author: Thompson, J.,

text:
    MAYOR AND CITY COUNCIL OF BALTIMORE v. WALTER LEE SEIDEL, JR. et al.
    [No. 375,
    September Term, 1979.]

      Decided January 9, 1980.

    The cause was argued before Morton, Thompson and Wiener, JJ.

      William Hughes, Associate City Solicitor for Baltimore City, with whom were Benjamin L. Brown, City Solicitor, and William R. Phelan, Jr., Assistant City Solicitor, on the brief, for appellant.

      Kenneth P Niman, with whom were Paul D. Bekman and Kaplan, Heyman, Greenberg, Engelman & Belgrad, P.A. on the brief, for appellees.
   Thompson, J.,

delivered the opinion of the Court.

The Mayor and City Council of Baltimore (the City) appeal from a judgment entered against it in favor of Walter Lee Seidel, Jr., Frances Seidel, his wife, and Northwestern National Insurance Company. (All of the appellees are hereinafter referred to as the Seidels).

The trial judge entered judgment against the Penn Central Transportation Company (Penn Central) and the City for the sum of $38,515.07. Penn Central did not appeal.

I. Sufficiency of the Evidence

Appellant’s first contention is that the trial judge erred in failing to grant its motion for directed verdict. In considering a motion for a directed verdict, the trial court must assume the truth of all credible evidence, and of all inferences fairly deducible therefrom in the light most favorable to the party against whom the motion is made. Impala Platinum Ltd. v. Impala Sales, 283 Md. 296, 328, 389 A.2d 887, 905-906 (1978); thus, we will recite the evidence in the manner most favorable to the appellees.

On February 7, 1973, at approximately 5:00 a.m. appellee Walter Lee Seidel, Jr. was driving his 1972 Ford truck to his place of employment, the F. & M. Schaefer Brewing Co., located at Conkling and O’Donnell Streets in Baltimore City. It was dark and the weather conditions were foggy and misty. Seidel followed his usual route from his home on Wilkens Avenue and, as he approached the plant, made a left turn from Boston Street onto Conkling Street. Approximately forty feet from its intersection with Boston Street, Conkling Street is crossed at grade by eight sets of railroad tracks, seven of which were in regular use. There were no street lights in the immediate area of the railroad crossing. Mr. Seidel had been using this route to work for the 32 years he had been employed by the F. & M. Schaefer Brewing Co. Seidel drove up to the tracks and stopped his vehicle. After stopping and looking both ways, he proceeded to cross the tracks, at which point his truck was struck by a railroad engine. Seidel testified that he saw no lights on the engine and that he heard no horn or bell. As a result of the collision, Seidel was injured and his truck damaged. The crossing was not protected by active warning devices; the only warning device located at the scene was a crossbuck sign, located on the right side of the northbound traffic on Conkling Street.

The Seidels called Mr. Hugo Liem, Jr., Commissioner of the Department of Transit and Traffic of Baltimore City, who was appointed to the post in 1969, and held the post at the time of the accident in question, February 7,1973. At the time of the accident, the Department of Transit and Traffic did not maintain any records, documents or memoranda with reference to (1) the number of railroad tracks present at the Conkling Street crossing; (2) the usual or general speed of rail traffic over that set of tracks; (3) the number and frequency of trains using the crossing; (4) the topography or general type of location surrounding the tracks; (5) the frequency of vehicular traffic over the tracks; or (6) the types of signaling, warning or sign devices present at the crossing. Mr. Liem testified that the Department of Transit and Traffic keeps, for a period of time, the records developed by the Police Department with regard to the number and character of accidents. While the Department of Transit and Traffic maintains a “worst corner” list, no railroad crossings were on that list.

The Seidels also called George E. Frangos, an expert in the area of traffic and transportation safety. He gave an opinion that the railroad crossing near the intersection of Boston and Conkling Streets was inherently unsafe and hazardous because of a lack of a proper warning device and because: (1) there was insufficient lighting in the area of the crossing; and (2) the presence of a utility pole in the vicinity of the crossing constituted a visual obstruction to the motorist northbound on Conkling Street looking west for approaching trains.

Frangos further testified that he studied the accident frequency of the crossing in question. Based on records kept by the Baltimore City Police Department he was able to determine that there had been four accidents at the crossing over a five year period. He further testified that based on a national study of 5,541 crossings controlled only by a crossbuck sign, there existed the probability of one accident occurring every ten years. We quote a portion of his testimony:

“Q. In the course of your study and investigation and the analysis of this railroad crossing, can you describe to the ladies and gentlemen of the jury, please, Mr. Frangos, what factors you considered that went into your analysis in this case? A. The standards for the marking and control of railroad grade crossings are rather — pretty generally well known to the traffic engineering profession. They’re contained in the traffic engineering handbook. They’re contained in publications of the American Association of Railroads who in turn provide the same input to the manual Uniform Traffic Control Devices. That is a document produced by the U.S. Department of Transportation that represents a national standard for the controlling regulation of traffic through signing, pavement marking and other control devices.
“Q. What is an advance warning sign? A. It is simply a black on orange informational sign that has railroad crossing ahead indicator on it. There is a pavement marking that is placed in the approach to the grade crossing that has — if you pardon me I will refer to my report. It has an X emblem painted on the street or the roadway approaching the grade crossing with the initials R-R on either side of this crossing. And at the immediate vicinity of the railroad tracks you have a white mark extended across the pavement to indicate where a vehicle should stop to look down the railroad tracks and see if a train is coming. The advance sign also alluded to an X on it with a R-R on it of course. Of course on the railroad property itself should be the crossbuck with the term railroad crossing on it. In many cases they even identify the number of tracks that are on the crossing.
“As the hierarchy extends you have wigwag signs — wigwag symbols. Excuse me. They’re two pendent shaped devices that sit at a V-shape and when a train is coming down they wave back and forth.
“Q. How are these operated? A. Electronically. A train coming down the track activates a device and it sets the wigwag device into action.
“Q. That is a device that indicates that a train is approaching? A. That’s correct.
“Q. What other devices are available? A. Flashing lights.
“Q. How do flashing lights work? A. When a train approaches the intersection they start flashing and warning the drivers that a train is coming.
“Q. Anything else that would be available? A. The highest type is a gate, a gate that literally drops down. These days in these cases they are done automatically and restrains a vehicle from crossing the railroad tracks.
“Q. That’s the same type of protection that was present at this scene? A. That’s correct [a crossbuck sign]. It deduced, based on this national study, that the probability of an accident occurring at this type of control was .103. This means one accident every ten years. That was assigned a relative hazard evaluation of one.
“Q. Other devices also studied in this study? A. The,-next device looked at was stop signs. They analyzed 728 crossings across the country that had this type of protection. Probability of an accident occurring here was .06 which means one accident every sixteen years. That had a relative hazard of .58. This means applying a stop sign at a railroad you cut that relative hazard in half.
“Q. Go on. A. Now, for the wigwags, which I described, they analyzed 303 intersections. Excuse me. 303 railroad grade crossings across the country. The probability of an accident at this type of control was .035, which means an accident once every thirty years.
“Q. Every thirty years? A. Thirty years.
“Now, the next protection type we come to is flashing lights. They analyzed 795 grade crossings across the country that had flashing lights. And the probability of an accident at this type of control was .021. That means an accident once every fifty years.
“Q. With flashing lights? A. With flashing lights. And the relative hazard here was .2, which means it is five times more effective.
“Q. Than what? A. Than the crossbuck. And, finally, gates. These are gates of all types. They analyzed 128 crossings across the country. Came up with a probability of .011, which means one accident every one hundred years. This was deduced to be ten times effective than simply a crossbuck.

Appellant argues that there was no evidence to show that Article 20, §§ 13-15 (c) of the Baltimore City Code (1968 ed.) were violated by the City. We disagree. The testimony of Mr. Hugo Liem, Jr. showed that he, as the Commissioner involved, did not keep the records nor make the studies required by the ordinance. If he had kept the required records and made the required studies the expert testimony shows that a different warning device should have been installed.

