BLOGS: North Carolina Land Use Litigator

Friday, January 16, 2015, 9:41 AM

Fresh Bill In Newly-Convened N.C. State Legislature Aims At Condemnation Powers

Portending what is likely to be a significant legislative session for local government powers and real property rights in North Carolina, the first "substantial" bill introduced in the 2015-2016 session of the North Carolina General Assembly takes aim at State government's and local government's ability to take property for economic development purposes.

House Bill 3, available here, seeks to amend the North Carolina State Constitution to ban State and local governments from employing eminent domain powers, inherent with the governments, for private use.  While this might seem non-controversial -- how can a government take my property and give it to another individual or to a private company? -- it's widely recognized that taking of private property for use by another private individual or entity is acceptable under State and federal constitutional principles.  In fact, such a legal gambit is an important part of economic development processes.

House Bill 3 would require government to pay just compensation for land seizures, and it would also allow the determination of compensation to be set by a jury "at the request of any party."

Lastly, House Bill 3 amends N.C.G.S. 40A-3 to limit takings by "private condemnors" to those for "public use" only, a change from the current "private condemnor" power to take for "public use or benefit".  But, in a sign of the times, the House Bill 3 also changes the takings powers of "private condemnors" by (1) removing "telephones" and "telegraphs" as proper bases for takings, and adds the apparently more broad term "communication facilities", a nod to technological changes, and by (2) allowing takings by "private condemnors" for the construction of "facilities related to the distribution of natural gas", a nod to American efforts toward energy independence and, some might say, perhaps a future of fracking or the rise of the Dominion Pipeline.

"Sir, you'll have to move to another corner with your sign.  This corner has been condemned for a different public use."

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

Tuesday, December 23, 2014, 10:49 AM

Raleigh Updates Public on the Citywide Zoning Re-Mapping Process

We've blogged in the past here, here, and here about the City of Raleigh's massive zoning re-mapping process, which is meant to migrate all properties in the City's land use jurisdiction into the reach of the new Unified Development Ordinance.  The re-mapping will have a significant effect on non-residential properties, of which there are many.

If you own or have some other interest in nonresidential property in the City, you should pay attention.

The City recently issued an update as to where it is in the process.  Here is the gist, directly from the City:

The City is in the process of rezoning a large area of land to replace older zoning districts with new UDO districts. City Staff developed a draft map of recommended changes to take to the Raleigh Planning Commission and City Council for approval. The draft map was released in May for a public comment period that ended September 30. During that phase, the City heard from and responded to 1,750 comments, of which about 500 requested changes to the draft recommendations that staff put forward.

Where are we now? Since October, the Planning Commission has been reviewing public comment change requests and developing recommendations. The Planning Commission’s review is organized geographically by the City’s Citizen Advisory Council (CAC) areas. They have formed recommendations on change requests focused on the North, Northeast, Forestville, Atlantic, Midtown, Hillsborough, Five Points, and Mordecai CACs. If you are interested in past review sessions, you can view videos of these meetings at www.raleighnc.gov. You will find the “Planning Commission Work Sessions” under “Planning Related Videos.”

Where are we going? On January 6, the Planning Commission will continue its review of the draft recommendations, examining public comments related to the South, Southeast, East, Central, South Central, and North Central CACs. Future meetings will address requests in the following order: West and Southwest CACs; and Wade, Glenwood and Northwest CACs. The Planning Commission review is anticipated to continue through March. At the end of the Planning Commission’s review its recommendations will be forwarded to City Council for final adoption. It is unknown at this point how long the City Council will take to review these recommendations. However, the review will include a widely-advertised public hearing, with mailed notice going out to all affected property owners.

Follow the process. The best place to find information is www.RaleighUDO.us. From this website you can add your email to the “UDO – Unified Development Ordinance communications” topic in the MyRaleigh Subscriptions box at the top right corner of the www.RaleighUDO.us page (this may appear near the bottom on a mobile device) to receive email notification when new agendas are published. If you still wish to comment on the proposed zoning map each Planning Commission Work Session has time set aside to allow anyone to bring forth concerns they may have. These concerns can also be delivered by letter.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

Monday, December 22, 2014, 11:01 AM

Raleigh "Splits" Department of Planning and Development Into Two New Departments

The City of Raleigh, growing at a seemingly undeniable pace, is aiming to "get ahead" of the governance challenges such growth portends by splitting the City's Department of Planning and Development into two separate departments: (1) City Planning and (2) Development Services.  The split is intended to separate the charge of "long-term planning" from the "nitty grittty details of inspections and construction", according to the News and Observer.

The new Department of City Planning will focus on strategic planning, looking as far as is reasonable into the future and helping to decide what types of development should happen in different areas of the City and the transportation that will serve that development.

The new Department of Development Services will handle smaller, street-level details of current growth, ensuring that buildings and structures meet the City's standards and laws.

This is the latest work of the City's "new" manager, Ruffin Hall.  

