2023 North Carolina Land Use Litigation
David W. Owens
School of Government
The University of North Carolina at Chapel Hill
© 2023
CURRENT TO: May 1, 2023
Below are brief digests of reported decisions regarding planning, land use, and related issues in North Carolina. State court of appeals decisions are listed first, followed by federal cases arising in North Carolina (there were no relevant state supreme court decisions). The cases are in chronological order (the more recent cases at the bottom of each list). Index terms are included in italics for each case.
North Carolina Supreme Court
Duke Energy Carolinas, LLC v. Kiser, ___ N.C. ___, ___ S.E.2d ___ (2023) [2023 WL 3136378]
Riparian access; Public trust doctrine
The defendants owned an island in Lake Norman. Their predecessor in title had granted a flowage easement to the plaintiffs for land that was submerged when Lake Norman was created and a flood easement for the area immediately adjacent to the lake that was normally on high ground but would be subject to periodic flooding. At issue was the right of the defendant to bulkhead and backfill an area within the flood easement and the right of the plaintiff to permit construction of a dock and piers within the flowage easement to neighboring third-party property owners. The court held that two easements not only gave Duke Energy the right to submerge the land for a lake and prohibit unauthorized fill but also gave Duke Energy “absolute water rights” to treat the servient estate “in any manner deemed necessary or desirable.” Thus, the plain, broad, and unambiguous language of the easement allows Duke Energy to allow third-party homeowners to build docks, piers, and other structures along the shoreline and to use the waters of Lake Norman for recreation. This dock and pier permitting program is consistent with Duke Energy’s federal licensing obligations for this hydroelectric lake and is consistent with Duke Energy’s long-standing permit plan for homeowners’ lake access facilities.
North Carolina Court of Appeals
Pope v. Davidson County, ___ N.C. App. ___, 885 S.E.2d 119 (2023)
Special use; Voting
The plaintiffs appealed the denial of a special use permit for a motocross training facility. At the conclusion of the evidentiary hearing, the board of adjustment voted that each of the four applicable standards had been met, but the vote to find the standard on maintaining the value of continuous property received a 3-2 affirmative vote. The board incorrectly believed that a four-fifths vote was required for each standard, so the matter was tabled until the board’s next meeting. At the following meeting, the board voted to rescind their prior votes and reconsider the matter. The board then voted that the application failed to meet three of the standards. The court held that the initial affirmative vote on all four standards had the effect of issuing the permit, that reconsideration was an error of law, and that the trial court properly ordered the permit to be issued.
Fonvielle v. N. C. Coastal Resources Commission, ___ N.C. App. ___, ___ S.E.2d ___ (2023) [2023 WL 2977168]
CAMA
Plaintiff sought to appeal a CAMA permit issued to demolish an oceanfront cottage in Wrightsville Beach and replace it with a new cottage. The Coastal Resources Commission denied the request for a contested case hearing on the grounds that the request was not brought within twenty days of the permit decision as required by G.S. 113A-113A-121.1.
In order to have a complete CAMA application, the applicant must provide actual notice to adjacent riparian landowners by certified mail, informing the owners in person or by telephone, or by any other method that satisfies the permit officer that a good faith effort has been made to provide the required notice. The Commission made a finding of fact that placing a placard on the proposed site was sufficient and the court applied a whole record review to uphold that factual finding. G.S. 113A-121.1 requires that a request for a hearing by a neighboring third party must be made within 20 days of the permit decision. As the permit was issued in February 2021 and the request for a hearing was not made until August 2021, the request was not timely and thus the Commission had no subject matter jurisdiction to consider the hearing request.
Federal Cases
PEM Entities, LLC v. County of Franklin, 57 F.4th 178 (2023)
Standing; Vested rights
The plaintiff in 2012 acquired land that was within the area of a preliminary plat approved by the county in 2005. The preliminary plat showed fifteen “phases” for development and included a note stating that the area “will be served by Franklin County water and sewer to be installed by the developer.” In 2019, the county adopted a water-and-sewer-allocation ordinance. The plaintiff contended they were not subject to this allocation ordinance because the 2005 preliminary plat had created a vested right to the service. Later in 2019, the plaintiff and other developers reached a settlement with the county providing that each developer could apply every year for service for up to fifty lots and that the county would review those applications in good faith without discriminating among the developers.
The court held that the plaintiff had standing to bring this action because its ability to obtain utility services on the terms it claims it was entitled to depend on the validity of its asserted vested rights. However, the court held that neither the 2005 preliminary plat nor the 2019 settlement agreement created a constitutionally protected property right. Under North Carolina law, a vested right requires substantial expenditures in good-faith reliance on a valid approval. No such valid approval exists in this case. Neither the required final-plan approval nor building permits had been applied for or received. Preliminary approvals cannot be the basis of a vested right under state law. Without a valid property right at issue, the plaintiff’s takings and due-process claims were properly dismissed. In addition, since the plaintiff did not show evidence of differential treatment compared to others who were similarly situated, the equal-protection claim was also properly dismissed.
Epcon Homestead, LLC v. Town of Chapel Hill, 62 F.4th 882 (4th Cir. 2023)
Statutes of limitation
The plaintiff’s predecessors in interest secured a special use permit in 2014 for a planned development with sixty-three dwelling units. They opted to make an in-lieu payment of $803,250 rather than set aside 15 percent of the units for affordable housing. Payments were made as certificates of occupancy were issued, commencing in July 2017 and ending in March 2019. In October 2019, this suit was filed alleging violation of state law (lack of statutory authority to impose the fee) and claiming violation of substantive due process and an unconstitutional taking. The plaintiff sought a return of the full amount of the inclusionary-housing fees paid and attorney’s fees.
The court held that the statute of limitations began to run when the plaintiff knew or had reason to know of the condition on the special use permit. This occurred when the plaintiff began to acquire the land that was already subject to the permit condition. The “continuing wrong” doctrine did not extend the time for beginning the case through the period of continuing payments because those fees were not separate and distinct fees but rather were partial payments toward a predetermined total. As under Koontz and Knick the constitutionality of the condition became cognizable at the time of imposition (here when the plaintiff became aware of it), which is when the statute of limitations began to run. Because the applicable three-year statute of limitations related to personal-injury actions had run, the case was properly dismissed.