The City further argues that, assuming there was a violation of the ordinance, the evidence was legally insufficient to show that the violation of the ordinance was the proximate cause of the injury. The City relies primarily upon Austin v. Buettner, 211 Md. 61, 124 A.2d 793 (1956), Bloom v. Good Humor Ice Cream Co., 179 Md. 384, 18 A.2d 592 (1941) and Peterson v. Underwood, 258 Md. 9, 264 A.2d 851 (1970) in which the Court said:

“Proximate cause ultimately involves a conclusion that someone will be held legally responsible for the consequences of an act or omission. This determination is subject to considerations of fairness or social policy as well as mere causation. Thus, although an injury might not have occurred ‘but for’ an antecedent act of the defendant, liability may not be imposed if for example the negligence of one person is merely passive and potential, while the negligence of another is the moving and effective cause of the injury. Bloom v. Good Humor Ice Cream Co., 179 Md. 384, 18 A.2d 592 (1941), or if the injury is so remote in time and space from defendant’s original negligence that another’s negligence intervenes. Dersookian v. Helmick, 256 Md. 627, 261 A.2d 472 (1970); Liberto v. Holfeldt, 221 Md. 62, 155 A.2d 698 (1959).” 258 Md. at 16.

On the other hand, the appellee argues and we agree that in this case the question of proximate cause was for the jury as a strictly factual question under Otis Elevator v. Lepore, 229 Md. 52, 181 A.2d 659 (1962), in which the Court quoted from Prosser, Torts (2d ed.) § 44:

“When a child is drowned in a swimming pool, no one can say with certainty that a life guard would have saved him; but the experience of the community permits the conclusion that the absence of the guard played a significant part in the drowning. Such questions are peculiarly for the jury; and whether proper construction of a building would have withstood an earthquake, or whether reasonable police precautions would have prevented a boy from shooting the plaintiff in the eye with an airgun, are questions on which a court can seldom rule as a matter of law.” 229 Md. at 58-59.

It seems to us the City was an active participant in the injury because of its failure to require a signaling device that would have notified Mr. Seidel not only that there were railroad tracks at the intersection, which he obviously knew, but that a train was actually approaching at the moment he was attempting to cross the tracks. We see no public policy, such as remoteness, which would preclude liability as in the cases relied upon by the appellant.

II Jury Instructions

Appellant argues that the judge erred by not including the words “proximate cause” in the jury instructions. The City requested that the trial court instruct the jury as follows:

“If you find that there was evidence of a violation of the ordinance that has been read to you in this case, you must then decide if the violation of the ordinance was the proximate cause of the plaintiff’s injuries.
If you do not find that the evidence shows that the violation of the ordinance was the proximate cause of the plaintiff’s injury then your verdict must be for Defendant.”

The trial judge gave the following instructions:

“The violation of a statute or an ordinance which is a cause of the injuries is evidence of negligence. In other words, if someone violates a statute or an ordinance and the violation of that ordinance or statute is a cause of the injury that was complained of, then the violation of the statute is evidence of negligence.”

Proximate cause, as we have indicated, can be merely a factual question as to cause or it can be the limitation which the courts have placed upon the actor’s responsibility for the consequences of his conduct. W. Prosser, Handbook of the Law of Torts (4th ed. 1971) § 41.

“The word ‘proximate’ is a legacy of Lord Chancellor Bacon, who in his time committed other sins. The word means nothing more than near or immediate; and when it was first taken up by the courts it had connotations of proximity in time and space which have long since disappeared. It is an unfortunate word, which places an entirely wrong emphasis upon the factor of physical or mechanical closeness. For this reason ‘legal cause’ or perhaps even ‘responsible cause’ would be a more appropriate term.” W. Prosser, Handbook of the Law of Torts (4th ed. 1971) § 42.

As the Court of Appeals stated in Peterson v. Underwood, supra:

“It should be clarified at this point that our inquiry is directed specifically to the issue of ‘causation in fact’ which has been regarded as an aspect of ‘proximate cause.’ W. Prosser, Handbook of the Law of Torts, § 41, at 240 (3d ed. 1964), 2 F. Harper and F. James, The Law of Torts, § 20.2, at 1110 (1956).” 258 Md. at 16.

As we have said, if the Director had kept the required records and made the required studies, he should have determined that a different type of warning signal was necessary at the intersection. The word, “proximate” in the jury instructions was unnecessary because the instructions did say the jury must find that the violation of the ordinance was a “cause” of the accident, and all the jury was concerned with was the factual, not the policy determination.

Ill Governmental Function

Appellants argue that the City is immune from liability because the placing of warning signs is a governmental function. It is established in Maryland that a municipality is immune from actions done pursuant to its governmental functions and not its proprietary or corporate functions. Katz v. Washington Suburban Sanitary Commission, 284 Md. 503, 508, 397 A.2d 1027, 1030 (1979); Godwin v. County Commissioners of St. Mary’s County, 256 Md. 326, 334, 335, 260 A.2d 295, 299 (1970).

In Mayor and City Council of Baltimore v. Thompson, 171 Md. 460, 467, 189 A. 822 (1936), the Court stated:

“It needs no authority to support the proposition that the municipality is under the duty of exercising reasonable care to keep its public highways safe for public travel...”

In Gordon v. Howard County, 13 Md. App. 42, 280 A.2d 906 (1971), this Court stated the rule with reference to signs along a highway as follows:

“It appears from the general tenor of these authorities cited with approval by the Court of Appeals that in order to impose a legal duty upon a municipality to post warning signs along its highways or to take other precautionary measures to guard the safety of members of the public using such public ways, the existing hazardous condition must be indeed unusual and extraordinary in nature. Furthermore in accordance with the rule enunciated in Birckhead v. Baltimore [174 Md. 32, 197 A. 615], at p. 38, the dangerous condition ‘must be such as would create a reasonable probability of an accident occurring to a traveler.’ ” 13 Md. App. at 48-9.

In the instant case the expert testimony was sufficient to show a hazardous condition existed at the railroad crossing which created a reasonable probability of an accident occurring to a traveller. Because the placing of warning signs on public highways is a proprietary or corporate function, the City is not immune from suit.

Judgment affirmed.

Appellant to pay the costs.

      . The train which struck Seidel approached the crossing from the west.

      . Sections 13-15 (c) of the Code provide:
      “13. Safety device required.

      In order to protect the health, safety, and security of the public at locations within the boundary lines of the City of Baltimore, now or as hereafter existing, where the tracks of any railroad company cross a public street at grade, the railroad company shall install and maintain at such crossing one of the type of signalling, warning or safety devices, in the manner, of the type, and as required under and in accordance with the provisions of Section 15 hereof.
      14. Enforcement of provisions.

      The Director of Traffic of the City of Baltimore is hereby authorized, empowered and directed to enforce the provisions of this subtitle.
      15. Enforcement procedures.

      (a) Notices; required. Whenever and wherever the Director of Traffic determines after adequate investigation and consultation with the railroad and the Director of the Department of Public Works that the crossing of a public street or highway at grade by the track or tracks of such railroad in the City of Baltimore creates a condition that reasc uioly requires more adequate protection in addition to that already provideu by the railroad, if any, he shall notify in writing the railroad company owning or operating oyer said tracks at the particular location of his finding that said crossing reasonably requires further protection and shall order the railroad company either to erect or install and maintain at the crossing (1) automatic gates, or (2) automatic flashing lights, or (8) appropriate warning signs, or (4) to provide train crew protection, or (5) any combination of (1) to (4), inclusive.
      (b) Same; content. Every such notice issued by the Director of Traffic shall set forth in writing the pertinent facts relative to the particular location; the requirements which must be complied with by the railroad; the reasons for said findings, conclusions and orders and a reasonable period of time in which the order must be complied with.
      (c) Factors to be considered. In determining whether or not a particular railroad grade crossing as aforementioned, creates a condition that reasonably requires further protection, and in determining which warning or safety measure, if any, set forth in 15(a) hereinabove shall be provided by the railroad company at a particular location, the Director of Traffic shall give consideration to the following:
      (1) The number of tracks involved at the particular location;
      (2) The usual or general speed of the rolling equipment operated over the tracks at the particular location;
      (3) The number and frequency of trains or other rolling equipment operated over the tracks at the particular location;
      (4) The type or character of the neighborhood surrounding the particular location;
      (5) The volume and type of vehicular and pedestrian traffic using the street or highway at the particular location at various times;
      (6) The transportation requirements and facilities;
      (7) The topography of the surrounding land, and the grade, width, course and location of the railroad tracks and the street or highway, at the particular location;
      (8) The existence of any signalling, warning or safety device or devices which have been constructed, installed or placed by the railroad company at the particular location;
      (9) The number and character of collisions that have occurred at the particular location; and
      (10) Any other pertinent facts or matters.”

      . In making our determination we are required to accept his testimony that the train was unlighted and made no audible sound.

      . Md. Pattern Jury Instruction 15:3 (1977).


source: Caselaw Access Project

author: Lowe, J.,

license: Public Domain

text:
    IN RE: JOHN A.
    [No. 404,
    September Term, 1979.]

      Decided January 9, 1980.

    The cause was argued before Lowe, MacD^niel and Weant, JJ.

