Wilson v. State (Ct. of Special Appeals)

Filed May 2, 2007--Opinion by Judge James Kenney.

During a traffic stop, the trunk of a vehicle driven by Wilson was found to contain a suitcase packed with six and one-half pounds of marijuana. Wilson was found guilty in a bench trial of possession of marijuana with intent to distribute and sentenced to two years imprisonment.

Prior to trial, Wilson moved to suppress evidence of the marijuana recovered from the trunk, and the denial of that motion is the subject of this appeal. The Court rewrote the presented question as follows: Does the odor of burnt marijuana emanating from the passenger compartment of a vehicle, by itself, establish probable cause to search the vehicle's trunk under the automobile exception to the warrant requirement of the Fourth Amendment?

In considering a denial of a motion to suppress, the Court is limited to the record of the suppression hearing. Further, the appellate court will accept the version of the evidence most favorable to the prevailing party. As a question of law, the Court reviews de novo whether appellant's motion to suppress was properly denied.

The Fourth Amendment ordinarily requires that a warrant be secured prior to conducting a search. An exception to the warrant requirement is the "automobile exception," known as the "Carroll Doctrine." If a car is readily mobile and probable cause exists to believe it contains contraband, the Fourth Amendment . . . permits police to search the vehicle without more. This Court has held that the odor of burnt marijuana, alone, affords probable cause to search the passenger compartment of a vehicle under the automobile exception. Further, many of the cases applying the Carroll doctrine have found probable cause to search the trunk of a motor vehicle based on evidence apparent to a police officer after a lawful search of the passenger compartment of the vehicle. However, in this case, the search of the passenger compartment produced no additional evidence of the presence of marijuana in the vehicle. Wilson contends that, under the circumstances, any probable cause to search the passenger compartment of a vehicle based solely on the odor of burnt marijuana would not extend to the vehicle's trunk.

The Court reasoned that marijuana and other illegal drugs, by their very nature, can be stored almost anywhere within a vehicle. The location-specific principle that "probable cause must be tailored to specific compartments and containers within an automobile" does not apply when officers have only probable cause to believe that contraband is located somewhere within the vehicle, rather than in a specific compartment or container within the vehicle. The odor of burnt marijuana emanating from a vehicle provides probable cause to believe that additional marijuana is present elsewhere in the vehicle. To adopt Wilson's argument, the trunk or any other area outside of the passenger compartment would become a safe harbor for the transportation of drugs for both users and traffickers. Judgment Affirmed.


The full opinion is available in PDF.

Bereano v. State Ethics Commission (Ct. of Special Appeals)

Filed April 12, 2007. Opinion by Judge James A. Kenney, III (retired, specially assigned).

Upon consideration of Bereano's appeal of the judgment of the Circuit Court for Howard County, which had affirmed the finding of the State Ethics Commission (the Commission") that Bereano had knowingly and willingly violated Section 15-713(1) of the State Government Article of the Maryland Code by being engaged for lobbying purposes for compensation that was contingent upon executive or legislative action, and the sanctions of reprimanding him, suspending his lobbying activities for ten months, fining him $5,000 and requiring him to submit copies of all fee agreements for a period of three years, the Court AFFIRMED the judgment below. The Court also DENIED Bereano's motion for reconsideration to a court panel or in the alternative for an en banc hearing.

This case arose out of a contractual relationship between Bereano and a client ("Traina") for lobbying, political consulting and contract development services for Traina's company. The contract ("Fee Argeement") was proposed by Bereano on September 1, 2001 and accepted by Traina on September 13, 2001, and provided for a monthly retainer, reimbursement of expenses, and compensation of 1% of the first year's receivables for each facility opened for which Bereano was "involved in securing and participated in obtaining, and/or any contract or performance of services which is entered into by your company with any government entity, unit or agancy in the State of Maryland or and other sate of jurisdiction in which [Bereano] worked on the matter."

On November 13, 2001, Bereano filed a lobbying registration form with the Commission for executive and legislative action lobbying on behalf of one of Traina's company's subsidiaries. Subsequently, Bereano billed Traina for his services, including the monthly retainer and expense reimbursement.

In June of 2002, Traina sent a letter to Bereano, noting that the Baltimore Sun had questioned the Fee Agreement, claiming it contained an illegal "contingency agreement". Subsequently, the Fee Agreement was amended to remove the questioned language. The Commission subsequently initiated a complaint against Bereano in September, 2002, on matters including the Fee Agreement, and a hearing on the merits was held in June of 2003. At the hearing, Bereano claimed the additional fee was included at Traina's request, but did not call Traina to testify on this, and claimed that he had not in fact performed any lobbying on behalf of his client.

