tag: North Carolina Land Use Litigator: August 2013

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Tuesday, August 27, 2013, 2:13 PM

North Carolina Court of Appeals Ends Its August on the Scope of Easements and Appeals of Quasi-Judicial Decisions

Last week, the North Carolina Court of Appeals -- always busy, even in the last days of August -- issued a number of decisions, some of which are of interest to the authors of this blog.  Let's take a quick end-of-summer look.

  The summer may be nearing its end, fine.  But the law takes no vacations.

Easements
In Barbour v. Pate, 10 CVS 1871 (August 20, 2013), the Court addressed the validity and scope of easements over property.  We are interested with the Court's analysis as applied to the scope of easements, by which the Court appears to favor that which is broad.

As to the scope of easements "implied by prior use", the Court vacated the trial court's ruling and explained that the scope of an easement "implied by prior use" is not limited in scope by the "historical use" but rather is controlled by the intention of the parties at the time of the land transfer creating the easement.  The Court does not prevent the "historical use" from informing the intent, but it does require the trial court to go deeper than just the "historical use" of the easement to determine its scope.

As to easements "by necessity", the Court also vacated the trial court's ruling.  The trial court limited the scope of the easement "by necessity" to the historical uses it could divine.  The Court required the trial court to determine the "intention" behind the uses of the easement path, as well as a determination as to the full universe of uses that would allow the "convenient and comfortable enjoyment" of the dominant tract.  

Appeals of Quasi-Judicial Decisions
In an interesting case involving challenges by homeowners to the physical expansion of an academic institution, the Court in Myers Park Homeowners Ass'n v. City of Charlotte, 12 CVS 7485 (August 20, 2013) made some pronouncements with regard to appeals of quasi-judicial decisions rendered by the City of Charlotte's Zoning Board of Adjustment.

First, the Court reinforces the use of the legal standards of review applicable in appeals of quasi-judicial decisions: (1) de novo review over issues of law, and (2) "whole record" review where it is alleged the quasi-judicial decision is not supported by the evidence or was arbitrary and capricious.  Interestingly, the Court appeared to consider the petitioners' procedural due process claim (the City's failure to notice the homeowners' of the binding administrative determinations about roads and uses under the zoning ordinance, when rendered) to be without merit because the trial court properly applied de novo review and "a de novo review of the zoning ordinance by this Court will remedy the alleged due process violations."

Second, the Court rejects petitioners' motions pursuant to N.C.R.P. 52 and 59, by which petitioners demanded that the trial court render findings of fact and conclusions of law.  The Court's bases for rejecting these motions are that (1) these rules are inapplicable to a trial court in an appellate setting, and (2) the trial court, in reviewing a quasi-judicial decision pursuant to a writ of certiorari, is sitting as an appellate court. The Court reminds that this principle had been visited in the past as to N.C.R.P. 52 -- citing Markham v. Swails, 29 N.C. App. 205 (1976) -- but this appears to be new law as to N.C.R.P. 59.

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, August 19, 2013, 4:13 PM

State of North Carolina Files Lawsuit Over Its Ownership of River Beds

In early August, the State of North Carolina, in behalf of the North Carolina Department of Administration, filed suit against Alcoa Power Generating, Inc. claiming the State's ownership of  "certain lands submerged beneath the waters of [North Carolina's] Yadkin River along an approximately 38-mile stretch of that River ...."

The lawsuit, viewable here, is filed in state court.  The State's release about the lawsuit is viewable here

The history tale is interesting, and is recounted to some degree in the complaint. 

The "present" fight between the State and Alcoa has continued since 2008, when Alcoa applied to the State for a new 50-year license to operate the Yadkin River Project and its dams. That application is on hold, pending Alcoa receiving a water quality certificate from the State. Alcoa initially received the certificate in May 2009, but the certificate was later revoked in 2010 after the Division of Water Resources (then, the "Division of Water Quality") said Alcoa submitted inaccurate data.

The State denied Alcoa's second attempt at the water quality certificate because of the “ownership dispute” now at the center of the lawsuit.  

