Muskin v. State Department of Assessments & Taxation

30 A.3d 962, 422 Md. 544, 2011 Md. LEXIS 644
CourtCourt of Appeals of Maryland
DecidedOctober 25, 2011
Docket140, September Term, 2010
StatusPublished
Cited by41 cases

This text of 30 A.3d 962 (Muskin v. State Department of Assessments & Taxation) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Muskin v. State Department of Assessments & Taxation, 30 A.3d 962, 422 Md. 544, 2011 Md. LEXIS 644 (Md. 2011).

Opinion

HARRELL, J.

Petitioner, Charles Muskin, trustee of two trusts owning ground rent leases in Baltimore City, contends that Chapter 290 of the Laws of 2007, the Ground Rent Registry Statute, is invalid under the federal and Maryland constitutions and Maryland’s Declaration of Rights. Chapter 290 was enacted by the General Assembly in response to media attention and public interest in perceived problems with the ground rent system in Maryland. The statute requires Respondent, the State Department of Assessments and Taxation (“SDAT”), to *550 maintain an online registry of ground rent leases and, if a ground lease holder failed to register the property with SDAT by the statutory deadline, to issue an extinguishment certificate transferring the reversionary interest from the ground lease holder to the ground rent tenant. Although we shall assume, for the sake of discussion, that Chapter 290 would pass analytical muster according to the United States Constitution and relevant federal cases, Maryland’s Constitution, Declaration of Rights, and long standing relevant case law provide specific prohibitions on the retrospective application of statutes that lead to the abrogation of vested rights and the taking of property without just compensation. For reasons that we shall elaborate, we hold that the extinguishment and transfer provisions of Chapter 290 are invalid under Maryland law. The registration requirements of the statute, however, survive Muskin’s challenge. Accordingly, the judgment of the Circuit Court for Baltimore City, which upheld generally the statute through its grant of the SDAT’s motion for summary judgment and denial of Muskin’s motion for summary judgment, shall be vacated and we shall remand the case for entry of a declaratory judgment and issuance of an injunction consistent with the views expressed in this opinion.

I. Factual and Legal Background.

Petitioner, Charles Muskin (“Muskin”), is the trustee of two trusts owning 300 ground rent leases located in Baltimore City. A ground rent lease, common in Baltimore City, is a renewable 99 year lease where the fee simple owner of a property receives an annual or semi-annual payment (“ground rent”) and retains the right to re-enter the property and terminate the lease if the leaseholder fails to pay. Kolker v. Biggs, 203 Md. 137, 141, 99 A.2d 743, 745 (1953). The fee simple owner retains a real property right in the land, but the leaseholder’s interest is governed by the law of personalty. Id.

Ground rent leases have a mixed history in Maryland, with proponents focusing on the tradition and importance of ground rental income, and critics focusing on anecdotal examples of *551 homeowners being evicted for failure to pay a relatively small amount of ground rent and the complicated system for administering ground rent leases. 1 In response to media publicity in 2006 regarding perceived problems in the ground rent system, the Maryland General Assembly passed Chapter 290 of the Laws of 2007, which required the SDAT to create and maintain an online registry of properties subject to ground leases. Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, § 8-703(a). Chapter 290 was designed to create a centralized registry where ground rent tenants could find easily for their properties the amount of ground rent owed, the ground rent due date, the ground rent payee, and the address to whom the rents could be sent. This registry sought to prevent predatory ejectments by protecting tenants against unintentional default. The new statute required ground rent holders to complete and submit a form 2 and registration fee 3 to the SDAT by 30 September 2010. Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, §§ 8-704 and 8-707(a). If a ground rent owner failed to register by the deadline, the new statute mandated that

*552 the reversionary interest of the ground lease holder under the ground lease is extinguished and the ground rent is no longer payable to the ground lease holder. The extinguishment of the ground lease is effective to conclusively vest a fee simple title in the leasehold tenant, free and clear of any and all right, title, or interest of the ground lease holder, any lien of a creditor of the ground lease holder....

