Willow Grove Citizens Association v. County Council Prince George's County
Willow Grove Citizens Association v. County Council Prince George's County
Opinion
This case is an appeal from a judgment entered on judicial review of a zoning decision in Prince George's County. Appellees Presidential Care, LLC ("Presidential") and Stoddard Baptist Home, Inc. ("Stoddard") applied for a special exception with the Prince George's County Office of Zoning. 1 Upon the recommendation of the Zoning Hearing Examiner ("Examiner"), the Prince George's County Council ("County Council"), sitting as the District Council, voted to approve the special exception. Various persons of record filed a petition for judicial review in the Circuit Court for Prince George's County, which affirmed. Willow Grove Citizens Association, Inc. and other persons of record (collectively, "Willow Grove") subsequently appealed the judgment of the circuit court.
On appeal, Willow Grove presents five questions for our review, which we have rephrased and consolidated as follows:
Whether the County Council's decision to grant the application for the special exception was legally correct in light of the fact that
a. Presidential had, at the time of filing, forfeited its right to do business in Maryland;
b. Stoddard was, at the time of filing, an unregistered foreign corporation;
c. People's Zoning Counsel did not recuse himself despite his involvement in the sale of the subject property to Presidential.
For the reasons explained herein, we shall affirm the judgment of the circuit court.
FACTS AND PROCEEDINGS
The land at the heart of this dispute is a 7.91 acre property located at 3911 Lottsford Vista Road in Bowie, Maryland ("the Property"). Under the Largo-Lottsford Master Plan and Sectional Map Amendment (Zoning Ordinance No. 3-2016), the Property is zoned Rural Residential. The prior owner, William Youngblood ("Youngblood"), obtained a special exception pursuant to Zoning Ordinance 7-2001 to build a 160-person child day care center, a 40-person adult day care center, and a 72-person congregate living facility. These zoning entitlements were never developed. On August 27, 2001, Youngblood sold the Property to Presidential, a limited liability company organized in Maryland in 2001. Youngblood's attorney at the time of the sale was Stan Brown ("Brown"). Brown conducted the settlement and was engaged in some of the contract work associated with the Property.
On November 1, 2012, Presidential's right to do business in Maryland and use its name was forfeited. Presidential's rights remained forfeited as of February 21, 2014, when it applied for a special exception to operate a 15-person adult day care facility and a 63-unit assisted living facility. The application was accepted by the Maryland National Capital Park and Planning Commission. The applicant was listed as "Presidential Care, LLC, by Stoddard Baptist Home, Inc., Managing Member." Stoddard, a foreign corporation organized in the District of Columbia, is the sole member of Presidential. At the time of filing, Stoddard was not registered to do business in Maryland.
The Examiner conducted a public hearing to consider the application for a special exception. Brown participated in this hearing as People's Zoning Counsel. 2 Brown disclosed his prior involvement in the sale of the Property and asked, on the record, whether anyone present objected to his participation in the proceedings. There were no objections. The Examiner approved the application for a special exception on October 15, 2014.
The Examiner's decision was appealed to the County Council. 3 After hearing oral arguments, the County Council remanded the matter for the Examiner to determine whether Presidential and Stoddard were in good standing with the State Department of Assessments and Taxation ("SDAT").
On May 4, 2015, Presidential's rights were reinstated. On June 2, 2015, Stoddard registered with SDAT and became qualified as a corporation in Maryland. The Examiner conducted a second public hearing on the application for a special exception in June of 2015. At the second hearing, Presidential and Stoddard provided certificates of good standing from SDAT. Thereafter, the Examiner conditionally recommended approval of the application for a special exception.
Willow Grove and other persons of record appealed to the County Council. After hearing oral arguments, the County Council found that "Presidential was legally authorized to engage in the activity of filing an application for a special exception concerning real or personal property," and that Presidential's forfeiture did not impair the validity of its application. The County Council also found that Stoddard, in applying for a special exception, was not doing business in Maryland. As a result, the County Council approved the application for a special exception on February 8, 2016. The Circuit Court for Prince George's County affirmed the County Council's decision.
DISCUSSION
I. Standard of Review
When reviewing "the decision of an administrative agency, this Court reviews the agency's decision, not the circuit court's decision."
Long Green Valley Ass'n v. Prigel Family Creamery
,
Although we generally defer to the factual findings of an administrative agency, "[w]e review an agency's decisions as to matters of law
de novo
for correctness."
