tag: North Carolina Land Use Litigator: March 2016

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Thursday, March 24, 2016, 5:46 PM

The Ready-Made Suit of Standing

Chief Superior Court Judge James H. Pou Bailey informed lawyers - “Justice under the law is like buying a suit off the rack.  It doesn’t fit anybody perfectly, but it fits a lot of people fairly well.”

Sometimes, an unpublished opinion contains informative illustrations.  Although it is not controlling legal authority and citation to it is disfavored, an unpublished opinion provides typical examples – how the already-made suit of justice under the law fits a situation. 

In our last blog post, we discussed Cherry v. Wiesner, a published North Carolina C ourt of Appeal’s opinion.  In Cherry, the North Carolina Court of Appeals affirmed dismissal of an appeal brought by a neighbor living across the street from the alleged misapplication of historic district rules because she failed to allege standing.  In that blog post, we suggested that a newly-made limited suit for standing might be appropriate for property located in historic districts because historic district zoning laws regulate the appearances of building exteriors.  Specifically, we suggested that consideration of the arguments for and  against the court crafting a newly-made limited suit for standing in historic districts was worthy of consideration because the answer affected all properties in historic districts, and would provide the definitive rule applicable to these special districts. 

Two weeks after publishing Cherry, the North Carolina Court of Appeals decided another standing case involving a challenge by an adjacent property owner where none of the property was located in a historic property district.  In Sugar Mountain Ski Resort v. Village of Sugar Mountain (2016 WL 791132)(March 1, 2016)(Unpublished) the North Carolina Court of Appeals affirmed the Superior Court’s denial of a motion to dismiss the appeal for lack of standing.  The Court of Appeals concluded that the adjacent property owner had alleged standing and showed special damages.  

In other words, the adjacent property owner’s pleading and evidence in Sugar Mountain fit the ready-made suit of standing.

Sugar Mountain Resort v. Village of Sugar Mountain and Round Boys, LLC

Facts
Round Boys LLC (RB) purchased a house located on a slope adjacent to Sugar Mountain Resort’s (SMR) ski slopes.  The house’s deck was less than 2½ feet from SMR’s property line and violated the existing setback requirement of the Village of Sugar Mountain (VSM).  However, the deck had been allowed to remain because it had been built prior to VSM’s adoption of its zoning ordinance. 

RB demolished a portion of the non-conforming deck and simultaneously applied for a variance to expand further into the setback by building new construction.  At the hearings held by the Board of Adjustment (Board) considering RB’s variance request, RB agreed to restrict its new construction to remain within the footprint of the original encroachment.  Based upon this agreement, the Board concluded that no variance was required and approved issuance of a Zoning Compliance Permit. 

SMR appealed the Board’s decision to Superior Court, and filed a motion in Superior Court requesting a temporary restraining order and preliminary injunction (Injunctive relief) to halt construction in the setback until SMR’s appeal was decided.  In its petition for writ of certiorari, SMR alleged:
Petitioner has standing…in that it is the owner of property that is adjacent to property which is the subject of the Board’s Order being appealed by this Petition and will suffer special damages as a result of the Board’s Order in that the Board’s Order allows additional construction and improvements to real property adjacent to a ski slope and within the prohibited [setback] area of the Village and the additional construction and improvements have the potential to affect safety and to create a damage to the general health, safety and welfare of the Village.   Sugar Mountain, p.4 (Emphasis by the Court).

Two surveys showing the location of pre-existing and new construction in the setback were in the record.  In support of its motion for injunctive relief, SMR proffered an affidavit signed by its manager stating in more detail the facts supporting SMR’s allegation of special damages.  SMR’s manager stated that the construction of the new improvements “would potentially interfere with skiing operations,” and the new structure added in the setback area “itself could pose an increased risk to the general safety and welfare of the public.”

Asserting that SMR lacked standing, RB filed a motion to dismiss SMR’s appeal. The Superior Court denied RB’s motion and remanded the case to the Board because the Board had “failed to make findings of fact or conclusions of law in the [Board’s] order so that [the superior court could] properly perform its function.”  RB appealed the Superior Court’s denial of its motion to dismiss for lack of standing to the North Carolina Court of Appeals.

