High Rock Lake Partners LLC v. North Carolina Dep't Of Transp.

• Decision Date: 18 May 2010
• Docket Number: No. COA09-95.,COA09-95.
• Citation: 693 S.E.2d 361
• Court: North Carolina Court of Appeals
• Parties: HIGH ROCK LAKE PARTNERS, LLC, a North Carolina Limited Liability Company, Petitioner,v.NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent.

693 S.E.2d 361

HIGH ROCK LAKE PARTNERS, LLC, a North Carolina Limited Liability Company, Petitioner,v.NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent.

No. COA09-95.

Court of Appeals of North Carolina.

May 18, 2010.

COPYRIGHT MATERIAL OMITTED

Appeal by John M. Dolven, M.D. from order entered 26 August 2008 by Judge Forrest Donald Bridges in Mecklenburg County Superior Court. Heard in the Court of Appeals 19 August 2009.

Van Winkle, Buck, Wall, Starnes and Davis, P.A., by Craig D. Justus, Asheville, for John M. Dolven, M.D., appellant.

Attorney General Roy Cooper, by Assistant Attorney General James M. Stanley, Jr. and Assistant Attorney General Scott K. Beaver, for respondent-appellee.

GEER, Judge.

John M. Dolven, M.D. (“Dolven”) appeals from the trial court's order entered in this action commenced by High Rock Lake Partners, LLC (“High Rock”) against the North Carolina Department of Transportation (“DOT”). Dolven's appeal from that order, in which the trial court denied Dolven's motion to intervene or be joined as a party and remanded the matter to the DOT for further proceedings, is interlocutory. Only the denial of Dolven's motion to intervene or be joined as a party is properly before this Court, and as to that issue, we believe that a substantial right will be affected absent immediate appellate review. Because Dolven, as the current owner of the property for which the permit at issue is sought, is the real party in interest, we reverse the trial court's denial of his motion to be joined as a party.

With respect to the merits of the trial court's order, because Dolven was not a party to the action below, he lacks standing to appeal the trial court's rulings on the merits of High Rock's petition. Nevertheless, since the trial court did not join the real party in interest-Dolven-before addressing the merits, we must set aside the order and remand for an order joining Dolven as a party and for reconsideration of the petition for judicial review.

Facts

High Rock is a real estate development company based in Mecklenburg County, North Carolina. On 12 August 2005, HCL Partnership, LLP, the predecessor entity to High Rock, bought a parcel of land totaling approximately 188 acres near High Rock Lake in Davidson County, North Carolina for $5,200,000.00. Financing for the purchase price was secured by three deeds of trust, including a first deed of trust held by Dolven.

The property is located on a peninsula jutting out into High Rock Lake, which is situated to the south and east of a railroad crossing. The only means of ingress and egress onto the peninsula from the mainland is by way of a 14-foot-wide road that runs across the railroad tracks. That road is SR 1135 and is part of the North Carolina highway system maintained by the DOT. North Carolina Railroad Company (“NCRC”) owns an easement over the railroad crossing subject to the DOT's right of way on SR 1135. Norfolk Southern (“Norfolk”), which manages the railroad crossing and rail lines for NCRC, operates a regional hump station on the north and west side of the railroad crossing.

On 9 September 2005, High Rock submitted an application to Davidson County for preliminary plat approval of a 60-home subdivision to be developed on the property. On 20 September 2005, the Davidson County Planning and Zoning Board (“the Planning Board”) conducted a meeting regarding the preliminary plat. Representatives from Norfolk appeared at the meeting to voice their opposition to the development, questioning the safety of the railroad crossing on SR 1135 located 1/4 mile from the proposed entrance to the development.

On 4 October 2005, the Planning Board met to consider approval of the preliminary plat. At the meeting, DOT representative Danny Gilbert voiced the DOT's opposition to the development. Gilbert recommended that the County require High Rock to build a bridge or grade separation at the railroad crossing due to safety issues resulting from (1) the high speed and number of trains crossing the location, (2) the hump station causing blocking of the crossing, and (3) the increased traffic on SR 1135 because of the proposed development. A representative from Norfolk also opposed the development, citing safety concerns related to trains blocking the crossing, train horn noise, and the potential for increased trespassers at the hump station. The Planning Board subsequently voted to deny the preliminary plat.

