College Bowl v. Baltimore
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In the Circu it Court for B altimore C ity Case No. 24-C-03-002737 Argued: June 1, 2006 IN THE COURT OF APPEALS OF MARYLAND No. 127 September Term, 2005 ______________________________________ COLLEGE BOWL, INC. v. MAY OR AN D CITY COUN CIL OF BALTIMORE ______________________________________ Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. ______________________________________ Opinion by Wilner, J. ______________________________________ Filed: August 31, 2006 In this lawsuit, petitioner, College Bowl, Inc., a manufacturer of sports apparel, claims that it lost its tenancy and was forced to relocate its business du e to insistence by Baltimore City that petitioner s landlord redevelop the building in which petitioner s business was located and threats by the City to condemn the building if that was not done. The issue before us is whether the Circuit Court for Baltimore City erred in concluding, through a grant of summary judgment, that the City was not required to reimburse petitioner for relocation expenses and was not liable in damages for inverse condem nation of p etitioner s lease hold interest. We agree with the C ourt of Special Ap peals that there was no e rror. Petitioner was a month-to-month commercial tenant in what is kn own as th e Abell Building in Baltimore City. The six-story building, built in 1878 as a warehouse, is situated in an area that the City became anxious to redevelop and that was, indeed, included in an adopted urban r enew al plan. As far back as 1997, the owner of the building the David and Annie E. Abram s Realty Corp oration (A brams) c ommen ced prelim inary discussion s with the City and began to explo re developmen t options. In 2000, Abra ms obtained zoning approval to construct 40 dwelling units in five of the six stories, including the one occupied by petitioner. When little or no renovation was actu ally fo rthcoming, h owe ver, t he C ity, in 2002, began to p ress Abra ms to commence acceptable redevelopment and, at various times thereafter, expressed the intent, in default thereof, to obtain authority to condemn the structure. In June, 2002, the City Administration included the property in an ordinance (Counc il Bill 823) that would have permitted the City to acquire 37 properties in the renewal area thr ough c ondem nation. On November 1, 2002, w hile the bill was pending before the City Council, Abrams notified petitioner of its intent to end the landlord-tenant relationship, and, on February 28, 2003, gave written notice of termination of the month-to-month le ase effective April 30, 2003. The notice made no reference to any activities by the C ity. In March, at le ast a month prior to the termination, petitioner vacated the premises and relocated its busin ess. Counc il Bill 823 was not e nacted un til March, 2 004 a year a fter petitioner m oved an d the City never did exercis e its authority to acquire the building. After petitioner vacated, Abrams made more intensive efforts to redevelop the structure and eventually, we are informed, sold it. In April, 2003, just after vacating, petitioner filed this action seeking fr om the C ity compensation for relocation expenses, damages for inverse condemnation, and damages under 42 U.S.C. § 1983 for a taking of petitioner s property, and seeking from three other defenda nts Baltimore Development Corporation (BDC) and two of its officials damages for tortious conduct. The tort claims were dismissed on motion and are no longer at issue. The claims against the City were resolved on summary judgment. On petitioner s appeal, the Court of Special Appeals affirmed, holding that, because petitioner s tenancy was terminated by the landlord and not in resp onse to any governm ental action by the City, petitioner was not a displace d person entitled to reloc ation com pensation a nd its property interest had not been ta ken by th e City. -2- DISCUSSION Statutory Relocation Compensation Maryland Code, § 12-205 of the R eal P rope rty Ar ticle, requ ires a displac ing a gency to compensate a displaced person for certain expenses incurred as a result of the displacing agency s acquisition or written notice of inten t to ac quire the disp lace d person s property. Section 12 -205(a) pro vides, in pertin ent part: Whenever a program or project undertaken by a displacing agency will result in the displacement of any person, the displacing agency shall make a p ayment to the displaced person, on proper application as approved by the displacing agency for: (1) Actua l reason able ex penses in mov ing him self, his family, busi ness , farm operatio n, or othe r per sona l property; (2) Actual dire ct loss of tang ible personal property as a result of moving or discontinuing a business or farm operation [subject to a certain maximum ]; (3) Actual reasonable expenses in searching for a replacement business or farm; and (4) Actual reasonable expenses necessary to reestablish a displaced . . . small business at its n ew site [subject to a certain maxim um]. (Emphasis add ed). The key issue with respect to pe titioner s entitlement to compensation under that statute is whether it qualifies as a displaced person . That term is defined in § 12-201 (e), in relev ant p art, a s any p erso n wh o mo ves f rom real p rope rty, or moves his persona