Court Opinion

ID: 4247059
Source: CourtListenerOpinion
Date Created: 2018-02-21 20:12:28.990696+00
Date Added: 2024-06-11T07:48:08.748682
License: Public Domain

Precision Small Engines, Inc. et al. v. City College Park et al., No. 43, September Term
2017. Opinion by Hotten, J.

ZONING – COUNTY AUTHORITY – DELEGATION OF POWER – Pursuant to
Land Use Article § 22-104, the District Council for Prince George’s County has authority
to adopt zoning laws within the County. Further, pursuant to Land Use Article § 22-119,
a municipality within Prince George’s County has concurrent jurisdiction with the County
to enforce zoning laws within the bounds of the municipality. However, before a
municipality can exercise concurrent authority, the County and municipality must enter
into an agreement outlining the parameters of the municipality’s enforcement authority.

ZONING – MUNICIPAL AUTHORITY – RETENTION OF POWER – Separate and
distinct from the concurrent zoning authority permitted by Land Use Article § 22-119, the
City of College Park possesses the authority to enact zoning regulations. Local
Government Article § 5-211 authorizes the City of College Park to enact regulations
governing the erection of buildings and the authority to enact a building code and
regulations governing occupancy and use permits. This authority is unmodified by the
exercise of concurrent jurisdiction provided under Land Use Article § 22-119.

CONTRACTS – INTERPRETATION – MEMORANDUM OF UNDERSTANDING
– A memorandum of understanding operates as a contract between a County and local
Municipality. Maryland Courts apply an objective theory of contract interpretation. Under
this doctrine, Maryland Courts will seek to interpret a contract using the plain language of
the agreement. If the language is unambiguous, the Court will apply the agreement
consistent with the parties’ intent. Therefore, absent evidence to the contrary, Maryland
Courts will apply the plain language of the agreement.
Circuit Court for Prince George’s County
Case No. CAL14-32376
Argued: December 5, 2017                       IN THE COURT OF APPEALS

                                                     OF MARYLAND

                                                           No. 43

                                                   September Term, 2017

                                           __________________________________

                                            PRECISION SMALL ENGINES, INC.
                                                       ET AL.
                                                                 v.
                                             CITY OF COLLEGE PARK ET AL.
                                           __________________________________

                                                Barbera, C.J.,
                                                Greene,
                                                Adkins,
                                                McDonald,
                                                Watts,
                                                Hotten,
                                                Getty,

                                                           JJ.
                                           __________________________________

                                                   Opinion by Hotten, J.
                                           __________________________________

                                                Filed: February 21, 2018
      We must consider the interplay between the enumerated zoning authority granted to

Prince George’s County (“the County”), the extent of the authority of the City of College

Park (“the City”) as a municipality within the County, and the rights and authorities

reflected in an agreement entered into between the County and the City pursuant to Md.

Code (Repl. Vol. 2012) § 22-119 of the Land Use Article (“Land Use”). The parties to this

appeal are Precision Small Engines (“PSE”), a tenant to the property at 9651 Baltimore

Avenue, College Park, and the owners of the property, Gregory Hnarakis and Thomas

Stokes (collectively “Petitioners”), and the County and the City (collectively

“Respondents”). The parties contest the County’s zoning authority, outlined in Prince

George’s County Code §§ 27-253, 4-352(a), and the City’s authority under Maryland Code

(Repl. Vol. 2013) 5-211 of the Local Government Article (“Local Gov’t”). We must

determine whether the Memorandum of Understanding (“MOU”) between the County and

the City altered the City’s authority to enforce zoning violations within the limits of its

municipality. For reasons to be explained, we hold that the MOU does not alter the City’s

authority, and that the MOU permitted the City to require additional permits under the City

Building Code. Accordingly, we shall affirm the judgment of the Court of Special Appeals.

                                      Background
      Petitioners initially challenged citations issued by the City in the District Court of

Maryland sitting in Prince George’s County. PSE and other occupants of shared property

received citations after failing to obtain required City permits. PSE challenged its fines,

arguing that portions of the MOU prohibited the City from issuing any occupancy and

building permits, including permits authorized under the City Code. On this basis, some,
but not all, of the fines were dismissed. Hnarakis employed the same argument, but it was

not successful.

