Zander v. Orange Cnty.

CourtSupreme Court of North Carolina
DecidedDecember 18, 2020
Docket426A18
StatusPublished

This text of Zander v. Orange Cnty. (Zander v. Orange Cnty.) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zander v. Orange Cnty., (N.C. 2020).

Opinion

IN THE SUPREME COURT OF NORTH CAROLINA

No.426A18

Filed 18 December 2020

ELIZABETH ZANDER and EVAN GALLOWAY

v. ORANGE COUNTY, N.C. and the TOWN OF CHAPEL HILL

Appeal pursuant to N.C.G.S. § 7A-27(a)(4) from an order on plaintiffs’ motion

allowing class certification and appointment of class counsel entered on 3 August

2018 by Judge C. Winston Gilchrist in Superior Court, Orange County. Heard in the

Supreme Court on 3 February 2020.

Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Robert J. King III, Daniel Smith, and Matthew B. Tynan, for plaintiffs.

Womble Bond Dickinson, by James R. Morgan, Sonny S. Haynes, and Patricia I. Heyen, for defendants.

MORGAN, Justice.

In this matter, we are asked to determine whether the Superior Court, Orange

County abused its discretion in certifying two classes of plaintiffs who wish to recover

impact fees assessed by defendants Orange County and the Town of Chapel Hill

under a now-repealed statute which had been enacted to allow certain counties and

municipalities to defray the costs for constructing public schools, among other public

services. As discussed herein, we affirm the trial court’s order regarding class

certification. Defendants have also advanced arguments of error in a related ZANDER V. ORANGE COUNTY

Opinion of the Court

discovery issue in the case, which we dismiss as interlocutory and not properly before

this Court at this time.

Factual Background and Procedural History

Although the essence of this appeal lies in our review of the trial court’s

decision regarding class certification, in order to understand the origination of this

case and the parties’ appellate arguments, initially it is appropriate to engage in a

brief review of the history of the impact fee legislation underlying plaintiffs’ claims

and hence the potential classes which plaintiffs seek to represent. In 1987, the North

Carolina General Assembly passed “An Act Making Sundry Amendments Concerning

Local Governments in Orange and Chatham Counties,” authorizing Orange County

to pass an ordinance providing “a system of impact fees to be paid by developers to

help defray the costs to the County of constructing certain capital improvements, the

need for which is created in substantial part by the new development that takes place

within the County.” 1987 N.C. Sess. Law 460. Among other types of capital

improvements listed in the 1987 Session Law, Orange County was specifically

authorized to collect impact fees for defraying the cost of public schools in the Town

of Chapel Hill. The 1987 Session Law included the following provision:

(i) Limitations on Actions. (1) Any action contesting the validity of an ordinance adopted as herein provided must be commenced not later than nine months after the effective date of such ordinance.

-2- ZANDER V. ORANGE COUNTY

(2) Any action seeking to recover an impact fee must be commenced not later than nine months after the impact fee is paid.

1987 N.C. Sess. Law 460, § 17(i).

In 1991, the General Assembly expanded Orange County’s authority to permit

the County to levy and collect impact fees for capital needs not only to benefit public

schools in the Town of Chapel Hill, but also to defray costs of public schools

throughout the entire county. 1991 N.C. Sess. Law 324, §§ 1, 2. The enabling

legislation was further amended in 1993. 1993 N.C. Session Law 642, § 4(a)–(b).

Pursuant to the authority granted by the state’s legislative body in these acts,

to which we shall refer collectively as “the enabling legislation” for purposes of this

decision, in 1993 the Orange County Board of Commissioners (the Board) adopted the

“Orange County Educational Facilities Impact Fee Ordinance” and began collecting

such fees from property owners seeking certificates of occupancy. The Town of Chapel

Hill and the Town of Carrboro, acting on behalf of Orange County, also collected fees

under the ordinance. In 2007, Orange County retained TischlerBise Inc., a company

of “fiscal, economic and planning consultants” based in the state of Maryland, for

assistance with a new impact fee schedule. TischlerBise prepared reports that

purported to calculate the “maximum supportable impact fees” for new housing to be

built in Orange County based on expected costs for land, school building construction,

portable classrooms, support facilities, buses and other school vehicles, and

consultant studies. Orange County adopted TischlerBise’s fee values. On 11

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December 2008, the Board adopted Orange County Ordinance 2008-114 (the 2008

Ordinance), which amended the Orange County Educational Facilities Impact Fee

Ordinance. See 2008 Ordinance, §§ 30-31 to 80.1 The 2008 Ordinance provided impact

fee amounts which would become effective on the respective dates of 1 January 2009,

1 January 2010, 1 January 2011, and 1 January 2012. Id. § 30-33 The fee amounts

prescribed by the 2008 Ordinance were determined by setting fees at varying

percentages of the values in the reports produced by TischlerBise.

On 25 September 2015, plaintiffs purchased a parcel of real property situated

in the Town of Chapel Hill and consequently located in Orange County. Plaintiffs

subsequently built a house on the land. The school impact fees at issue in this matter

were levied against plaintiffs as authorized by the 2008 Ordinance, pursuant to which

plaintiffs were assessed $11,423.00. Following an unsuccessful attempt to seek a

waiver of the impact fees or an exemption from payment of the assessed impact fees,

plaintiffs paid the impact fees to the Town of Chapel Hill on 4 May 2016. On 15

November 2016, the Board promulgated Orange County Ordinance 2016-034, titled

“An Ordinance Amending Chapter 30, Article II - Educational Facilities Impact Fee

of the Orange County Code of Ordinances” (the 2016 Ordinance), that included new

fees based upon additional reports and calculations from TischlerBise. Plaintiffs

would have paid a lower fee under the 2016 Ordinance’s fee schedule. See 2016

1 Certified copies of the ordinances in question were provided in the supplemental

record to this case, which can be viewed through the Court’s electronic filing system.

-4- ZANDER V. ORANGE COUNTY

Ordinance § 30-33. The 2016 Ordinance further provided that (1) any fees not

expended within ten years “shall be refunded to the feepayer,” 2016 Ordinance § 30-

35(e)(1); (2) “[i]f the Schedule of Public School Impact Fees . . . is reduced . . . no refund

of previously paid fees shall be made,” but the “difference between the old and new

fees shall be returned to the feepayer” under certain circumstances, id. § 30-35(e)(2);

and (3) “[w]here an impact fee has been collected erroneously, or where an impact fee

has been paid, and the feepayer subsequently files for and is granted an exception . .

. the fee shall be returned to the feepayer,” id. § 30-35(e)(3).

Plaintiffs commenced their putative class action by filing a class action

complaint on 3 March 2017 asserting thirteen claims for relief against defendants,

including, inter alia, claims premised upon an allegation that fees collected under the

2008 Ordinance were illegal and including claims seeking partial refunds as provided

under the 2016 Ordinance. On 16 May 2017, the Board, recognizing that the General

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