HUNTINGTON PROPERTIES v. Currituck County

• Court: North Carolina Court of Appeals
• Writing for the Court: McCULLOUGH.
• Citation: HUNTINGTON PROPERTIES v. Currituck County, 569 S.E.2d 695, 153 NC App. 218 (N.C. App. 2002)
• Decision Date: 01 October 2002
• Docket Number: No. COA01-884.,COA01-884.
• Parties: HUNTINGTON PROPERTIES, LLC, a Michigan Limited Liability Corporation, and Carolina Village, LLC, a Michigan Limited Liability Corporation, Plaintiffs, v. CURRITUCK COUNTY, Eldon L. Miller, Jr., S. Paul O'Neal, Ernie Bowden, Gene A. Gregory and J. Owen Etheridge, in their official capacities, Defendants.

569 S.E.2d 695

153 NC App. 218

HUNTINGTON PROPERTIES, LLC, a Michigan Limited Liability Corporation, and Carolina Village, LLC, a Michigan Limited Liability Corporation, Plaintiffs, v. CURRITUCK COUNTY, Eldon L. Miller, Jr., S. Paul O'Neal, Ernie Bowden, Gene A. Gregory and J. Owen Etheridge, in their official capacities, Defendants.

No. COA01-884.

Court of Appeals of North Carolina.

October 1, 2002.

Smith Helms Mulliss & Moore, L.L.P., by Thomas E. Terrell, Jr., and Neale T. Johnson, Greensboro, for plaintiff-appellants.

Poyner & Spruill, by Robin L. Tatum and Kacey C. Sewell, Raleigh, for defendant-appellees.

McCULLOUGH, Judge.

This case arises from a declaratory judgment action, the pertinent facts of which are as follows: In July 1995, Dutch Key Corporation (Dutch Key) purchased Orchard Park, a 90-acre mobile home park in Currituck County, North Carolina. Orchard Park was constructed in 1972 and was approved to accommodate 440 mobile homes on the land, including pads, sewer, water, and electrical connections. At the time Orchard Park opened, it was a permitted use under Currituck County (County) zoning. After Orchard Park opened, but prior to its purchase by plaintiffs, the County adopted the Uniform Development Ordinance (UDO); Article 15 of the UDO governed "nonconforming situations." In 1992, the County amended the UDO to prohibit mobile home parks altogether, except as lawful nonconforming uses, which Orchard Park was. Orchard Park retained its status as a legal nonconforming use under UDO §§ 1501(1)(g) and 2501. As a result of the County's amendments to the UDO, Orchard Park has operated as a nonconforming use since at least November 1992.

Orchard Park operated near capacity in the 1970s and 1980s. During that time, Orchard Park's owners provided sewer services to its residents using a private wastewater treatment system. The system was approved by the State of North Carolina; when such approvals were later assigned to the Division of Environmental Management (DEM), DEM also approved the system. During the 1980s, environmental regulations concerning private wastewater treatment systems became more demanding. By 1987, Orchard Park's wastewater treatment system could only service about 140 mobile home residents, due to a 29,000 gallon daily limit on the amount of treated water that could be sprayed onto the system's spray fields.

The 1992 UDO restricted owners from enlarging or increasing the nonconforming use by altering structures or placing new structures on open land if such activity resulted in

(a) an increase in the total amount of space devoted to a nonconforming use; or

(b) greater nonconformity with respect to dimensional restrictions such as setback requirements, height limitations or density requirements or other requirements such as parking requirements.

UDO § 1504(1). UDO § 1504(4) stated that

[t]he volume, intensity, or frequency of use of property where a nonconforming situation exists may be increased and the equipment or processes used at a location where a nonconforming situation exists may be changed if these or similar changes amount only to changes in the degree of activity rather than changes in kind and no violation of other paragraphs of this section occur.

UDO § 1505(1) encouraged owners to repair and maintain structures located on property where nonconforming situations existed."[R]enovation, restoration or reconstruction" of structures was permissible to refurbish or replace what previously existed so long as Article 15 of the UDO was not violated. UDO § 1505(1). Additionally,

[f]or purposes of determining whether a right to continue a nonconforming situation is lost pursuant to this section, all of the buildings, activities, and operations maintained on a lot are generally to be considered as a whole. For example, the failure to rent one (1) apartment in a nonconforming apartment building for 270 days shall not result in a loss of the right to rent that apartment or space thereafter so long as the apartment building as a whole is continuously maintained. But if a nonconforming use is maintained in conjunction with a conforming use, discontinuance of a nonconforming use for the required period shall terminate the right to maintain it thereafter.

UDO § 1507(3).

