IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-371 and 15-374
Filed: 20 October 2015
New Hanover County, No. 12 CVS 4482 and 13 CVS 1254
POINT SOUTH PROPERTIES, LLC, and SANCO BUILDERS CORPORATION, Plaintiffs,
v.
CAPE FEAR PUBLIC UTILITY AUTHORITY and NEW HANOVER COUNTY, Defendants.
and
CB WINDSWEPT, LLC, SELLAR’S COVE, LLC, TELFAIR SUMMIT, LLC, and CB SNOWS CUT LANDING, LLC, Plaintiffs,
CAPE FEAR PUBLIC UTILITY AUTHORITY and NEW HANOVER COUNTY, Defendants.
Appeal by defendants from orders entered 23 September 2014 by Judge W.
Douglas Parsons in New Hanover County Superior Court. Heard in the Court of
Appeals 23 September 2015.
Shipman & Wright, LLP, by William G. Wright and Gary K. Shipman for plaintiffs-appellees.
Ward and Smith, P.A., by Jeremy M. Wilson and Ryal W. Tayloe for defendants- appellants.
ZACHARY, Judge. POINT S. PROPS., LLC V CAPE FEAR PUB. UTIL. AUTH. AND CB WINDSWEPT, LLC V CAPE FEAR PUB. UTIL. AUTH.
Opinion of the Court
In Court of Appeals Case COA 15-371, Cape Fear Public Utility Authority
(CFPUA) and New Hanover County (collectively referred to as defendants) appeal
from an order granting summary judgment in favor of Point South Properties, LLC
and Sanco Builders Corporation (Point South plaintiffs), on plaintiffs’ claims arising
from the payment of impact fees assessed by defendants. Similarly, in Court of
Appeals Case COA 15-374, the same defendants appeal from summary judgment
entered in favor of CB Windswept, LLC; Sellar's Cove, LLC; Telfair Summit, LLC;
and CB Snows Cut Landing, LLC (Windswept plaintiffs), on claims arising from
plaintiffs’ payment of impact fees. Pursuant to the provisions of N.C.R. App. P. 40,
the cases were consolidated for oral argument by this Court. Moreover, in that “both
appeals involve common questions of law, as evidenced by defendants’ decision to
submit virtually identical appellate briefs in each case,” the Court has consolidated
“these appeals for the purpose of rendering a single opinion on all issues properly
before the Court.” Putman v. Alexander, 194 N.C. App. 578, 580, 670 S.E.2d 610, 613
(2009).
On appeal defendants argue that plaintiffs’ claims were barred by the statute
of limitations and the doctrine of laches, that defendants were entitled to charge
water and sewer impact fees to plaintiffs, and that plaintiffs’ constitutional claims
lack merit. We conclude that plaintiffs’ claims were not barred by the statute of
limitations or the doctrine of laches, that the trial court properly entered summary
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judgment for plaintiffs on their claim that defendants’ imposition of impact fees was
ultra vires, and that it is not necessary to reach the merits of plaintiffs’ constitutional
claims.
I. Factual and Procedural Background
In 1983 New Hanover County created the New Hanover County Water and
Sewer District (NHCWSD), which provided water and sewer service in the
unincorporated areas of the county. In 1987 NHCWSD established an impact fee
policy, pursuant to the terms of which the payment of a water and sewer impact fee
was a precondition for a developer to receive a building permit. The rationale for this
policy was that “the Water and Sewer District was working to expand out its
infrastructure with the goal of providing water and sewer services to everybody
throughout the county.” In 2007 New Hanover County and the City of Wilmington
entered into an interlocal agreement and created CFPUA, a water and sewer
authority. Pursuant to the agreement creating CFPUA, all assets and liabilities of
NHCWSD were transferred to CFPUA. In 2008 CFPUA replaced the previous
ordinances of NHCWSD and of the City of Wilmington with a single CFPUA
ordinance that did not assess impact fees for developments prior to the time that
service was provided.
Plaintiffs are companies engaged in residential development in southern New
Hanover County. Between 2003 and 2006, plaintiffs developed certain properties in
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New Hanover County (the subject properties). In order to obtain the necessary
building permits, plaintiffs were required to pay NHCWSD impact fees associated
with the provision of water and sewer service. The fees totaled approximately
$238,000 paid by the Point South plaintiffs, and approximately $220,000 paid by the
Windswept plaintiffs.
Aqua North Carolina, Inc., (Aqua) is a private utility company providing water
and sewer service in various locations throughout North Carolina. At all times since
their construction, Aqua has provided water and sewer service for the subject
properties. When plaintiffs were first assessed impact fees, they informed defendants
that water and sewer service was provided by Aqua and argued that they should not
have to pay the fees because plaintiffs’ properties were already served by Aqua and
therefore the subject properties would not have any impact on the water or sewer
facilities operated by NHCWSD. Defendants would not capitulate and ultimately
plaintiffs paid the required fees in order to obtain building permits.
