Coastal Ready-Mix Concrete Co., Inc. v. Board of Com'rs of Town of Nags Head

• Decision Date: 01 April 1980
• Docket Number: READY-MIX,No. 93,93
• Citation: 299 N.C. 620,265 S.E.2d 379
• Parties: COASTALCONCRETE COMPANY, INC. v. BOARD OF COMMISSIONERS OF the TOWN OF NAGS HEAD et al.
• Court: North Carolina Supreme Court

Page 379

265 S.E.2d 379

299 N.C. 620

COASTAL READY-MIX CONCRETE COMPANY, INC. v. BOARD OF COMMISSIONERS OF the TOWN OF NAGS HEAD et al.

No. 93.

Supreme Court of North Carolina.

April 1, 1980.

Gerald F. White, White, Hall, Mullen, Brumsley & Small, Elizabeth City, for petitioner appellee Coastal Ready-Mix Concrete Co., Inc.

Thomas N. Barefoot and Thomas L. White, Jr., Kellogg, White & Evans, Manteo, for respondent appellant Bd. of Com'rs of the Town of Nags Head.

CARLTON, Justice.

The issue before us is whether the superior court properly reversed the Town of Nags Head Board of Commissioners' (Commissioners') denial of petitioner's application for a conditional use permit. Determination of the issue involves the continuing attempt to establish a proper balance between limiting arbitrary exercise of local zoning power while maintaining flexible local authority to control growth and development. We think in this case the denial of the conditional use permit by the Commissioners was based on sound discretion involving no mistaken application of law. We therefore reverse the Court of Appeals which affirmed the superior court.

I.

Authority for a municipality to grant conditional use permits is posited in G.S. 160A-381 which provides in pertinent part

the board of adjustment or the city council may issue special use permits or conditional use permits in (1) the classes of cases or situations (set forth in the zoning ordinance) and in accordance with the principles, conditions, safeguards and procedures specified therein and (2) may impose reasonable and appropriate conditions and safeguards upon these permits. (Numbered parentheses added.)

As the statute implies, the terms "special use" and "conditional use" are used interchangeably, see Brough, Flexibility without Arbitrariness in the Zoning System: Observations on North Carolina Special Exception and Zoning Amendment Cases, 53 N.C.L.Rev. 925 (1975), and a conditional use or a special use permit "is one issued for a use which the ordinance expressly permits in a designated zone upon proof that certain facts and conditions detailed in the ordinance exist." Humble Oil & Refining Company v. Board of Aldermen, 284 N.C. 458, 467, 202 S.E.2d 129, 135 (1974); In re Application of Ellis, 277 N.C. 419, 178 S.E.2d 77 (1970).

Judicial review of town decisions to grant or deny conditional use permits is provided for in G.S. 160A-388(e) which states, inter alia, "Every decision of the board shall be subject to review by the superior court by proceedings in the nature of certiorari."

The scope of this judicial review is currently ambiguous. Under prior law, this Court in Jarrell v. Board of Adjustment, 258 N.C. 476, 480, 128 S.E.2d 879, 883 (1963), stated that review of a special use permit decision was adequate only if the scope of such review was equal to that posited by former G.S. 143-306, the predecessor statute to the current North Carolina Administrative Procedures Act. Humble Oil & Refining, supra, built upon this statement and held that the "general administrative agencies review statutes" then in force were applicable to municipal decisions about special or conditional use permits. 284 N.C. at 470, 202 S.E.2d at 137.

The current "general administrative agencies review statutes," however, are expressly not applicable to the decisions of town boards. The North Carolina Administrative Procedures Act provides judicial review only for agency decisions, G.S. 150A-50, from which the decisions of local municipalities are expressly exempt, G.S. 150A-2(1). Technically, then, the decision of the Nags Head Commissioners or any town board is exempted from the scope of review currently posited by the North Carolina Administrative Procedures Act (APA). ¹

Despite this, we cannot believe that our legislature intended that persons subject to zoning decision of a town board would be denied judicial review of the standard and scope we have come to expect under the North Carolina APA. Such a position would ignore a very long tradition in this State of significant judicial review of town zoning ordinances, see, e. g., Lee v. Board of Adjustment, 226 N.C. 107, 37 S.E.2d 128, 168 A.L.R. 1 (1946); In re Pine Hill Cemeteries, Incorporated, 219 N.C. 735, 15 S.E.2d 1 (1941), and would contravene the sound logic of Jarrell, supra, and Humble Oil & Refining, supra.

