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.
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Precision Small Engines, Inc. v. City of Coll. Park
Court: Court of Appeals of Maryland
Date filed: 2018-02-21
Citations: 179 A.3d 1019, 457 Md. 573
Copy CitationsCombined Opinion