Opinion ID: 2363004
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: In this case we are called upon to determine whether the trial judge properly granted summary judgment on behalf of River Walk. The entry of summary judgment is governed by Maryland Rule 2-501, which provides in pertinent part that: (f) Entry of judgment. The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law. Maryland Rule 2-501(f). The question of whether the trial court properly granted summary judgment is a question of law and is subject to de novo review on appeal. Standard Fire Ins. Co. v. Berrett, 395 Md. 439, ___, 910 A.2d 1072, ___ (2006); Miller v. Bay City Prop. Owners Ass'n, Inc., 393 Md. 620, 632, 903 A.2d 938, 945 (2006), quoting Myers v. Kayhoe, 391 Md. 188, 203, 892 A.2d 520, 529 (2006); Ross v. State Bd. of Elections, 387 Md. 649, 658, 876 A.2d 692, 697 (2005); Todd v. MTA, 373 Md. 149, 154, 816 A.2d 930, 933 (2003); Beyer v. Morgan State Univ., 369 Md. 335, 359, 800 A.2d 707, 721 (2002). If no material facts are in dispute, we must determine whether summary judgment was correctly entered as a matter of law. Standard Fire Ins. Co., 395 Md. at ___, 910 A.2d at ___; Ross, 387 Md. at 659, 876 A.2d at 698; Todd, 373 Md. at 155, 816 A.2d at 933; Beyer, 369 Md. at 360, 800 A.2d at 721. On appeal from an order entering summary judgment, we review only the grounds upon which the trial court relied in granting summary judgment. Standard Fire, 395 Md. at 450, 910 A.2d at 910 A.2d at 1079; Ross, 387 Md. at 659, 876 A.2d at 698, quoting Eid v. Duke, 373 Md. 2, 10, 816 A.2d 844, 849 (2003), quoting in turn Lovelace v. Anderson, 366 Md. 690, 695, 785 A.2d 726, 729 (2001). In the case before us, River Walks seeks the enforcement of both the November and the Deferral Agreements, entered into by different Mayors. Both Agreements obliged the Property Owners' successors to convey certain rights-of-way to the City in exchange for the creation of a special assessment fee provision, which allowed River Walk to obtain all necessary shell construction permits from the City for a fee of $1.00 per square foot of each shell to be constructed, instead of any impact fees. River Walk asserts that the November and the Deferral Agreements constituted the purchase of necessary rights-of-way necessary for the completion of an existing public ways project, specifically, Phase III of the Monocacy Boulevard Project. River Walk contends that, because these Agreements represented nothing more than the implementation of an already authorized and existing public project, they constituted executive, not legislative, actions, which the Mayor, as the chief executive officer of the City, possessed the requisite authority to do on behalf of the City and cites Eggert v. Montgomery County Council, 263 Md. 243, 259, 282 A.2d 474, 482 (1971) (stating that an executive action is one which merely looks to or facilitates the administration, execution or implementation of a law already in force and effect) (emphasis added), quoting Scull v. Montgomery Citizens League, 249 Md. 271, 282, 239 A.2d 92, 98 (1968), and Queen Anne's Conservation, Inc. v. County Commissioners of Queen Anne's County, 382 Md. 306, 321, 855 A.2d 325, 334 (2004) (stating that the negotiation of contracts on behalf of a local government body constitutes a discretionary, executive action), for authority. Therefore, River Walks posits, the Agreements should be enforced. Contrary to River Walk's assertions, the gravamen of this case is not whether the Mayor had the power to purchase land, establish necessary rights-of-way, or even enter into contracts on behalf of the City. The gravamen of this case is whether the two Mayors had the requisite authority to create special assessment fees on behalf of the City and to waive impact fees. The City of Frederick is a municipality, incorporated in 1816 pursuant to Chapter 74 of the Acts of 1816. Municipalities possess only such powers as have been conferred upon them by the Legislature. Jewel Tea Co. v. Town of Bel Air, 172 Md. 536, 539, 192 A. 417, 418 (1937). This Court explicated as early as 1872 in Mayor and Council of Hagerstown v. Sehner, 37 Md. 180 (1872), that municipalities are: public corporations created by the Legislature for political purposes, with political powers, to be exercised for purposes connected with the public good, in the administration of civil government. They are instruments of