MD Appeals Court Concludes that Opponents of Proposed Development Waived Their Right to Cross-Examine Witnesses When They Did Not Raise Objections at the Meeting and Finds Decision was Based on Substantial Evidence

This post was authored by Olena Botshtyen, Esq.

1788 Holdings, LLC (“1788 Holdings”) was planning to construct a convenience store and automobile filling station at a property zoned as Corridor Development (“CD”) in the City of Gaithersburg, Maryland. The Master Plan describes the area as commercial-office-residential and provides that it may contain multi-family units, light commercial uses and office uses. 1788 Holdings submitted a development plan for the City Council’s review, which was opposed by nearby property owners (“Opponents”). On August 5, 2019, the City Council and the Planning Commission held a joint public hearing, where 1788 Holdings presented the plan and provided information on its efforts to reduce light and noise spillage onto neighboring lots and to promote harmony with the residential character of the development. The Planning Commission held its public record open until August 29, 2019 and then following the next meeting on September 4, 2019 it provided a recommendation to the City Council to approve the plan subject to several conditions.

The City Council approved the plan in October, 2019, and Opponents sought judicial review of the City Council’s resolution. The circuit court concluded that the City Council failed to make findings of fact with regard to “residential character as required by the master plan” and that the Planning Commission failed to provide Opponents with a reasonable opportunity to cross-examine witnesses at the September 4, 2019 meeting. The court then issued an amended order and rescinded its previous decision regarding the City Council’s failure to make specific findings but affirmed the second part regarding cross-examination of witnesses. Opponents filed an appeal and 1788 Holdings and the City Council filed a cross-appeal. On appeal, the court considered (1) whether the City Council’s decision was based upon substantial evidence, (2) whether it was erroneous for not containing the required findings of fact, (3) whether the proposed automobile filling station is a permitted use in CD zone or it requires a conditional use permit, and (4) whether Opponents’ due process rights were violated when they were denied an opportunity to cross-examine witnesses.

• Substantial evidence

On the first issue, the court concluded that the decision was based on substantial evidence and was not unreasonable. Specifically, it found that the evidence showed that the proposed development was in accordance with the Master Plan and that the City Council did not err when it defined the gas station use as “accessory” to the retail use. The City Council resolution provides that according to the 1788 Holdings’ documentation, the majority of the commercial activity will take place at the retail store, and therefore, the primary use is a light commercial use rather than an auto service and repair center, and the gas station is accessory use to the retail use. Such a project would be in conformance with the Master Plan, which allows light commercial uses in the area. The court agreed that since retail sales are expected to outpace gas sales by a margin of two to one, the gas station should be considered an accessory use.

• Required findings of fact

Opponents argued that the City Council failed to make specific findings with regard to traffic and pedestrian safety, environmental, noise, and lighting impacts, whether the proposed project would be “in keeping with the residential character” of the neighborhood and whether it would be in the public interest. The court disagreed, stating that the record clearly shows that the City Council made the required findings of fact. In its resolution it stated that a shared drive aisle which would facilitate vehicular connectivity was established. Further, the plan provided for a landscape buffer between the proposed retail building and adjacent residential neighborhood. Finally, with regard to public interest, the City Council stated that the proposed project will contribute to overall economic development of the city, create jobs and generate additional tax revenues. The court thus concluded that the City Council made the required findings of fact, which is demonstrated by the record.

• Gas station as permitted vs. conditional use

The code lists permitted uses as “all uses listed as permitted … in all zoning districts unless otherwise prohibited…” Opponents’ understanding of this provision is that the only permitted uses in CD zone are those that are permitted in “every single zoning district”. They further stated that since a gas station is not permitted in every zoning district and even expressly prohibited in some, it is not permitted as of right in the CD zone and must require a conditional use permit. The court agreed with the opposite interpretation of 1788 Holdings and the City Council, which understood this provision as “so long as the use is permitted as of right in one of the other districts in the City of Gaithersburg, that use is permitted as of right in the CD Zone.” In their brief, the City Council noted that “there is no use that is permitted in all zoning districts,” which means that if Opponents’ interpretation was correct, there would be no uses permitted as of right in the CD zone. The court thus concluded that since a gas station is a permitted use in other commercial zones, it is also permitted in the CD Zone.

• Due process rights violation

The court concluded that Opponents’ due process rights were not violated, since they waited for more than three weeks before they submitted their objections, and by doing so they waived their right to cross-examine witnesses.

At the August 5, 2019 hearing, everyone who opposed the plan was given three minutes to speak. Opponents’ counsel spoke at the meeting, but he never requested to cross-examine the witnesses. The Planning Commission held its public record open until August 29, 2019, and on August 29^th Opponents’ counsel sent a letter to the Planning Commission, where he argued that the application should be regarded as a conditional use, and cross-examination of witnesses should be permitted. The court relied on the Hyson case, where “the opponents waived their right to cross-examination by failing to request cross-examination at the appropriate time during the relevant hearing.” The court then concluded that since Opponents did not request to cross-examine witnesses at the August 5, 2019 meeting, and waited for more than three weeks to submit their request, they waived their right to do so.

Cross Appeal

1788 Holdings and the City Council appealed the circuit court’s order, which concluded that Opponents were denied an opportunity to cross-examine witnesses at the September 4, 2019 Planning Commission Hearing. Similarly to its conclusion in the due process rights violation issue, the court concluded that since Opponents failed to assert that they were denied an opportunity to cross-examine witnesses at the September 4 hearing and only raised this issue in a letter two weeks after, they waived their opportunity to cross-examine witnesses. The court thus reversed the judgement of the circuit court with regard to cross-examination of witnesses, and otherwise affirmed.

Johnson v Mayor and City Council of Gaithersburg, 2021 WL 1233394 (MD 3/31/2021)