       On December 1, 2014, while the disputes were still pending before the District Court

for Prince George’s County, Petitioners filed an action for declaratory judgment in the

Circuit Court for Prince George’s County. Petitioners sought a declaration that the terms

of the MOU restricted the City from requiring City non-residential occupancy or building

permits where occupants previously obtained use and occupancy, or building permits, from

the County. Respondents filed a Motion for Summary Judgment on December 4, 2015.

On February 18, 2016, the circuit court held a hearing.

       In a Memorandum Opinion and Order, issued May 24, 2016, the circuit court

decided that the MOU restricted the City from requiring owners or occupants of non-

residential properties within the municipal corporate limits to obtain non-residential

occupancy permits issued by the City, where such persons have obtained County use and

occupancy permits. The court also determined that the MOU restricted the City from

requiring owners or occupants of non-residential property within the municipal corporate

limits to obtain building, grading, or other construction permits from the City, where

persons have obtained permits from the Department of Permits, Inspection, and

Enforcement. The circuit court opined that the City’s and County’s permits virtually serve

the same purpose, and the only difference between the permits is that the City permit must

be renewed annually after re-inspection, whereas the County permit is issued upon changes

in property use or occupancy. However, the circuit court held that the City could exercise

                                            2
its police powers for the purpose of health, safety, and welfare, including annual

inspections, and any other purpose not specifically addressed in the Order.

           Respondents noted a timely appeal to the Court of Special Appeals. The Court of

Special Appeals issued a reported opinion on June 6, 2017, reversing the circuit court’s

decision. The court reasoned that the plain language of the MOU clearly dictated that the

City did not give up any of its power to adopt and enforce its own building code, or its own

health, safety, and welfare regulations. City of Coll. Park v. Precision Small Engines, 233
Md. App. 74, 87, 161 A.3d 728, 735, cert. granted sub nom. Precision Small Engines v.

Coll. Park, 456 Md. 57, 170 A.3d 292 (2017). The intermediate appellate court reasoned

that the circuit court’s ruling deviated from the MOU’s plain language, and projected an

interpretation outside of the parties’ intention. Id.

       Petitioners now request that this Court determine whether the Court of Special

Appeals erred in declaring that the MOU does not restrict the authority of the City to issue

non-residential building and occupancy permits.1 We determine that the Court of Special

Appeals properly concluded that the MOU does not limit the City’s power to enact

additional ordinances. The City is granted enactment power pursuant to several statutes,

including Local Gov’t § 5-211. Under these statutes, the City may enact regulations that

       1
        Petitioners sought this Court’s review of the following question: Did the Court of
Special Appeals err in reversing the decision of the circuit court granting summary
judgment in favor of Petitioners, and declaring that the memorandum of understanding
between the City and the County restricts the authority of the City to issue non-residential
building and occupancy permits?
                                               3
control the issuance of permits. The MOU only controls power that the County delegated

to the City, not power that originates from other sources of law.

                              Sources of Zoning Authority
       Under Land Use § 22-104, the County Council for Prince George’s County, sitting

as the District Council, may adopt and amend the County’s zoning laws. A zoning law

under Land Use § 14-101(q)(1)(2) is defined as, “the legislative implementation of

regulations for zoning by a local jurisdiction [and] includes a zoning ordinance, zoning

regulation, zoning code, and any similar legislative action to implement zoning controls in

a local jurisdiction.” Pursuant to that power, the County adopted Subtitle 27 of the Prince

George’s County Code, which regulates all zoning matters, including use and occupancy

permits. County Code § 27-253 provides that:

       (a) None of the following activities shall take place unless a use and
           occupancy permit certifying compliance with this Subtitle has been
           issued for the activity by the Building Inspector:
           (1) Use of a building, structure, or land;
           (2) Conversion of a building, structure, or land from one use to another
               use;
           (3) Medical practitioner’s, insurance sales, and real estate sales offices;
           (4) Conversion of a one-family detached dwelling to include additional
               dwelling units (by Special Exception).
       (b) Use and occupancy permits shall not be required for the following:
           (1) One-family dwelling (other than a new one-family dwelling) used for
               a single family;
           (2) Agricultural uses;
           (3) Accessory uses (except where a specific use is allowed as accessory
               to another use); or
           (4) Home occupations for which no permit is specifically required, unless
               requested by the applicant.
       (c) All use of the property shall be in conformance with the use and
           occupancy permit, including the accompanying plans.