      John W. Sause, Jr., District Public Defender, with whom was Harry J. Goodrick, Assistant Public Defender, on the brief, for appellant.

      Thomas P. Barbera, Assistant Attorney General, with whom were Stephen H. Sachs, Attorney General, Donaldson C. Cole, Jr., State’s Attorney for Cecil County, Joseph J. Mahoney and John L. Scarborough, Assistant State’s Attorneys for Cecil County, on the brief, for appellee.
   Lowe, J.,

delivered the opinion of the Court.

Accused of delinquency, John A. was brought before the Circuit Court for Cecil County sitting as a juvenile court to defend against two charges. The acts with which he was accused would have constituted, if proven against an adult, the crimes of trespass and daytime housebreaking with the intent to steal. The evidence indicated that one rainy afternoon John A. had entered what appears to have been an unoccupied summer cottage at Crystal Beach. While there he admitted having smoked a cigarette. John A. left and went to “Big Bills, Bill Johns”, from whence he subsequently saw smoke coming from the cottage. Sensing responsibility for the fire, he alerted Big Bill to help and had a neighbor call the fire company.

Although appellant’s admission placed him within the premises, there was no evidence that he had “been duly notified not to so enter”; consequently the chancellor dismissed the trespass charge. But despite the evidence of breaking having been circumstantial and inferentially slim, the chancellor found John A. delinquent for having broken into the dwelling house —

“with the intent to commit a certain felony therein, to wit: intent to steal, take and carry away the goods, chattels, monies and properties ... valued at One Hundred Dollars, and upwards____”

In that regard, the chancellor inferred that simply because such chattels were present in the house, appellant’s intent upon entering the premises was to steal.

The issue on appeal narrows to just that point, i.e., the necessary ingredient of proof of a burglarious intent. See Martin v. State, 10 Md. App. 274, 276 (1970). The State relies on a single case, Clemons v. State, 228 Md. 237, 238 (1962), which it points out

“held that where the circumstances of the breaking and entering showed no other motive, a larcenous intent may be inferred.”

Clemons is a single page per curiam which may be read to so hold, if viewed in a void. But in Clemons there is the additional factor that the accused was caught or interrupted on the premises in flagrante delicto.

It is apparent that so intangible a proof as one’s intent may — if not must — be inferred in most cases from a more provable circumstance. The Court of Appeals in Felkner v. State, 218 Md. 300, 307 (1958), has reiterated the permissibility of such inference.

“Felonious intent is an essential element of burglary at common law and under statutes requiring such intent. The felonious intent like any other element of the crime must be proven. The proof need not be direct but may be inferred from the circumstances.”

The court pointed out the obvious:

“The most conclusive evidence that the breaking was with the intent to steal is the larceny itself,”

and the not so obvious,

“although intent may exist and be proven although nothing in fact is taken.”

Expanding upon that in Ridley v. State, 228 Md. 281, 282 (1962), the Court later explained that:

“The actual intention at the time of the breaking is controlling, not whether any goods of value were found and stolen, and the intention may be inferred from the circumstances.”

To read these excerpts in the abstract would lead to the conclusion drawn by the State from the Clemons per curiam, that is, that one may infer from a breaking into a dwelling, the purpose was to steal the contents. But if such is law, there would be in reality no requirement upon the State to prove intent in a burglary or daylight housebreaking. The proof of breaking and entering would suffice. Such is not the law. Felkner itself pointed out that

“there must be proof of some fact or circumstance or act or declaration of the prisoner in addition to the proof of the mere breaking and entering from which the trier of the facts can find the intent.” Id. at 307. (Emphasis added).

The inference that is permissible is in the nature of a Thayer-Wigmore “bubble” presumption; except that a presumption is a rule of law, an inference a rule of reason. A presumption arises by law without regard to reasonableness upon proof of prescribed facts and must be considered unless dispelled affirmatively; an inference merely becomes available in proportion to its reasonableness and even if reasonable may be ignored notwithstanding.

While the accused remained upon the premises he had unlawfully broken into, the reasonableness of the inference remained that he had entered to steal. His unlawful presence, immediately proximate to pilferable items, is the necessary “fact or circumstance ... in addition to the proof of the mere breaking and entering from which the trier of the facts can find the intent.”

But once the culprit voluntarily leaves the premises having stolen nothing, the probability arising from the opportunity apparent is negated. The initial breaking no longer implies the assumed purpose; the likelihood of theft is no greater after he leaves than it was before he arrived. Since he did not avail himself of the opportunity, that opportunity is no longer available to him and it becomes as unreasonable to infer an intent to steal from the former entry, as it would have been to infer an intent to commit arson had there been no burning.

In this case, the “fact or circumstance” in addition to “the mere breaking and entering” contradicts the thought of theft but raises an inference of arson. The appellant implicitly admitted that he may have caused the fire before leaving the premises although he denied intentional culpability for the burning. The fact of the fire is a circumstance which provides a clear inference of arsonohs intent upon entry, despite the quite reasonable (but not compelling) explanation of a 14-year-old that he went in an empty house to smoke a cigarette before visiting a friend’s home. On the other hand, it is apparent that if the accused had been caught on the premises or flushed therefrom as was Clemons, before any fire had started, the inference that he intended to steal the personal property that was available to him in the house would have remained reasonable and may even have withstood a denial by accused that such was his purpose in having broken in.

Such inferences are only permissible if they are “reasonable”. The chancellor seems to have momentarily lost sight of that prefatory adjective appearing in all cases of circumstantial evidence in his hope of compensating the owner for his unjustified loss through restitution. Because the appellant was charged with breaking and entering with the intent to commit the felony of stealing — rather than of arson — the owner must seek his recompense in a civil action. Any inference that appellant entered the premises with an intent to steal, if available at all, is not so reasonable as to withstand the criminal standard test of being beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979).

Judgment reversed.

Costs are not reallocated as part of the judgment of this Court pursuant to Maryland Rule 1082f.

      . The facts upon which the allegation is based are as follows: “On or about October 16, 1978, John A. ... unlawfully did break into the dwelling house of James Andrew Restaneo located at Crystal Beach Manor, Earleville, Maryland, in the daytime, with the intent to commit a certain felony therein, to wit: intent to steal, take and carry away the goods, chattels, monies and properties of James Andrew Restaneo valued at One Hundred Dollars, and upwards, current money, in violation of Article 27, Section 30 of the Annotated Code of Maryland; unlawfully did enter upon the land, premises or property, known as Crystal Beach Manor, Earleville, Maryland, after having been duly notified not to so enter or after having been requested to leave said premises and having refused to do so in violation of Article 27, Section 577 of the Annotated Code of Maryland.”

      . The case then proceeded against appellant and his mother. Because of substantial defects in that proceeding, the State conceded on appeal “that insufficient evidence was presented to support the judgment of restitution against Appellant’s mother.” At argument, that concession was expanded to include John A. We are in accord that such was the case.


author: Morton, J.,

text:
    DANIEL HOPE, JR. et al. v. BALTIMORE COUNTY, MARYLAND et al.
    [No. 412,
    September Term, 1979.]

      Decided January 9, 1980.

    The cause was argued before Morton, Liss and Couch, JJ.

      C. Victor McFarland, with whom was Louis J. Weinkam on the brief, for appellants.

      John A. Austin, Assistant County Solicitor for Baltimore County, with whom was Leonard S. Jacobson, County

      Solicitor, on the brief, for appellee Baltimore County, Maryland. Charles B. Heyman, with whom were Ellen W. Fales, John Martin Jones, Jr., Mark Poliak and Kaplan, Heyman, Greenberg, Engelman &Belgrad, PA. and Piper & Marbury on the brief, for other appellees.
   Morton, J.,

delivered the opinion of the Court.

This is an appeal from an order entered in the Circuit Court for Baltimore County by Judge John E. Raine, Jr., dismissing the appeal of the appellants from a decision of the Baltimore County Planning Board approving the final subdivision plat submitted by the appellees, Victor Frenkil, Walden Associates and Victor Development Co., Inc. The subdivision plat had been submitted as a procedural step in the proposed construction by the appellees of a large apartment complex to be known as Walden Pond Apartments. The appellants are individual owners of property in the area of the proposed apartment complex.

The single issue in this appeal is whether Judge Raine was correct in holding that the Circuit Court for Baltimore County lacked jurisdiction to hear a direct appeal from the decision of the Baltimore County Planning Board approving the subdivision plat submitted by the appellees.