In its final decision and order, the Commission found that Bereano had knowingly and willfully violated Section 15-713(1), based upon the clear language of the Fee Agreement, finding Bereano's testimony less than credible in claiming not to be aware of Traina's public contracts and in not performing lobbying for Traina, and imposed a fine, a reprimand, a suspension for ten months, and supervision for three years thereafter.

The Court noted that Bereano's claim to have not done any actual lobbying was not relevant, since the prohibited activity was contracting for such contingent agreement and not actual performance, and he had in fact registered as a lobbyist, bringing him within the sanctions provided in the statute. Interpretation of the 'plain meaning' of the statute may include consideration of the context in which it was passed, and the evil intended to be addressed, and to prohibit only contracts for successful lobbying would not effect the purpose. Similarly, the 'plain language' of the Fee Agreement supported the Commission's conclusion that in fact it contained a prohibited contingency fee agreement.

Bereano also claimed that the statute's effective date, being November 1, 2001, was after the execution of the Fee Agreement, and to hold him liable would be to retroactively apply the statute. The Court disagreed, since it was not only the execution of the Fee Agreement, but the continued operation under it, that constituted the violation, distinguishing this situation from that in the Evans decision, which involved a prior criminal conviction. The Court also found that intentionally and voluntarily entering into the Fee Agreement and continuing to operate under its provisions satisfied the "knowingly and willingly" requirement of the statute.

Bereano also contended that the Commission erred in applying the "missing witness rule" to infer from Bereano's decision not to call Traina that Traina would not have supported Bereano's representations on several points. The Court found that it was up to the Commission, as trier of fact, to draw inferences from conflicting evidence, and that here Traina was "peculiarly available" to Bereano, based on their business relationship, that was not countermanded by the Commission's ability to subpoena Traina, had it chosen to do so. Since Bereano had himself highlighted what Traina would have said "if he were here under oath", it was incumbent upon him to explain Traina's absence, and no error for the Commission to apply the "missing witness rule", allowing it to draw a negative inference from that absence.

The opinion is available in PDF format.

Cinque v. Montgomery County Planning Board (Ct. of Special Appeals)

Filed March 15, 2007. Opinion by Judge James Kenney.

This case concerns the ability of an administrative agency to reconsider a quasi-judicial decision.

The Montgomery County Planning Board of the Maryland-National Capital Park and Planning Commission (the "MCPB"), first approved a preliminary plan for a subdivision in Montgomery County's Agricultural Reserve, then reconsidered its decision and denied the proposed plan, and then reconsidered its denial and ultimately approved the application. Appellants, individual property owners and various organizations, argued that the MCPB violated its own Rules of Procedure and the McKinney test in granting the second reconsideration and approving the proposed subdivision.

An administrative agency may grant reconsideration pursuant to a statute or regulation. In the absence of such express authority, an agency has the inherent power to reconsider its decision in the event of fraud, surprise, mistake or inadvertence. Miles v. McKinney, 174 Md. 551, 199 A.2d 502 (1938). In this case, MCPB regulations provided that the agency may reconsider upon "a clear showing that the [agency] did not conform to relevant law or its rules of procedure." Accordingly, when the MCPB accepted the argument of the property owner that the denial of the application was not in accordance with the development standards of the applicable zone, it had a valid ground to grant reconsideration. Neither the fact that the membership of the MCPB had changed nor the fact that one member had reversed his own views made the reconsideration decision an impermissible change of mind.

The opinion is available in PDF.

Comptroller v. Colonial Farm Credit, ACA (Ct. of Special Appeals)

Filed March 12, 2007--Opinion by Judge James A. Kenney, III.

The taxpayer is an "Agricultural Credit Association" (an "ACA") established under Federal law to provide credit to farms. Often, ACAs are the result of the merger of two other types of farm credit entities, Federal Land Bank Associations ("FLBAs") and Production Credit Associations ("PCAs").

After the creation of ACAs by Congress, disputes arose between ACAs and the IRS regarding whether lending activities that would have previously been conducted by FLBAs remained tax exempt after the merger of an FLBA into an ACA. In United States v. Farm Credit Servs. of Fargo, ACA, 89 A.F.T.R.2d (R.I.A.) 2002-334-36 (1998), the United States District Court for the District of North Dakota considered one such dispute. The court concluded that the lending services at issue were exempt. This lead to a number of "closing agreements" between the IRS and other ACAs, including Colonial.

Specifically, IRS entered into two closing agreements with Colonial, one of which entitled Colonial to a refund of 60% of its "long-term taxable income" for the years 1991 and 1993-1999, and a second to the same effect for the year 2000. The Comptroller refused to be bound by these closing agreements and denied Colonial tax refunds for the years in question.