                                             4
(d) When an occupant vacates premises, and a different occupant assumes
    possession of such premises, the new occupant is required to obtain a use
    and occupancy permit, regardless of whether the use has changed.
(e) No use and occupancy permit shall be issued by the Department of
    Permitting, Inspections, and Enforcement until after the expiration of the
    specified appeal period from a Planning Board decision concerning the
    subject property of the permit, unless the right of appeal has been waived;
    nor shall any permit be issued during the pendency of any appeal to, or
    review by, the District Council.
(f) The Chief of Police and the Fire Chief are authorized to direct the Police
    Department and the Fire/Emergency Medical Services Department
    respectively, to take all immediate reasonable and necessary action to
    cease and desist the operation of any activity requiring a use and
    occupancy permit when a use and occupancy permit has not been issued.
(g) The Chief of Police, the Fire Chief, and the Director of the Department
    of Permitting, Inspections, and Enforcement are authorized to direct the
    Police Department, the Fire/Emergency Medical Services Department,
    and the Department of Permitting, Inspections, and Enforcement,
    respectively, to take all immediate reasonable and necessary action to
    cease and desist the operation of any activity requiring a use and
    occupancy permit when a use and occupancy permit has been issued and
    is not in compliance with the provisions of this Section and all applicable
    use and occupancy provisions of the Zoning Ordinance.
(h) The Chief of Police and the Fire Chief are authorized to direct the Police
    Department and the Fire/Emergency Medical Services Department
    respectively, to take all immediate reasonable and necessary action to
    cease and desist the operation of any activity requiring a use and
    occupancy permit when the activity is found to present an imminent
    danger and threat to the health, safety, and welfare of the public by not
    doing so, that there are no other mitigating actions to be taken to resolve
    the imminent danger and threat to the health, safety, and welfare of the
    public, and that there are no other reasonable means of preventing further
    danger and threat to the health, safety, and welfare of the public resulting
    from the continuation of the activity.
(i) Immediate reasonable and necessary action shall include, but not be
    limited to: entering the building, structure, and land; securing the
    building, structure, and land; removing the occupants of the building,
    structure, and land; padlocking the building, structure, and land; and
    preventing the use and occupancy of the building, structure, and land.

                                       5
       (j) Actions taken pursuant to Sections 27-253(f), (g), and (h) shall remain in
           force and effect unless amended or vacated by a decision of the Zoning
           Hearing Examiner in accordance with Section 27-264.01(g) or by a
           decision of a court of competent jurisdiction.
Prince George’s County Code § 27-253. As indicated by the Court of Special Appeals,

“[a] municipal corporation within the County, such as the City, does not have zoning

authority except as specifically authorized by State law; however, it has ‘concurrent

jurisdiction’ within its corporate limits to enforce County zoning laws.” Precision Small

Engines, 233 Md. App. at 78, 161 A.3d at 730 (quoting [Land Use] § 22-119(a)(2)).

Beyond the authority granted by Land Use § 22-104, Land Use § 22-119(b) describes the

requirements needed before a municipality may exercise its jurisdiction. Under § 22-

119(b), a municipality must enter into an agreement with the County, which must outline

the following:

       (1) the method by which the county will be advised of citations issued by a
           municipal inspector;
       (2) the responsibility of the municipal corporation or the county to prosecute
           violations cited by the municipal corporation;
       (3) the disposition of fines imposed for violations cited by the municipal
           corporation;
       (4) the resolution of disagreements between the municipal corporation and
           the county about the interpretation of zoning laws; and
       (5) any other matter that the district council considers necessary for the
           proper exercise of the authority granted by this section.
Land Use § 22-119. The agreement between the County and the City is typically in the

form of a MOU, and must sufficiently describe the powers granted to, and the limitations

imposed upon the City in enforcing County zoning laws. Once entered, the MOU grants a

municipality the power to exercise enforcement authority equal to that of the County. In

this case, the County and the City entered into a valid MOU, discussed in detail infra.
                                             6
       The City also derives its powers to enact local regulations from Local Gov’t §§ 5-