Maryland Code (1974, 2010 Repl.Vol.) Real Property Article, § 8-708(a)(c). The session law did not contain a severability clause.

Petitioner Muskin did not register the trusts’ ground rent leases with the SDAT by the deadline, filing instead an action in the Circuit Court for Anne Arundel County requesting a declaratory judgment that Chapter 290 was unconstitutional 4 and an injunction prohibiting the SDAT from issuing extinguishment certificates regarding the trusts’ ground leases. The action was transferred to the Circuit Court for Baltimore City and a hearing was held on 6 October 2010. In a written opinion issued 25 October 2010, the Circuit Court denied Muskin’s motion for summary judgment, granted the SDAT’s summary judgment motion, and issued a declaratory judgment stating that Chapter 290 was constitutional under the United States and Maryland Constitutions. The Circuit Court based its rulings primarily on United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985), and Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982), concluding that:

Chapter 290 is not a retroactive abrogation of vested property rights because, inter alia, it does not operate retroactively. Chapter 290 requires ground lease holders to register their ground leases with the Department, and conditions their continued maintenance of that interest on compliance. Further, Chapter 290 does not retroactively create or elimi *553 nate property rights, but instead, prospectively conditions the continued ownership of ground rents on compliance with the requirement of registration. As a result, Chapter 290 does not violate the takings clauses of both the United States and the Maryland Constitutions.
Further, Chapter 290 does not violate the Equal Protection Clause because it is rationally related to legitimate government interests. This Court finds that the registration requirement of Chapter 290 is rationally related to legitimate governmental interests in fixing the ground rent system. Lastly, on this record, this Court finds that the Plaintiff has not provided any basis for concluding that Chapter 290 was enacted in an arbitrary or capricious way, or that it lacked a rational basis.

Petitioner filed an appeal to the Court of Special Appeals and subsequently a petition for writ of certiorari to us. We granted his petition and issued our writ, see Muskin v. State Dep’t of Tax’n, 418 Md.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Key School v. Bunker
Court of Appeals of Maryland, 2025
Bd. of Education Of Harford Cnty. v. Doe
Court of Appeals of Maryland, 2025
Archbishop of Washington v. Doe
Court of Appeals of Maryland, 2025
In the Matter of Winifred Carpenter
Court of Special Appeals of Maryland, 2024
Kelly v. State
Court of Special Appeals of Maryland, 2024
In re Estate of Wiggins
992 N.W.2d 429 (Nebraska Supreme Court, 2023)
NECEC Transmission LLC v. Bureau of Parks and Lands
2022 ME 48 (Supreme Judicial Court of Maine, 2022)
Velicky v. The CopyCat Building LLC
476 Md. 435 (Court of Appeals of Maryland, 2021)
Moore v. Donegal Mutual Insurance
239 A.3d 764 (Court of Special Appeals of Maryland, 2020)
Maryland Shall Issue, Inc. v. Lawrence Hogan
963 F.3d 356 (Fourth Circuit, 2020)
Md. Shall Issue v. Hogan
353 F. Supp. 3d 400 (D. Maryland, 2018)
Ellis v. McKenzie
178 A.3d 14 (Court of Appeals of Maryland, 2018)
Woolridge v. Abrishami
163 A.3d 850 (Court of Special Appeals of Maryland, 2017)
State v. Merritt Pavilion, LLC
149 A.3d 682 (Court of Special Appeals of Maryland, 2016)
United Insurance Co. of America v. Maryland Insurance Administration
144 A.3d 1230 (Court of Appeals of Maryland, 2016)
Harvey v. Sines
137 A.3d 1045 (Court of Special Appeals of Maryland, 2016)
State v. Braverman
137 A.3d 377 (Court of Special Appeals of Maryland, 2016)
State v. Roshchin
130 A.3d 453 (Court of Appeals of Maryland, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
30 A.3d 962, 422 Md. 544, 2011 Md. LEXIS 644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/muskin-v-state-department-of-assessments-taxation-md-2011.