Summary
The Maryland Court of Appeals held that the common law voluntary payment doctrine does not bar a refund claim when the General Assembly has provided a statutory refund mechanism. A person who pays a municipal sewer connection fee and alleges that it was illegal or miscalculated may seek a refund under Maryland's local-government refund statute and appeal a denial to the Maryland Tax Court. The court decided only that the claim could proceed and expressed no opinion on whether a refund was ultimately warranted.
Topics
Practice areas
Questions Presented
- Whether a person who paid municipal sewer connection charges may seek a refund under Maryland Code, Local Government Article, § 20-113 et seq.
- Whether the common-law voluntary payment doctrine bars a statutory refund claim for allegedly illegal or miscalculated municipal sewer connection charges.
- Whether the Maryland Tax Court has jurisdiction under Local Government Article, § 20-117, to hear an administrative appeal from the municipality's denial of that refund claim.
Holdings
- A person who paid a sewer connection fee imposed by a municipality and alleges that the fee was illegal or miscalculated may seek a refund under Maryland Code, Local Government Article, § 20-113 et seq.; the statute broadly covers taxes, fees, charges, interest, and penalties imposed by a local government.
- West Capital Associates, L.P. v. City of Annapolis did not preclude Tax Court jurisdiction because that case involved contractual payments to a municipality acting in a proprietary capacity, whereas the charges here were imposed under a municipal ordinance.
- The voluntary payment doctrine does not bar a refund claim brought under the local-government refund statute.
- The Maryland Tax Court has jurisdiction under Local Government Article, § 20-117, to hear an administrative appeal from a municipality's denial of a refund claim involving an allegedly illegal or miscalculated sewer connection charge.
Key quotations
“The question before us is not whether Brutus 630 gets a refund, but rather whether it gets a day in court – more precisely, a day before the administrative agency known as the Maryland Tax Court – to decide its claim for a refund.” (448 Md. at 359)
“The text of LG §20-113 allows a person who has made an allegedly erroneous or illegal payment of any tax, fee, charge, interest, or penalty imposed by a municipality an opportunity to file an application for a refund.” (448 Md. at 373)
“A person who has paid a sewer connection fee imposed by a municipality and alleges that the fee is illegal or miscalculated may seek a refund from the municipality under LG §20-113 et seq.” (448 Md. at 382)
“The voluntary payment doctrine does not bar such a refund claim.” (448 Md. at 382)
“The Maryland Tax Court has jurisdiction under LG §20-117 of an administrative appeal of a denial of such a refund claim.” (448 Md. at 382)
Factual background
The Town of Bel Air imposed sewer connection charges on property within the Town under its ordinances and agreements concerning sewage treatment services provided through Harford County. During development of a 274-unit condominium community, NVR paid the Town $1,186,627 in sewer connection fees as a condition of obtaining building permits. NVR assigned its potential refund claim to Brutus 630, which alleged that the charges were unauthorized and incorrectly calculated.
Procedural history
NVR, Inc. paid sewer connection fees to the Town and assigned its potential refund claim to Brutus 630. Brutus 630 filed a refund application under Maryland's local-government refund statute, which the Town denied. The Maryland Tax Court dismissed Brutus 630's appeal for lack of jurisdiction and alternatively concluded that the voluntary payment doctrine barred recovery. The circuit court dismissed the judicial-review action, the Court of Special Appeals affirmed, and the Court of Appeals reversed and remanded for the Tax Court to consider the appeal.
Remand instructions
The judgment of the Court of Special Appeals was reversed. The case was remanded to that court with instructions to remand it to the Circuit Court for Harford County, which was instructed to remand the case to the Maryland Tax Court for further proceedings consistent with the opinion, including consideration of the refund appeal on its merits.