Holly Ridge Associates, LLC v. North Carolina Department of Environment & Natural Resources

627 S.E.2d 326, 176 N.C. App. 594, 2006 N.C. App. LEXIS 581
CourtCourt of Appeals of North Carolina
DecidedMarch 21, 2006
DocketCOA03-1686
StatusPublished
Cited by6 cases

This text of 627 S.E.2d 326 (Holly Ridge Associates, LLC v. North Carolina Department of Environment & Natural Resources) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holly Ridge Associates, LLC v. North Carolina Department of Environment & Natural Resources, 627 S.E.2d 326, 176 N.C. App. 594, 2006 N.C. App. LEXIS 581 (N.C. Ct. App. 2006).

Opinions

HUDSON, Judge.

On 5 March 2000, the Department of Environment and Natural Resources (“DENR”) assessed a civil penalty against petitioner Holly Ridge Associates (“HRA”) for an alleged violation of the Sedimentation Pollution Control Act (“SPCA”), N.C. Gen. Stat. § 113A-50 et seq. (1999). HRA disputed the penalty and filed a contested case petition on 3 April 2000. In October 2000, the North Carolina Shellfish Growers Association (“Shellfish Growers”) and the North Carolina Coastal Federation (“Coastal Federation”) moved to intervene. In November 2000, the Administrative Law Judge (“ALJ”) granted the motion to intervene, over HRA’s objection. On 20 December 2001, the ALJ affirmed a reduced penalty and on 29 April 2002, DENR adopted the ALJ’s recommended decision as its final agency decision. HRA appealed in Superior Court in New Hanover County. On 5 September 2003, the court affirmed DENR’s final agency decision. HRA appeals. For the reasons discussed below, we affirm.

This case involves 1262 acres of land in Onslow County owned by HRA (“the tract”). The tract fronts on and adjoins the Atlantic Intracoastal Waterway (“AIWW”) near Stump Sound. The tract drains directly to the AIWW and to Cypress Branch, a stream that forms the southern boundary of much of the tract. Cypress Branch, a perennial stream and tributary of Batts Mill Creek, flows into the AIWW. The tract, which is located on the mainland across the AIWW and Stump Sound from the resort community of Topsail Island, is largely forested and contains substantial wetlands acreage.

During the 1950’s, Edgar Yow assembled the tract and owned a 50% interest, with the remaining interest divided equally between two [597]*597other individuals. During the 1960’s and 70’s, the owners constructed a lake on the property and converted some of the agricultural fields to forest. Small stands of timber were cut, some to clear land for the lake, and proceeds from the timber harvesting were used to pay for the lake and dam construction, as well as for property taxes and other expenses associated with owning the land.

In 1983, Westminster Company, a Weyerhauser subsidiary devoted to developing residential subdivisions, purchased the tract. In 1986, Lionel Yow (Edgar Yow’s son), Henry E. Miller, Jr., and Weyerhauser entered into a joint venture agreement to acquire the tract and “maintain[], operat[e], and develop[] thereon a resort residential community.” The joint venturers formed HRA, a partnership, “to acquire, manage, maintain and develop” the tract. In 1986, HRA had development layouts prepared for the tract, depicting potential residential and recreational development of the entire tract. HRA used the layouts as a sales tool with prospective buyers. Mr. Yow participated in numerous other development projects in nearby coastal communities during the late 1980’s and early 1990’s. In 1995, he requested that an engineering firm send copies of the 1986 development drawings to a potential buyer. In 1996, Hurricanes Bertha and Fran struck the North Carolina coast in the vicinity of the tract, damaging timber and washing out unpaved roads on the property. At the suggestion of Corbett Lumber Company, HRA engaged Corbett to remove damaged timber from the tract in 1997.

In May 1997, HRA hired regulatory and environmental consultants to plan and execute a ditch excavation project. Neither consultant had any forestry experience and did not provide clients with advice or expertise concerning timber management. By November 1998, the tract had 17 major ditches or systems of ditches, comprising approximately 8 miles over a 34-acre area.

In February 1999, after receiving a report of potential violations from the North Carolina Division of Water Quality, two Division of Land Resources (“DLR”) employees inspected the tract. They found numerous violations of the SPCA, including inadequate erosion control devices for the steep ditches. On 3 March 1999, DENR issued a notice of violation of the SPCA. The NOV specified corrective actions necessary to bring the tract into compliance and warned that civil penalties could be assessed if the violations were not corrected within 30 days. On 23 April 1999, DLR returned to the site for a follow-up inspection and observed the same violations as before. DENR issued a notice of continuing violations on 28 April 1999. On 9 July [598]*5981999, having still received no submission of the required and previously requested erosion and sedimentation control plan, and having received no notice from HRA that the other violations had been corrected, DENR assessed a penalty of $32,100 for the following violations: failure to submit an erosion and sedimentation control plan for the project, failure to take reasonable measures to protect from damage by land-disturbing activities (not taking measures to control erosion and retain sediment), exposed slopes too steep to maintain ground cover and without other adequate erosion control devices, and failure within fifteen days of grading to have ground cover or other sufficient erosion control devices.

Thereafter, HRA submitted an erosion and sedimentation control plan which was ultimately disapproved due to deficiencies. On 10 November 1999, after another inspection, DENR sent HRA a notice of additional violations, which described new, as well as continuing, violations. After another inspection, DENR sent HRA a notice of continuing violations on 5 January 2000, as the earlier violations had not been corrected. On 5 March 2000, DENR assessed further civil penalties totaling $118,000 for violations of the SPCA. In its contested case petition, HRA claimed that its activities were exempt from the SPCA pursuant to a forestry exception. N.C. Gen. Stat. § 113A-52.01 (1999). Before, during and after the excavation and agency enforcement process, HRA had not claimed that the ditching was being carried out for forestry purposes; it made this assertion for the first time in its petition for contested case hearing.

The North Carolina Administrative Procedure Act (“APA”) applies to this case. See, e.g., Watkins v. N.C. State Bd. of Dental Exam’rs, 358 N.C. 190, 199, 593 S.E.2d 764, 769 (2004). Because the petition in this case was filed in April 2000, and the subsequent amendments to the APA apply only to cases commenced on or after 1 January 2001, the “old” APA governs review of this case. 2000 Sess. Law 190, Section 14.

On review of a trial court’s order affirming a decision by an administrative agency, our scope of review is the same as it is for other civil cases. Henderson v. N.C. Dep’t of Human Resources, 91 N.C. App. 527, 530, 372 S.E.2d 887, 899 (1988). We must examine the trial court’s order for error of law and determine whether the trial court exercised the appropriate scope of review and whether the trial court properly applied this standard. Amanini v. N.C. Dep’t of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d 114, 118 (1994).

[599]*599The nature of the error asserted determines the appropriate manner of review; where appellant contends legal error in the agency’s decision, the trial court must review de novo. Dillingham v. N.C. Dep’t of Human Resources, 132 N.C. App. 704, 708, 513 S.E.2d 823, 826 (1999).

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Bluebook (online)
627 S.E.2d 326, 176 N.C. App. 594, 2006 N.C. App. LEXIS 581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holly-ridge-associates-llc-v-north-carolina-department-of-environment-ncctapp-2006.