As early as 1976, defendants identified the unincorporated areas in the
southern part of New Hanover County as a potential location for expansion of water
and sewer service. Accordingly, defendants have included this area, which includes
the subject properties, in their long range estimates of possible future demand for
water and sewer service. It is undisputed, however, that defendants have never made
an official decision to extend water and sewer service to any of the subject properties
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or taken any steps towards extending water and sewer service in these specific
developments.
On 21 November 2012 the Point South plaintiffs filed suit against defendants,
seeking the refund of the impact fees plaintiffs had paid, together with interest and
attorney’s fees. The Point South plaintiffs alleged that defendants’ actions in
assessing impact fees were ultra vires and violated plaintiffs’ rights to due process
and equal protection under the United States and North Carolina Constitutions. On
27 December 2012, defendants filed an answer and a motion to remove the Point
South plaintiffs’ action to the United States District Court for the Eastern District of
North Carolina, on the basis of the Point South plaintiffs’ inclusion in their complaint
of claims arising under the U.S. Constitution. The parties each filed an amended
complaint and answer in federal court. Thereafter, the Point South plaintiffs
dismissed their federal constitutional claims and moved for remand to state court.
On 26 March 2013 the case was remanded to the Superior Court of New Hanover
County. On 5 November 2013 the Point South plaintiffs filed their second amended
complaint. On 3 January 2014 defendants filed their answer, raising various
defenses, including allegations that the Point South plaintiffs’ claims were barred by
the applicable statute of limitations and the doctrine of laches, and that the impact
fees were authorized by statute. The Point South plaintiffs and defendants moved
for summary judgment on 21 August 2014 and 27 August 2014, respectively.
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On 27 March 2013 the Windswept plaintiffs filed a complaint seeking damages
arising from their payment of impact fees, including refund of the payments with
interest and attorneys’ fees. The Windswept plaintiffs’ complaint similarly alleged
that defendants’ imposition of impact fees was ultra vires and violated plaintiffs’
rights to due process and equal protection under the North Carolina Constitution. As
the Windswept plaintiffs did not assert any claims arising under the federal
constitution, the issue of removal to federal court did not arise in connection with
their lawsuit. On 5 February 2014 Judge William G. Wright granted the Windswept
plaintiffs’ motion to amend their complaint. On the same date, the Windswept
plaintiffs filed an amended class action complaint on behalf of themselves and others
similarly situated. On 6 March 2014 defendants filed an answer denying the material
allegations of the Windswept plaintiffs’ complaint and asserting various defenses,
including the statute of limitations and the doctrine of laches. The Windswept
plaintiffs filed a motion for class action certification on 28 March 2014, which was
denied by Judge W. Allen Cobb, Jr., on 18 July 2014. The Windswept plaintiffs filed
a motion for summary judgment on 21 August 2014 and defendants filed a motion for
summary judgment on 27 August 2014.
As discussed above, the procedural histories of the claims filed by the Point
South plaintiffs and the Windswept plaintiffs are slightly different, given that the
Point South plaintiffs initially brought claims under the federal constitution and the
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Windswept plaintiffs initially sought class certification. Nevertheless, because the
Point South plaintiffs voluntarily dismissed their federal claims, and the Windswept
plaintiffs did not appeal the denial of their motion for class certification, the parties’
summary judgment motions raised the same issues in both cases. Accordingly, on 4
September 2014 the trial court conducted a single hearing on the summary judgment
motions of the parties in both cases, at which all plaintiffs were represented by the
same law firm. On 23 September 2014 the trial court entered identical orders in both
cases granting summary judgment for the plaintiffs in each case. Defendants timely
entered notices of appeal from both summary judgment orders. As defendants have
raised the same appellate issues in both cases and the plaintiffs have presented the
same defenses, in the remainder of this opinion the term “plaintiffs” shall refer to
both the Point South plaintiffs and the Windswept plaintiffs.