In challenging the correctness of Judge Raine’s decision, the appellants point to § 22-38 of the Baltimore County Code, 1968 Edition, which provides:

“If any person shall be aggrieved by the action of the planning board on final plats of subdivisions under section 22-37 of this Code, an appeal may be taken to the circuit court for the county within thirty days after the date of action by the planning board. The court shall hear all such appeals without the intervention of a jury and shall have power to affirm, modify or reverse in part or in whole any such decision from and may remand any case for the entering of a proper order or for further proceedings as the court shall determine. Upon the hearing of such appeal, the decision of the planning board shall be presumed by the court to be proper and to best serve the public interest; the burden of proof shall be upon the appellant to show that the decision complained of was against the public interest and that the planning board’s discretion in rendering its decision was not honestly and fairly exercised, or such decision was arbitrary, or procured by fraud, or unsupported by any substantial evidence, or was unreasonable, or that such decision was beyond the powers of the planning board and was illegal.”

Judge Raine found, and we agree, “that as a matter of law Section 22-88 of the Baltimore County Code is a nullity. It is void because it is in direct conflict with the Baltimore County Charter.”

The citizens of Baltimore County adopted a charter for Baltimore County on November 6, 1956, pursuant to the provisions of Article XI-A of the Constitution of Maryland. Also pursuant to Article XI-A the General Assembly of Maryland enacted Article 25A, commonly known as the Express Powers Act. Section 5 (U) of art. 25A authorizes charter counties:

“(U) County Board of Appeals
To enact local laws providing (1) for the establishment of a county board of appeals whose members shall be appointed by the county council; (2) for the number, qualifications, terms, and compensation of the members; (3) for the adoption by the board of rules of practice governing its proceedings; and (4) for the decision by the board on petition by any interested person and after notice and opportunity for hearing and on the basis of the record before the board, of such of the following matters arising (either originally or on review of the action of an administrative officer or agency) under any law, ordinance, or regulation of, or subject to amendment or repeal by, the county council, as shall be specified from time to time by such local laws enacted under this subsection: An application for a zoning variation or exception or amendment of a zoning ordinance map; the issuance, renewal, denial, revocation, suspension, annulment, or modification of any license, permit, approval, exemption, waiver, certificate, registration, or other form of permission or of any adjudicatory order; and the assessment of any special benefit tax: Provided, that upon any decision by a county board of appeals it shall file an opinion which shall include a statement of the facts found and the grounds for its decision. Any person aggrieved by the decision of the board and a party to the proceeding before it may appeal to the circuit court for the county which shall have power to affirm the decision of the board, or if such decision is not in accordance with law, to modify or reverse such decision, with or without remanding the case for rehearing as justice may require. Any party to the proceeding in the circuit court aggrieved by the decision of the said court may appeal from such decision to the Court of Special Appeals. The review proceedings provided by this subsection shall be exclusive.”

In accordance with the authority conferred upon charter counties by § 5 (U), the Charter adopted by Baltimore County contains provisions for establishing a Board of Appeals and procedures for administering the functions of the Board:

“Sec. 601. County board of appeals; appointment; terms; compensation.
There is hereby created and established a county board of appeals consisting of three members who shall be appointed by the county council for three years____”
“Sec. 602. Powers and functions of county board of appeals.
The county board of appeals shall have and may exercise the following functions and powers ...:
(d) Appeals from executive, administrative and adjudicatory orders. The county board of appeals shall hear and decide appeals from all other administrative and adjudicatory orders as may from time to time be provided by Article 25A of the Annotated Code of Maryland (1951 Edition), as amended, or by legislative act of the county council not inconsistent therewith.” (Footnote omitted.)

The “Reporter’s Notes,” prepared by Arthur W. Machen, Jr., Esq., states in the report for the charter board:

“As hereinabove indicated, this subsection [d] is a ‘catch-all’ designed particularly to include within the jurisdiction of the County Board of Appeals all matters now or hereafter covered by Article 25A, Section 5 (V) [] of the Code.”

It is at once apparent that § 602 (d) of the county Charter provides that the Board of Appeals shall be the forum to hear and decide appeals “from all other administrative and adjudicatory orders as may... be provided” by § 5 (U) of art. 25A. And it is equally clear that § 5 (U) envisions the establishment of a county Board of Appeals with exclusive authority to hear appeals from actions of administrative officers or agencies taken under the laws, ordinances or regulations of the county, where such actions involve “the issuance, renewal, denial... of any license, permit, approval ... or other form of permission____” (Emphasis added.)

All parties agree that the direct appeal to the circuit court from the decision of the county’s Planning Board involves the “approval” of the appellees’ final subdivision plat. Thus, the appeal by the appellants contained all the procedural ingredients provided for by § 5 (U) as implemented by § 602 (d) of the county Charter.

It is self-evident that the provisions for appeal contained in § 22-38 of the Baltimore County Code in authorizing a direct appeal to the circuit court are completely contrary to the appeal procedures provided in § 5 (U) of art. 25A. Since the appeal procedures in § 5 (U) “shall be exclusive,” the county lacked authority to enact or continue in force and effect the appeal procedures provided for in § 22-38. See Maryland Classified Employees Association, Inc. v. Anderson, 281 Md. 496 (1977).

In reaching this conclusion we find support in the language employed by the Court of Appeals in Urbana Civic Association, Inc. v. Urbana Mobile Village, Inc., 260 Md. 458 (1971). In Urbana the Court voided a local subdivision regulation which allowed appeals to the Circuit Court for Frederick County. That regulation was void because there was no statutory authority for its enactment in the enabling acts for subdivision control then in art. 66B. In so holding the Court noted, at 462:

“Frederick County is neither a charter nor a code county provided with home rule under Arts. XI-A or XI-E of the Maryland Constitution (contained in Code (1957, 1963 Repl. Vol. and 1970 Cum. Supp.)). With home rule it could have created a county board of appeals capable of reviewing the planning commission’s disapproval of the subdivision plat in question here. In this event, Art. 25A, § 5 (U) (1966 Repl. Vol.) and Art. 25B, § 13 (1970 Cum. Supp.) would have permitted appellate review first in the circuit court and then in the Court of Appeals."

In the instant case Baltimore County is a charter county with home rule and has created a county Board of Appeals with authority to review the Planning Board’s decisions on subdivision plats. That such authority should be exclusive is implicit in the passage quoted from Urbana. Therefore, the Board of Appeals in Baltimore County is the proper forum to hear initial appeals from decisions of the Planning Board approving or disapproving a subdivision plat.

We are unimpressed with appellants’ suggestion that their appeal to the circuit court from the decision of the Baltimore County Planning Board is somehow authorized by art. 25A, § 5 (X), which provides:

“(X) Planning and Zoning
To enact local laws, for the protection and promotion of public safety, health, morals, and welfare, relating to zoning and planning including the power to provide for the right of appeal of any matter arising under such planning and zoning laws to the circuit court except as is provided in § 5 (U) of this article. Any decision of the circuit court may be appealed to the Court of Special Appeals.”

Appellants apparently overlook the key phrase — “except as is provided in § 5 (U) of this article.” See Klein v. Colonial Pipeline Company, 285 Md. 76 (1979). We have already found that § 5 (U) authorizes the establishment of a Board of Appeals as the forum to review, initially, the actions of the Planning Board.

We agree with the appellees that to give validity to § 22-38 would require the circuit court to act as a “super Planning Board,” for a direct appeal from the Planning Board could reach the court in the posture of no record whatsoever to support the Board’s decision. The Planning Board conducts no formal hearing of an adversary nature with the right to examine and cross-examine witnesses under oath and to offer evidence and exhibits. As Judge Raine said: “The Planning Board has a general discussion, as reflected in their minutes, and then makes a decision. They make no findings of fact. They make no conclusions of law. It is impossible to determine who considered what or who failed to consider what aspect of the matter before them, so that it is impossible to accord the usual type of judicial review to actions of the Planning Board. Yet, Section 22-38 of the County Code purports to give to any aggrieved party the right to appeal directly to the Circuit Court.”

Since Baltimore County took no appeal or cross appeal, we are at a loss to understand how the county solicitor has standing to urge this Court to reverse the action of the trial judge.

Judgment affirmed; costs to be paid by appellants.

      . Now § 5 (U).


text:
    HARFORD MEMORIAL HOSPITAL v. HEALTH SERVICES COST REVIEW COMMISSION et al.
    [No. 422,
    September Term, 1979.]

      Decided January 10, 1980.

    The cause was argued before Lowe, Mason and Liss, JJ.

      M. Natalie McSherry, with whom were StanleyB. Rohdmd White ford, Taylor, Preston, Trimble & Johnston on the brief, for appellant.

