Bryant v. Hogarth

• Decision Date: 05 August 1997
• Docket Number: No. COA96-93,COA96-93
• Citation: 127 N.C.App. 79,488 S.E.2d 269
• Court: North Carolina Court of Appeals
• Parties: Robert D. BRYANT, and wife, Brunhilde S. Bryant, Plaintiffs, v. William T. HOGARTH, Fisheries Director, Division of Marine Fisheries and the (North Carolina) Marine Fisheries Commission and Jonathan Howes, Secretary of the North Carolina Department of Environment, Health and Natural Resources, and North Carolina Department of Environment, Health and Natural Resources, by and through its Registered Agent, Richard B. Whisnant, Defendants.

Page 269

488 S.E.2d 269

127 N.C.App. 79

Robert D. BRYANT, and wife, Brunhilde S. Bryant, Plaintiffs, v. William T. HOGARTH, Fisheries Director, Division of Marine Fisheries and the (North Carolina) Marine Fisheries Commission and Jonathan Howes, Secretary of the North Carolina Department of Environment, Health and Natural Resources, and North Carolina Department of Environment Health and Natural Resources, by and through its Registered Agent, Richard B. Whisnant, Defendants.

No. COA96-93.

Court of Appeals of North Carolina.

Aug. 5, 1997.

Wheatly, Wheatly, Nobles & Weeks, P.A. by C.R. Wheatly, III, Beaufort, for plaintiffs-appellants.

Attorney General Michael F. Easley by Special Deputy Attorney General J. Allen Jernigan and Assistant Attorney General David W. Berry, for defendants-appellees.

JOHN, Judge.

Plaintiffs appeal the trial court's order granting defendants' "motion to dismiss for lack of subject matter jurisdiction." The court determined plaintiffs "failed to exhaust the administrative remedies provided by the N.C. Administrative Procedure Act, N.C. Gen.Stat. § 150B-1 et seq." We affirm the ruling of the trial court.

Relevant background information and procedural history are as follows. In 1969, Mrs. Garland W. Yopp (Yopp), plaintiffs' predecessor in title to the franchise to cultivate and harvest shellfish (the franchise) at issue herein, registered her claim pursuant to N.C.G.S. § 113-205 (1994) to the franchise applicable to approximately 38 acres of Onslow County submerged land (the tract) in Chadwick's Bay. Yopp's claim was based on grants issued to predecessors in title conferring a perpetual franchise for the purpose of raising and cultivating shellfish in the tract. 1887 N.C. Sess. Laws Ch. 90, repealed by 1889 N.C. Sess. Laws Ch. 298.

Subsequent to Yopp's application, the Marine Fisheries Commission (MFC) designated the waters of Chadwick's Bay a "Primary Nursery Area" (PNA) effective 1 November 1977. Former N.C. Admin. Code (NCAC) tit. 15 r. 3B.1405(m)(4), now codified as NCAC tit. 15A r. 3R.0103(13)(d)(April 1997). Prior to resolution of Yopp's claim but following the PNA designation, title to the franchise passed to plaintiffs by general warranty deed filed 25 August 1982.

Acting on Yopp's original claim, the Secretary of the North Carolina Department of Natural Resources and Community Development (now North Carolina Department of Environment, Health, and Natural Resources (DEHNR)) notified plaintiffs by letter dated 18 June 1985 that the State officially recognized the franchise under G.S. § 113-205 as "a limited interest" vis a vis claims of other private claimants for the "purpose of cultivating shellfish." Plaintiffs thus were acknowledged to hold an exclusive franchise to cultivate shellfish in the tract as against the State, but the latter reserved judgment as to the validity of plaintiffs' claims vis a vis claimants other than the State.

The Secretary's letter, while conceding plaintiffs' title, also stated the tract had been designated a PNA and consequently that "the use of mechanical or other bottom-disturbing gear to harvest shellfish in the area [wa]s prohibited." However, other means of harvesting, such as hand "tonging" and raking, were not precluded in such areas. PNA classifications were effected to protect juvenile populations of economically important seafood species, such as shrimp and finfish, in fragile estuarine areas from environmentally destructive bottom-disturbing fishing gear. See NCAC tit. 15A r. 3N.0101 and 3N.0104 (April 1997).

On four separate occasions between 1985 and 1992, plaintiffs sought a permit from the Marine Fisheries Division (MFD) of DEHNR to harvest shellfish mechanically in the tract. On each occasion, the request was denied based upon the PNA designation conferred by the predecessors of NCAC tit. 15A r. 3R.0103(13)(d) (April 1997), which prohibited mechanical harvesting in such areas. On none of the four occasions did plaintiffs pursue administrative appeal of denial of their application.

Plaintiffs filed the instant declaratory judgment and condemnation action 10 June 1993. Plaintiffs first sought a declaration that MFD lacked authority to prohibit mechanical harvesting in the tract. In their second claim, plaintiffs alleged that designation of the tract as a PNA and refusal to allow use of mechanical harvesting therein rendered their interest in the land worthless, and thus constituted a regulatory taking entitling them to compensation under N.C.G.S. § 113-206(e). Defendants filed answer which included a motion to dismiss for lack of subject matter jurisdiction pursuant to N.C.R. Civ. P. 12(b)(1) on grounds plaintiffs had failed to exhaust the administrative remedies provided in G.S. § 150B-1 et seq. Following a hearing, the trial court granted defendants' motion in an order entered 15 September 1995. Plaintiffs filed timely notice of appeal, setting out the court's grant of defendants' motion as their sole assignment of error.

A motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction may be raised at any time. Bache Halsey Stuart, Inc. v. Hunsucker, 38 N.C.App. 414, 421, 248 S.E.2d 567, 571 (1978), disc. review denied, 296 N.C. 583, 254 S.E.2d 32 (1979). Subject matter jurisdiction is a prerequisite for the exercise of judicial authority over any case or controversy. Harris v. Pembaur, 84 N.C.App. 666, 667-68, 353 S.E.2d 673, 675 (1987). An action is properly dismissed under the Rule for lack of subject matter jurisdiction when the plaintiff has failed to exhaust its administrative remedies. Flowers v. Blackbeard Sailing Club, 115 N.C.App. 349, 352-53, 444 S.E.2d 636, 638-39 (1994), disc. review denied as improvidently granted, 340 N.C. 357, 457 S.E.2d 599 (1995)(collateral attack on permit application in trespass action properly dismissed for lack of subject matter jurisdiction when plaintiff failed to appeal permit decision through administrative channels); see also Concerned Citizens v. N.C. Environmental Management Comm'n., 89 N.C.App. 708, 711, 367 S.E.2d 13, 15 (1988)(summary judgment dismissing complaint affirmed because failure to seek judicial review of permit decision was "insurmountable bar to plaintiff's claim for declaratory judgment and injunctive relief"). "[W]here the legislature has established by statute an effective administrative remedy, that remedy is exclusive and its relief must be exhausted before recourse may be had to the courts." Presnell v. Pell, 298 N.C. 715, 721-22, 260 S.E.2d 611, 615 (1979).

The State holds title to lands under navigable waters, such as Chadwick's Bay, in public trust for the use and benefit of all its citizens. State ex rel. Rohrer v. Credle, 322 N.C. 522, 525-26, 369 S.E.2d 825, 827-28 (1988). However, the State may permit the exclusive use of such lands by private individuals, i.e., a franchise, for specific purposes, such as shellfishing, id. at 527, 369 S.E.2d at 828, and has enacted statutes to facilitate such use. See G.S. § 113-201 et seq. Indeed, plaintiffs' predecessor in interest obtained a perpetual franchise to cultivate shellfish in the tract pursuant to such a grant. 1887 N.C. Sess. Laws ch. 90.

In an effort to clear title on submerged lands so as to preserve the rights asserted by various individuals, the General Assembly enacted G.S. § 113-205 in 1965. Rohrer, 322 N.C. at 531, 369 S.E.2d at 830. The statute provides: "All rights and titles not registered in accordance with this section on or before January 1, 1970, are hereby declared null and void." G.S. § 113-206 established procedures for the resolution ofG.S. § 113-205 private claims of title to a bed and fishery rights in submerged lands under navigable waters. Rohrer, 322 N.C. at 532, 369 S.E.2d at 830-31. An individual claiming application of G.S. §§ 113-205 or 113-206 "has deprived him of his private property rights in land under navigable waters ... without just compensation" may appeal to the superior court in the county where the land is situated. G.S. § 113-206(e). Under the statute, therefore, the superior court is accorded subject matter jurisdiction only over appeals of denial of a claim of title or franchise asserted pursuant toG.S. § 113-205.

Plaintiffs contend recognition of their franchise claim limited by designation as a PNA constituted a taking under G.S. § 113-206(d) and therefore was subject to judicial review under G.S. § 113-206(e) without resort to the administrative remedies of G.S. § 150B. Plaintiffs maintain the statute applies in all instances where a claimant has asserted any right in submerged land superior to that of the general public. Notwithstanding plaintiffs' arguments, we conclude the section is inapplicable to MFD's denial of a permit to harvest shellfish by mechanical means within submerged lands.

First, plaintiffs' reasoning confuses grant of a franchise, exclusive to the claimant, to harvest shellfish on a given tract of submerged land, with issuance of a permit designating the methods an exclusive franchise holder may employ in harvesting shellfish thereon. The circumstance that acquisition of a franchise may exclude all others from harvesting shellfish in a given tract does not necessarily preclude limitation upon the harvesting processes utilized by the exclusive franchisee.

Further, plaintiffs' franchise was not acquired free of government regulation. See State v. Sermons, 169 N.C. 285, 287, 84 S.E. 337, 338 (1915)(shellfish come well within police power of State and "are subject to rules and regulations reasonably designed to protect them and promote their increase and growth"). Indeed, the very statute granting the franchise to plaintiffs' predecessor in interest also gave the shellfish commissioners exclusive jurisdiction and control over shell-fisheries covered by the legislation. 1887 N.C. Sess. Laws ch. 90 § 1. As our Supreme Court recently affirmed in RJR Technical Co. v. Pratt, 339 N.C. 588, 453 S.E.2d 147, reh'g denied,...