The Court of Special Appeals noted that there are two methods by which a taxpayer may enter into a binding agreement with the IRS on a disputed issue: (1) a closing agreement under 26 U.S.C.A. §7121, or (2) a compromise under 26 U.S.C.A. §7122. The Court of Special Appeals drew on this distinction and said:

A settlement agreement between a taxpayer and the IRS does not necessarily alter the taxpayer's legally required federal taxable income, and a compromise generally would not create an income figure that is binding on Maryland. A closing agreement, on the other hand, can have the effect of altering a taxpayer’s federal taxable income. When it does, as in the case before us, the taxable income figure established by the closing agreement is binding as the basis for Maryland income tax.

Thus, the Court of Special Appeals rejected the Comptroller's position, a position that had been accepted by the Maryland Tax Court, to the effect that the closing agreement was a compromise as to the tax due and that the Maryland taxing authorities could reach a different conclusion and result. Rather, it affirmed the Circuit Court, which had reversed the Tax Court, and interpreted the closing agreement as an agreement that altered the amount of taxable income reported by the taxpayer in the years in question, making that determination binding on the State of Maryland.

A copy of the opinion is available in PDF.

Montgomery County v. Wildwood Medical Center, L.L.C. (Ct. of Special Appeals)

Filed March 8, 2007. Opinion by Judge Theodore G. Bloom (retired, specially assigned), dissent by Judge James A. Kenney, III.

In a case decided upon a fine weighing of real property principles, the judgment below was REVERSED and the case REMANDED to the Circuit Court for Montgomery County for entry of a judgment reversing the decision of the Tax Court.

The matter arose from the determination below that a refund was due for recordation and transfer taxes imposed and paid upon the recordation of a deed in 2003. That deed had conveyed certain property, owned and titled of record in various percentage interests and to various family members and trusts for the benefit of family members (collectively, the "Aubinoe Family"), to a limited liability company (the "LLC") whose members were the same family members and trusts who held membership interests in the LLC in the same proportion as their prior direct ownership of the real property.

The deed recited that, for several years prior to the 2003 transfer, the Aubinoe Family had operated as a family general partnership, and thus the transfer should not be subject to recordation and transfer taxes under the Tax-Property Article of the Maryland Code. Nonetheless, payment of such taxes was required before the deed would be accepted for record, and they were paid under protest and the deed recorded.

The LLC then sought a refund of recordation and transfer taxes required at recording, on the grounds that the deed was exempt as a transfer to the LLC from a predecessor entity under Section 12-108(y)(2) and Section 13-405(c) of the T-P Article. Denied relief by the Montgomery County Department of Finance, the LLC appealed to the Maryland Tax Court, which ordered the requested refund. Montgomery County then appealed to the Circuit Court, which affirmed the Tax Court's decision, and this appeal followed.

Noting that in 1766, execution and recordation of a deed had replaced livery of seisin as the sole means of transferring title to real property in Maryland, the court further noted that, by contrast, transfer of ownership of real property need not be in writing, citing for that proposition the 1958 case of Vlamis v. Deweese, in which it was held that a transfer of a one-half interest in real property to a business partner was effective as a transfer to, and disposition as, partnership property, notwithstanding the record title interest. The court then traced the history and current language of the recordation and transfer tax statutes, noting that the tax was imposed upon instruments that were required to be recorded to transfer title to property, and the exemption in Section 12-108(y)(2) is limited to instruments of writing that transfer title to property, and further noting that such exemptions are to be narrowly construed.

The court then went on to note that the Aubinoe Family could have avoided recordation and transfer taxes on the deed in question if they had first transferred title to the property to the general partnership, and then to the LLC, but then noted that the first transfer of title (from the individual and trust owners of record to the family general partnership) would have been taxable at the same rate avoided on the second transfer. Since the family general partnership did not have title to the property to transfer, merely ownership, the deed was not entitled to the exemption. Therefore, the court held that the imposition of taxes was justified, and consequently reversed the decision below, and remanded the case for entry of an order reversing the Tax Court's decision.

In dissent, Judge Kenney cited the Tax Court decision, several Court of Appeals decisions and other authority for the proposition that property does not have to be titled in the name of a partnership to in fact be partnership property, and that the majority's reliance on a crucial distinction between "title" and "ownership" to resurrect an "empty technicality" that had long been put to rest by case and statutory law. Judge Kenney found both the statutory intent and the specific statutory language for the exemption to have been satisfied here, and would have affirmed the decision of the Tax Court.

The majority and dissenting opinions are available in PDF format.