      JayE. Levy, Assistant Attorney General, with whom were
      Stephen H. Sachs, Attorney General, and Stanley Lustman, Assistant Attorney General, on the brief, for appellee Health Services Cost Review Commission. John A. Picciotto, with whom was F. M. Gloth, Jr., on the brief, for other appellee.
   Lowe, J.,

delivered the opinion of the Court.

Having limited success in its appeal to the Circuit Court for Harford County, the Harford Memorial Hospital turns to this Court for respite from a decision of the Health Services Cost Review Commission. That Commission was established by the Legislature initially to cause the public disclosure of the financial position of hospitals, but subsequently to initiate investigation, to review and approve rates and to promote and approve alternate methods of rate determination.

— the rate review —

By expression of its intent, Md. Code, Art. 43, § 568H, and by delegation of its powers, § 568U, the Legislature authorized reviews and investigations purposed to assure purchasers of health care services that:

—hospital costs are “reasonably” related to its service;

—“the hospital’s aggregate rates are reasonably related to the hospital’s aggregate costs;”

—“rates are set equitably among all purchasers or classes of purchasers of services without undue discrimination or preference.”

Pursuant to such review, the statute goes on to say that:

“In order to properly discharge these obligations, the Commission shall have full power to review and approve the reasonableness of rates established or requested by any hospital subject to the provisions of this subtitle. No hospital shall charge for services at a rate other than those established in accordance with the procedures established hereunder.” § 568U (b).

Although more substantial powers are spelled out under other circumstances, such as when hospitals petition to increase rates, the issues here arose when on May 17, 1976, the Commission exercised its responsibility to review Harford Hospital’s existing rates and charges based on the budget year 1977.

— telephone charges; admission charges; room rates —

Among other issues not here relevant, the Commission requested that patients’ telephone charges be reported by allotted rates rather than computing generally and allowed for in the daily rate charges of the hospital. On that issue, the trial judge affirmed the Commission. We agree with the trial judge for reasons he expressed.

“The Hospital has been absorbing the costs of patient telephones in its rate structures. It says that it computes the cost at ten cents per day per patient and that it is simply not worth it to segregate this cost from the rates and bill it separately. Blue Cross concedes that if only ten cents were involved, there would be no controversy but, maintains that the Hospital has improperly allocated only $6,000.00 to the patient portion of operator assisted calls instead of what Blue Cross says is the true cost, $67,000.00.
The effect of the Commission’s ruling is to get at the bottom of the situation by excluding the cost of patient telephones as determined by its staff after review of the situation at the Hospital. In the divergence between the contentions of the Hospital and of Blue Cross, it does not seem arbitrary, capricious or unreasonable for the Commission to adopt a course of action which would get at the facts.”

A second issue affirmed by the trial judge related to the inclusion of an admission charge to each patient admitted to the Hospital. Implicit in this recommendation by the Commission is the commensurate lowering of the daily room rates which heretofore reflected those revenues for which the admission charge was intended to compensate, i.e., communications, medical staff administration, and medical records, but as pointed out by the judge “ironically” not the admission office. Again we agree with the reasoning of the trial judge as set forth.

“In greatly oversimplified lay terms it appears that the Commission is concerned that the traditional inclusion of overhead costs in daily room rates and other charges provides hospitals with a financial stake in prolonged patient stays. By assuring the hospital that its overhead costs will, at least partially, be recouped through the admission charge, an incentive will be provided to ‘reduce excessive lengths of stay, marginal ancillary utilization, and will foster pre-admission testing.’ Looking for ways to ‘promote the most efficient and effective use of health care hospital service’ is one of the Commission’s reasons for existence. Section 568U (c)”

Even if we did not agree wholeheartedly with the Commission, there is little room for change by us since

“... its judgment is accorded the respect due an informed body that is aided by a competent and experienced staff... Our inquiry, then, is limited to a determination of whether there was illegality or unreasonableness in the commission’s action; when that inquiry is finished, judicial scrutiny ends and the judicial function in the rate rating process is over... In recognition of our limited role, therefore, we have repeatedly held that a reviewing court may not substitute its judgment for that of the commission.” Potomac Edison Co. v. PSC, 279 Md. 573, 582-583 (1977).

Although this is not a rate making question, see § 568U (d), it is a review by a Commission which

“may promote and approve alternative methods of rate determination and payment of an experimental nature that may be in the public interest and consistent with the purposes of this subtitle” § 568U (c),

and that appears precisely what they have done thus far. The costs which relate to the services are neither inequitable nor discriminatory, but rather disclose and certify to the reasonableness of the rates by such disclosure.- § 568H (1).

— out-of-county patient surcharge —

Because Harford County had floated and was paying the bonded indebtedness incurred in building the Hospital, Harford Hospital proposed a surcharge for out-of-county residents applicable to the principal and interest on bonds being paid by county residents. The surcharge was to be paid to the county; however, the Commission did not approve it because it believed

“Harford Memorial should undertake an extensive fund raising program in Cecil County and the resultant contributions can be used to reduce the operating expenses of the Hospital.”

While we are not as enamoured with the Commission’s views as we might like, we are compelled to affirm, persuaded again by the cogency of the trial judge’s opinion which, encapsulated, said that the Hospital’s

“... arguments are unimpressive, for all the Hospital... proposed was that the Hospital be asked to be a collecting agent for the benefit of Harford County so that Cecil County users would shoulder some of the burdens now shouldered by Harford County users. But even though the concept is eminently fair, it has little to do with hospital rates. Appealing as it is to Harford County taxpayers, it amounts to little more than a forced exaction from Cecil County residents to permit the Hospital to make a voluntary contribution to Harford County’s government. The Commission cannot be said to have exceeded its authority in declining to sanction this arrangement.”

— funded depreciation v. capital facilities allowance —

Although the attempt by the Hospital to recompense the county for its outlay by surcharging its neighboring county residents has some appeal as indicative of a concern for past moral obligation, the Hospital seems even more concerned for its future needs. Since we again find the trial judge properly affirmed the Commission in accordance with the standard of review prescribed in the Administrative Procedure Act, Md. Code, Art. 41, § 255 (f), we will use his explanation of the next issue.

“Historically, the Hospital has allowed for the replacement of its capital assets through what it calls standard depreciation and has included the sum so calculated as part of its costs in setting its charges. The depreciation is funded, that is, the money is actually set aside in a fund where it earns income which is plowed back into the fund or used for replacement purchases.
The commission on the other hand has rejected the Hospital’s use of funded depreciation and has required the use of a Capital Funds Allowance (‘CFA’) whereby the Hospital sets aside enough currently to accumulate sufficient money to cover a twenty percent down payment on replacements of facilities and equipment. The rationale is that today’s patients should not pay for tomorrow’s replacements, or at least should not be required to pay more than is reasonably necessary to keep the Hospital’s finances in sufficiently sound condition to make a down payment on future acquisitions. The remaining cost of such acquisitions would be defrayed on a current basis by the patients actually using the facilities.
The Hospital complains that the Commission based its decision, not on facts related to Harford Memorial’s situation, but on the theories outlined in position papers prepared by the Commission’s staff and on the prepared testimony of an accountant delivered in another case. The Commission, says the Hospital, has ignored the fact that under the depreciation method, today’s patients are paying for facilities they are actually using. This is in contrast to the CFA approach by which today’s patient pays for facilities to be used by tomorrow’s patients. Furthermore, the CFA approach is more appropriate to preserve the financial integrity of those hospitals which cannot afford replacements because of past failure to provide a depreciation reserve than it is for Harford Memorial which has consistently and soundly funded its future needs. Thus, says the Hospital, the Commission is favoring an absolute rule over the case-by-case approach commanded by Health Cost Services Review Commission v. Franklin Square Hospital 280 Md. 233, 240-241 (1977).
In effect, we have a battle of accounting theories. The Hospital’s case, in sum, is that its use of funded depreciation has met the objectives of the CFA approach and is reasonable. The Commission says that the CFA approach is a sounder one and, furthermore, the Hospital’s funded depreciation is improperly based because much of it is calculated on funds supplied by the County which shouldn’t be included in the Hospital’s depreciation base to begin with.”

The trial judge decided this question by a single paragraph.

“This Court is ill-prepared to decide a controversy involving the relative merits of two accounting theories. The CFA theory adhered to by the Commission seems plausible and the record facts brought out by the Hospital do not persuade me that the Hospital’s historically used method is so superior as to require overruling the Commission. The Commission has obviously found that the specifics have not rebutted the general rule.”

We agree that he reached the right result, but will expand upon his reasoning.