Alcoa has indicated it will seek to remove the lawsuit to federal court, with an Alcoa spokesperson reported as stating, "Ownership of submerged lands is a question of federal law."

If the State has its way, the sign will read "Not Owned, but certainly Operated by ..." 

We will follow this lawsuit.

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.

Thursday, August 8, 2013, 2:27 PM

Imperfect Fit: Abercrombie Store Threatens Location In Tailored-Clothing Mecca Savile Row

We've all heard the various means of describing the inappropriate place for an otherwise benign thing, rendering the otherwise benign thing a hazard or a liability or just plain offensive.  In 1855, the author Robert De Valcourt referred to, "An awkward man in society is like a bull in a china shop, always doing mischief."  Robert De Valcourt, The Illustrated Manners Book: A Manual of Good Behavior and Polite Accomplishments (1855).  In 1926, Justice Sutherland opined, "A nuisance may be merely a right thing in the wrong place — like a pig in the parlor instead of the barnyard."  Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926).

Village of Euclid, of course, upheld the constitutionality of the zoning concept, a replacement of single purposes ordinances and private litigation for land use management.  See David Owens, Land Use Law In North Carolina (2d ed. 2011).


"Late Ming dynasty, kaolin and pottery stone foundation, cobalt firing enamelling with Arabic lettering.  If only I could find a well-tailored suit and some skinny jeans to go with this vase." 

Well, the "pig" or the "bull" in one particular instance is anticipated to be an Abercrombie and Fitch children's store in the heart of London.  

The "china shop" or the "parlor"?  Well, that may be Savile Row, legendary collection of fine British tailors and suitmakers to the rich and famous.  Consider this quote from Mark Henderson, chairman of "heritage tailor Gieves & Hawkes", reported by CNBC about objection to the Abercrombie store:
"Opening a kids store on Savile Row is a somewhat bizarre thing to do. It's a fairly narrow street, it's got its own atmosphere to it.  It's just fundamentally a mistake from Abercrombie - they don't get everything right." 
We don't purport to know the land use laws in London.  We'll leave that to the Ealing Common Land Use Barrister blog.  But it's always interesting to see just how common and universal land use issues can be.  

It's also interesting to see how different motives underpin all land use issues.  For example, one might assume the "hubub" over the Abercrombie store is a degradation of the historical nature of the narrow street, as Mr. Henderson alludes.  Well, maybe the distaste is different for another, even another from a seemingly similar perspective.  Consider this worry about "higher rents", from John Hitchcock of "bespoke tailor Anderson & Sheppard" (man, I love the British):
"One or two of the tailors are concerned it might put the rents up, and it will do, I suppose.  There's only so much rent we can pay. Our costs are already high as we make every suit by hand – unlike the big chains which don't make their products on the premises."
The Lesson of the Day
Land use decisions are nuanced legally but they are also very nuanced politically.  In this one space, one street within one small universe of British tailors, we have two very distinct motives for refusing the Abercrombie store.  Yes, both are opposed to the store, but each is opposed for a different reason, which means a political salve must address, at least, two distinct concerns.

One must fully and fairly understand the forces against which one is working, before success is at hand.  I think Sun Tzu, the Zhou Dynasty Land Use Litigator, said that.

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.

Wednesday, August 7, 2013, 11:50 AM

City of Asheville and State Play Game of "Marco Polo" Over Water System Ownership

We've written here and here about the ongoing legal dispute between the North Carolina General Assembly and the City of Charlotte over the ownership and operation -- well, now, it appears, only the operation -- of the Charlotte Douglas International Airport.

Another, similar legal dispute is ongoing between the North Carolina General Assembly and the City of Asheville over the ownership and operation of the City's water supply and distribution system.  So similar, in fact, that it's been reported the same lawyer from the Attorney General's office is representing the State -- or, more specifically, the North Carolina General Assembly -- in both legal tilts.

The Pont du Gard on the Biltmore Estate, a spur of the Asheville water system.  That Vanderbilt guy really wanted a green lawn.