l property from real property (1) [a] s a direct resu lt of written notice of intent to acquire or the acquisition of such re al property in whole or in part by a displacing agency . . . or (2) on -3- which that person conducts a small business and the head of the displacing agency determines that disp laceme nt is perm anent, as a direct result of rehabilitation, demolition, or other displacing activity . . . . (Emphasis added). In light of that definition, and given that the City never did acquire the property, the critical question is whether petitioner s displacement was a direct result of either a written notice of intent by the City to acquire the property or a determination by the head of the displacing agen cy that petitioner s displacement would be permanent as a direct result of rehabilitation, demolition, or other disp lacin g act ivity. 1 For purposes of summary judgment, the material factual alleg ations offe red in connection with the motion and all reasonable inferences from those averments must be taken in a light most favorable to pe titioner. Considerable discovery was und ertaken in this case, and the factual record developed through th at process w as before th e court w hen it 1 Petitioner suggests that Abrams acted as an instrumentality of the City and may itself qualify as a displacing agency. The term displacing agency is defined in § 12201(f) as any public or private agency or person carrying out: (1) A program or project with fede ral financial a ssistance; (2) A public wo rks program or project w ith State financial assistance; or (3) Acquisition by eminent domain or by negotiation. Petitioner s arg ument in th is regard is no t well-deve loped, and the simple a nswer to it is that there was no evidence that Abrams received any Federal or State financial assistance or that it was carrying out any [a]cquisition by eminent domain or by negotiation. We need not consider here whether circumstances could exist in which a landlord might qualify as an instrumentality of a public agency intent on acquiring the structure, because even if so, th is would n ot be one o f them. Th ere is nothing in this record to indicate that, when Abrams terminated petitioner s month-to-month lease in February, 2003, having given prior notice in November, 2002 of its intent to do so, it was acting as an agent or instrum entality of the City. It w ould no t, therefo re, qualif y as a disp lacing a gency. -4- considered the City s motio n for sum mary judgm ent. We ne ed not r ecoun t it all. Suffice it to say that, beginning at least in 2000, the City, through BDC and some of its officials, placed increasing pressure on Abrams to redevelop the Abell Building in conformance with the general redevelop ment plan for that area of the City, including exp ressions of its intent to seek authority to condemn the building if that were not done. Consistent with those expressions, the City Adm inistration included the building in the list of 37 structures for which it sought con demnatio n authority in Coun cil Bill 823, intro duced into the City Counc il in June , 2002. Although we may fa irly assume th at, had Ab rams don e nothing m ore, the City likely would have condemned the property once Council Bill 823 was ena cted, things n ever got to that point. Petitioner was actually forced to relocate and move its personal property because of the termination of its tenancy by Abram s in Februa ry, 2003, but it w ould be too simplistic to stop the inquiry there. The question appropriately raised by petitioner is whether Abrams was forced to a ct because of condu ct by the City that would suffice to make petitioner a displa ced pe rson w ithin the mean ing of § 12-20 1(e). It is undis puted, of cou rse, that the City never did acquire the property, either by condemnation or through negotiations conducte d under the threat of condemnation. Petitioner s complaint is that the City effectively forced Abram s to terminate petitioner s lease by threatening, both orally and in writing, to condemn the property unless Abrams proceeded with redevelopment activities that would necessitate term inati on of the tena ncy, -5- and that the City had no author ity to make such threats. Its argument, in this regard, is that [t]he City had no authority to inform the property owner that eminent domain authority would be obtained and exercised unless the building was renewed. Whether the City did possessed authority to make that threat is not the issue. The issue, in terms of compensation for relocation expenses, is, and remains, whether petitioner s relocation was the direct result o f conduc t specified in § 12-201(e), authorized or unauth orized. It clearly was not. As we have observed, Abrams made some efforts on its own to renovate the building, including a successful pursuit of zoning authority to convert fiv e floors of the building to residential use, and, in F ebruary, 2003 , presumab ly in furtheranc e of those e fforts, it terminated the month-to- month tenancy. That termination, by the landlord, occu rred more than a year before Counc il Bill 823 w as enacted and thus m ore than a yea r before the City had any le gal a utho rity to acquire the building through the exercise of eminent domain. There is simply no ev idence that te rmination o f the tenancy was the direct result of a written notice by the City of its