) Contract Is Unreasonable

Text: In my opinion, the purported contract of January 15, 1962 was also unconstitutional as a denial of due process of law contrary to the Fourteenth Amendment to the Constitution of the United States and Article 23 of the Declaration of Rights of the Maryland Constitution, as being unreasonable and as resulting from arbitrary and capricious action on the part of the officials of Rockville. The owner was required by the contract to purchase three acres of land owned by the Woodmont Country Club and devote it permanently to recreational use. This land is not contiguous to the 3.55 acre tract to be annexed. In the event Brookeville failed to acquire the three acres by July 1, 1962, it agreed to pay the City $10,000 ($15,000 was originally sought) in four installments, the first installment being payable on July 1, 1962, the $10,000 to be used by the City for the purpose of acquiring and developing additional public recreational area. It will be noted that the location of the additional public recreational area is not specified in the contract so that such an area could be purchased by the City at any location without regard to the 3.55 acres to be annexed. The memorandum of December 18, 1961, from the City Manager to the Mayor and Council set out in the majority opinion indicates that the $10,000 fund was to acquire by purchase or condemnation the three acres to have been purchased by Brookeville but the contract does not so provide. In addition, Brookeville was required by the contract to convey to Rockville 22,534 square feet for the proposed realignment of the City street known as West Edmonston Drive. West Edmonston Drive is not in or even contiguous to the 3.55 acres annexed. The testimony indicated that this land was valued at two dollars a square foot, a total valuation of $45,068. The price to Brookeville under the contract to induce Rockville to act to annex the 3.55 acre tract was $55,068. The testimony indicated that the cost of the entire tract of 19.05 acres (15.5 acres in Rockville and 3.55 acres outside Rockville) was purchased for approximately $450,000 by Brookeville. This is a per acre price of approximately $23,600 so that on this basis the cost of the 3.55 acre tract of land was approximately $83,780. The price of getting Rockville to act on the annexation was $55,068 or approximately 65% of the original cost of the land. I consider this grossly unreasonable and in effect confiscatory. It should be kept in mind that the sewer and water utilities to which the improvements on the 3.55 acre tract would ultimately connect had been installed at the expense of Brookeville. Under the contract Brookeville would pay Rockville approximately $15,510 an acre to act to annex 3.55 acres to the municipality. This is unreasonable on its face. (Compare this enormous demand with the 8% provision in the ordinance involved in Kitty Hawk ). If the 3.55 acre tract to be annexed were directly affected by the three acre tract or the realignment of West Edmonston Drive or if they were contiguous to the 3.55 acre tract it might possibly be argued  apart from the unreasonable price  that such provisions were reasonable, but, in my opinion, under the facts in this case such provisions were utterly unreasonable and deny Brookeville due process of law. The actions of the officials of Rockville, moreover, were arbitrary and capricious. Rockville zoned the 15.5 acres of the 19.05 tract located within the municipality R-20 (from the existing heavy commercial zoning of C-2) on January 19, 1960, without any conditions. Mayor Greene said it was good zoning as did neighboring citizens. The city officials knew that Brookeville had planned the entire 19.05 tract for apartment development as a total plan for 412 to 421 apartment units and that it proceeded to erect apartments on the 15.5 acre portion of the tract rezoned to R-20. By the end of 1961 Brookeville had constructed 314 apartment units on the 15.5 parcel. Parking, sewer, water, utilities and all things necessary for the total development of the whole 19.05 acre tract were installed. The City officials also knew that Brookeville could only connect sewer and water facilities in the 3.55 acre tract through Rockville. The original site plan for the development of the 19.05 acres was approved by the Rockville Planning Commission and zoning of R-20 for the 3.55 acre tract was recommended in the Master Plan Report of the City of Rockville Planning Commission dated in September 1960. Brookeville filed simultaneous, but separate, petitions for annexation and rezoning of the 3.55 acre tract on November 16, 1960. The annexation resolution and the rezoning application were scheduled for hearing on January 16, 1961 before the City Council. Just four days before the hearing, the Planning Commission of Rockville, on January 12, 1961 by a four to one vote recommended that the 3.55 acre tract be zoned R-S (Suburban Residential instead of R-20 previously recommended) until the City of Rockville has had an opportunity to investigate whether there is a need to locate a playground on a portion of the subject tract which would serve the immediate area. In this same recommendation, the Planning Commission notes with concern that no provision had been made to provide a playground for occupants of the existing and proposed apartments (approximately 410 units) in the area bounded by Rockville Pike on the east, commercial development on the south, Woodmont Country Club on the west and West Edmonston Drive on the north. The recommendation then states: It is the view of the Commission that consideration should be given