The state's second-highest court has struck down a key portion of a lower-court ruling in a controversial impact-fee lawsuit against Anne Arundel County, potentially lowering the county's refund to Odenton homebuyers of $4.7 million plus interest by more than half, the county's top attorney said.
That interpretation differs wildly from that of the plaintiffs' attorneys, who believe the Court of Special Appeals found in their favor and estimate that the award could be as high as $23.2 million.
A three-judge panel for the Court of Special Appeals said an Anne Arundel County Circuit Court judge erred in ruling in 2004 that the county improperly accounted for millions of dollars in the fees collected from developers and set aside for road and school projects because they were not listed in budget documents.
The 53-page opinion issued Thursday said the county appropriately "encumbered" -- or designated -- funding for infrastructure projects in underlying accounting statements within the six years from the time they were collected, as specified by law.
The ruling does not, however, establish the precise accounting for how much revenue was encumbered, or how much money the county owes, sending the 7-year-old case back to Circuit Court.
"We view this decision as a win," County Attorney Jonathan Hodgson said. Based on the appeals court ruling, he said, the award of $4.7 million plus interest that homeowners in the Seven Oaks community won against the county in 2006 will drop to about $2.2 million plus interest.
But John R. Greiber Jr., one of the attorneys for the plaintiffs in the class-action suit, said yesterday the award could be ten times that, which includes impact money that he said was spent on ineligible renovation projects and accumulated interest going back two decades.
Hodgson said that interpretation was "based in fantasy."
"One of the problems we have had with opposing counsel in this case from the beginning has been their inability to see clearly and place proper value on their case," Hodgson said.
Greiber said the county tried to encumber $8.3 million that's in question, but only properly set aside $2.1 million for infrastructure projects. Based on his reading of the three-judge panel's opinion, the county owes at least $6.2 million plus interest.
"It's apparent to me that Mr. Hodgson doesn't have a firm grasp of the obvious," Greiber said.
The appeals court ruling also leaves open the possibility of the lower court's weighing whether to enforce a county Ethics Commission ruling in 2006 to oust Phillip F. Scheibe, the county attorney in the late 1990s, from the case. Scheibe said if the ethics decision stands, he would be denied payment in the case from March 2006 on.
Homeowners brought the suit against the county in 2001, alleging that the county either misspent or didn't spend the impact fees it collected between 1988 and 1996. Developer impact fees are typically passed on to homebuyers.
The three-judge panel agreed that the Planning and Zoning Department erred in seeking three-year extensions to spend collected impact fees because the request failed to establish how future infrastructure projects would benefit specific homes.
The lower court ruled that those fees should be refunded to homeowners. County lawyers have argued that the planning agency should be allowed to correct the error, which could nullify a refund. Hodgson said he was weighing an appeal of that part of the decision.