The Background
The background is relatively simple.  On May 14, 2013, the North Carolina General Assembly adopted Session Law 2013-50, originally introduced as House Bill 488.  The law created "Metropolitan Water and Sewerage Districts" and served to transfer all the assets and debts of the water supply and distribution system owned and operated by the City -- which the City had done for more than 100 years -- to a Metropolitan Water and Sewerage District.  The law does not mention the City by name, and it does not apply only to the City, but its effect was to change ownership and operation of the Asheville water supply and distribution system, which is what this post concerns.

A co-sponsor of the legislation, Rep. Chuck McGrady (R-Henderson) explained part of the reasoning behind the law:  "Asheville has a history of using water as a weapon against its neighbors that has precipitated several interventions by the legislature."

The law was to take effect on May 15, 2013.

The Lawsuit
On May 14, 2013, the eve of the law's effect though after its adoption, the City filed a lawsuit against the State.  In the suit, the City claimed the law (1) is a constitutionally prohibited local act or special enactment in violation of the North Carolina Constitution, (2) is discriminatory, arbitrary, and capricious, without any rational basis, in violation of the "Law of the Land" Clause of the North Carolina Constitution, (3) is an invalid exercise of the powers of condemnation in violation of the North Carolina Constitution, (4) impairs contractual obligations evidenced by bonds in violation of the United States Constitution, (5) impairs contractual obligations evidenced by bonds in violation of N.C.G.S. 159-93, (6) in the alternative, is a taking requiring the payment to the City of just compensation in excess of $1 billion.

The lawsuit seeks injunctive relief against State and the transfer of the assets, and is accompanied by a motion for a temporary restraining order.

The TRO  
On May 14, 2013, after a hearing, the Superior Court granted the TRO preventing the law's operation against the City of Asheville and its water distribution and supply system.

The May 14 TRO was set to expire within 10 days of its issuance, which is by rule.  However, the City and the State have extended the TRO until September, at least, when the parties will next appear in Superior Court to argue the merits of an injunction against the law.  Until then, the TRO remains in place and the City remains in ownership and in control of its water distribution and supply system.

What's Next
Well, like we said, a hearing on the merits of an injunction is next, probably in September.  Until then, the City can build its case and the public can react -- positively or negatively -- to the continued impacts on local governments from the State level.

We'll follow this as it flows.

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, August 6, 2013, 1:13 PM

Busy North Carolina Court of Appeals Issues Rulings In Land Use Sphere

It's August and most people are at the beach.  Not the North Carolina Court of Appeals, however.  Earning its keep, the Court today issued a dizzying 36 published opinions and several unpublished opinions.  We'll review a couple of them after this awesome image of the Dancing Itos.  You know, because it's 1995 and Jay Leno is, um, "appealing" (neither of which is true).

"And step .. one two three ... and dismiss .. one two three ... and reverse and remand ... one two three"


No Attorney Fees Against Local Government/N.C.G.S. 6-19.1
In Izydore v. City of Durham, 09 CVS 7031 (August 6, 2013), the Court of Appeals refused to extend the attorney fee statute N.C.G.S. 6-19.1 to operate against local governments.

N.C.G.S. 6-19.1 authorizes the court to award attorney fees, in its discretion, against a State "agency".  After successfully vacating -- twice -- the decision of the Durham City-County Board of Adjustment to divide a single lot into two lots for residential construction, the petitioner sought attorney fees under N.C.G.S. 6-19.1, claiming the City, the Board and the Durham City-County Planning Department to be a State "agency".  The trial court disagreed with that argument, and the Court of Appeals affirmed.  Employing the "principles of statutory construction", the Court of Appeals noted the reference within N.C.G.S. 6-19.1 to Chapter 150B, the North Carolina Administrative Procedures Act.  In what was obvious to the Court of Appeals, Chapter 150B expressly defines "agency" not to include "[a] local unit of government".  N.C.G.S. 150B-2(1a).  Thus, the Court of Appeals concluded, N.C.G.S. 6-19.1 cannot be used against a local government, like Durham.

