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Rockville Cars, LLC v. City of Rockville

United States Court of Appeals, Fourth Circuit

May 24, 2018

ROCKVILLE CARS, LLC, d/b/a BMW of Rockville; PRIORITY 1 AUTOMOTIVE GROUP, INC., Plaintiffs - Appellants,
v.
CITY OF ROCKVILLE, MARYLAND; ROBERT L. PURKEY, JR., In his personal capacity, Defendants - Appellees.

          Argued: January 25, 2018

          Appeal from the United States District Court for the District of Maryland, at Greenbelt. Peter J. Messitte, Senior District Judge. (8:15-cv-03375-PJM)

         ARGUED:

          Howard Benjamin Hoffman, Rockville, Maryland, for Appellants.

          Kevin Bock Karpinski, KARPINSKI, COLARESI & KARP, P.A., Baltimore, Maryland, for Appellees.

         ON BRIEF:

          Sandra D. Lee, KARPINSKI, COLARESI & KARP, P.A., Baltimore, Maryland, for Appellees.

          Before MOTZ and DIAZ, Circuit Judges, and Robert J. CONRAD, Jr., United States District Judge for the Western District of North Carolina, sitting by designation.

          ROBERT J. CONRAD, JR., DISTRICT JUDGE:

         Rockville Cars, LLC and Priority 1 Automotive Group, Inc. ("Rockville Cars"), brought a Section 1983 suit in the District of Maryland against the City of Rockville, Maryland ("the City") and its Acting Chief of Inspection Services, Robert L. Purkey, Jr. In its action, Rockville Cars alleged a violation of its procedural due process rights under the Fourteenth Amendment when the City suspended its building permit. The City filed a Motion to Dismiss, which the District Court granted. Rockville Cars now appeals the District Court's decision.

         We agree with the District Court and affirm its decision. A property right failed to vest in Rockville Cars' building permit when its application contained material misrepresentations. Furthermore, even if Rockville Cars did have a property interest, it failed to take advantage of the sufficient process afforded to it by the state.

         I.

         In pursuit of its business selling new and used cars, Rockville Cars leased a parcel of land owned by Robin Tang in Rockville, Maryland. On this leased plot stood a building which previously housed a restaurant and a small furniture store. Rockville Cars planned to convert this building into an automobile show room.

         Before commencing its work on the building, Rockville Cars submitted two documents to the City in order to obtain a building permit. First, Rockville Cars sent a Minor Site Plan Application on October 17, 2012, to the City's Department of Community Planning and Development Services. This department would determine whether Rockville Cars' renovation plans complied with the City's zoning ordinances. In its Minor Site Plan Application, Rockville Cars accurately listed Robin Tang as the owner of the parcel of land and obtained his permission to begin redevelopment of the existing building. The project narrative stated that Rockville Cars would repurpose the building into a show room that would house approximately four cars. Specifically, Rockville Cars disclosed that the show room would "replace the vacated, approved restaurant use within the existing building." J.A. 46.

         Approximately four months later, in February 28, 2013, Rockville Cars filed a second document, a Commercial Building Permit Application ("Permit Application"), to a separate division of the Planning Department, the Inspection Services Division. This division's bailiwick did not include determining compliance with the City's zoning ordinances. It never saw-nor did the Permit Application refer to-the Minor Site Plan Application. The Permit Application featured two differences from the Minor Site Plan Application. First, under the project description, the Permit Application stated that Rockville Cars would not just repurpose, but demolish and renovate the building.[1] The demolition would leave the current building's existing foundation and partial walls unchanged, but Rockville Cars would otherwise rebuild within that footprint. Second, the Permit Application mistakenly listed Priority One Automotive as the property owner rather than Mr. Tang.

         After receiving the Permit Application, the City approved the renovation of the Rockville Pike building on March 21, 2013, and issued a permit in Mr. Tang's name. With the permit in hand, Rockville Cars razed the leased building, leaving only the foundational slab. Rockville Cars' plans, however, would soon come to a grinding halt. On July 17, 2013, Rockville Cars received an email relaying that Mr. Tang contacted the City and retracted his permission underlying the building permit. Accordingly, on July 19, Acting Chief of Inspection Services for the City, Robert Purkey, Jr., suspended Rockville Cars' building permit through a written Stop Work Order. The order explained that Mr. Tang claimed Rockville Cars lacked the authority to submit a building permit application. Additionally, the Stop Work Order stated that the scope of the project did not comport with the Minor Site Plan Amendment, which the City previously approved.

         In December of 2013, the City sent Rockville Cars a letter further detailing why it suspended the building permit. The City explained that the demolition of the building resulted in a violation of the City's zoning ordinances. Specifically, a "build-to" provision applied along the commercial strip upon which Mr. Tang's property was located. This ordinance mandated the construction of new buildings within a certain distance from the road. The original building predated the build-to provision and therefore was exempted from compliance. The City Code would have allowed this exception to continue if Rockville Cars merely renovated the interior of the original building. However, because Rockville Cars demolished the building, Rockville Cars was then required to build any new structure in accordance with the build-to provision.

         The following year, on May 16, 2014, Rockville Cars submitted a new application which the City approved. To restart construction, Rockville Cars conceded to numerous demands at a considerable expense. As a result, Rockville Cars brought suit in the District of Maryland claiming that suspension of the building permit violated its procedural due process rights under the Fourteenth Amendment. In Rockville Cars' sprint to federal court, it chose not to first pursue its claim through the City's Board of Adjusters and Appeals. As laid out in the Rockville City Code, Chapter 5, Article 5, Section 113.1, this Board of Appeals allowed claims for "[a]ny person aggrieved by and desirous of challenging a decision of the administrative authority in connection with the interpretation, application, or modification of any provision … relating to the manner of construction or material used in connection with the erection, alteration, or repair of a building." J.A. 28.

         The City responded to Rockville Cars' complaint by filing a Motion to Dismiss the Amended Complaint, or, in the Alternative, Motion for Summary Judgment.[2] The District Court granted the City's Motion, concluding that no property interest vested in a building permit granted on the basis of material misrepresentations within an application. Rockville Cars, LLC v. City of Rockville, Maryland, No. CV PJM 15-3375, 2017 WL 57215, at *6 (D. Md. Jan. 4, 2017). It also found in the alternative that, even if Rockville Cars obtained a property interest, it was not deprived of that interest. Id. at *6-7. Going further, the District Court also concluded that, even if Rockville Cars was deprived of its property interest, it was nonetheless afforded due process. Id. at *7-8. The District Court explained that Rockville Cars had access to post-deprivation process but "gave the matter little or no thought." Id. at *9. Not only did the District Court point to ...


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