High Rock appealed the decision to the Davidson County Board of Commissioners, which conducted a public hearing on the appeal on 7 November 2005. At the hearing, DOT representatives and Norfolk again spoke in opposition to the development, with the DOT recommending that County approval of the plat be conditioned on High Rock building a bridge at the railroad crossing. On 12 December 2005, the Board of Commissioners reconvened the public hearing and approved the preliminary plat based on High Rock's meeting all of the County's requirements for subdivision approval.

On 6 October 2005, High Rock submitted to the DOT a driveway permit application seeking to extend the end of SR 1135 in order to create an access to the development. On 12 December 2005, the DOT sent High Rock a letter informing it that the driveway permit application had been denied because SR 1135 was too narrow to accommodate additional traffic from the development, and the parties could not agree as to any widening improvements.

On 11 January 2006, High Rock appealed the DOT's initial decision to deny the driveway permit to Pat Ivey, the DOT Division Engineer. On 3 March 2006, Ivey approved the driveway permit subject to certain conditions. In essence, Ivey ruled that High Rock was required to widen the railroad crossing to allow safe passage of two-way traffic on the road. Ivey said this would require High Rock to (1) “[o]btain all required licenses and approvals from the owning railroad, NCRR, to widen the crossing and approaches on their right of way”; and (2) “[o]btain all necessary agreements and approvals from the operating railroad, Norfolk Southern Railway Company (NSR), necessary to revise and acquire the automatic flashers, gates and enhanced devices that will enable the crossing to remain at the current ‘Sealed Corridor’ level of safety consistent with the USDOT designation of the corridor for development of high-speed intercity passenger rail service.” Ivey directed that “[a]ll expenses and costs associated with the subject improvements shall be borne by the applicant.”

On 30 March 2006, High Rock appealed Ivey's decision to the DOT Driveway Permit Appeals Committee. On 12 June 2006, the Appeals Committee upheld the conditions set forth in Ivey's letter. On 12 July 2006, High Rock filed a petition for judicial review in Davidson County Superior Court. The trial court dismissed High Rock's petition with prejudice on 13 September 2007, and on 17 September 2007, High Rock re-filed its petition in Mecklenburg County Superior Court.

On 20 June 2008, High Rock and Dolven filed a motion to join Dolven as a party petitioner to the action. The motion explained that Dolven had acquired the property in a foreclosure proceeding and that High Rock had assigned to Dolven its rights to seek the driveway permit and pursue the appeal of the denial of the permit. The motion contended that “Dolven is a real party in interest and/or a necessary party to this action.” High Rock and Dolven also argued that “Dolven's interests as the owner of the Property are different than Petitioner's and not, therefore, adequately represented by the existing Petitioner.” Dolven moved in the alternative for an order allowing him to intervene in the action.

The trial court entered an order on 24 July 2008 and an amended order on 26 August 2008 in which it denied the motion for joinder/intervention. The court explained that “High Rock's attempt to assign its claim for relief to Dr. Dolven is contrary to the anti-assignment provisions of G.S. § 143B-426.40A(b) and that, pursuant to that statute, any attempt to assign this claim to Dr. Dolven is void.”

The court concluded that the portion of the Final Agency Decision that conditioned receipt of the driveway permit on High Rock's obtaining licenses and approvals from the owning and operating railroads was an unlawful delegation of the determination of the permit application. It reasoned that such a condition unlawfully left to the discretion of the railroads the decision whether or not the necessary licenses and approvals would be issued. The court, therefore, ordered those conditions stricken and remanded the case to the Appeals Committee “for purposes of entering an amended order that determines whether or not to issue a Driveway Permit with respect to this property and, if such Permit is to issue, to determine and specify what, if any [,] conditions are to be attached to the issuance of the Permit.” The trial court stated: “Any conditions specified must be articulated by the agency issuing the decision and not left to the discretion of any third party.”

The trial court authorized the Appeals Committee on remand to consider additional evidence as necessary to determine what could reasonably be required of High Rock by the railroads and to specify those requirements as conditions of the permit. The court stated:

The Court's intent is that, at the hearing upon remand, the Committee should consider all pertinent evidence, including evidence of what improvements need to be made for a safe crossing. The Committee would then have authority to deny the application, grant the application without conditions, or grant the application subject to whatever conditions Respondent determines necessary, but the conditions cannot be contingent upon approval of any third party. In other words, whatever steps are necessary to complete the process need to be fully investigated and determined during the hearing process with the Committee.

The court then held that “[a]s to all other aspects of ...