II. Standard of Review
The standard of review of a trial court’s summary judgment order is well-
established. Under N.C. Gen. Stat. § 1A-1, Rule 56(c), summary judgment is properly
entered “if the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that any party is entitled to a judgment as a matter of law.” “ ‘ In
a motion for summary judgment, the evidence presented to the trial court must be
admissible at trial, N.C.G.S. § 1A-1, Rule 56(e) [(2013)], and must be viewed in a light
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most favorable to the non-moving party.’ ” Patmore v. Town of Chapel Hill, N.C., __
N.C. App. __ , __ , 757 S.E.2d 302, 304 (quoting Howerton v. Arai Helmet, Ltd., 358
N.C. 440, 467, 597 S.E.2d 674, 692 (2004) (internal citation omitted)), disc. review
denied, 367 N.C. 519, 758 S.E.2d 874 (2014). “If the trial court grants summary
judgment, the decision should be affirmed on appeal if there is any ground to support
the decision.” Nifong v. C.C. Mangum, Inc., 121 N.C. App. 767, 768, 468 S.E.2d 463,
465 (1996) (citing Shore v. Brown, 324 N.C. 427, 428, 378 S.E.2d 778, 779 (1989)).
“We review trial court orders granting or denying a summary judgment motion
utilizing a de novo standard of review.” Davis v. Woodlake Partners, LLC, __ N.C.
App. __, __, 748 S.E.2d 762, 766 (2013) (citing In re Will of Jones, 362 N.C. 569, 573,
669 S.E.2d 572, 576 (2008)).
III. Statute of Limitations
Defendants argue initially that plaintiffs’ claims are barred by the applicable
statute of limitations. We disagree.
We first clarify the nature of the parties’ dispute as it relates to the statute of
limitations. Defendants assert that plaintiffs’ claims are based on N.C. Gen. Stat. §
162A-88, which grants defendants the authority to levy fees for water and sewer
“services furnished or to be furnished.” Based on their contention that plaintiffs’
claims arise from this statute, defendants assert that plaintiffs’ claims were subject
to the three year statute of limitations set out in N.C. Gen. Stat. § 1-52(2) for claims
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based upon a “liability created by statute.” We conclude, however, that defendants’
position is based upon a misapprehension both of plaintiffs’ complaint and of the
provisions of N.C. Gen. Stat. § 162A-88.
Defendants contend that the parties have no disagreement over defendants’
authority to impose the impact fees at issue and that plaintiffs “simply allege that
the manner in which Defendants have exercised this statutory authority has resulted
in liability.” In addition, defendants maintain that plaintiffs have claimed that
defendants “acted improperly under these statutes by not actually providing sewer
service to the Properties.” Defendants do not cite a basis in the record evidence for
this contention. Our own review of plaintiffs’ complaint reveals that plaintiffs assert
that defendants lacked the authority to impose impact fees under N.C. Gen. Stat. §
162A-88, and that in their complaint plaintiffs do not ask defendants to provide water
or sewer service, or complain of defendants’ failure to provide service. Moreover, at
the hearing on the parties’ summary judgment motions, plaintiffs’ counsel stated
that:
[Defense counsel] says that we are alleging that there is some implied obligation to provide services within a designated period of time. Hear me again loud and clear, we’re not alleging that at all. We’re alleging that they levied these fees without authority, period. We don’t want them to provide service. We don’t need them to provide service. So, we’re not alleging that there’s some obligation to provide service, we’re saying they had no authority to extract the fees.
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We conclude that plaintiffs neither conceded defendants’ authority to levy the impact
fees at issue nor based their claims on defendants’ failure to provide water and sewer
service for the subject properties, and that plaintiffs do not contend that defendants
breached a duty owed under N.C. Gen. Stat. § 162A-88. Instead, it is defendants who
raise the statute as a defense to plaintiffs’ claims, by arguing that the impact fees
were authorized under N.C. Gen. Stat. § 162A-88.
In support of their position that the three year statute of limitations in N.C.
Gen. Stat. § 1-52(2) applies to the instant case, defendants cite several cases in which
the plaintiff sought to recover damages based on a statute that established the
defendant’s alleged liability. For example, defendants cite Wilson v. McLeod Oil Co.,
327 N.C. 491, 506, 398 S.E.2d 586, 593 (1990), rehearing denied, 328 N.C. 336, 402
S.E.2d 844 (1991), in which the plaintiffs sought damages under N.C. Gen. Stat. §
143-215.93, which provides in part that “[a]ny person having control over oil or other
hazardous substances which enters the waters of the State . . . shall be strictly liable,
without regard to fault, for damages to persons or property, public or private, caused
by such entry[.]” In Wilson, our Supreme Court held that the plaintiffs’ “statutory
claim based on N.C.G.S. § 143-215.93 is barred by the statute of limitations found in
N.C.G.S. § 1-52(2)[.]” Defendants contend that because plaintiffs’ claims are based
on N.C. Gen. Stat. § 162A-88, plaintiffs are therefore seeking recompense based on a
“liability created by statute.” Although N.C. Gen. Stat. § 162A-88 grants defendants
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the authority to levy fees for water and sewer “services furnished or to be furnished,”
the statute does not impose any duty on defendants, or expose them to liability.
