State ex rel. Utilities Commission v. Buck Island, Inc.

592 S.E.2d 244, 162 N.C. App. 568, 2004 N.C. App. LEXIS 263
CourtCourt of Appeals of North Carolina
DecidedFebruary 17, 2004
DocketNo. COA03-198
StatusPublished
Cited by4 cases

This text of 592 S.E.2d 244 (State ex rel. Utilities Commission v. Buck Island, Inc.) 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
State ex rel. Utilities Commission v. Buck Island, Inc., 592 S.E.2d 244, 162 N.C. App. 568, 2004 N.C. App. LEXIS 263 (N.C. Ct. App. 2004).

Opinion

MARTIN, Judge.

Appellant Buck Island, Inc. (“Buck Island”), successor in interest to Ship’s Watch, Inc., and Monteray Shores, Inc. (“Monteray Shores”), developers of residential and commercial developments known as Buck Island and Monteray Shores, near Corolla, North Carolina, constructed and installed a water and sewage system to jointly serve their developments. In 1988, Buck Island and Monteray Shores entered into a Utility System Operating Agreement (“USOA”) with Carolina Water Service, Inc. of North Carolina (“CWS”) giving CWS title to the water mains and lines while retaining ownership of what was referred to as the “backbone facilities,” the water supply and treatment system and the central wastewater treatment and disposal system. CWS, a public utility, was the exclusive operator of the system. Pursuant to the agreement, Buck Island and Monteray Shores were not responsible for any future construction of facilities in the event of any delay or cessation of development of the service area.

Monteray Shores, whose only shareholders were Robert and Laurie DeGabrielle, was to be developed in three phases. Phases I and II were developed as planned, but the Phase III property was foreclosed on by the original owners, Whalehead Properties. In May 1999, Ocean Club Ventures, L.L.C. (“OCV”) acquired an interest in this portion of the property, calling its new development Corolla Shores.

In March 2000, OCV requested water and sewer service from CWS through an interconnection with the backbone facilities of Monteray [572]*572Shores and Buck Island. With the existing facilities, there was insufficient capacity to serve the customers in Corolla Shores at its anticipated full build-out of 224 residential units. After failed negotiations with Monteray Shores to expand the backbone facilities, OCV petitioned the Utilities Commission on 26 May 2000 to require CWS to provide water and sewer service to Corolla Shores. CWS, although willing to serve Corolla Shores, explained that because it did not own the backbone facilities it was unable to expand them to accommodate Corolla Shores. On 4 August 2000, the Commission allowed a motion to intervene, filed by Monteray Shores and Robert and Laurie DeGabrielle, over objections by OCV.

On 20 March 2001, the Utilities Commission ordered Monteray Shores and Buck Island to develop a plan to extend service to Corolla Shores under reasonable terms and to bring the facilities used to provide water and sewer service in Buck Island and Monteray Shores under common ownership and control. The order also required the parties to determine the amount OCV should pay for construction of the expanded facilities. In addition, the Commission concluded that Monteray Shores was a public utility as defined by N.C. Gen. Stat. § 62-3(23)a.2, and that Buck Island “appeared to be in the same category.”

After additional filings, hearings and comments from OCV, CWS, Monteray Shores and Buck Island, the Utilities Commission issued an order on 1 April 2002 addressing contracts and related issues. The order declared that Buck Island was a public utility by virtue of its part ownership and control of the backbone facilities and thus, Buck Island was subject to the jurisdiction of the Commission. In addition, the order, inter alia, designated CWS as the public utility authorized to provide service to Buck Island, Corolla Shores and Monteray Shores, and that the facilities available to provide service in all three developments should be operated in a unified fashion.

Buck Island appealed from the 20 March 2001 and 1 April 2002 orders of the Utilities Commission declaring it to be a public utility. This Court dismissed the appeal as interlocutory on 17 June 2003. State ex rel. Utils. Comm’n v. Buck Island, Inc., 158 N.C. App. 536, 581 S.E.2d 122 (2003).

After receiving additional motions and comments from the parties in response to the 1 April 2002 order, the Commission concluded, in an order dated 19 August 2002, that it was reasonable to intercon[573]*573nect the facilities serving the three developments and for CWS to operate them as a single system, that CWS had no obligation to serve Corolla Shores until OCV built or obtained the required capacity, and that OCV had the choice of whether to construct its own facilities or whether to negotiate with Monteray Shores and Buck Island to expand the existing facilities. OCV filed a motion for reconsideration of the order, claiming the Commission, in requiring OCV to obtain the expansion needed to serve Corolla Shores, had effectively reversed its prior orders on the issue without explanation. After allowing responses, the Commission denied the motion, explaining that its decision was not inconsistent with previous orders.

Buck Island appeals from the 19 August 2002 order which affirmed the Commission’s prior 1 April 2002 decision declaring Buck Island a public utility. In addition, Buck Island appeals from the 20 March 2001 order, contending the Commission modified its contractual rights and obligations and unconstitutionally confiscated its property.

OCV cross appeals, contending the Commission’s order was inconsistent with its previous orders as well as contrary to prevailing principles of utility law. OCV also asserts that the Commission did not resolve the issues and thus abandoned its jurisdiction.

Appeal of Buck Island. Inc.

I.

Contending that Buck Island has not been aggrieved by the Commission’s decision, appellees raise the threshold issue of whether appellant Buck Island has standing to appeal. “In order to have standing to appeal, a party must not only file notice of appeal within 30 days, but must also be aggrieved.” State ex rel. Utilities Comm. v. Carolina Utility Cust. Assn., 104 N.C. App. 216, 218, 408 S.E.2d 876, 877 (1991), disc. review denied, 330 N.C. 618, 412 S.E.2d 95 (1992); N.C. Gen. Stat. § 62-90(a) (2003). Although the phrase “aggrieved party” has no technical meaning and “depends on the circumstances involved,” In re Assessment of Sales Tax, 259 N.C. 589, 595, 131 S.E.2d 441, 446 (1963), the Administrative Procedure Act provides guidance as to the intent of the General Assembly in its definition of “person aggrieved” as “any person or group of persons of common interest directly or indirectly affected substantially in his or its person, property, or employment by an administrative decision.” N.C. [574]*574Gen. Stat. § 150B-2(6) (2003). In addition, in Assessment of Sales Tax, the North Carolina Supreme Court defined an “aggrieved person” as one “adversely affected in respect of legal rights, or suffering from an infringement or denial of legal rights.” Assessment of Sales Tax, 259 N.C. at 595, 131 S.E.2d at 446.

Buck Island, although admittedly not a party to the original proceeding before the Utilities Commission, was brought into the litigation between OCV and CWS against its will. By declaring Buck Island a public utility, the Utilities Commission obtained the power and authority to supervise and control it, N.C. Gen. Stat. § 62-30 (2003), including, inter alia,

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Bluebook (online)
592 S.E.2d 244, 162 N.C. App. 568, 2004 N.C. App. LEXIS 263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-utilities-commission-v-buck-island-inc-ncctapp-2004.