intent to acquire the property or a determination by the head of a displacing agency that petitioner s displacem ent was p ermanen t as a direct result of rehabilitation, demolition, or other displac ing activ ity. See Dugge r v. City of M issoula, 676 F. Supp. 209 (D. Mont. 1987) (decided under Federal relocation assistance law, 42 U.S.C. § 4601 et seq.), and cf. Pete v. State , 384 M d. 47, 58 -61, 862 A.2d 41 9, 425-27 (2004), in which we gave a restric tive mean ing to the term d irect result in the context of the statute -6- allowing restitution for losses sustained by a victim as a direct result of the crime. Inverse Condemnation Petitioner s claim of inverse condemnation rests largely on the same argument made with respect to relocation compensation. Petitioner points out th at, if the City had a ctually condemned the Abell building in order to implement its urban renewal plan, it would have been required to pay compensation to p etitioner. It argues that the City cannot escape that obligation by unlawfully using the threat of condem nation to force the landlord to undertake its own redevelopment of the building. That conduct, petitioner contends, constitutes a taking of its property in the form of an inverse condemnation. In United States v. Clarke, 445 U.S. 253, 257, 100 S. Ct. 1127, 1130, 63 L. Ed.2d 373, 377 (1980), the S upreme C ourt charac terized an in verse condemnation as a shorthand description of the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted. In that regard, the Court adopte d the vie w of D . Hagm an, U RBAN P LANNING AND L AND D EVELOPMENT C ONTROL L AW 328 (1971) that [i]nverse condemnation is a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the po wer of e minent do main has been attempted by the taking agency. Id. See also Reichs Ford v. State Roads, 388 Md. 500, 511, 880 A.2d 307, 313 (2005). In determining whether governmental action constitutes -7- an inverse takin g, the Supr eme Co urt has look ed to wh ether the restriction forc[es] some people alone to be ar public burdens which, in all fairness and justice, should be borne by the public as a whole. PruneYard Shopping Center v. Robins, 447 U.S. 74, 83, 100 S. Ct. 2035, 2041, 64 L. Ed.2d 741, 753 (1980), quoting from Armstrong v. United States, 364 U.S. 40, 49, 80 S. Ct. 1563, 15 69, 4 L. Ed.2d 15 54, 1561 (1960 ). Because it is in the nature of a generic description, an inverse condemnation can take many different forms the denial by a governmental agency of a cces s to o ne s prop erty, regulatory actions that effectively deny an owner the physical or economically viable use of the property, conduct that causes a physical invasion of the property, hanging a credible and prolonged threat of condemnation over the property in a w ay that significan tly diminishes its value, or, closer in point here, c onduct tha t effectively for ces an ow ner to sell. Amen v . City of Dearborn, 718 F.2d 789 (6 th Cir. 1983) illustrates the last of those types. It was a class action based on inverse condemnation against the city of Dearborn, Michigan, by former residents of certain neighborhoods in the city. In order to coerce resid ents into selling their homes to the city, the city denied or unreasonably delayed building and repair permits or demanded expensive renovations as a condition to receiving a permit, demanded that residents perform maintenance and repairs not required by the building co de, publicly announced that the area w ould be cleared and thereby inhibited residents from selling their homes to others, and allowed properties in the area to remain vacant and unprotected. The court concluded that, while none of those action s alone mig ht have su fficed, the a ggregate -8- of that conduct did result in a taking. Petitioner relies on Amen as supporting its claim that the City s conduct in this case constituted a taking of its proper ty. There is no comparison. We observed in Maryland Port Admin. v. QC Corp., 310 M d. 379, 4 02, 529 A.2d 829, 840 (1987) that a taking in a Constitutional sense requires a high degree of interference with th e use of the pro perty. In Amen, there was that requisite degree of interfere nce. Similarly, in Reichs Ford, supra, 388 Md. 500, 880 A.2d 307, the State informed the own er and a ten ant directly that it intended to cond emn th e prope rty, as a result of which the tenant d ecided no t to renew its lease an d the lan dlord w as unab le to re-le ase the p roperty. The problem for petitioner lies less with the legal principles it espouses than with the fact that it has not shown, even for summary judgment purposes , that any condu ct by the City caused the termination of its tenancy. The threat of condemnation here was always a contingent or co nditiona l one . The City w as lookin g to h ave t he prope rty renovated in accordance with the area urban renewal plan, preferably by Abrams. Acquisition of the property was never the City s primary objective. At least six years before the month-tomonth tenancy was terminated and five years before the ordinance permitting condemnation was even introd uced, Ab rams wa s itself pursuin g re-develo pment op tions that would, inevitably, have resulted in termination of petitioner s lease. There was no taking. JUDGMENT OF COURT OF SPECIAL APPEALS AFFIRMED, WITH COSTS. -9-
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