Accordingly, the cases cited by defendants are clearly distinguishable from the
instant case.
We conclude that plaintiffs’ claims are not based upon defendants’ alleged
breach of a duty or liability established by N.C. Gen. Stat. § 162A-88, and that the
statute itself does not expose defendants to liability. Therefore, we hold that
plaintiffs’ claims are not subject to the three year statute of limitations for a claim
based on a liability created by statute.
Defendants also assert, in the alternative, that plaintiffs’ claims are barred by
the two year statute of limitations set out in N.C. Gen. Stat. § 1-53(1) for an “action
against a local unit of government upon a contract, obligation or liability arising out
of a contract, express or implied.” Defendants allege that plaintiffs are seeking
damages based on an “implied” contract, and assert that “[p]laintiffs apparently
attempt to argue that NHCWSD was obligated to immediately provide them with
sewer services.” Defendants do not cite to any allegations of plaintiffs’ complaint for
their position, and we conclude that plaintiffs do not maintain that defendants were
obligated to provide them with water and sewer service either “immediately” or
within some other time limit, but that defendants lacked authority to impose the
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impact fees at issue. Defendants’ argument that plaintiffs’ claims are subject to the
two year statute of limitations for an action arising under a contract is without merit.
Plaintiffs contend that the ten year statute of limitations set out in N.C. Gen.
Stat. § 1-56 applies to their claims. N.C. Gen. Stat. § 1-56 provides that “[a]n action
for relief not otherwise limited by this subchapter may not be commenced more than
10 years after the cause of action has accrued.” Plaintiffs argue that, because no other
statute establishes the statute of limitations for their claim, the residual or “catch
all” period of ten years set out in N.C. Gen. Stat. § 1-56 applies. We agree.
Plaintiffs cite Amward Homes, Inc. v. Town of Cary, 206 N.C. App. 38, 698
S.E.2d 404 (2010), which applied the ten year statute of limitations in N.C. Gen. Stat.
§ 1-56 to the plaintiffs’ claim for damages arising from payments of allegedly ultra
vires impact fees, with Judge Jackson dissenting on the basis that plaintiffs’ appeal
was interlocutory. Upon appeal of Amward Homes to our Supreme Court, during
which time Justice Jackson was seated on the Supreme Court and did not take part
in the consideration of this case, in Amward Homes, Inc. v. Town of Cary, 365 N.C.
305, 716 S.E.2d 849 (2011), the Supreme Court stated that the remaining members
of the Court were equally divided and that “[a]ccordingly, the decision of the Court of
Appeals is left undisturbed and stands without precedential value.” Amward, 365
N.C. at 306, 716 S.E.2d at 850. As a result, this Court’s holding in Amward does not
constitute binding precedent.
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Plaintiffs also direct our attention to Tommy Davis Constr., Inc. v. Cape Fear
Pub. Utility Authority, 2014 U.S. Dist. LEXIS 92449 (E.D.N.C. July 7, 2014), in which
the federal district court for the Eastern District of North Carolina granted summary
judgment in favor of the plaintiff. In Tommy Davis, which is very similar to the case
at hand, the plaintiff real estate developer sued the current defendants for damages
based on plaintiff’s payment of impact fees. In the opinion, which discusses the same
issues raised in the present appeal, the court held that the statute of limitations for
the plaintiff’s claims was ten years. Although neither Amward nor Tommy Davis
constitutes binding precedent, we agree with the holdings of these cases that the
proper statute of limitations is ten years. It is undisputed in the case at bar that
plaintiffs filed suit within ten years of their payment of the challenged impact fees,
and we conclude that plaintiffs’ claims are not barred by the statute of limitations.
IV. Laches
Defendants also argue that plaintiffs’ claims are barred by the doctrine of
laches. “We [have] previously held, ‘laches is an equitable defense and is not available
in an action at law.’ When a ‘[p]laintiff’s claims are legal in nature, not equitable[,]’
laches cannot support judgment for the defendant.” Cater v. Barker, 172 N.C. App.
441, 448, 617 S.E.2d 113, 118 (2005) (quoting City-Wide Asphalt Paving, Inc. v.
Alamance County, 132 N.C. App. 533, 537, 513 S.E.2d 335, 338, disc. rev. denied and
appeal dismissed, 350 N.C. 826, 537 S.E.2d 815 (1999) (internal citations omitted)),
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aff'd, 360 N.C. 357, 625 S.E.2d 778 (2006). In the cases cited by defendants, the
plaintiffs sought injunctive or other equitable relief, while in this case plaintiffs’
claims are legal rather than equitable. Therefore, the doctrine of laches is not
applicable to this case.