211, 5-202 and 5-209. Pursuant to Local Gov’t § 5-211, a municipality may enact

regulations relating to the erection of buildings and signage, and may enact a building code

and regulations which relate to occupancy and use permits. Additionally, the City can

require inspections of property under this Article. Local Gov’t § 5-202 empowers a

municipality to adopt ordinances designed to protect “personal property from damage and

destruction” as well as for the protection of “the health, comfort, and convenience of the

residents of the municipality.” Local Gov’t § 5-202. Finally, Local Gov’t § 5-209 permits

a municipality to regulate certain health hazards or other nuisances that may cause

unsanitary conditions or conditions detrimental to health. Local Gov’t § 5-209. Pursuant

to the authority derived therefrom, the City adopted an ordinance regulating use and

occupancy permits. Under the City ordinance, any rented residential property or any non-

residential property that is required to get a County Use permit must also obtain a City use

and occupancy permit. Coll. Park, Md., City Code § 144 (1966).

                                   Parameters of the MOU
        Pursuant to Local Gov’t § 22-119, the County Council unanimously approved the

MOU on October 22, 2002. On November 19, 2002, the City Council unanimously ratified

the MOU, which remains in effect. The MOU provides that the agreement is to run from

year to year extending automatically at the conclusion of each term. Either party can void

the MOU at the conclusion of a given term. The following provisions of the MOU are

relevant to the instant dispute:

                                             7
       Paragraph 1(a) requires the City to enforce the zoning laws effective as of

         December 1, 2002.       The City also gains all enforcement powers then

         possessed by the County.

       Paragraph 1(b) definitively states that the City’s assumption of these duties

         was not intended to diminish any City power or authority under §§ 8-112.1

         or 8-112.3 of the Regional District Act, or any other law.

       Paragraph 2(a) provides that the City is compelled to require compliance on

         all properties within municipal boundaries, except for construction

         operations proceeding under a County grading or building permit and uses

         which are the subject of active use and occupancy permit applications on file

         with the County Department of Environmental Resources.

       Paragraph 2(c) 2 provides:

                The City is not authorized to issue building, grading, use &
                occupancy, or other permits now issued by the County
                Department of Environmental Resources [now known as
                DPIE], the City is not authorized to override Department
                interpretations of the Ordinance in issuing permits, and the
                City is not authorized to perform inspections for permit
                applications. The City may initiate and pursue enforcement
                action for any property which does not have the required
                permits for its use or uses.

       Paragraph 3(b) restricts the City from imposing stricter standards than those

         imposed by the County.

2
    Paragraph 2(c) serves as the basis for the Petitioners’ challenge.

                                         8
           Paragraph 3(c) allows a property owner or occupant to appeal a zoning

               citation or notice of a violation issued by the City.

           Paragraph 10 provides that the MOU was created for the sole benefit of the

               enumerated parties and did not create any additional rights for other persons.

       The MOU generally restricted the City’s enforcement power. Successive paragraphs

require the City to file copies of violations with the County, enforce zoning laws consistent

with the plain language of the Code, and consult with the County Attorney to ensure

consistency.

                                          Discussion
       The City’s authority to regulate zoning matters is reserved by various sources of

City and State law. Petitioners rely on isolated portions of the MOU, and assert that the

MOU, along with the statutory requirements under § 22-119 of the Land Use Article, does

not empower the City to adopt its own zoning regulations. Petitioners ask us to reverse the

Court of Special Appeals, and follow the analysis outlined by the circuit court, which

highlights that there are few differences between the County use and occupancy permit and

the City occupancy permit. As such, they each serve the same purpose in violation of the

MOU, and the City can only enforce County laws. In turn, Respondents argue that the plain

language of the MOU did not require the City to relinquish its authority to require

occupancy and building permits under City law. Respondents posit that the Court of

Special Appeals’ holding was correct. Although the MOU at issue here empowers the City

to enforce the County’s zoning laws, the City additionally reserves the authority to enforce

its own zoning laws. The MOU’s plain language elucidates that the parties never intended
                                               9
that the City cede its authority and power to create its own city zoning laws. Therefore, we

affirm the Court of Special Appeals.

