Hyatt v. Town of Lake Lure, CIV. 1:02CV94.

• Citation: 225 F.Supp.2d 647
• Decision Date: 26 August 2002
• Docket Number: No. CIV. 1:02CV94.,CIV. 1:02CV94.
• Court: U.S. District Court — Western District of North Carolina
• Parties: Patricia HYATT, Plaintiff, v. TOWN OF LAKE LURE; H.M. (Chuck) Place, III; Terri Potts; Blaine Cox; George Pressley; and Lea Hullinger, Defendants.

225 F.Supp.2d 647

Patricia HYATT, Plaintiff, v. TOWN OF LAKE LURE; H.M. (Chuck) Place, III; Terri Potts; Blaine Cox; George Pressley; and Lea Hullinger, Defendants.

No. CIV. 1:02CV94.

United States District Court, W.D. North Carolina. Asheville Division.

August 26, 2002.

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William R. White, White & Dalton, Brevard, NC, J. Thomas Davis, Forest City, NC, for Plaintiff.

Sandra M. King, Russell & King, P.A., Asheville, NC, for Defendants.

MEMORANDUM AND ORDER

THORNBURG, District Judge.

THIS MATTER is before the Court on the Defendants' motion to dismiss for failure to state a claim and on the Plaintiff's motion to amend complaint. For the reasons stated below, the Plaintiff's motion to amend is granted and the Defendants' motion to dismiss is granted in part and denied in part.

I. FACTUAL HISTORY

In the 1920's, Chimney Rock Mountains, Inc. ("Chimney Rock") acquired title to a substantial area of land along the Broad River in Rutherford County, North Carolina, in order to construct what is now known as Lake Lure (sometimes, "the Lake"). Complaint, ¶ 7. Chimney Rock conveyed a portion of this land to Carolina Mountain Power Company ("the Mountain Power Company") for the Lake and the dam which contains it, but retained the land around the Lake. Id., ¶ 8. On February 7, 1927, the Mountain Power Company conveyed to Chimney Rock an easement and right-of-way which granted the easement holder, inter alia, the "right to pass and repass over the strip of land which shall lie between the edge of the lake of [The Mountain Power Company] and the boundary line of the property adjoining [The Mountain Power Company's property] ... and to use the same for boat landings ...." Id., ¶ 9; Exhibit A, Easement dated February 7, 1927, attached to Complaint. Chimney Rock developed the land around Lake Lure primarily for residential purposes. From the creation of Lake Lure in the 1920's until the present time, numerous boathouses and docks have been constructed along the shore of the Lake by persons owning land adjacent thereto. Id., ¶ 12. In the mid-1960's, the Defendant Town of Lake Lure ("the Town") acquired the Mountain Power Company's interest in the Lake and dam. Id., ¶ 13. The Town established "Lake Structures Regulations" ("LSR's") as a part of its municipal ordinances in the early 1990's. Id., ¶ 14; Exhibit B, Lake Structures Regulations, attached to Complaint. These regulations govern the construction or alteration of any structures along or in the Lake. They also mandate that each owner of property adjacent to the Lake construct a "seawall" along the edge of the Lake.¹ Exhibit B, at § 94.07.

Plaintiff Patricia Hyatt is a resident of the State of Florida who has owned the land in question, which borders Lake Lure, "at all relevant times." Id., ¶¶ 1, 15. She apparently purchased the land sometime in the mid-1980's; regardless, she is a successor in interest to real property formerly owned by Chimney Rock and as such, claims the right to the easement and right-of-way granted by the Mountain Power Company to Chimney Rock in 1927. Id., ¶¶ 16, 17.

Beginning sometime in the late 1980's, Plaintiff's lot began to erode along the shoreline of Lake Lure as a result of flooding caused by storms and waves created by boat traffic on the Lake. Id., ¶ 17. As a result of this erosion, she is left with a steep bank rising from the elevation of the shoreline up to the previous elevation of her lot and a shallow sandbar extending some 15 to 18 feet under the water. Id.

In June 2001, the Plaintiff sought and received a permit from the Town under the LSR's for the construction of the required seawall and a boathouse on her lot on Lake Lure which cost in excess of $110,000. Id., ¶¶ 18, 19. She alleges that the seawall and boathouse were constructed in accordance with all relevant provisions of the LSR's. Id., ¶ 20. Defendant Terri Potts, in her capacity as zoning administrator for the Town made "numerous inspections and photographs" of the boathouse and seawall but never interposed any objection to their location. Id., ¶¶ 21, 22.