Moreover, defendants have failed to produce evidence that they were
prejudiced by plaintiffs’ delay in bringing suit. Defendants assert that they invested
the impact fees “into expansion of wastewater service capacity in order to, in part,
eventually provide services to communities in southern New Hanover County.” It is
undisputed, however, that defendants’ proposed expansion of wastewater service
capacity remains at the planning stage, and that expansion is required without
regard to whether or not the subject properties are ever serviced by defendants.
Defendants contend that their calculation of projected needs included reference to the
subject properties, but have failed to articulate any prejudice arising from inclusion
in planning documents of a figure representing the subject properties. Defendants
do not contend that they undertook any expenditures that would not have been
otherwise necessary, or that their legal position has been negatively impacted by the
passage of time. We conclude that plaintiffs’ claims are not barred by the doctrine of
laches.
V. Authority to Impose Impact Fees
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Defendants argue that the trial court erred by granting summary judgment for
plaintiffs, on the grounds that defendants’ imposition of impact fees was authorized
by N.C. Gen. Stat. § 162A-88, which provides in relevant part that:
The inhabitants of a county water and sewer district created pursuant to this Article are a body corporate and politic . . . [and] may establish, revise and collect rates, fees or other charges and penalties for the use of or [for] the services furnished or to be furnished by any sanitary sewer system, water system or sanitary sewer and water system of the district[.] . . .
Defendants contend that the impact fees were for services “to be furnished.” We
disagree, and conclude that plaintiffs produced uncontradicted evidence establishing
that defendants could not present a prima facie case that defendants have ever
decided or planned for water and sewer service “to be furnished” to the subject
properties. Defendants have not responded to plaintiffs’ evidence with any evidence
demonstrating a genuine issue of material fact, making entry of summary judgment
for plaintiffs proper in this case.
As a preliminary matter, we again spell out the nature of the parties’ dispute,
this time as it relates to defendants’ authority to assess the impact fees at issue. At
the hearing on this matter and in their appellate brief, defendants characterize their
dispute with plaintiffs as an issue of whether defendants have been sufficiently
prompt in arranging to extend water and sewer service to the subject properties. For
example, defendants state in their appellate brief that “Plaintiffs contend that
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NHCWSD's actions were ultra vires because NHCWSD charged impact fees for
properties that would not immediately be connected to its wastewater system.”
Plaintiffs’ complaint, however, does not fault defendants for failing to “immediately”
extend water and sewer service to the subject properties, or allege that it is the
timeline of defendants’ actions that renders the impact fees ultra vires. Rather,
plaintiffs assert in their complaint that imposition of the impact fees was “beyond the
statutory authority of the Defendants and any of their predecessors in interest,” and
assert in their appellate brief that the “Impact Fees were ultra vires as the fees
assessed to Plaintiffs were neither for services that were furnished nor to be
furnished.” We conclude that the issue before us is not, as defendants have urged,
whether defendants were required to “immediately” extend water and sewer service
to plaintiffs after assessment of impact fees. Rather, we must decide whether there
is evidence from which it might reasonably be found that defendants have ever
evidenced a commitment to extending water and sewer service to the subject
properties, regardless of the timeline.
The record demonstrates that defendants previously have stated their
intention to extend service to specific locations and have set out a target timeline for
doing so. For example, the 9 June 2010 CFPUA minutes includes the following:
Mr. Fletchner provided an overview of [CFPUA’s] anticipated CIP [Capital Improvement Program] through
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FY [Fiscal Year] 2018. Water CIP was summarized as follows:
In Fiscal Year 2011, Porters Neck customers will be added and plans for the extension of a water line down 23rd Street to Castle Hayne Road will begin.
In Fiscal Year 2012, extensions are planned for Bald Eagle Lane, and bulk sales should be underway with Pender County and Figure 8 Island. The distribution system along Kerr Avenue will be continued. FY2012 includes plans to extend water service down Carolina Beach Road to the South. . . .
In Fiscal Year 2013, . . . [the] Authority plans to expand into the Middle Sound area[.] . . . Extensions will continue in the Southern part of the County and along River Road.
In Fiscal Year 2014, the Sweeny plant expansion will be completed . . . [and the] Authority plans to extend service into the Bayshore area.
No new growth is anticipated for Fiscal Years 2015 and 2016. In Fiscal Year 2017, additional growth is expected in the Porters Neck area and along Castle Hayne road. In Fiscal Year 2018, the Authority expects to continue building the system in the Northern part of the County.
The wastewater CIP was summarized as follows:
In Fiscal Year 2011 . . .[through] 2013, the Authority will address pump station upgrades[.] . . .