Wallace H. Campbell & Co. v. Md. Comm'n on Human Relations
,
Willow Grove objects to the decision of the County Council on purely legal grounds. The only question, then, is whether the approval of the application for a special exception was premised on legally erroneous conclusions of law. Because the County Council does not administer the statutory provisions governing the rights of corporate entities, we will give no deference to the County Council's legal conclusions.
II. The Decision of the County Council Was Legally Correct.
A. Presidential's Application for a Special Exception Was Valid.
Willow Grove argues that Presidential's application for the special exception was "a nullity" because Presidential had forfeited its right to do business in Maryland and use its name. We disagree. The County Council correctly concluded that Presidential's application was valid under Maryland law.
When a Maryland LLC fails to pay its taxes, SDAT may issue a proclamation declaring that the LLC has forfeited the right to do business in Maryland and the right to use its name. Md. Code (1975, 2014 Repl. Vol., 2016 Supp.), § 4A-911 of the Corporations & Associations Article ("Corps. & Ass'ns"). Unlike a corporation, an LLC does not become a non-entity after forfeiture.
Price v. Upper Chesapeake Health Ventures
,
The forfeiture of the right to do business in Maryland and the right to the use of the name of the limited liability company under this title does not impair the validity of a contract or act of the limited liability company entered into or done either before or after the forfeiture, or prevent the limited liability company from defending any action, suit, or proceeding in a court of this State.
Corps. & Ass'ns § 4A-920 (emphasis added).
Here, Willow Grove's claim that "Presidential's actions were a nullity" is contrary to the express language of § 4A-920. It is undisputed that Presidential was an LLC when it applied for a special exception. As such, Presidential was a legal entity with the power to enter into binding contracts, and its acts were at all times legally valid. We hold, therefore, that Presidential's application was valid and that, consequently, the County Council did not err in approving the application for a special exception.
Willow Grove contends that, in applying for a special exception, Presidential was actually initiating a judicial proceeding. When an LLC forfeits the right to do business in Maryland, it also loses the right to bring a lawsuit in Maryland court. As we explained in Price v. Upper Chesapeake Health Ventures ,
Nevertheless, with respect to court proceedings, [ § 4A-920 ] expressly provides that a forfeited LLC may only defend an action in court. The negative implication of such language, and the sweep of the "doing business" and name "using" prohibition is that the company may not file or maintain a lawsuit after its rights have been forfeited.
In our view, Willow Grove's interpretation of § 4A-920 is contrary to the plain meaning of that statute. Our reasoning in
Price
was based on the "negative implication" of the final phrase of § 4A-920, which provides that an LLC may
defend
any lawsuit after forfeiture.
B. Stoddard Was Not "Doing Business" in Maryland.
Willow Grove maintains that Stoddard "did not validate" Presidential's application for a special exception because Stoddard, a foreign corporation, was not registered to do business in Maryland. 4 Because Willow Grove has failed to show that Stoddard was doing business in Maryland, we hold that Stoddard's involvement did not invalidate the application for the application for special exception.
As a preliminary matter, we are not persuaded by Willow Grove's argument that "[t]he acts of a corporation doing business in the State of Maryland without legal consent are void." In support of this argument, Willow Grove cites
Kitchen v. Himelfarb
,
Corps. & Ass'ns § 7-103. As we explained in Aeropesca Ltd. v. Butler Aviation Int'l, Inc. ,
The statutory provisions relating to foreign corporations "doing business" in Maryland ... were never intended to bar foreign corporations from entering into an occasional contract with Maryland businesses and, when necessary, pursuing in Maryland courts, rights under that contract or actions arising out of it.
To be sure, a foreign corporation must register with SDAT before doing interstate business in Maryland. Corps. & Ass'ns § 7-202. A foreign corporation is also required to qualify with SDAT before doing intrastate business. Corps. & Ass'ns § 7-203. A foreign corporation is doing business in Maryland "when it transacts some substantial part of its ordinary business therein."
Tiller Const. Corp. v. Nadler
,
(1) whether the foreign corporation pays state taxes; (2) whether it maintains property, an office, telephone listings, employees, agents, inventory, research and development facilities, advertising and bank accounts in the state; (3) whether it makes contracts in the state; and (4) whether its management functions in the state are pervasive.
Tiller Const. Corp.
,
supra
,
Here, Willow Grove has failed to carry its burden of showing that Stoddard was doing business in Maryland. Willow Grove's argument appears to rest solely on Stoddard's involvement
in the application for the special exception at issue.