Thus, while the specific review provision of the North Carolina APA is not directly applicable, the principles that provision embodies are highly pertinent. Indeed, even Humble Oil & Refining, supra, the case which extended the then effective administrative review statutes to municipal zoning decisions, did so not by express reference to statutory provisions but by derivation of certain general principles of judicial review.

In Humble Oil & Refining, the Chapel Hill Board of Aldermen had denied petitioner Humble's request for a conditional use permit to build a gas station. The Board had based its denial on unsworn opinion evidence elicited at a public hearing. In remanding the permit decision to the Board of Aldermen for a hearing de novo, this Court outlined the two-step decision-making process the town had to follow in granting or denying an application for a special use permit:

((1)) When an applicant has produced competent, material, and substantial evidence tending to establish the existence of the facts and conditions which the ordinance requires for the issuance of a special use permit, prima facie he is entitled to it. ((2)) A denial of the permit should be based upon findings contra which are supported by competent, material, and substantial evidence appearing in the record.

Humble Oil & Refining, supra, 284 N.C. at 468, 202 S.E.2d at 136, citing Jackson v. Board of Adjustment, 275 N.C. 155, 166 S.E.2d 78 (1969); Utilities Commission v. Tank Line, 259 N.C. 363, 130 S.E.2d 663 (1963).

Simply following the two-step process is not enough, however. The Humble Court went on to delineate a host of procedural safeguards town boards must provide when denying or granting special zoning requests. Emphasizing the quasi-judicial function of a board of aldermen when it hears evidence to determine the existence of facts and conditions upon which the ordinance expressly authorizes it to issue a conditional use permit, this Court stated the well-established rule that findings of fact and decisions based on those facts are final, subject to the right of the courts to review the record for errors in law and to give relief against orders which are oppressive or abusive of authority. Humble Oil & Refining, supra, 284 N.C. at 469, 202 S.E.2d at 136-37; Lee v. Board of Adjustment, supra; In re Pine Hill Cemeteries, supra.

The Court in Humble further stated that a municipal board sitting in a quasi-judicial fashion must insure that an applicant is afforded a right to cross-examine witnesses, is given a right to prevent evidence, is provided a right to inspect documentary evidence presented against him and is afforded all the procedural steps set out in the pertinent ordinance or statute. Any decision of the town board has to be based on competent, material, and substantial evidence that is introduced at a public hearing.

Extrapolating from these guidelines, it is clear that the task of a court reviewing a decision on an application for a conditional use permit made by a town board sitting as a quasi-judicial body includes:

(1) Reviewing the record for errors in law,

(2) Insuring that procedures specified by law in both statute and ordinance are followed,

(3) Insuring that appropriate due process rights of a petitioner are protected including the right to offer evidence, cross-examine witnesses, and inspect documents,

(4) Insuring that decisions of town boards are supported by competent, material and substantial evidence in the whole record, and

(5) Insuring that decisions are not arbitrary and capricious.

From the foregoing, it is apparent that both the Court of Appeals and the superior court erred in failing to apply appropriate judicial review standards. The Court of Appeals' mere conclusion that Judge Fountain's order was proper because it was supported by competent evidence is clearly erroneous. In reviewing the sufficiency and competency of the evidence at the appellate level, the question is not whether the evidence before the superior court supported that court's order but whether the evidence before the town board was supportive of its action. In proceedings of this nature, the superior court is not the trier of fact. Such is the function of the town board. Humble Oil & Refining, supra; Lee v. Board of Adjustment, supra; In re Pine Hill Cemeteries, supra. The trial court, reviewing the decision of a town board on a conditional use permit application, sits in the posture of an appellate court. The trial court does not review the sufficiency of evidence presented to it but reviews that evidence presented to the town board.

Moreover, the Court of Appeals' decision represents an incomplete view of a reviewing court's role in a case of this nature. Both the superior court and the appellate courts are bound by all the standards of review noted above. Reviewing the sufficiency of the evidence is only one of those standards, and the Court of Appeals erred in limiting its review to this single factor. It failed to recognize the error of law committed by the trial court when Judge Fountain determined that the denial of the conditional use permit by the town board was "not based on findings contra which are supported by competent, material and substantial evidence appearing in the record."

With the foregoing in mind, and applying all the applicable standards of review, we turn to the contentions of the parties in this appeal.

II.

Petitioner Ready-Mix contends that it has produced competent, material and substantial evidence tending to establish the existence of the facts and conditions which the ordinance requires...