by the Mayor and Council regarding the need for, and the acquisition of, approximately two (2) acres in size to serve this area, prior to giving the subject tract a permanent zone classification. (Emphasis supplied). At the January 16, 1961 hearing on the annexation resolution, at which the Director of Planning, Mr. Watts, was present, there was no suggestion that there should be any condition or contract in regard to the annexation. No one spoke in opposition to the annexation. The only testimony given before the City Council of Rockville was that of Mr. Clark, a representative of Brookeville. The annexation hearing was concluded and thereafter a separate hearing on the application to rezone the 3.55 acre tract from C-2 to R-A was held. Mr. Clark presented the case for the applicant, Brookeville. He pointed out that the whole 19.05 acre tract had been planned as a single development and that the Planning Commission of Rockville had approved the site plan and grading plan, the utilities plan, for the Courthouse Square Apartment project; that site plan did make, at the time it was approved, the layout for several apartment buildings which were planned to be placed on this 3.55-acre parcel. A copy of a map appearing in the Master Plan Report of the City of Rockville dated in September 1960, entitled Proposed Land Use was introduced into evidence and showed that the 3.55 acre tract had been recommended for R-20 apartment use. Mr. Clark pointed out that the Planning Commission had recommended temporary R-S zoning until the City had an opportunity to study recreational needs for the area. Both he and Mr. Collins testified in regard to the recreational facilities which had been installed in the project which amounted in area to approximately 11% of the land area in the project. Mr. Clark concluded his testimony with the following statement: In view of the integral plans of the developer to put all of this together, we would like to have you give it your early and favorable consideration, and annex it to the city, rezoning it to the R-20 zoning classification. No one testified in opposition to the proposed rezoning. Mr. Gingery, president of Brookeville, pointed out to the City Council the substantial economic loss which would occur if the rezoning of the 3.55 acre tract were delayed but stated    it is entirely within your power just to let it sit. I am, in a way, helpless to do anything about it. The City Council did, indeed, let it sit. When no action had been taken on the rezoning ordinance, Mr. Gingery became quite alarmed. The delay was causing him grave economic loss and a failure to pass the rezoning ordinance would result in economic ruin for his company. In July 1961, some seven months after the rezoning hearing, Mr. Gingery had lunch with Mayor Greene and explained his plight. The Mayor suggested the City Council would not take action on the annexation resolution and the rezoning ordinance unless two acres were taken out of the project for recreational facilities in addition to those already installed in the project. Further delay, further conferences with City officials and Council members finally resulted in the contract of January 15, 1962. Mayor Greene testified that the standard used to demand the three acres was that established by the National Association of Recreation which uses one acre per hundred people. The Report of the National Association of Recreation is not in the record. There was no showing that this was an official publication of any department or agency of the federal government. [4] There was no showing that even this national standard would justify the request for three acres (the Planning Commission only recommended two acres) and it does not purport to justify a demand for 22,534 square feet for the relocation of a highway. In my opinion, the actions of the City officials as above described were arbitrary and capricious. There was no evidence before the City Council at either the annexation or rezoning hearings which would justify the failure to act for a one year period. The last-minute action by the Planning Commission  four days before the hearings  to recommend a temporary zoning of R-S was contrary to the prior approval by the Planning Commission of R-20 for the entire 19.05 acre tract, including the 3.55 acre tract. The Planning Commission knew that Brookeville had proceeded with the development in the 15.5 acre part of the tract in reliance on that prior approval. There is no provision of the Zoning Enabling Act providing for temporary zoning. It can only be concluded that this action by the Planning Commission was an invitation to the City Council to delay action on the rezoning application in order to extract two acres of land from Brookeville for additional recreational purposes. This invitation was obviously accepted and indeed, the two acres recommended by the Planning Commission was increased to three acres and the additional demand for the 22,534 square feet for the realignment of West Edmonston Drive was added. As mentioned earlier, sec. 19(e) of Article 23A requires the legislative body to enact the annexation resolution in accordance with the usual requirements and practices applicable to its legislative enactments. Surely the actions  and failure to act  of the City Council were most extraordinary and unusual and contrary to the usual practice in legislative enactments. Those actions, lacking justification in law, were both contrary to the statute and by the facts arbitrary and capricious. Courts should not permit such bureaucratic excesses. See generally McQuillin, Municipal Corporations, secs. 10.27-10.29, 10.37.