Decision

After reviewing SMR’s pleading, the surveys and SMR’s manager’s affidavit, the Court of Appeals concluded that SMR had “sufficiently alleged (1) that the improvements that the Board allowed were unlawful… in that they were located ‘within the prohibited [setback] area’ and (2) that the resort would suffer ‘special damages’ in the form of interfering with skiing operations and reducing the safety of the resort’s ski slopes for members of the public who are guests and patrons of the resort.”  Sugar Mountain p.5.

In reaching this conclusion, the Court rejected two legal arguments proffered by RB.  First, RB contended that the proposed improvements would not alter the existing setback or increase or alter the pre-existing nonconformity.  Therefore, SMR could not suffer special damages.  As for this argument, the Court reviewed the record and noted that RB’s variance application proposed an expansion of the home and construction within 2 1/2 feet of the property line.  In other words, while the record was unclear, there was evidence prepared by RB that seemed to contradict RB’s first legal argument.

In its second argument, RB contended that the Board’s determination that the proposed improvements would not increase the footprint of the structure conclusively established that the proposed improvements were lawful uses.  The Court of Appeals rejected this argument emphatically.  The Court observed that “were we to accept the owner’s reasoning, no zoning board decision finding a requested use to be ‘permitted’ could ever be questioned, no matter how erroneous the board’s determination might actually be.”  Sugar Mountain p.4.
Comments

1.  Sugar Mountain illustrates the importance of standing.  When a party considers appealing a governmental land use decision that which entitles a use on another owner’s property, an essential first step is identifying the (1) illegal use permitted by the decision and (2) the special damages arising from this illegal use.  
2.  The concept of standing is quite simple.  At the point a party invokes the jurisdiction of a court by filing a case, the party must show to the court at that time and continuously thereafter during the entire proceeding that the dispute practically matters. 

In Sugar Mountain, the record showed that determining whether the Board’s decision was erroneous mattered practically.  An erroneous decision would allow an illegal use on adjacent property and “special damages in the form of interfering with skiing operations and reducing the safety of the resort’s ski slopes for members of the public who were guests and patrons of the resort” could flow from the illegal use.  The case fit the already-made suit of standing.










Thursday, March 10, 2016, 3:38 PM

Aesthetics and Land Use Regulations

Perhaps disappointing to those who enjoy debating architecture, the North Carolina Court of Appeals affirmed dismissal of a challenge to a historic district commission’s approval of a house located across the street from the contesting property owner’s home. Cherry v. Wiesner __ N.C. App. __, __ S.E. 2d ___(WL 611074)(February 16, 2016).   The Court of Appeals held that the property owner failed to prove her standing to appeal the commission’s decision. 

A fair reading of the Court of Appeals’ opinion is that the property owner failed to produce sufficient evidence to prove standing at the right time, but a broader understanding of the case shows that the relationship between land use regulations and aesthetics is complex, uncertain and evolving.  

Background:   Planned Communities and Governmental Land Use Regulations

Planned communities maintain their appearance by enforcing extensive land use restrictions contained in private covenants.  In this context, the North Carolina Supreme Court evidences significant sensitivity to the risk that amendments might change the nature and character of a planned community.  See e.g., Armstrong v. Ledges Homeowners Ass’n, Inc., 360 N.C 547(2006)(reasonableness of an amendment to restrictive covenants should be judged by, among other things, the “nature and character of the community.”) 

On the other hand, governmental regulation of aesthetics is uncertain and controversial:

  • 1959 - The North Carolina Supreme Court refuses to enforce a regulation based purely upon aesthetics
  • 1972 - The North Carolina Supreme Court notes a growing authority in other jurisdictions that police power includes regulation of property for aesthetic reasons alone.
  • 1979 - The North Carolina Supreme Court upholds a regulation in a historic district "to control the exterior appearance of private property when the object of such control is the preservation of the State's legacy of historically significant structures."  These regulations are "not primarily concerned with whether the subject... is beautiful or tasteful, but rather with preserving it as it is, representative of what it was." 298 N.C. 207, 216 (quoting Rathkopf's, The Law of Zoning and Planning). 
  • 1982 - The North Carolina Supreme Court overrules its 1959 case, and holds that zoning regulations may be based solely upon aesthetics depending upon facts and circumstances.
  • 2015 - The North Carolina General Assemble withdraws power to regulate the exterior appearance of one or two dwellings except in historic districts and a few other situations.

Cherry v. Wiesner

Facts

In 2013, Cherry and Gordon (CG) sought issuance of a certificate of appropriateness from the Raleigh Historic Commission (Commission) to build a new house on a vacant lot.  After several hearings, the Commission granted CG’s request and Wiesner (W), a neighbor living across the street from CG’s future home, appealed the decision to the Raleigh Board of Adjustment (Board).  