5
Such isolated actions are generally insufficient to constitute "doing business."
See
Aeropesca Ltd.
,
supra
,
In applying for a special exception, Stoddard was maintaining an administrative proceeding.
See
County Council v. Brandywine Enterprises
,
Willow Grove argues that the proceedings below were unfair because Brown, People's Zoning Counsel, had been involved in Presidential's purchase of the Property. As a result, Willow Grove maintains that Brown should have recused himself due to his prior involvement with the purchase of the property. In the alternative, Willow Grove contends that the Examiner should have asked whether anyone objected to Brown's participation. We hold that this issue was not preserved for judicial review.
In reviewing an appeal from a judgment entered on judicial review of an administrative decision, "a court ordinarily may not pass upon issues presented to it for the first time on judicial review and that are not encompassed in the final decision of the administrative agency."
Zakwieia v. Baltimore Cty., Bd. of Educ.
,
Presidential's application for a special exception was valid notwithstanding that its right to do business in Maryland was forfeited. Stoddard's participation as either an agent or co-applicant did not invalidate the application for a special exception because it did not constitute "doing business" in Maryland. For the foregoing reasons, we hold that the County Council's decision to approve the application for the special exception was correct as a matter of law. 9 JUDGMENT OF THE CIRCUIT COURT FOR PRINCE GEORGE'S COUNTY AFFIRMED. COSTS TO BE PAID BY THE APPELLANTS.
Stoddard's role in the application for the special exception at issue is not entirely clear, as we will discuss below.
People's Zoning Counsel is appointed by the County Council to protect the public interest and ensure the compilation of a full and complete record. Prince George's County Code § 27-136.
The County Council of Prince George's County is the District Council for that portion of the Maryland-Washington Regional District located in Prince George's County. Md. Code (2012, 2016 Supp.), § 22-101 of the Land Use Article ("Land Use"). As such, the County Council has authority over zoning matters in Prince George's County. Land Use § 22-104. When sitting as a District Council, the County Council acts as an administrative agency.
Cnty. Council v. Brandywine Enter.
,
It is unclear whether Stoddard was a co-applicant or merely Presidential's agent. For our present purposes, it is a distinction without a difference. The question before us is whether Stoddard's involvement in the application for a special exception-whether as agent or co-applicant-constituted "doing business" under Maryland law.
Willow Grove alleges generally that "Appellees purchased property in Maryland, hired counsel to represent them in Maryland, paid taxes in Maryland, had employees in Maryland and solicited the local government for services." These allegations, however, are not supported by citations to the record, and they appear to refer primarily to the activities of Presidential.
Willow Grove argued below that "maintaining," as used in § 7-103, does not refer to the filing of a new complaint. As used elsewhere in that Title, however, "maintaining" has been interpreted to mean "bringing a lawsuit."
See, e.g.,
Yangming Marine Transp. Corp. v. Revon Prod. U.S.A., Inc.
,
Even if Stoddard had been doing business in Maryland without consent, we are not convinced that the application for the special exception would be invalid. The contracts of an unregistered foreign corporation, for example, are valid notwithstanding its failure to comply with registration requirements. Corps. & Ass'ns § 7-305. To be sure, a foreign corporation that does business without consent loses the right to "maintain a suit" in Maryland court. Corps. & Ass'ns § 7-301. Applying for a zoning exception, however, is not the same as bringing a lawsuit. Further, by the time the special exception was approved, Stoddard was in good standing with SDAT and, therefore, had regained the right to maintain a suit under Corps. & Ass'ns § 7-301.
Insofar as the issue was preserved, it is without merit. At the first hearing before the Examiner, Brown disclosed his involvement in the sale of the Property and asked, on the record, whether there was any objection to his participation in the proceedings. Notably, Willow Grove provides no legal authority in support of its view that Brown's participation rendered the proceedings unfair.
We need not address the fourth question presented by Willow Grove, which concerns the lack of factual and legal findings made by the circuit court. In reviewing an appeal from a judgment entered on judicial review of an administrative decision, we review the agency's decision, not the circuit court's decision.
Brandywine Enter.
,
supra
,
Reference
- Full Case Name
- WILLOW GROVE CITIZENS ASSOCIATION, Et Al. v. COUNTY COUNCIL OF PRINCE GEORGE'S COUNTY, Maryland
- Cited By
- 5 cases
- Status
- Published