tag: North Carolina Land Use Litigator: North Carolina Court of Appeals Upholds Annexation Ordinance, Articulates Standard of Judicial Review

Wednesday, June 8, 2011, 9:12 AM

North Carolina Court of Appeals Upholds Annexation Ordinance, Articulates Standard of Judicial Review

In May 2009, the City of Wilmington adopted an ordinance annexing an area known as Monkey Junction. The original annexation proposal provided for the addition of personnel and "necessary corresponding equipment" to accommodate and facilitate the annexation of new land into the City. Moreover, the City projected $0 in cost for extending services to Monkey Junction in fiscal year 2010, but did project revenues and expenditures for fiscal years 2011 through 2014.

In July 2009, unhappy with the annexation plan, Plaintiffs filed a petition seeking judicial review of the ordinance. Plaintiffs alleged that (1) the City failed to substantially comply with the requirements of NCGS §160A-47 to set forth the method by which the City planned to finance the extension of services to Monkey Junction for the fiscal year the annexation became effective, and (2) that the City failed to comply with NCGS §160A-49 by denying City residents and persons resident or owning property in the annexation area the opportunity to be heard at the public hearing.

The trial court granted the City's motion for summary judgment. Plaintiffs appealed.

In Royal Palms MHP, LLC v. City of Wilmington, the North Carolina Court of Appeals affirmed summary judgment in the City's favor.

In doing so, the Court spelled the judicial manner of reviewing an annexation ordinance. First, the Court noted that NCGS §160A-50(f) provides the paradigm governing judicial review of an annexation ordinance. Relevant provisions provide that review shall be conducted by the court, which may hear oral arguments and receive written briefs, and "may take evidence intended to show (1) That the statutory procedure was not followed, or (2) That the provisions of G.S. 160A-47 were not met, or (3) That the provisions of G.S. 160A-48 have not been met."

The Royal Palms Court then quoted from well-held caselaw regarding the practical application of the above paradigm and the limited breadth of judicial review: "The scope of judicial review of an annexation ordinance adopted by the governing board of a municipality is prescribed and defined by statute.... These statutes limit the court's inquiry to a determination of whether applicable annexation statutes have been substantially complied with. When the record submitted in superior court by the municipal corporation demonstrates, on its face, substantial compliance with the applicable annexation statutes, then the burden falls on the petitioners to show by competent and substantial evidence that the statutory requirements were in fact not met or that procedural irregularities occurred which materially prejudiced their substantive rights. 'In determining the validity of an annexation ordinance, the court's review is limited to the following inquiries: (1) Did the municipality comply with the statutory procedures? (2) If not, will the petitioners suffer material injury thereby? (3) Does the area to be annexed meet the requirements of G.S. 160A–48 ... ?'"

Challenging an annexation ordinance can be complicated work and, like most land use processes, must be addressed swiftly and in a technical manner. The hurdles articulated in Royal Palms reinforce that difficult lesson.

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

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