«No. 56, Sept. Term, 2015 Opinion by Battaglia, J. CORPORATIONS AND ASSOCIATIONS - POWER TO SUE - STATUTE OF LIMITATIONS A foreign limited liability ...»
A Guy Named Moe, LLC, t/a Moe’s Southwest Grill v. Chipotle Mexican Grill of
Colorado, LLC et al., No. 56, Sept. Term, 2015 Opinion by Battaglia, J.
CORPORATIONS AND ASSOCIATIONS - POWER TO SUE - STATUTE OF
A foreign limited liability company that files a judicial review action, although it
forfeited its right to do business prior to bringing the action, may nevertheless cure the
infirmity and “maintain” the action.
REAL PROPERTY LAW - ZONING - JUDICIAL REVIEW - STANDING -
SPECIAL AGGRIEVEMENT - PROTESTANT LACKS PROXIMITYWhen a protestant lacks proximity to the rezoned property, claims of harm, including a change in the character of the neighborhood and increase in traffic, and limited visibility, are not sufficient to show special aggrievement.
Circuit Court for Anne Arundel County, Maryland Case No. C-13-178391 IN THE COURT OF APPEALS Argued: February 5, 2016 OF MARYLAND No. 56 September Term, 2015 A GUY NAMED MOE, LLC, T/A MOE’S
CHIPOTLE MEXICAN GRILL OFCOLORADO, LLC ET AL.
*Battaglia Greene Adkins McDonald Watts Wilner, Alan M.
(Retired, Specially Assigned), JJ.
Opinion by Battaglia, J.
Filed: April 26, 2016 *Battaglia, J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the Constitution, Article IV, Section 3A, she also participated in the decision and adoption of this opinion.
In this case we are asked to determine whether A Guy Named Moe, LLC, the Petitioner, a foreign limited liability company doing business in Maryland, having filed a civil action in the Circuit Court for Anne Arundel County, although not registered to do business in Maryland, can continue to pursue its claims, once Chipotle Mexican Grill of Colorado, LLC, the Respondent, moved to dismiss the case because of Moe’s failure to register.1 Because we shall hold Moe can maintain its suit, we also address whether Moe has standing as a “person aggrieved” by the decision of the Board of Appeals of the City of Annapolis to approve Chipotle's application for a special exception and shall hold it does not.
The parties to this case are two foreign limited liability companies:2 A Guy Named Moe, LLC (“Moe”) and Chipotle Mexican Grill of Colorado, LLC (“Chipotle”). Both companies operate a chain of restaurants, which are respectively known as “Moe's Southwest Grill” and “Chipotle Mexican Grill.” The dispute between the parties, which underlies this appeal, began in 2012, when Chipotle applied for a “special exception”3 to 1
The question posed in the Petition for Certiorari states:
Did the Court of Special Appeals err when it determined that a foreign limited liability, that had previously and correctly registered to do business in Maryland, but whose registration lapsed or was forfeit, is absolutely and incurably barred from maintaining a lawsuit in the State of Maryland that is filed during such lapse?
2 “Foreign limited liability company” refers to “a limited liability company formed under the laws of a state other than this State.” Md. Code Ann., (1975, 2007 Repl. Vol., 2012 Supp.), Corporations and Associations Article § 4A–101(j).
3 In People's Counsel for Baltimore Cty. v. Loyola Coll. in Maryland, 406 Md. 54, 71A.2d 166, 176 (2008) we explained that a special exception use allows
administrative boards to permit certain land uses on a case by case basis:
(continued... ) build a restaurant at 36 Market Space in Annapolis, Maryland, which is approximately 425 feet from Moe's Southwest Grill at 122 Dock Street. The Department of Planning and Zoning for the City of Annapolis recommended that the City’s Board of Appeals approve Chipotle's application, but Moe opposed that recommendation during Board proceedings.
The Board, though, unanimously approved Chipotle's request in the Spring of 2013.
