MARYLAND’S HIGH COURT IS HIGHLY UNFRIENDLY TO BUSINESS!

Maryland Reclamation Associates, Inc. v. Harford County
(Court of Appeals of Maryland)
Filed: March 11, 2010.
Opinion by Judge Sally D. Adkins.

Holding: The expenditure of over a million dollars to purchase property and obtain state permits does not, by itself, grant a vested right to a landowner or permit a landowner to succeed in an equitable estoppel claim against a government which has revised its zoning code in a manner that precludes a landowner's intended use of the property.

Facts: Landowner sought to construct a landfill in Harford County. After being included in the County's solid waste management plan, Landowner purchased property for proposed landfill. While the Maryland Department of Environment processed its permit (and just four days after settlement), a new Harford County Council passed a resolution to remove the property from its plan. With litigation pending, the County revised its zoning code in a manner that resulted in the property being disqualified for its Landowner's intended use as a landfill.

Analysis: Landowner argued, among other theories, that it had obtained a vested right in the zoning use and that County should be estopped from applying its new zoning regulation based on equitable and zoning estoppel.

"In order to obtain a vested right in an existing zoning use that will be protected against a subsequent change in a zoning ordinance prohibiting that use, the owner must initially obtain a permit" and must make a substantial beginning in construction to commit the land to its permitted use before the zoning ordinance has been changed. Landowner asserted a substantial change in relation to the land had been made as it purchased the land, made over a million dollars in expenditures (acquisition, engineering and legal fees) and incurred obligations in proceeding with the the engineering development plans for the State's permitting process. The Court rejected Landowner's argument holding that neither the purchase of property nor expenditure of funds in preparation for development is sufficient to grant a vested right in an existing zoning use.

The Court denied Landowner's theory of equitable estoppel because a court must first make a finding that plaintiff had a vested right. While declining the opportunity to adopt the doctrine of zoning estoppel, the Court discussed the theory in length and recognized "as zoning and permitting processes become more complex, the need for such a doctrine grows." Yet, the Court opined that even if zoning estoppel was recognized, Landowner would not succeed because it could not prove it relied in good faith on an act or omission by the government that caused Landowner to make a substantial change because Landowner "knew of facts that should have given it notice that it should not rely on the government action in question."
Dissent: Judge Glenn T. Harrell, Jr., provided a dissenting opinion, which Chief Judge Robert M. Bell joined. Judge Harrell contended that the Court of Appeals had "again wimp[ed]-out on adopting the doctrine of zoning estoppel." He would have held "that [Harford County] is estopped from applying the provisions of Bill 91-10 to the [Landowner's] proposed rubble landfill, based on [County's] prior approvals of the . . . Site Plan, its inclusion of [the Landowner's] rubble landfill in the [County’s] Solid Waste Management Plan (“SWMP”), the official assurances it gave to [the Landowner] that construction could proceed, and [Landowner's] substantial expenditures made in good faith reliance upon such assurances."

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