Restrictive Covenants and Riparian Rights
Warrender v. Gulf Harbor Yacht Club, Inc., 07CVS1043/08CVS1270 (August 6, 20123) is a meandering dispute among property owners, a homeowners' association, a yacht club and non-owner lessees of boat slips.  We won't address the parties or the procedural history, which is complex, in this space.

We will, however, look at some highlights of the decision.  The Court of Appeals looked with favor on a restrictive covenant established and recorded with the original subdivision and sale of land.  The Court determined that (1) the "original intent" of the covenant must be divined, which in this case would lead to its application against all successors in interest, and (2) notice of the covenant was pretty clear in the chain of title.

As to violation of the restrictive covenants, the Court looked to the language of the covenant as a contractual instrument.  The Court determined that (1) 99-year boat slip leases to non-owner lessees did not violate the covenant, as those long-term leases are not "in effect sales" and no willing and waiting property owner was deprived of a right to a boat slip by virtue of the long-term leases, and (2) the Yacht Club's efforts to charge property owners "user fees" to access the marina did violate the restrictive covenant because it is contrary to the express language of the covenant that "explicitly limited the maximum amount of maintenance costs to be contributed [by property owners]".

On riparian rights, an interesting argument in this context, specific property owners claimed riparian rights to the marina to the exclusion of any title claim by the Yacht Club.  The Yacht Club, in return, contended a fee simple in the marina that trumps any riparian rights of the property owners.  After a brief review of some title information, the Court concluded issues of fact exist in this realm to preclude summary judgment in any one direction.  This seems like a legal question to us, however.

Beachfront Property and Erosion Control/N.C. Coastal Resources Commission
In Riggings Homeoewners, Inc. v. Coastal Resources Commission of the State of North Carolina, 09CVS2761 (August 6, 2013), the Court of Appeals affirmed a variance in landowner's favor permitting the use of a sandbag revetment to prevent beachfront property erosion.  The Court of Appeals reviewed two "variance factors" deemed satisfied at the trial level, one to which the Court of Appeals applied a de novo standard of review and the other to which it applied both a de novo and whole record review (from which Judge Bryant dissented, arguing that the majority managed to fail in its application of both standards to the fourth variance factor).  At its core, the Court of Appeals seemed to conclude that the balance between private property ownership and public beach access, in this particular instance, landed in favor of private ownership.

As to the cross appeal by the private landowners, the Court of Appeals ruled that (1) the landowners' takings claim was not ripe, insofar as the Commission's denial of the variance was not yet final (and, in any event, the denial was reversed, such that there was no taking), and (2) the Commission's creation and actions, which are pursuant to the Coastal Area Management Act ("CAMA", at N.C.G.S. 113A-100 et seq.), do not violate the separation of powers because the Commission's creation and actions are a "constitutional delegation of legislative power" and, because the Commission is empowered to issue variances, it must follow "that judicial authority to rule on variance requests is 'reasonably necessary' to accomplish the Commission‖s statutory purpose" such that there is not an unconstitutional delegation of judicial power.

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, August 5, 2013, 4:08 PM

Checking the "Landscape" of the North Carolina General Assembly's Just-Concluded Session

Working since January, the Republican-led North Carolina General Assembly has adjourned for the 2013 session, leaving Raleigh until the spring of 2014 "short session".

The dust is starting to settle from a busy and nationally-relevant (or so it seemed) session, which included everything from (in my opinion) insignificant high-profile legislation to significant low-profile legislation, and all in between.  Some proposed legislation is still before Governor Pat McCrory.  But short of a "special session", we will not see anything new proposed in the coming several months.

So, this is as good a time as any to review what's come from Jones Street.  As usual, Professor David Owens of the U.N.C. School of Government does the best -- and easiest to follow -- job of collecting and digesting new laws that impact local governments in North Carolina, not the least of which relate to land use.  We won't purport to duplicate what he has so effectively done.  Thus, Professor Owens' table is available here.

We'll highlight specific legislation in coming weeks.

This is Jones Street in Raleigh, where laws are made.  
Just down the street is Centro, where tacos are made.

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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