government subject at all times to the control of the Legislature with respect to their duration, powers, rights and property. It is of the essence of such a corporation, that the government has the sole right as trustee of the public interest, at its own good will and pleasure, to inspect, regulate, control and direct the corporation, its funds and franchises. These are the unquestioned general doctrines on this subject, sustained by all the authorities. Id. at 193 (emphasis added). Possessing no inherent powers, municipalities, therefore, are limited to exercising only those expressly granted by the Legislature, those necessarily or fairly implied in or incident to the powers expressly granted, and those powers essential or indispensable to the accomplishment of the declared objects and purposes of the corporation. Hardy v. Housing Mgmt. Co., 293 Md. 394, 396-97, 444 A.2d 457, 458 (1982); Barlow v. Friendship Heights Citizens' Comm., 276 Md. 89, 93, 344 A.2d 415, 417 (1975); City of New Carrollton v. Belsinger Signs, Inc., 266 Md. 229, 237, 292 A.2d 648 (1972); McRobie v. Mayor and Comr's of Westernport, 260 Md. 464, 466, 272 A.2d 655, 656 (1971). The municipal power implicated in this case is the power to impose and waive impact fees. Article 14 of the Maryland Declaration of Rights states that no aid, charge, tax, burthen or fees ought to be rated or levied, under any pretense, without the consent of the Legislature. Maryland Declaration of Rights, Article 14. Section 5 of Article XI-E of the Maryland Constitution grants the General Assembly the power to authorize municipalities to levy taxes and fees: No such municipal corporation shall levy any type of tax, license fee, franchise tax or fee which was not in effect in such municipal corporation on January 1, 1954, unless it shall receive the express authorization of the General Assembly for such purpose, by a general law which in its terms and its effect applies alike to all municipal corporations in one or more of the classes provided for in Section 2 of this Article. Maryland Constitution, Section 5 of Article XI-E (emphasis added). Thus, a municipality may levy only such type of tax, license fee, franchise tax or fee that is specifically authorized by the General Assembly. Tidewater/Havre de Grace, Inc. v. Mayor and City Council of Havre de Grace, 337 Md. 338, 343, 653 A.2d 468, 471 (1995) (emphasis added). See also Campbell v. Mayor & Aldermen of City of Annapolis, 289 Md. 300, 305, 424 A.2d 738, 741 (1981). The General Assembly, pursuant to Article 23A of the Maryland Code (1957, 2001 Repl.Vol.), [11] delegated to the legislative bodies of municipalities the general authority to establish and collect reasonable fees and charges; the relevant portions of Section 2 of Article 23A are: (a) General authority. The legislative body of every incorporated municipality in this State, except Baltimore City, by whatever name known, shall have general power to pass such ordinances not contrary to the Constitution of Maryland, public general law, or, except as provided in § 2B of this article, public local law as they may deem necessary in order to assure the good government of the municipality, to protect and preserve the municipality's rights, property, and privileges, to preserve peace and good order, to secure persons and property from danger and destruction, and to protect the health, comfort and convenience of the citizens of the municipality. . . . (b) Express powers. In addition to, but not in substitution of, the powers which have been, or may hereafter be, granted to it, such legislative body also shall have the following express ordinance-making powers:    (5) To make reasonable regulations concerning buildings and signs to be erected within the limits of the municipality, including a building code and the requirement for building permits.    (33) Subject to the limitations imposed under Article 24 of the Code, the Tax General Article, and the TaxProperty Article, to establish and collect reasonable fees and charges; (i) For the franchises, licenses, or permits authorized by law to be granted by a municipal corporation; or (ii) Associated with the exercise of any governmental or proprietary function authorized by law to be exercised by a municipal corporation. Article 23A Section 2 (emphasis added). We recently held in J.P. Delphey Ltd. P'ship v. Mayor and City of Frederick, 396 Md. 180, 913 A.2d 28 (2006) (filed Dec. 14, 2006) (Delphey), that the express powers enumerated in Section 2 of Article 23A of the Maryland Code were conferred upon the legislative body of the municipalities, which in the City of Frederick is the Aldermen, pursuant to Section 7 of Article II of the City of Frederick Charter. In Delphey, a private company challenged the condemnation of its property by the City of Frederick on the ground that the City had failed to enact an ordinance specific to the property authorizing the condemnation. We concluded in Delphey that: The plain language of Section 2(b) confers the power of condemnation on the legislative body of the municipality. Section 7 of Article 2 of the City of Frederick Charter vests [a]ll legislative powers of the city in the Aldermen, and Section 173 of Article Fourteen of the Charter also authorizes the Aldermen to: condemn any property, right, or interest belonging to any person, persons, corporation, or corporations for the purpose of making any public improvement. Thus, pursuant to the express grant of authority of Section 2(b)(24) of Article 23A and Section 173 of the City of Frederick Charter, the Aldermen, acting in their legislative capacity, possessed the requisite authority to condemn the Delphey property specifically when they so voted in the November 6 closed, executive session. Id. at 35. Thus, the delegation of the express powers enumerated in Section 2(b) of Article 23A is to the Aldermen of the City of Frederick. We held in Eastern Diversified Properties, Inc. v. Montgomery County, 319 Md. 45, 570 A.2d 850 (1990) (Eastern Diversified), that impact fees constitute taxes. In Eastern Diversified, a developer contested Montgomery County's imposition of impact fees as a prerequisite for obtaining building permits. We noted that a distinction exists between the imposition of fees and the imposition of taxes, and that, in making that distinction, `the purpose of the enactment governs rather than the legislative label.' Id. at 53, 570 A.2d at 854. We explicated that a fee is typically part of a regulatory measure, whereas a tax is an `enforced contribution to provide for the support of [the] government.' Id. at 52, 54, 570 A.2d at 854, quoting United States v. LaFranca, 282 U.S. 568, 572, 51 S.Ct. 278, 280, 75 L.Ed. 551, 555 (1931). Noting that the stated purpose for the impact fees established by Montgomery County was to ensure that new development in certain impact fee areas . . . pay their pro rata share of the costs of impact highway improvements necessitated by such new development, we determined that the characteristics of the development impact fee scheme as set forth [in the Montgomery County Code] are indicative of a tax rather than a regulatory fee. Id. at 54, 570 A.2d at 854, 855. In the case sub judice, pursuant to the delegation of legislative power to municipalities enumerated in Article XI-E of the Maryland Constitution and Article 23A of the Maryland Code, Section 166-A of Article XIII of The City of Frederick Charter provides: Powers of city generally. The City of Frederick shall have the power to levy and collect taxes in the form of special assessments upon property in a limited and determinable area for special benefits conferred upon such property by the construction or installation of water mains, sewer mains, public ways, sidewalks, curbs, gutters, and storm water sewers, and to provide for the payment of all or any part of the above projects out of the proceeds of such special assessment. City of Frederick Charter, Article XIII, Section 166-A. Exercising the power enumerated in Section 166-A, the Aldermen of the City of Frederick passed Ordinance G-02-19, § 1, which imposes impact fees in the City of Frederick for the stated purpose of requir[ing] that new residential, commercial, institutional and industrial development pay for its appropriate share of capital improvements to the City's water and sewer treatment and distribution systems. Under our cases, these fees, imposed to raise revenue for the City, may be created only by legislative act and therefore, by implication, may be waived only by legislative act. Thus, neither Mayor Grimes nor Mayor Dougherty possessed the requisite authority to levy the special fee created in the November and the Deferral Agreements, or to waive the impact fees created by Ordinance G-02-19, § 1. River Walk maintains, however, that even if only the legislative body