(... continued) The special exception adds flexibility to a comprehensive legislative zoning scheme by serving as a “middle ground” between permitted uses and prohibited uses in a particular zone. Permitted and prohibited uses serve as binary, polar opposites in a zoning scheme. A permitted use in a given zone is permitted as of right within the zone, without regard to any potential or actual adverse effect that the use will have on neighboring properties. A special exception, by contrast, is merely deemed prima facie compatible in a given zone. The special exception requires a case-by-case evaluation by an administrative zoning body or officer according to legislatively-defined standards. That case-by-case evaluation is what enables special exception uses to achieve some flexibility in an otherwise semi-rigid comprehensive legislative zoning scheme.
Chapter 21.26.010 of the Annapolis City Code provides:
A special exception may be granted for a use that the Zoning Code specifically authorizes in a zoning district as being allowed by special exception. In general, special exception uses may be compatible with the purposes of the zoning district in which they are to be located, but may have the potential to result in adverse impacts upon the immediate neighborhood. The process for review of special exception applications is designed to address such adverse impacts and minimize them where possible. A special exception requires a careful review of its location, design, configuration and special impact to determine, against specific standards, the desirability of permitting its establishment on a particular site.
7-201 et seq.,4 asking that the Circuit Court for Anne Arundel County review the Board's decision. Chipotle then filed a Motion to Dismiss in which it argued that Moe was unable to file a petition for judicial review because its right to do business had been forfeited,5 and, thus, could not “maintain” suit under Section 4A-1007(a) of the Corporations and Associations Article of the Maryland Code (1975, 2007 Repl. Vol.).6 Chipotle also 4 Rule 7-201(a) provides that, “The rules in this Chapter govern actions for judicial review of (1) an order or action of an administrative agency”. The time for filing such
petition is provided by Rule 7–203(a), which provides:
(a) Generally. Except as otherwise provided in this Rule or by statute, a
petition for judicial review shall be filed within 30 days after the latest of:
(1) the date of the order or action of which review is sought;
(2) the date the administrative agency sent notice of the order or action to the petitioner, if notice was required by law to be sent to the petitioner; or (3) the date the petitioner received notice of the agency's order or action, if notice was required by law to be received by the petitioner.
Md. Rule 7-201(a) (2012).
5 A “Certificate of Status” issued by the State Department of Assessments and Taxation, which was attached to Chipotle’s Motion to Dismiss, indicated that Moe was not in good standing because it had its right to do business forfeited by the State Department of Assessments and Taxation on November 16, 2006.
Under Section 4A-1013 of the Corporations and Associations Article, the State Department of Assessments and Taxation “may forfeit the right of any foreign limited liability company to do business in this State if the limited liability company fails to file with the Department any report or fails to pay any late filing penalties required by law”.
Upon forfeiture, “the foreign limited liability company is subject to the same rules, legal provisions, and sanctions as if it had never qualified or been licensed to do business in this State.” Id. Section 4A-1002(a), in turn, states that, “Before doing any interstate, intrastate, or foreign business in this State, a foreign limited liability company shall register with the Department.” 6 Section 4A-1007(a) of the Corporations and Associations Article provides that a foreign limited liability company may not maintain suit without complying with the requirements
of the Foreign Limited Liability Company subtitle:
(continued... ) 3 argued that Moe did not have standing to pursue a petition for judicial review of the Board’s decision because it was not a “taxpayer” and was not “a person aggrieved” under Section 4–401(a) of the Land Use Article, Maryland Code (2012).7 Moe, in response, filed an Amended Petition for Judicial Review and attached a “Certificate of Good Standing” issued by the State Department of Assessments and Taxation on September 24, 2013. Moe argued that, while it was not registered to do business in Maryland when it had filed its petition, it could still “maintain” the action under Section 4A-1007 of the Corporations and Associations Article because it had (... continued) (a) If a foreign limited liability company is doing or has done any intrastate, interstate, or foreign business in this State without complying with the requirements of this subtitle, the foreign limited liability company and any person claiming under it may not maintain suit in any court of this State, unless the limited liability company shows to the satisfaction of the court
(1) The foreign limited liability company or the person claiming under it has paid the penalty specified in subsection (d)(1) of this section; and (2)(i) The foreign limited liability company or a successor to it has complied with the requirements of this title; or (ii) The foreign limited liability company and any foreign limited liability company successor to it are no longer doing intrastate, interstate, or foreign business in this State.