In Fiscal Year 2014, the Authority expects to work closely with the New Hanover County Health Department to address failing septic systems in the Southern part of the County. No new expansion is anticipated for Fiscal Years 2015 and 2016.
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In Fiscal Year 2017, . . . [the Authority will] continue to increase pump station capacity.
In Fiscal Year 2018, the Authority expects to extend wastewater services in the Heritage Park, Wrightsboro and Prince George Estates areas.
Defendants do not allege that their capital improvement plan includes any specific
commitment to extend water and sewer service to any of the developments that
comprise the subject properties. Given that these plans extend through Fiscal Year
2018, it appears that the CFPUA has no plans in the foreseeable future to extend
service to the subject properties.
Moreover, at all times since their construction, water and sewer service for the
subject properties has been provided by Aqua, and the defendants do not have the
authority to condemn Aqua’s property. N.C. Gen. Stat. § 40A-5, entitled
“Condemnation of property owned by other condemnors,” provides that a public
condemnor, as defined in N.C. Gen. Stat. § 40A-3, “may condemn the property of a
private condemnor if such property is not in actual public use or not necessary to the
operation of the business of the owner.” N.C. Gen. Stat. § 40A-5(b). Under N.C. Gen.
Stat. § 40A-42(c), if a public condemnor such as CFPUA attempts to condemn
property [that] is owned by a private condemnor, the vesting of title in the condemnor and the right to immediate possession of the property shall not become effective until the superior court has rendered final judgment (after any appeals) that the property is not in actual public use or is not necessary to the operation of the business of the owner, as set forth in G.S. 40A-5(b).
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In this case, it is undisputed that Aqua has continuously provided water and sewer
service and, as a result, that the property owned by Aqua is both in actual use and
“necessary to the operation of the business of the owner.” Therefore, defendants do
not have the authority to exercise the right of eminent domain in order to condemn
Aqua’s property for their own use. In addition, the uncontroverted affidavit of
Thomas J. Roberts, the president and Chief Operating Officer of Aqua, avers in
relevant part that, as regards the Point South plaintiffs:
4. In 2005, Aqua North Carolina, Inc. was granted a Certificate of Public Convenience and Necessity for several subdivisions in southern New Hanover County, including Willow Glen at Beau Rivage subdivision and Point South Apartment complexes.
...
6. Aqua North Carolina, Inc. has entered into sewer and water agreements with the developers of Willow Glen at Beau Rivage subdivision and Point South Apartment complexes and provides sewer and water service to the subdivision and apartment complexes.
7. To the best of my knowledge and belief no other entity, including the New Hanover County Water & Sewer District or the Cape Fear Public Utility Authority furnished any water or sewer services to Willow Glen at Beau Rivage subdivision and Point South Apartment complexes since their creation and construction.
8. To the best of my knowledge and belief no other entity, including the New Hanover County Water & Sewer District or the Cape Fear Public Utility Authority currently furnishes any water or sewer services to Willow Glen at
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Beau Rivage subdivision and Point South Apartment complexes.
9. Aqua North Carolina, Inc.’s intent and plan is to continue to provide water and sewer services to Willow Glen at Beau Rivage subdivision and Point South Apartment complexes and other subdivisions in southern New Hanover County, north of Snow's Cut in accordance with the terms and provisions of its tariff. Aqua North Carolina, Inc. has no current intent or plans to abandon or sell those services and infrastructure and would not anticipate taking any such action for the foreseeable future.
10. I have informed the Cape Fear Public Utility Authority of Aqua North Carolina, Inc.’s intent and plan as stated above.
11. Aqua North Carolina, Inc. has never been presented with any offer from the Cape Fear Public Utility Authority to purchase Aqua North Carolina, Inc.’s services or infrastructure in southern New Hanover County.
Mr. Roberts also executed an affidavit in regards to the Windswept plaintiffs, which
was essentially identical except for the names of the relevant subdivisions. Thus, the
uncontradicted record evidence establishes that Aqua has always provided water and
sewer service to the subject properties, intends to continue providing water and sewer
service, and that defendants have never contacted Aqua about purchasing the right
to extend service to the subject properties.
To summarize, the uncontradicted record evidence shows that at the time that
defendants required plaintiffs to pay impact fees and at all times since then, the
following circumstances have existed:
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1. Since 1976 defendants have represented that they have a generalized long range plan to expand water and sewer service to the southern part of New Hanover County, where the subject properties are located.
2. Although defendants have stated their intention to extend water and sewer service to other specific locations within a projected timeframe, defendants have never expressed any decision or official commitment to expand service to any of the subject properties.
