## Facts

- John Bollech, Kenneth Haapala, Daniel Meisinger, and Dennis Winson, as trustees (the trustees), owned land in Charles County, Maryland known as Potomac Cliffs and planned a residential development.
- Clifton Potomac Associates Limited Partnerships I–X (Clifton) owned nearby land known as Newburg Station.
- In 1989, the trustees, Charles County (the County), and Clifton entered into a development agreement intended to coordinate “timely and orderly” provision of public water and sanitary sewer facilities to support staged residential development on the two properties.
- The agreement contemplated that residential development could proceed in prescribed stages, tied to the developers’ construction (or assurance of construction) of adequate public water and sewer facilities by a specified deadline in 1994.
- The trustees did not develop Potomac Cliffs and did not ensure that the required water and sewer facilities were provided within the period specified by the agreement.
- During the early 1990s, the County amended its land-use rules, including rezoning and related water/sewer classification changes affecting Potomac Cliffs, reducing permitted density and making the trustees’ contemplated buildout inconsistent with current regulations.
- In 1999, the trustees submitted an application to the County for a preliminary development plan for Potomac Cliffs.
- The County refused to accept the 1999 application because, under the amended zoning and water/sewer classification, the County could not approve the plan as proposed.
- The trustees claimed the 1989 development agreement gave them the right to proceed with development despite later zoning and classification changes and that the County’s actions both impaired contractual obligations (Contracts Clause) and breached the agreement.
- The County responded that the agreement did not (and could not) promise a permanent “freeze” of zoning and related classifications, and that any County obligations under the agreement were discharged because the trustees failed to satisfy their own conditions and time requirements.
- The district court granted summary judgment to the County (and Clifton), and the trustees appealed.

## Issues

1. Did the 1989 development agreement obligate Charles County to accept and process the trustees’ 1999 preliminary plan application under the earlier zoning and water/sewer classifications?
2. Did the County’s rezoning and related classification changes, and its refusal to accept the 1999 application, violate the Contracts Clause by impairing the obligation of contract?
3. Did the County’s conduct constitute a breach of the development agreement, or were any County obligations discharged by the trustees’ failure to meet required conditions and deadlines?

## Decision

- The Fourth Circuit affirmed the district court’s grant of summary judgment for the County (and Clifton).
- The court agreed that the development agreement did not create an enforceable contractual right to have Potomac Cliffs governed indefinitely by the 1989 zoning and service classifications.
- The court further agreed that, because the trustees failed to ensure timely provision of the water and sewer facilities required by the agreement, any arguable obligations on the County’s part were no longer enforceable.
- Because the trustees could not show an enforceable contractual obligation that the County later impaired, the Contracts Clause claim failed.
- The County’s refusal to accept the 1999 application, based on then-current zoning and classification rules, did not constitute a breach of the agreement.

## Legal Principles

- A Contracts Clause claim requires an identifiable contractual obligation that remains enforceable; if the asserted obligation does not exist as a matter of contract interpretation or law, there is no unconstitutional impairment.
- Government entities generally cannot bind themselves by contract to surrender future legislative zoning authority; an agreement interpreted as permanently fixing zoning classifications is not enforceable as a promise against later rezoning.
- Where a development agreement conditions governmental commitments on a developer’s timely completion of specified infrastructure or other prerequisites, the developer’s failure to satisfy those conditions can discharge corresponding governmental duties.
- Summary judgment is proper when the agreement’s text and the undisputed record show no enforceable promise supporting the plaintiff’s theory and no triable issue of breach or constitutional impairment.

## Conclusion

The Fourth Circuit held that the trustees could not use the 1989 development agreement to require Charles County to process a 1999 development application under outdated zoning and service classifications. Any reading of the agreement as freezing zoning would be legally unenforceable, and the trustees’ failure to meet the agreement’s water/sewer conditions and timelines meant the County had no continuing contractual duty to approve or process development under the earlier regulatory scheme; therefore, there was neither a Contracts Clause violation nor a breach of contract.


Bollech v. Charles County, Maryland, 69 Fed. Appx. 178 (2003)