       The plain language of the MOU does not relegate the City’s preexisting powers to

require building and use permits issued by the City. This Court follows an “objective theory

of contract interpretation, giving effect to the clear terms of agreements, regardless of the

intent of the parties at the time of contract formation.” Myers v. Kayhoe, 391 Md. 188,

198, 892 A.2d 520, 526 (2006). “[I]f the language employed is unambiguous, ‘a court shall

give effect to its plain meaning and there is no need for further construction by the court.’”

Walker v. Dep’t of Human Resources, 379 Md. 407, 421, 842 A.2d 53, 61 (2004). If

feasible, we will construe a contract as a whole, “to interpret their separate provisions

harmoniously, so that, if possible, all of them may be given effect.” Id. “[T]he

determination of whether a contract is ambiguous ... is a question of law ... subject to de

novo review.” Precision Small Engines, 233 Md. App. at 85, 161 A.3d at 734 (quoting Sy–

Lene of Washington, Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157, 163, 829 A.2d
540, [544] (2003)). In sum,

       A court construing an agreement under [the objective theory] must first
       determine from the language of the agreement itself what a reasonable person
       in the position of the parties would have meant at the time it was effectuated.
       In addition, when the language of the contract is plain and unambiguous there
       is no room for construction, and a court must presume that the parties meant
       what they expressed. In these circumstances, the true test of what is meant
       is not what the parties to the contract intended it to mean, but what a
       reasonable person in the position of the parties would have thought it meant.

                                             10
Dennis v. Fire & Police Employees’ Ret. Sys., 390 Md. 639, 656–57, 890 A.2d 737, 747

(2006). Thus, we must first ascertain the reasonable interpretation of the parties’ intent

from the MOU’s language. If the language is unambiguous, we only need apply the terms.

       Following this approach, Petitioners assert that the plain language of the MOU

limits the City’s enforcement authority. As before the Court of Special Appeals, Petitioners

highlight paragraphs 2(c) and 3(b) as clear demarcations that the County intended to restrict

the City from imposing requirements that are different or more restrictive than those

imposed under County zoning laws. Paragraph 2(c) states, in part, that “the City is not

authorized to issue building, grading, use and occupancy, or other permits now issued by

the County…” Paragraph 3(b), partially explains, “[n]othing in the Memorandum

authorized the City to impose standards or requirements which the Zoning Ordinance does

not establish….” Petitioners read these two provisions together to restrict the City from

imposing additional requirements than those imposed under County zoning laws. Mainly,

the City process requires additional inspections, fees, and compliance with other zoning

laws before a permit is issued. These sections do not contain any relinquishment of power

by the City in order to gain concurrent enforcement power. Rather, the plain language of

the contract demonstrates that the County imposed limitations of the City’s enforcement in

an effort to maintain its own power with regard to zoning. In doing so, the County ensured

that the City could enforce the law, while requiring it to submit to the County’s authority.

Respondents contend that reading these two paragraphs in isolation, renders a result that

                                             11
the parties did not intend. We agree. Petitioners’ reading of the MOU omits key paragraphs

that illustrate the parties’ intention for the City to retain permit issuing power.

       A reading of the MOU in its entirety, demonstrates that the parties intended that the

City maintain its authority to enforce its own building and use permit laws, specifically in

light of paragraphs 1(a) and 1(b). We have explained that “[e]ffect must be given to each

clause so that a court will not find an interpretation which casts out or disregards a

meaningful part of the language of the writing unless no other course can be sensibly and

reasonably followed.” Clancy v. King, 405 Md. 541, 557, 954 A.2d 1092, 1101 (2008)

(quoting Sagner v. Glenangus Farms, Inc., 234 Md. 156, 167, 198 A.2d 277, 283 (1964)).