3. At all times, the water and sewer service for the subject properties have been provided by Aqua, and defendants have never announced an official decision to take concrete steps towards replacing Aqua as the water and sewer service provider for these properties.
5. Defendants have not contacted Aqua about purchasing Aqua’s infrastructure or entered into negotiations or communications with Aqua about this possibility.
6. Defendants have never stated a timeline, or even an aspirational target year, for provision of service to any of the subject properties.
We conclude that there is no evidence in the record that defendants have ever
planned for water and sewer service “to be furnished” to the subject properties. We
hold that under these factual circumstances defendants have failed to show any
evidentiary basis for their contention that the fees were for service “to be furnished.”
If we were to accept defendants’ contention that the documents indicating a
generalized goal of extending water and sewer service to unspecified parts of New
Hanover County at an unspecified time in the indefinite future are sufficient to
authorize imposition of impact fees for services “to be furnished,” then fees could be
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imposed whenever a water and sewer board expressed even the vaguest intention to
possibly extend service at some unspecified time in the future. This would be an
absurd result, and it is well established that:
“The Court will not adopt an interpretation which resulted in injustice when the statute may reasonably be otherwise consistently construed with the intent of the act. Obviously, the Court will, whenever possible, interpret a statute so as to avoid absurd consequences.”
Sutton v. Aetna Casualty & Surety Co., 325 N.C. 259, 265, 382 S.E.2d 759, 763 (1989)
(quoting Insurance Co. v. Chantos, 293 N.C. 431, 440, 238 S.E.2d 597, 603 (1977)).
This Court’s holding that defendants have failed to show that impact fees were
assessed for water and sewer service “to be furnished” is based solely upon the specific
facts of this case, in which defendants produced no evidence that they had ever made
a decision to furnish water and sewer service to the subject properties, and had taken
no steps towards extending service to these locations. Accordingly, this Court
expressly declines to state any criteria, guidelines, or standards for determination of
whether the evidence in a particular case is adequate to support assessment of impact
fees for services “to be furnished.”
Moreover, it is noted that in McNeill v. Harnett County, 327 N.C. 552, 570, 398
S.E.2d 475, 485 (1990), our Supreme Court held “that the provisions of N.C.G.S. §
162A-88 authorizing user fees for services ‘to be furnished’ [are] not limited to the
financing of maintenance and improvements of existing customers.” In McNeill,
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however, there was no question that sewer service would be provided to the plaintiffs.
On the facts of this case, we agree with the analysis in Tommy Davis, which
distinguished McNeill and stated that:
[D]efendants in the instant matter have been developing “plans” to provide water and sewer services to the southern portion of New Hanover County, which includes [the subject properties], since 1976. As plaintiff points out, these plans are at best vague, and some plans even indicate that water and sewer services will not need to be provided by the government because service is already available through Aqua NC. Defendants have not taken concrete steps to actually provide water and sewer services to [the subject properties]. As of the time of filing the instant motions, Aqua NC continued to provide services to [the properties], eight years after plaintiff paid the impact fees, and Aqua NC intends to continue to provide those services. Aqua NC is unaware of any plan by any other entity, including defendants, to ever provide water and sewer services to [the subject properties] or any other areas in southern New Hanover County that are serviced by Aqua NC. Because no clear steps have been taken over the past decade since [the properties were] first permitted for defendants to provide water and sewer services, the assessment of impact fees was not a reasonable exercise of defendants' powers, but an ultra vires act beyond their statutory authority.
Tommy Davis, 2014 U.S. Dist. LEXIS 92449 at *9. We conclude that plaintiffs
produced evidence showing that defendants could not make a prima facie case that
the impact fees were properly imposed for water and sewer service “to be furnished,”
and that defendants failed to produce evidence to rebut plaintiffs’ showing. As a
result, the trial court did not err by granting summary judgment in favor of plaintiffs.
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In reaching this conclusion, we have rejected defendants’ arguments urging us
to reach a contrary result. Defendants direct our attention to N.C. Gen. Stat. § 153A-
4, which states that:
It is the policy of the General Assembly that the counties of this State should have adequate authority to exercise the powers, rights, duties, functions, privileges, and immunities conferred upon them by law. To this end, the provisions of this Chapter and of local acts shall be broadly construed and grants of power shall be construed to include any powers that are reasonably expedient to the exercise of the power.
