Relating to Real Estate

In Lillian C. Blentlinger LLC v. Cleanwater Linganore, Inc., 456 Md. 272, 173 A.3d 549 (2017), the Court of Appeals reversed the decision of the Court of Special Appeals and held that a Development Rights and Responsibilities Agreement (“DRRA”) between the landowner and Frederick County was enforceable. The Court of Appeals determined that the DRRA did not need to include enhanced public benefits to the county.

The owner of 279 acres of land in Frederick County desired to develop it.  The property was zoned for agricultural use in 1959, and it was designated Low Density Residential (LDR) in 2006, which permitted its owner to establish a Planned Unit Development (PUD).  In 2007, Frederick County removed the LDR designation.  In 2008 the property’s designation was changed to agricultural/rural.  In 2012, the property designation was changed back to LDR, and the owners filed for PUD zoning with 720 residential dwelling units and a 25 acre middle school.

In light of all of these changes, is it any wonder that the landowners applied for a PUD and drafted a DRRA to lock in the zoning and to freeze the land use requirements for the property?  On October 8, 2014, the Planning Commission staff recommended the PUD, and on November 16, 2014, the Board of County Commissioners approved the PUD with 675 dwelling units on the condition that no building permits could be obtained before January 1, 2020.

The landowners and Frederick County signed a DRRA, and a month later Cleanwater Linganore, Inc. challenged it in the Circuit Court for Frederick County.  In November 2015 the Circuit Court held that the DRRA was enforceable.  Cleanwater appealed to the Court of Special Appeals, which reversed in a reported decision dated February 3, 2017 entitled Cleanwater Linganore, Inc. v. Frederick County, 231 Md. App. 620 (2017).  See Relating to Real Estate (May 2017).  The Court of Special Appeals found that there was not adequate consideration for the DRRA and that it did not provide any enhanced public benefits to the County.

The Court of Appeals granted certiorari.  In a turn of events, the County argued before the Court that a DRRA must provide enhanced public benefits, and it further contended that the DRRA exceeded the County’s authority under the authorizing statute.  This was a dramatic change in the County’s position, which first signed the DRRA and then challenged it.  This change was brought about by the results of the County election between the signing of the DRRA and the briefing before the Court of Appeals.  The landowners claimed that the County could not do this under the doctrine of judicial estoppel, but the Court held that judicial estoppel did not apply because the County changed its position in the same litigation, and not in subsequent litigation.

The Court held that the plain language of the DRRA statute, Land Use Article § 7-303 et seq., and the County statutes governing DRRAs were unambiguous and did not require that a DRRA needed to provide enhanced public benefits to a local governing board.  Further, the Court stated that nothing in the legislative history of the DRRA statute required that there must be an enhanced public benefit for a DRRA to exist.

The Court found that there was consideration for the DRRA in the owners’ limiting the number of residential units, delaying the request for building permits, and offering the 25 acre site to the school board for a middle school.

Therefore, the Court of Appeals reversed the decision of the Court of Special Appeals and ordered that the decision of the circuit court be affirmed.

For questions, please contact Ed Levin (410) 576-1900.