In December 1995, Dutch Key hired an engineer to design, upgrade, and apply for permits for a wastewater treatment system that would comply with DEM regulations to serve all 440 rental spaces at Orchard Park. When the County learned of Dutch Key's actions, its Board of Commissioners amended UDO § 1504(9) by adding a new paragraph, which stated:

Improvements to water and sewage treatment systems in order to accommodate more mobile homes in a mobile home park shall be considered an enlargement of a nonconforming situation and shall not be permitted. However, improvements to a water and sewage treatment system serving a mobile home park for the purpose of improving public health that will not result in an increase in the number of mobile homes within the park shall be permitted. (Amended 8/19/96)

UDO § 1504(9) (hereinafter the Amendment). The Amendment was finalized on 19 October 1996.

On 17 October 1996, Dutch Key filed a complaint challenging the validity of the Amendment and sought a judgment declaring the Amendment void, as well as a permanent injunction to enjoin the County from enforcing the Amendment against it. Dutch Key believed it could continue operating Orchard Park at its original capacity of 440 mobile homes because "the use of plaintiff's property as a mobile home park has not been discontinued for a consecutive period of 270 days at any point in time since Orchard Park first opened."

The County filed its answer on 2 August 2000. The delay in answering was caused by questions regarding whether Dutch Key's original counsel could represent it in this action. On 29 January 2001, the parties consented to substitution of counsel. On 20 February 2001, Dutch Key moved to substitute real parties in interest because "[t]he affected property has been sold by ... Dutch Key Corporation, and its successors in interest and current owners are Carolina Village, L.L.C., a Michigan limited liability corporation, and Huntington Properties, L.L.C., a Michigan limited liability corporation." On 13 March 2001, the trial court allowed the motion. The case was heard at the 5 March 2001 Civil Session of Currituck County Superior Court on defendants N.C. Gen.Stat. § 1A-1, Rule 12(b)(6) (2001) motion to dismiss. On 15 March 2001, the trial court entered an order granting the County's motion to dismiss the action. Plaintiffs appealed.

On appeal, plaintiffs argue the trial court erred in granting the County's motion to dismiss because (I) UDO §§ 1507(3) and 1504(9) do not prohibit them from upgrading the wastewater treatment system to serve existing but unoccupied spaces at Orchard Park; (II) UDO Article 15 was improperly construed to impair plaintiffs' vested rights; (III) the General Assembly granted exclusive authority to the Department of Environment and Natural Resources to regulate wastewater treatment systems; and (IV) plaintiffs' constitutional rights to due process and equal protection under the state and federal constitutions were violated. For the reasons set forth herein, we disagree with plaintiffs' arguments and affirm the action of the trial court.

"A motion to dismiss under N.C. Gen.Stat. § 1A-1, Rule 12(b)(6) tests the legal sufficiency of the complaint, which will be dismissed if it is completely without merit." Town of Beech Mountain v. County of Watauga, 91 N.C.App. 87, 89, 370 S.E.2d 453, 454-55 (1988), aff'd, 324 N.C. 409, 378 S.E.2d 780, cert. denied, 493 U.S. 954, 110 S.Ct. 365, 107 L.Ed.2d 351 (1989) (citations omitted). The main inquiry is "whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory[.]" Harris v. NCNB, 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987).

When evaluating zoning ordinances, the following rules apply: "It is well established that a duly adopted zoning ordinance is presumed to be valid and the burden is on the complaining party to show it to be invalid." Williams v. Town of Spencer, 129 N.C.App. 828, 830-31, 500 S.E.2d 473, 475 (1998). This is a heavy burden. Id. Prohibition of the expansion of a nonconforming use is lawful and consistent with good zoning practices. A county has legitimate power to regulate the extent to which nonconforming uses can be extended, expanded and enlarged. See N.C. Gen.Stat. § 153A-340 (2001); and Williams, 129 N.C.App. 828,500 S.E.2d 473. This Court has consistently held that nonconforming uses are common; however, "[a]ny expansion of a nonconforming use is ... subject to regulation." Pamlico Marine Co., Inc. v. N.C. Dept. of Natural Resources, 80 N.C.App. 201, 203-04, 341 S.E.2d 108, 111 (1986). "Zoning ordinances are construed against indefinite continuation of a nonconforming use. Ordinances in general are construed to give effect to all of their parts if possible." Forsyth Co. v. Shelton, 74 N.C.App. 674, 676, 329 S.E.2d 730, 733,appeal dismissed, disc. review denied, 314 N.C. 328, 333 S.E.2d 484 (1985) (citations omitted). Moreover,

[n]on-conforming uses are not favored by the law. Most zoning schemes foresee elimination of non-conforming uses either by amortization, or attrition or other means. In accordance with this policy, zoning ordinances are strictly construed against indefinite continuation of non-conforming uses.

CG & T Corp. v. Bd. of Adjustment of Wilmington, 105 N.C.App. 32, 39, 411 S.E.2d 655, 659-60 (1992) (quoting Appalachian Poster Advertising Co. v. Board of Adjustment, 52 N.C.App. 266, 274, 278 S.E.2d 321, 326 (1981) (citations omitted)). With these principles in mind, we turn to the arguments presented by the parties.

Right to Lease Existing but Unoccupied Rental Spaces

By their first assignment of...