At the outset, in paragraph 1(a) of the MOU, the agreement states that the City gained “all

enforcement powers then possessed by County government [.]” Paragraph 1(b) states that

“[t]he City’s assumption of these zoning enforcement powers and duties shall not be

deemed to diminish any City power or authority under §§ 8-112.1 or 8-112.3 of the

Regional District Act, or any other law.”3 The plain language of paragraph 1(a) dictates

that the City may undertake the same powers to enforce permitting that the County

possessed. Paragraph 1(b) expressly reserves that the City has authority enumerated by any

other laws. These paragraphs, considered with paragraphs 2(c) and 3(b), plainly

demonstrates that both parties were cognizant of other sources of municipal power and

intended for the City to retain that power, while gaining additional power from the County.

       3
        The Regional District Act empowers specific municipalities including the City of
College Park, the authority to enact zoning regulations pursuant to enumerated guidelines.
See generally Md. Code (Repl. Vol. 2012) § 25-303 of the Land Use Article.
                                              12
Thus, the plain language of the MOU dictates that the parties reasonably intended for the

City to retain the right to create and enforce its own zoning laws.

       Due to the express language of the MOU and the City’s statutorily granted power,

the circuit court went beyond the expressed intent of the parties. See Tomran, Inc. v.

Passano, 391 Md. 1, 14, 891 A.2d 336, 344 (2006) (holding that the cardinal rule of

contract interpretation is to give effect to the parties’ intentions). The circuit court failed

to apply the objective theory of contract interpretation, and in doing so applied a meaning

inconsistent with the plain language of the agreement. Additionally, during the hearing,

the circuit court did not examine the nature of the relationship between the City and the

County. Specifically, the court did not consider the over 4,000 inspections conducted by

the City annually and the extent to which the County may have either expressly permitted

the City to act, or otherwise ratified the City’s actions. Given this volume, it appears that

the City was well within the authority granted to it by the County.

       The circuit court also overlooked the MOU’s express provision that reflected its

intended beneficiaries.    Generally, only parties to a contract or third-party intended

beneficiaries have standing to challenge the validity or application of a contract. See 120

W. Fayette St., LLLP v. Mayor of Baltimore, 426 Md. 14, 36, 43 A.3d 355, 368 (2012).

Paragraph 10 specifically states that the City and the County are the only beneficiaries of

the contract and no other persons have rights that are applicable under the MOU. Assuming

arguendo that an enforcement issue exists, the City and the County, as parties to the

                                              13
agreement, would be in the best position to dictate how to construe the terms of agreement

and the appropriate parties to challenge the agreement, not Petitioners.

       Finally, the circuit court disregarded the express authority of the City granted under

Local Gov’t §§ 5-202, 5-209, and 5-211. Per these sections, the power of the City to enact

regulations is separate and distinct from power granted by the County in the MOU. We

quote again from the Court of Special Appeals opinion:

       [T]he MOU is consistent with the statutory grant of authority for municipal
       corporations to exercise concurrent jurisdiction to enforce the County Zoning
       Ordinance. [Land Use] section 22–119 does not mandate that a municipal
       corporation surrender its powers under the [Local Gov’t] Article to regulate
       health, safety, and welfare in order to accept a delegation of authority to
       enforce the County Zoning Ordinance. Rather, it requires the County and
       the municipal corporation to reach an agreement respecting the division of
       authority between the entities to prevent inconsistent enforcement. [Land
       Use] § 22–119(b). If the legislature had intended for the assumption of
       zoning enforcement powers by a municipal corporation to be conditioned
       upon its forfeiting other statutory grants of authority, it would have said so.
       []

Precision Small Engines, 233 Md. App. at 86–87, 161 A.3d at 735. Accordingly, we shall

affirm the judgment of the Court of Special Appeals.

                                                  JUDGMENT OF THE COURT OF
                                                  SPECIAL APPEALS IS AFFIRMED.
                                                  COSTS   TO   BE    PAID  BY
                                                  PETITIONERS.

                                             14