The issue is not which of two accounting theories is the best. The accounting methodology is of no concern except as its result is reflected in the rate structure. Obviously, in order to fund the scheduled depreciation, these funds must come from rates which are the primary income of the Hospital. The question then is whether the present hospital patients should provide completely for the facilities for future patients, or whether those patients in the future should pay for the cost of the new facility as it is then being used by them. In light of the fact that the present Hospital is for all practical purposes a gift from the present day Harford taxpayers, in the spirit of fair play it is not unreasonable, inequitable or discriminatory for present day patients — many of whom are the taxpayers donors themselves — to benefit, rather than to preserve that gratuity for future patients when the recycling program comes to an end.

Nor is it the burden of the Hospital to persuade the trial judge that the Hospital’s “historically used method” is superior to the one promoted by the Commission. Even if the judge was so persuaded, that is not the test and he would have no right to substitute his judgment for that of the Commission. The Court of Appeals made it abundantly clear in Blue Cross v. Franklin Sq. Hosp., 277 Md. 93, 110-113 (1976), that it is the Commission’s opinion which of two or more rate structures is best designed to assure fair costs and fiscal integrity, whether one is a standard applied by the Commission or even an experimental procedure developed by it. Unless the Commission’s opinion violates one of the criteria permitting reversal or modification in Art. 41, § 255 (f), the trial judge must affirm. The judge so decided and we agree.

That neither the trial judge nor we on appeal may choose, was more expressly recognized in the court’s opinion relating to the Hospital’s proposal for paying the costs of equipment purchases. The explicit reasoning in the opinion on this aspect of the rate structure is appropriate as well to the previous issue.

“The CFA concept applies not only to buildings but also to equipment. It appears that the Hospital’s cash requirements for equipment amounted in 1977 to some $519,100.00 but the CFA allowance was but $214,256.00. Part of the resulting shortfall was to be met by use of interest income on building and equipment funds and the addition of leasing costs to the CFA formula allowance, but there still remained some $89,918.00 of cash requirements to be included in the rate structure. The Commission staff recommended that this $89,918.00 be allowed because the Hospital had spent below the current year’s CFA in the three prior years. Because equipment purchases vary widely from year to year, the Commission staff felt it reasonable to permit the Hospital to include the $89,918.00 in current rates.
Blue Cross, however, opposed the staff recommendation and asked that the equipment purchases in excess of the CFA be paid from the Hospital’s considerable surplus, which had built up over the years. This invasion of the Hospital’s principal would reduce the total funds on hand from 124 days of expected revenue to 118 days of expected revenue. Since the Commission had ruled in the South Baltimore General Hospital case that reducing principal to 35 days of expected revenue was reasonable, Blue Cross argues that there is nothing unreasonable in requiring the Hospital to dip into its surplus to the extent of only six days of expected revenue and that to do otherwise, would be unfair to today’s patient.
The Commission agreed with Blue Cross and denied the extra allowance. The Hospital says that its way of doing things was reasonable, just as the Commission’s own staff had found, and that in the absence of competent evidence that the expense was unreasonable, the Commission had no right to adopt Blue Cross’ theory.
But my task is not to choose between two alternatives if both of them are reasonable. There is nothing inherently unreasonable about the Commission’s decision to force the Hospital to use some of its accumulated financial fat to defray the expenses in question rather than to recoup them through current patient charges. It is true that by doing so the Commission has made present patients the beneficiaries of money paid by past patients to the Hospital’s depreciation reserve and of the largess of charitable donors. But the alternative would be to charge present patients more money merely to keep the Hospital in its present state of adiposity. The slight decrease in financial caloric intake ordered by the Commission seems unlikely to be detrimental to the Hospital’s economic health. Presented with two reasonable alternatives, the Commission chose that which it considered to be the optimum one. Thus, with echoes of the ultimate commandment in Orwell’s Animal Farm, some rates are more reasonable than others and it is within the Commission’s prerogative to declare them so. Blue Cross v. Franklin Square Hospital, 277 Md. 93, 112-113.” (Footnote omitted).

Since it is the Commission that is empowered to approve that rate structure which it finds to be most reasonable under the circumstances, even though the Hospital proposal may be reasonable also, the burden to reverse is not to prove an imbalance of reasonableness on the side of the Hospital proposal but rather to negate the reasonableness of the Commission’s proposal. The statutory standard which the Commission must apply before approval is not only that rates be reasonable in the light of services and costs, but also that rates be set equitably and without undue discrimination.

We must not lose sight of the fact that these accounting concepts are not to be viewed in isolation but rather as one facet of the rate structuring procedure. In viewing the rate structure as a whole, the Commission may consider each of the items which make up the rate structure. In weighing the merits of these items, the Commission may compare the Hospital’s proposals with others of its own and, despite neither being unreasonable, inequitable nor discriminatory, “promote” its own alternate method of rate determination (even if it is experimental) by rejecting the Hospital’s program. § 568U (c). As established by Blue Cross, supra at 110-111,

“[i]f, in the Commission’s opinion, a proposed rate structure is designed to further the purposes of the statute less effectively than another rate structure would, then it would be proper for the Commission to reject the proposed rates.
The provisions of the Act reflect the legislative intent that the Commission have broad authority over the financial affairs of hospitals and that it should only approve those rates best designed to assure fair costs and fiscal integrity.”

Merely because the other rate structure is one established as a benchmark by the Commission does not preclude its use by the Commission in a comparative sense. The Commission has not thereby established an absolute rule applicable to all hospitals under all circumstances; it simply has applied a standard by which to review as it investigates hospitals on a hospital-by-hospital basis. See Health Serv. Cost v. Franklin Sq., 280 Md. 233, 240-241 (1977).

— cross subsidization —

The Hospital’s proposed rate structure established a uniform daily room rate of $73.00 for three departments of the Hospital:

1. Medical and Surgical

2. Pediatrics

3. Obstetrics and Gynecology.

This uniformity was based upon virtually identical services and care. The Commission denied the right to charge a uniform rate despite the Hospital’s practice of interdepartmental use dependent upon availability. When a department was overcrowded and another had vacancies, therapeutics notwithstanding, the patient was provided a bed where the vacancy existed. It also proposed a reduced rate as,compared to actual cost for the Intensive Care Unit and for its Coronary Care Unit. There appears to be no question but that these rates would nonetheless “permit the institution to render effective and efficient service in the public interest____” Art. 43, § 568V.

The Commission rejected this proposal, first encapsulating the Hospital’s reasoning for increasing the medical and surgical department by $5.00 over costs to effect reductions in the more expensive units.

“The Hospital’s principal arguments for requesting cross-subsidization are:
a. without subsidization rates in certain areas place a severe financial burden on patients least able to pay, and
b. increased bad debts will result from unsubsidized charges.”

Responding to this the Commission pointed out that:

“The Hospital, however, provided no substantive evidence to support these claims. In particular, upon cross examination Hospital representatives stated that:
a. the percentage of financial classes of patients utilizing the various centers was not available.
b. the percentage of bad debts generated by each class of purchaser (e.g. obstetrical patients) was not available.
Without such supporting facts and cogent arguments as to why cross-subsidization should be allowed, the Commission believes that it cannot approve discriminatory pricing practices. Therefore, the Commission concurs with the staff and views the rate structure proposed by Harford Memorial as unduly discriminatory.”

At first blush it is hard to gainsay the Hospital’s proposed rate schedule which in its extreme increases two departmental rates by only $5.00 in order to effect a savings in two others of nearly $50.00.

“Hospital’s rates Commission’s rates

Medical/Surgical $ 73.00 per day $ 67.11 per day

Pediatrics 73.00 per day 80.13 per day

OB/Gyn 73.00 per day 98.09 per day

ICU 148.00 per day 202.43 per day

CCU 143.00 per day 194.43 per day”

The Hospital contends here that the burden of proof was upon the Commission to show that the Hospital’s rates or accounting practices were unreasonable before it could refuse to approve those rates or practices. But that would be contrary to the very role of the Commission as a quasi-judicial body. As pointed out in Blue Cross, supra, it is the Commission’s opinion of reasonableness that prevails, and from our interpretation of Blue Cross, the burden on appeal is not only upon the Hospital but it is a heavy one indeed.

Recognizing the necessity of expertise in judging reasonableness of controls within a regulated industry, the Legislature made the standard of administrative review especially stringent. It is substantially greater than the judicial standard of “clearly erroneous” with which our rules protect the lower court’s decisions. The Legislature said that:

“The court may affirm the decisions of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional provisions; or
(2) In excess of the statutory authority or jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Unsupported by competent, material, and substantial evidence in view of the entire record as submitted; or
(6) Arbitrary or capricious.” Art. 41, § 255 (f).