Nonetheless, “[w]hen the language of a statute is clear and unambiguous, there is no
room for judicial construction, and the courts must give it its plain and definite
meaning.” Lemons v. Old Hickory Council, 322 N.C. 271, 276, 367 S.E.2d 655, 658
(1988) (citations omitted). The language of N.C. Gen. Stat. § 162A-88 is clear and
unambiguous:
Section 153A-4 does state that any legislative act affecting counties should be “broadly construed and grants of power shall be construed to include any powers that are reasonably expedient to the exercise of the power.” N.C. Gen. Stat. § 153A-4 [(2013)]. . . . But, in conjunction with our general rules of statutory construction, only if there is an ambiguity in a statute found in chapter 153A should section 153A-4 be part of the courts' interpretative process. If, however, the statute is clear on its face, the plain language of the statute controls and section 153A-4 remains idle.
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Durham Land Owners Ass’n v. County of Durham, 177 N.C. App. 629, 633-34, 630
S.E.2d 200, 203, disc review denied, 360 N.C. 532, 633 S.E.2d 678 (2006). We conclude
that N.C. Gen. Stat. § 153A-4 is not applicable to the present case.
Defendants also contend that their assessment of impact fees was authorized
under local ordinances. Assuming, without deciding, that the local ordinances cited
by defendants might grant a broader right to impose impact fees than is allowed
under N.C. Gen. Stat. § 162A-88, N.C. Gen. Stat. § 162A-19 provides that “[a]ll
general, special or local laws, or parts thereof, inconsistent herewith are hereby
declared to be inapplicable to the provisions of this Article.” We conclude that
defendants cannot rely upon a local ordinance to extend the right to assess impact
fees beyond what is allowed under N.C. Gen. Stat. § 162A-88.
Defendants have also filed a Memorandum of Additional Authority citing this
Court’s unpublished opinion in Quality Built Homes Inc. v. Town of Carthage, 2015
N.C. App. LEXIS 656 (N.C. Ct. App. Aug. 4, 2015). “An unpublished opinion
‘establishe[s] no precedent and is not binding authority[.]’ ” Long v. Harris, 137 N.C.
App. 461, 470, 528 S.E.2d 633, 639 (2000) (quoting United Services Automobile Assn.
v. Simpson, 126 N.C. App. 393, 396, 485 S.E.2d 337, 339, disc. review denied, 347 N.C.
141, 492 S.E.2d 37 (1997)). Furthermore, the primary issue in Quality Built Homes
was whether the Town of Carthage was authorized to impose fees for service “to be
furnished,” and the case did not address the question of whether the assessment of
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impact fees was a reasonable exercise of governmental authority under circumstances
similar to those presented in this appeal to this Court. We conclude that Quality
Built Homes does not indicate that we should reach a different result in the present
case.
Finally, defendants argue in their appellate brief that “genuine issues of
material fact remain regarding the amount of damages to which plaintiffs may be
entitled.” This argument is without merit.
Plaintiffs produced records in discovery detailing the impact fees that were
assessed against them, and defendants do not dispute the accuracy of the amounts
stated in these records. Defendants’ designee, Mr. Frank Styers, CFPUA’s Chief
Operating Officer, acknowledged in his deposition that these documents were
defendants’ business records and accurately set out the impact fees at issue. (Styers
depo 72-78) Thus, defendants do not challenge plaintiffs’ contentions regarding the
amounts that were paid. Instead, defendants argue that a genuine issue of material
fact arises from the fact that in some instances plaintiffs paid the fees directly, while
in other instances the fees were initially paid by a builder or other third party who
was then reimbursed by plaintiffs. “An issue is ‘genuine’ if it can be proven by
substantial evidence and a fact is ‘material’ if it would constitute or irrevocably
establish any material element of a claim or a defense.” Lowe v. Bradford, 305 N.C.
366, 369, 289 S.E.2d 363, 366 (1982) (citation omitted). Defendants do not articulate
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a defense to plaintiffs’ claims that would be established by evidence that plaintiffs
paid some of the impact fees directly and others as reimbursement to a builder.
Defendants also assert, without citation to any evidence, that plaintiffs may have
increased the sale price of the subject properties or “passed on” the impact fees to
purchasers of homes. Defendants’ contention in this regard is mere speculation. In
addition, defendants do not argue that the legal relationship of the parties would be
affected if, as defendants allege, plaintiffs included their expenses, including impact
fees, in their calculation of the price at which properties were sold. We conclude that
defendants have failed to demonstrate that a genuine issue of material fact exists
that made it improper for the trial court to award summary judgment in favor of
plaintiffs.
We have held that the trial court did not err by granting summary judgment
for plaintiffs on their claim that, on the facts of this case, defendants’ imposition of
impact fees was ultra vires and beyond their authority, and for recovery of plaintiffs’
damages resulting therefrom. Having reached this conclusion, we have no need to
address the parties’ arguments regarding plaintiffs’ claims under the North Carolina
Constitution. We hold that the trial court did not err and that its order should be
AFFIRMED.
Judges STEPHENS and McCULLOUGH concur.
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