has the power to impose fees and also waive fees, that the City of Frederick is bound by the contract, citing Montgomery County v. Revere National Corp., 341 Md. 366, 671 A.2d 1 (1996), City of Greenbelt v. Bresler, 248 Md. 210, 236 A.2d 1 (1967), Cohen v. Baltimore County, 229 Md. 519, 185 A.2d 185 (1962), and Board of County Commissioners of Harford County v. MacPhail, 214 Md. 192, 133 A.2d 96 (1957), for support. We disagree; none of these cases implicate actions that were ultra vires on the part of the municipality or the agent acting on the municipality's behalf. A municipality is not bound by those actions which transcend its authority and the authority of those allegedly acting on its behalf; those actions are ultra vires. As early as 1869, this Court clarified in Horn v. City of Baltimore, 30 Md. 218 (1869), that actions taken by the Mayor transcending his or her authority are ultra vires and therefore, not binding on the municipality. We explicated in Horn that: These persons thus selected [to be Mayor] become the agents and representatives of the [municipality]. As such they are entrusted with certain powers, which are specially defined and limited, and which can be exercised by them in the manner and form only prescribed by law. To the extent alone of these powers, can they bind their principal, and so long as they keep within them, the corporation is responsible for their acts. But whenever they transcend them, their acts, although done colore officii, and upon pretense of law, are no more binding upon the [municipality] than the acts of an agent in any other case can bind his principal, when done beyond the scope of the authority conferred. Id. at 222. We therefore held that acts undertaken by an agent of a municipality, including the Mayor, if not properly authorized, are  ultra vires  and therefore invalid. Id. at 224. We iterated again in Inlet Associates v. Assateague House Condominium Ass'n, 313 Md. 413, 545 A.2d 1296 (1988) (Inlet), that contracts entered into by municipalities without proper authorization are ultra vires and unenforceable. We held in Inlet that a resolution passed by the Ocean City Council by which the City was to convey twenty-five feet of a city street and its appurtenant riparian rights to Inlet, a private corporation, in exchange for Inlet's agreement to develop and maintain the property, was ultra vires because it did not comply with the requirements of Article 23A and the Ocean City Charter for an ordinance, conveying City property. Id. at 433-34, 545 A.2d at 1306. We emphasized in Inlet that the conveyance of the City's interest in the [property] solely for the private benefit of another, is not within the legislative body's power, and went on to state that both the Ocean City Charter and Section 2(b)(24) of Article 23A required that the Ocean City Council affirmatively make a determination that there is no longer any public need for the street before undertaking the conveyance, and that the Council's actions failed to comply with this requirement. Id. at 431, 545 A.2d at 1305. The Court also stated that a legislative act conveying property was required to be signed by the Mayor or passed over the Mayor's veto, and that the City Council's actions failed to meet this requirement. Id. at 433-34, 545 A.2d at 1306. The Inlet opinion concluded that: Considering the central involvement of South Division Street and the waters of the bay in Inlet's proposal, and the magnitude of the property interests involved (City property of estimated value approximating one million dollars), a simple resolution, neither reduced to writing nor journalized as required by the City Charter, cannot suffice to validate the City's actions. An ordinance was thus fundamental to the legality of the conveyances here in question; without it, the City Council's action was without legal effect. Id. (emphasis added). In the case before us, neither the Mayor who signed the November Agreement, nor the Mayor who signed the Deferral Agreement, possessed the requisite authority to create a special fee or to waive impact fees; these actions required legislative authorization, which was never obtained, so we hold that both are ultra vires and unenforceable. [12] JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED WITH COSTS. Consistent with their positions in Delphey, 396 Md. 180, 913 A.2d 28 (2006), Judges CATHELL and HARRELL join in the judgment only.