Md. Code Ann. (1975, 2007 Repl. Vol.), Section 4A-1007 of the Corporations and Associations Article.
Section 4–401(a) of the Land Use Article, Maryland Code (2012) provides:
(a) Any of the following persons may file a request for judicial review of a decision of a board of appeals or a zoning action of a legislative body by
the circuit court of the county:
(1) a person aggrieved by the decision or action;
(2) a taxpayer; or (3) an officer or unit of the local jurisdiction.
that it did have standing, both as a taxpayer and as a person aggrieved.
The Circuit Court, after a hearing, dismissed Moe's petition, reasoning that a foreign limited liability company could maintain an action as long as it “c[a]me back and renew[ed]” its right to do business, but found that Moe lacked standing to petition for judicial review because it was not a taxpayer and the petition was brought “simply [as] a
matter of competition”:
[THE COURT]: The fact is that in this case, your client does not have standing. Your client is not a taxpayer within the meaning of the statute and therefore on that basis alone the Court must grant the motion.
You stand in the front of either one of these properties and look at the other, you will never have a direct view of it, and I don’t even have to get into all of those issues that you have raised, all the other issues. The fact is they are not a taxpayer and therefore cannot maintain this action.
I do believe, however, I believe if a limited corporation does file and hasn't paid their taxes or whatever, if they come back and renew it, I believe that would restore their right to maintain the action. But in this case, it simply appears to this Court it is simply a matter of competition.
It is an argument that is not the subject for which the Court could grant on the basis of competition. So therefore the Court is going to grant the motion to dismiss the case with prejudice. I will sign an order to that effect.
Moe appealed to the Court of Special Appeals, conceding that it was not a “taxpayer,” under Section 4-401(a) of the Land Use Article, but arguing that it still had standing to file such an action as “a person aggrieved” by the Board's decision under the very same statutory provision.8
Colorado, LLC, 223 Md. App. 240, 242, 115 A.3d 733, 734 (2015), the Court of Special Appeals affirmed the Circuit Court but disagreed with the lower court on the seminal issue of whether Moe could maintain its suit. Our intermediate appellate court concluded that, “the petition at issue was void ab initio, given that, at the time that it was filed, Moe's had lost its right to do business in Maryland and was nonetheless continuing to do business in Maryland.” Id. at 246, 115 A.3d at 736. The court reasoned that Moe’s right to do business in Maryland was forfeited when it had filed its initial petition for judicial review and had not been restored until over four months after the 30–day filing period had lapsed. Id. at 244, 115 A.3d at 735. Thus, according to the court, Moe could not proceed with its action because “it did not meet Rule 7–203(a)'s 30–day deadline, as it had no right to ‘maintain suit’ under C.A. § 4A–1007(a) during the entire 30–day period and, when it re-attained that right, the thirty-day period had long since lapsed.” Id. at 254, 115 A.3d at 741. The court opined that, “the plain language of the statute allows a foreign LLC to ‘cure the infirmity’ of forfeiture so that it may ‘maintain suit,’” but that even after satisfying the court of its right to maintain suit it could not “rely on a petition it had filed with the court when it had no such right to do so”. Id. at 248, 115 A.3d at 738.
1. Did the Circuit Court err when it concluded Appellant A Guy Named Moe, LLC lacked standing solely on the basis of the fact it did not pay property taxes as an owner of real property?
2. Is the Circuit Court required to make factual findings as to alleged aggrievement before dismissing an appeal of a zoning board decision for lack of standing?