At the Board, the City of Raleigh (City) requested dismissal of W’s appeal because of her lack of standing to appeal the Commission’s decision.  The Board made no specific ruling on the City’s request, exercised jurisdiction and reversed the Commission’s decision.

CG and the City appealed the Board’s decision to Superior Court.   They continued to maintain that W lacked standing. As the issue of standing sharpened, W offered more specific and detailed information to show standing, including evidence stating the property value of W’s home would diminish should CG build their home.  In response, CG requested the court to strike the new evidence and offered their evidence stating that W’s property value would not diminish should CG build their home.    

The Superior Court did not admit any new evidence, agreed that W failed to show standing, reversed the Board and restored the Commission’s original decision. 

 Decision

Relying upon established standing requirements applicable to challenging governmental land use decisions, the Court of Appeals reasoned that standing “most often turns on whether the party has alleged ‘injury in fact’ in light of the applicable statutes or caselaw.” p. 5.  To challenge a governmental land use decision, the challenger “must claim special damages, distinct from the rest of the community.” p. 6.

Five years before Cherry, the North Carolina Court of Appeals had applied these same requirements to an appeal arising from a historic commission decision concerning demolition of an existing structure and construction of a new structure in its place. Sanchez v. Town of Beaufort, 211 N.C. App. 574 (2011), dis. rev. den., 365 N.C. 349 (2011).  Sanchez alleged that the new structure would damage her property because she would lose her private waterfront view and this loss would reduce the value of her property by at least $100,000.00.   The Court of Appeals concluded that Sanchez had standing.

After reviewing the Cherry record, the North Carolina Court of Appeals described W’s allegations of standing as “purely aesthetic or are not distinct to her property” and concluded that the allegations did “not demonstrate special damages distinct to respondent other than the view from her front porch.”  pp. 8-9.  (emphasis by the Court).  Accordingly, the Court of Appeals affirmed the Superior Court’s dismissal of W’s challenge, reversal of the Board and restoration of the decision allowing CG to build their home.

Comments
  1. A person residing in a historic district might reasonably believe that he or she possessed a right to challenge approval of a home across the street solely because the structure was not representative of the structures in the district.  But, unlike property owners in planned communities, owners in historic districts lack contractual rights to enforce restrictions.
  2.     In Cherry, W’s special damages arise from an alleged “incongruous, oddball two-story modernist home in a largely intact 19th Century historic neighborhood located directly across the street from Mrs. Wiesner.”  W’s Motion to Supplement the Record.  In other words, W’s special damages arise from the exterior appearance of a home in close proximity of W’s home – and nothing else.  The alleged consequences of the exterior appearance is “loss of view and vista, increased gawker traffic, loss of privacy, impairment of ingress to and egress from her property, anxiety, harassment, diminished quiet enjoyment of [her] home, and diminution in property value and marketability.”  Id.

    The distinction between Sanchez and Cherry is that the source of Sanchez’ special damages is not the appearance of the new structure but its height, depriving Sanchez’ property of a waterfront view.  It is common knowledge that having a waterfront view at the coast is valued in the marketplace.   Sanchez’s damages occur irrespective of the structure’s exterior appearance.

    W’s hurdle is twofold: showing (1) North Carolina caselaw finding standing solely because of the exterior appearance of a home and (2) the particular exterior appearance of a future home on a currently vacant lot across the street from W’s property causes an injury in fact.  
  3.          In 2015, the General Assembly withdrew police powers to regulate exterior appearances of one or two dwellings, but reaffirmed an exception for historic districts.   

    Should North Carolina courts design a special standing rule for appeals arising in historic districts?  A secondary source states, “an allegation that the development of property threatens the aesthetic or cultural value of a historic district is sufficient to confer standing.”  Rathkopf’s The Law of Zoning and Planning § 63.22. 

    In Sanchez, the Court of Appeals did not address this issue and in Cherry the Court may have been bound to follow Sanchez.  The North Carolina Supreme Court may be the only court that can address this question. 

    Respectfully, the answer to this question is more significant than architectural debates between CG, W – or anybody else. There are good arguments pro and con for a special standing rule for historic districts. The answer is a policy decision made by the North Carolina Judiciary and answering it provides the “rules of the community” for every person living in a historic district in North Carolina.    








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