While we may not have agreed in every instance had we comprised the Commission, we are unable to find unconstitutionality, ultra vires conduct, unlawful procedure, error of law, an evidentiary vacuum or arbitrary or capricious decisions. We may not reverse.

That is precisely what the trial judge correctly decided below and clearly stated in his opinion.

“The Hospital contends that ‘[wjhere rates in one department are decreased by only $5.00 per day, while those of other departments are increased by $15.00 to $50.00 per day, the financial burden to, at the minimum, the 8% uninsured patients in all departments will be radically increased, and with it the probability of bad debts.’ The Hospital, however, was unable to substantiate these claims. Neither the percentage of financial classes of patients using the various centers nor the percentage of bad debts generated by each class of purchaser was made available to the Commission.
Under Article 48, Section 568H, (2), Annotated Code of Maryland, Volume 4B (1957 Repl. Vol., 1977 Cumulative Supplement), the Commission is charged with the responsibility of assuring ‘all purchasers of health care hospital services ...; that rates are set equitably among all purchasers of services without undue discrimination.’ It is the Commission’s position that to charge a patient in part for a service he does not receive constitutes undue discrimination.
The Hospital argues that it is trying to provide a wide variety of services at a cost affordable to its class of patients and that the Commission has failed to establish that its rates are unduly discriminatory. The Commission has ‘the power to approve those rates which it considers best designed to effectuate the purposes of the statute’ and ‘[t]he Commission is not required ... to defer to the hospital’s view of reasonableness in cases of conflict,... If, in the Commission’s opinion, a proposed rate structure is designed to further the purposes of the statute less effectively than another rate structure would, then it would be proper for the Commission to reject the proposed rates.’ Blue Cross of Maryland, Inc. v. Franklin Square Hospital, 277 Md. 93, 110 (1976).
It is evident from the record that the Commission considered the arguments of the Hospital but found them unsubstantiated in fact and in theory. Its findings were not, as the Hospital would have us believe, based on an inflexible dogma that rates must follow costs for otherwise ‘undue’ discrimination would result. It says that arbitrary charges not based on costs or some other persuasive factor are undue ‘simply because if discrimination is to be thought of as ‘due discrimination’ then there must be some reason for it’ (James M. Kelly testimony, p. 1). If the reasons have been supplied, which the Hospital was unable convincingly to do, the Commission has been persuaded to permit cross-subsidization. (Id. p. 2, cross-examination, p. 9-13). There is no logical unsoundness in the Commission’s philosophy that cost-based charges are more likely to be non-discriminatory than ones using cross-subsidization. To require specific facts to rebut this philosophy is not asking too much in view of the Commission’s statutory responsibilities. Section 568U(a) and (c), Section 568V(2).
The Hospital also contends that the Commission is imposing an absolute rule, namely, that rates should be based upon the economic costs of each revenue center through the application of accounting principles, rather than making their determination on a case-by-case basis.
‘Whether a hospital’s rate is fair to purchasers of health care services and also will assure the hospital’s fiscal integrity must of necessity be determined on a case-by-case basis. Absolute rules concerning cost factors, applicable to all hospitals under all circumstances,..., are therefore inappropriate.’ Health Services Cost Review Commission v. Franklin Square Hospital, 280 Md. 233, 241 (1977).
The Commission did, however, consider the Hospital’s rationale and found it unsupported by facts or cogent arguments. Given the lack of proof, the Commission, by necessity, relied on its general policy of rate structuring and there is insufficient evidence in the record for this Court to say that decision was clearly wrong.
‘A reviewing court may, and should, examine any conclusion reached by an agency, to see whether reasoning minds could reasonably reach that conclusion from the facts in the records before the agency, by direct proof, or by permissible inference. If the conclusion could be so reached, then it is based upon substantial evidence, and the court has no power to reject that conclusion.’ Commissioner, Baltimore City Police Department v. Cason, 34 Md. App. 487, 508 (1977).”

At argument, counsel for the Hospital stated that the underlying question to be decided on this appeal was whether the Commission adhered to the mandate of the Court of Appeals or substituted its own standard contrary to the admonition in Health Serv. Cost v. Franklin Sq., 280 Md. at 240-241.

“Although the parties in their briefs differed on the questions of whether the inclusion of paragraphs 3 and 4 in the modified judgment is inconsistent with our prior mandate, it became clear at oral argument that both sides are in basic agreement as to the proper procedure in future rate review cases. Both agree that the Commission must determine on a hospital-by-hospital basis the most reasonable rate structure. Moreover, both seem to agree that no absolute rule, applicable to all hospitals under all circumstances, pertaining to the use of the capital facilities allowance or depreciation, or the reasonableness of the inclusion of costs of excess facilities, is proper. They take the position that these matters must be determined on a case-by-case basis, subject to judicial review under the Administrative Procedure Act, Art. 41, §§ 255, 256. We think that this position, adopted by both sides at oral argument, is consistent with our prior holding in Blue Cross and with statutory provisions relating to the Commission.
Absolute rules concerning cost factors, applicable to all hospitals under all circumstances, as found in the modified order, are therefore inappropriate. Whether the use of the capital facilities allowance or depreciation is more reasonable, or whether the inclusion of costs for excess facilities and services unrelated to patient care is reasonable, must be determined by the Commission on a case-by-case basis.”

This simply means that the Commission may not arbitrarily impose accounting formulae across the board on all hospitals of a like type or size. That was the original issue in Blue Cross, supra at 96-97. It does not, however, preclude the use of a prestudied procedure prepared by the Commission to be applied as a standard or yardstick with which to compare a hospital’s procedure when that hospital is being individually reviewed. When laid side by side, the Commission may disapprove a hospital’s procedure and “promote and approve alternative methods of rate determination and payment of an experimental nature____” Md. Code, Art. 43, § 568U. We need hardly add that the power to review and determine the reasonableness of a particular rate structure necessarily includes the power to review the individual cost factors of which the rate structure is comprised. Health Serv. Cost v. Franklin Sq., 280 Md. at 239.

In addressing the depreciation issue, the trial judge stated that:

“This Court is ill-prepared to decide a controversy-involving the relative merits of two accounting theories.”

He may well have generalized that no court is well prepared to weigh the nuances of rate making in any regulated industry. That is undoubtedly the reason why the Legislature provided so protective a shield around the determinations of the regulatory commissions. The court’s statutory role upon review goes very little beyond its inherent power of review to prevent illegal, unreasonable, arbitrary or capricious administrative action. See Insurance Comm’r v. Nat’l Bureau, 248 Md. 292, 300 (1967); see also Criminal Inj. Comp. Bd. v. Gould, 273 Md. 486, 501-502 (1975). We find no such conduct on the part of appellees. Primarily for the reasons stated by the trial judge in his opinion, we affirm his judgment.

Judgment affirmed.

Costs to be paid by the appellant.


author: Couch, J.,

text:
    JOSEPH M. DELLA RATTA et al. v. BROADNECK DEVELOPMENT CORPORATION et al.
    [No. 425,
    September Term, 1979.]

      Decided January 10, 1980.

    The cause was argued before Morton, Mason and Couch, JJ.

      Roy Niedermayer for appellants.

      Timothy E. Meredith, with whom were Robert W Warfield
      and Corbin, Heller & Warfield, Chartered on the brief, for appellees.
   Couch, J.,

delivered the opinion of the Court.

This appeal stems from an adverse judgment rendered by the Circuit Court for Anne Arundel County against appellants, Joseph M. Della Ratta and Della Ratta, Inc., in their suit against appellees, Broadneck Development Corp., William E. Dixon, Thomas I. Baldwin, and William E. Baldwin, Jr. The action contained five counts — two counts of breach of contract, two counts of fraud, and one count of “lost builder’s profit”. At the trial of the case appellants abandoned count five (lost profits), the court granted appellees’ motion to dismiss counts one and three (the contract counts) at the conclusion of appellants’ case, and found in favor of appellees on counts two and four (the fraud counts). Appellants have appealed only from the judgment entered as to the contract counts, raising a single issue for our consideration:

“Did the trial court err by dismissing counts one and three on the ground that enforcement of Della Ratta’s contract for the formation of joint ventures to develop real property was barred by the Maryland Statute of Frauds?”

To better understand the basis for this controversy, we shall recite, from the record, the historical background of the participants and their relationship. Joseph Della Ratta was a real estate developer experienced in the financing and construction of apartment projects. Broadneck Development Corporation was the owner of some 374 acres of land in Bay Hills, Anne Arundel County. The individual appellees were the controlling stockholders of Broadneck and each was also a director and officer of this corporation. Prior to 1970 Broadneck’s primary activity had been the finishing of single family house lots and subdivisions by the installation of utilities and roads; the lots were then sold to other builders. Of the total acreage owned by Broadneck, some 76 acres were zoned to permit construction of multi-family, garden-type apartments. It is this acreage that is involved in this case.