The change should streamline some more straightforward decisionmaking, according to reports, and should increase effectiveness as to the more complex others.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

Tuesday, December 16, 2014, 2:46 PM

N.C. Court of Appeals: Limitations Period Does Not Apply to Local Government Enforcement of Subdivision Performance Bonds

A post-Great Recession treat, the North Carolina Court of Appeals affirmed today a ruling that the Town of Black Mountain is entitled to enforce subdivision performance bonds originally in the name of Buncombe County, after the Town annexed the land to which the performance bonds applied.

Facts
From March 2005 through February 2007, defendant sureties entered into four subdivision performance bonds related to the development of two residential subdivisions that were, at the time, located within the County's subdivision jurisdiction.  County approval of the two projects was conditioned on the developers obtaining those performance bonds, which named the County (and not the Town) as obligee.

At various points between May 2005 and February 2007, the property related to the bonds was annexed into the Town.

The developers eventually folded.

In 2012, the Town contacted the defendant sureties and asked if they would "consent to an assignment of the bonds to the Town".  Defendant sureties refused consent.

Later in 2012, the County assigned, and the Town accepted assignment of, the bonds despite defendant sureties' lack of consent. The Town then submitted notice of its claims to defendant sureties, and defendant sureties refused payment on the subdivision performance bonds.

Trial Court
The Town and the County brought a breach of contract suit together "because they anticipated that defendants would challenge standing if either party sued separately".  As a result, according to the Court, their claims were "pled in the alternative".

The trial court entered summary judgment in favor of the Town and the County, and the defendant sureties appealed.

Appellate Decision
In Town of Black Mountain v. Lexon Ins. Co., No. COA14-740 (Dec. 16, 2014), the Court of Appeals affirmed.    

The Court held as follows: (1) the annexation of land "that is the subject of a private contract between the county and a private citizen" does not "nullif[y] the contract", and the Court refuses defendant sureties' efforts to read Stillings v. City of Woinston-Salem, 311 N.C. 689 (1984) to that degree; (2) the bonds, themselves, do not at all indicate that assignment from the County to the Town was impermissible or without legal effect; (3) the three-year statute of limitations at NCGS 1-52 does not apply to subdivision performance bonds entered into pursuant to NCGS 153A-331, because that is a governmental activity and so the Town is protected under the doctrine of nullum tempus occurrit regi, relying on Rowan County Bd. of Educ. v. U.S. Gypsum Co., 87 N.C. App. 106 (1987) and Rowan County Bd. of Educ. v. U.S. Gypsum Co., 332 N.C. 1 (1992).

The defendant sureties are not entitled to a "windfall", the Court opines, a result which any other analysis would create.  The Town will get its funds to complete the subdivision improvements initally promised to the County.

We take special note of the statute of limitations portion of the ruling, which could open the door in North Carolina to a number of suits on unclaimed performance bonds entered into before the real estate development climate turned "south" in 2009.  Time is not, as the Court sees it, of the essence to the local government in enforcing certain of these obligations.

"But we can still enforce the performance bonds to get that traffic light we were promised, right?"

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

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N.C. Court of Appeals: Statutory "Custodian" of Public Records Is "In Charge of" the Relevant Office

Former Durham District Attorney Tracey Cline was removed from office by Court order in the first half of 2012.  The story behind her efforts to return to the office has been detailed at great length by the local Raleigh and Durham press corps.

Ms. Cline recently filed suit against David Hoke -- both, personally and "in his official capacity as assistant director of the North Carolina Administrative Office of the Courts" (the "AOC") -- to obtain certain AOC emails "related to [Ms. Cline's] service as district attorney in preparation to defend a complaint filed against her by the North Carolina State Bar".

The case we're talking about is Cline v. Hoke, No. COA14-428 (Dec. 16, 2014).

The trial court dismissed Ms. Cline's suit against Mr. Hoke in part, and Ms. Cline appealed.

On appeal, the Court first addressed the dismissal of the suit against Mr. Hoke in his individual capacity.  The Court dispenses with this appellate point with a swift stroke of the pen: "In order to compel an unresponsive custodian to fulfill this statutory duty [to permit reasonable inspection of public records pursuant to NCGS 132-6], a party must sue the custodian of those records in the custodian's official capacity."

Ok, so Mr. Hoke must be sued in his official capacity.  Turns out that Ms. Cline covered that base, however.  The question then becomes: is Mr. Hoke, as assistant director of the AOC, the "custodian" to be named in a public records suit?

The AOC argues on two levels.  First, the AOC argues that "each individual employee is the custodian of his/her emails" such that a lawsuit against Mr. Hoke would only cover emails to/from Mr. Hoke, himself, and not with AOC writ large.  The Court disagrees, and notes that the AOC made a similar, losing argument in LexisNexis Risk Data Management, Inc. v. N.C. AOC, __ N.C. App. __, 754 S.E.2d 862 (2014).  The AOC, rather than the individual employee within the AOC, is the custodian.  The AOC's argument fails on this point.

On the second level, however, the AOC argues successfully that Mr. Hoke, as assistant director of the AOC, is not the official "in charge of an office having public records".  Therefore, Mr. Hoke is "not the designated custodian of the AOC's records per NCGS 132-2".  Ms. Cline's suit fails.

"This is all of my crap, yes.  And no one else should touch my crap.  But, correct, I'm not the custodian of this crap."  

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

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