Appellants claimed that in the spring of 1970 Thomas Baldwin approached Joseph Della Ratta to ask him to participate in the development of the Broadneck property. It seems clear that Della Ratta had shown interest in such participation previously (1968) but nothing resulted at that time. Della Ratta testified that he had made it clear at the meeting with Baldwin in 1970 that he was not interested in land development and single family lot preparation and that he was only interested in the development of the multi-family acreage. Della Ratta also testified that an oral contract was made at this initial meeting providing for his and his corporation’s participation, using a 1968 memorandum agreement as the basic framework for this contract. It was claimed that by this oral agreement Della Ratta agreed to purchase ten per cent (10%) of Broadneck’s outstanding stock. for Twenty Five Thousand Dollars ($25,000) and to loan Broadneck an additional Twenty Five Thousand Dollars ($25,000). In return, the individual appellees, as controlling stockholders of Broadneck, agreed to have Broadneck transfer the property zoned for garden apartments to a series of separate entities. It appears that the overall development was to have been accomplished in stages since some of the lots, having sewer and water available, could be developed before other portions of the land which did not have these facilities. The record makes clear the intention.of the parties to form a joint venture for the purpose of developing the land as each section became available for building. Della Ratta was to have a percentage interest in each joint venture in an amount equal to his interest in Broadneck, increased by fifteen per cent (15%) for performing the actual construction through Della Ratta, Inc., his contracting corporation.

Mr. Della Ratta did pay Twenty Five Thousand Dollars to Broadneck and received five (5) shares of stock. Later, he paid the additional Twenty Five Thousand Dollars representing the loan. Thereafter, Broadneck implemented the agreement by its corporate resolution to sell the designated property to six joint ventures set up to effectuate the agreement. In 1972 Broadneck conveyed to the Oakland Hills Joint Venture that part of the property known as “Oakland Hills”, and construction began. When this particular project was substantially completed, the parties turned to the development of another section known as “Dorado Village”. After preliminary work was done, including preparation of site, engineering, and architectural plans, appellees refused to proceed further and this suit followed.

The motion to dismiss was granted at the close of plaintiffs’ (appellants) case in chief, and we shall review the ruling only on the basis of the evidence before the court at that time. The trial judge explained his reason for dismissing the counts in the Memorandum and Order filed at the end of the case. In it the trial judge stated:

“At the conclusion of Della Rattas’ case, the Court granted the Defendants’ Motion to Dismiss Counts I and III. The Court found from the evidence presented that the agreement attempted to be sued upon by the Della Rattas was oral. It specifically provided that the Della Rattas, upon completion of various constructions of the multi-family units, would receive a part ownership of the land in addition to other benefits. Thus, the Court concluded that any agreement between the parties was barred by the Statute of Frauds, § 5-104 Real Property, Maryland Code. Counsel for the Defendants urged James v. Herbert, 309 P2d 92, upon the Court. This California case however, although admittedly extremely close factually, provided for each of the partners to the joint venture to share profits, not realty. As has been pointed out in Wiley v. Wiley 115 Md. 646, 656, an oral agreement to divide profits is not unenforceable as a violation of the Statute of Frauds. Nor does Della Rattas’ part performance remove them from under the Statute of Frauds, as the doctrine is available only in Equity. Cline v. Fountain Rock Lime and Brick Company, Inc., 210 Md. 78, 88.”

As a preliminary to our consideration of the trial court’s granting of appellees’ motion to dismiss, we note that the portion of the Maryland Statute of Frauds applicable to contracts involving real property is now found in § 5-104, Md. Real Prop. Code Ann. (1974), and provides:

“No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him.”

To resolve the issue presented by appellants, the applicability of § 5-104 of the Real Property Code to counts one and three must be considered separately.

Count One

Appellants’ allegations in count one, in a nutshell, are based upon Broadneck’s refusal to convey the remainder of the land in question to the various joint ventures and proceed with the development. While this is part and parcel of the larger agreement among the individuals, it is based upon a separate agreement between Broadneck and the joint ventures. This agreement poses the greatest difficulty since it directly involves the “sale or disposition of land”. There is little doubt that this agreement falls within the operation of the Statute of Frauds. The question, then, becomes whether the Statute was satisfied, and we conclude that it was.

The Statute in this instance was satisfied by a resolution of the Broadneck Development Corporation contained in the typed minutes of a stockholders’ meeting on April 29, 1971. It was thereby resolved:

“... (T)hat Broadneck Development Corporation enter into contracts with six different joint ventures for the sale of the apartment land at and for a total price of $378,500.00. This sale shall be in the form of contracts of sale with a deposit of 10% and the balance to be paid over a three year period with interest at the rate of 5% per annum to start accruing from the date of contract. The contract shall provide that any or each joint venture may prepay in whole or in part at any time but that title shall be clear at the time of the execution of the deed.
As soon as descriptions of the separate parcels can be obtained, contracts shall be executed.”

The minutes containing this resolution were signed by William E. Dixon, the corporate secretary of Broadneck. Dixon admitted in his deposition, portions of which were received into evidence, that six contracts between Broadneck and the six joint ventures were executed by Broadneck and sent to Mr. Schwartz (another partner in the joint venture), who never executed the contracts and did not return them. The written contracts themselves were not produced at trial. Restatement of Contracts § 216 (1932), states as follows:

“The loss or destruction of a memorandum does not deprive it of its effect as a satisfaction of the Statute____”

Cited with approval in Sewell v. Sewell, 218 Md. 63, 71, 145 A.2d 422 (1958); quoted in R.E.C. Management v. Bakst Serv., 265 Md. 238, 289 A.2d 285 (1972). Thus, although the whereabouts of the six written and executed contracts between the corporation and the joint ventures is unknown, this fact does not destroy its effectiveness in satisfying the Statute. All the Statute of Frauds requires is that the contract upon which the action was brought be in writing and signed by Broadneck or its duly authorized agent. Mr. Dixon’s testimony established that these requirements were met. Any deficiencies created by the loss of the contracts may be compensated by oral testimony as to their making and contents. In our view the corporate resolution, signed by the corporate secretary, and followed by six contracts which were admittedly executed by Broadneck, satisfy the requirements of the Statute of Frauds. The trial court erred in concluding that an action could not be maintained upon the agreement alleged in count one since it was barred by § 5-104 of the Real Property Article.

Count Three

We also conclude that the trial court erred in dismissing count three, the contract count involving the individuals, Baldwin and the Dixons. Appellants admit that the agreement to form a joint venture for the purpose of purchasing and developing the property in question was oral, but contend that such an agreement does not fall within the Statute of Frauds.

It was alleged in count three that “Upon completion of development, Della Ratta was to receive a fifteen (15%) percent ownership interest in the multi-family projects constructed in return for (a) construction of the apartment projects through his general contracting corporation at cost plus a five (5%) percent fee, and (b) arranging suitable construction and permanent financing.” According to Della Ratta’s testimony the increased ownership interest would be in the joint venture which was to own and develop property. This is confirmed by the “First Amendment to Oakland Hills Joint Venture Agreement” which provides: “(a) The net profits or net losses of the joint venture shall be distributable, or chargeable, as the case may be, to the Venturers in the proportions set out below:

NAME PROPORTION

DELLA RATTA 25%

By this agreement Della Ratta’s share was increased from 10% to 25% in the first phase of development.

The oral agreement alleged in count three was an agreement by the joint venturers to share in the profits and losses arising from the partnership’s dealings in land, and as such, the Statute of Frauds does not apply to it. The Court of Appeals in Morgart v. Smouse, 103 Md. 463, 63 A. 1070 (1906), stated in part:

“It has been repeatedly held in different jurisdictions that an agreement by two or more persons to buy land and sell it and share either the profits or the profits and losses constitutes them partners for that venture and entitles either of them to an accounting in equity from the others of the joint transactions____A verbal agreement is sufficient to constitute a partnership to deal in lands, the Statute of Frauds not being applicable to such a contract. ” (Citations omitted. Emphasis supplied.)

Id. at 468; see also Hohman v. Hohman, 164 Md. 594, 165 A. 812 (1933); Bruns v. Spalding, 90 Md. 349, 45 A. 194 (1900). Thus, the trial court erred in granting appellees’ motion to dismiss upon the ground that the Statute of Frauds barred appellants from bringing an action upon the agreement.

Judgment reversed; case remanded for further proceedings not inconsistent with this opinion.

Costs to be paid by appellees.