At some point, the boundary stake marking the western boundary of Plaintiff's property had become dislodged and was replaced incorrectly. Id., ¶ 23. This mistake resulted in the seawall's encroachment some six to eight feet onto the neighboring property, owned by an entity controlled by Lemuel Oates. Id. Oates complained to the Town and requested that action be taken. Id., ¶ 24. On November 21, 2001, Defendant H.M. (Chuck) Place, III, in his capacity as Town Manager for the Town of Lake Lure, sent Plaintiff a letter informing her that her construction violated the LSR's in four ways and that she would be fined $500 for each violation. Id., ¶ 25; Exhibit C, Letter to Patricia Hyatt, dated November 21, 2001, attached to Complaint. Place stated that Plaintiff's seawall had not been constructed along the shoreline as defined in the LSR's, that she had filled a portion of the lake without approval of the Town Council, that her boathouse extended too far out into the Lake, and that her encroachment onto the land controlled by Oates violated her land disturbance permit. Id., at Exhibit C.

This letter instructed the Plaintiff that in order to avoid these penalties and the possible demolition and reconstruction of the entire project, she would have to seek after-the-fact permission for filling in behind her wall from the Lake Lure Town Council or she could petition for a waiver of the penalties. Id., ¶ 26; Exhibit C, supra. She did both; and the Town Council, in rejecting her petition, specifically required her to bring the construction into compliance with the LSR's, including the location of the seawall and boathouse. Id., ¶ 27. Defendant Place wrote the Plaintiff a second letter on January 16, 2002, which detailed the procedures she should follow in order to comply with the LSR's. Id., ¶ 28, Exhibit D, Letter to Patricia Hyatt, dated January 16, 2002, attached to Complaint. Pursuant to both of the Town's letters, Plaintiff filed a petition with what she refers to as the "Board of Adjustments and Appeals" for a variance for both her seawall and her boathouse.² Id., ¶ 29. Prior to the hearing of the Board of Adjustments and Appeals, Defendant Potts forwarded a memorandum to members of the Board of Adjustment detailing various factual contentions, but did not provide the Plaintiff with a copy of this memorandum nor a notice that it was being provided to the Board. Id., ¶ 30; Exhibit E, Memorandum, dated February 4, 2002, attached to Complaint. The Board of Adjustments denied the Plaintiff's petition and she appealed that decision to the Town Council. Id., ¶ 31. As of the filing of the complaint on April 24, 2002, the appeal remained pending. Id.

Plaintiff claims that the LSR's constitute zoning ordinances that were not promulgated according to the procedural requirements for zoning ordinances established by North Carolina Law and are, therefore, invalid. N.C. Gen.Stat. Chapter 160A, Article 19. Plaintiff further claims that the LSR's as applied to her violate the Equal Protection clause and both the substantive and procedural requirements of the Due Process clause of the Fourteenth Amendment; that her construction complies with the LSR's or, in the alternative, that the Town is estopped from denying that the construction complies with the LSR's because they issued a permit for the construction and Defendant Potts' failed to interpose an objection; and that the actions of the Town and the individual Defendants violated her constitutional rights under the color of state law in violation of 42 U.S.C. § 1983.³ She also included in her complaint a request for a temporary restraining order and for preliminary injunctive relief which the undersigned previously denied by Order filed May 7, 2002.

The Plaintiff's motion to amend would add these facts. First, that the Town is protected by one or more insurance policies which will cover any recovery that she might obtain in this matter and as such has waived any sovereign immunity it might assert. Plaintiff's Motion to Amend Complaint, filed June 13, 2002, ¶ 2.a. Secondly, the Plaintiff seeks to clarify that each of the claims against the individual Defendants are made both in their individual and official capacities and that similar insurance policies cover each of them and constitute a waiver of immunity. Id., ¶ 3.a-b. Furthermore, she alleges that each of the individual Defendants acted either in their official capacities or were grossly negligent, corrupt, or acted outside the scope of their authority or with "personal malice" towards the Plaintiff. Id., ¶ 3.a. Third, the Town has used the Lake primarily for the purpose of generating and selling electricity to private wholesale purchasers, and the recreational uses of the Lake are primarily for the creation of profit or otherwise proprietary in nature as opposed to governmental. Id., ¶ 13.a. Fourth, the facts and conclusion presented by Defendant Potts in her memorandum to the Lake Structures Committee (Board of Adjustment) are "false and misleading" and they were made for the improper purpose of influencing the members of the Committee and prejudicing the Plaintiff's attempt to obtain a variance. Id., ¶ 30.a. Fifth, the Town Council rejected Plaintiff's appeal from the Lake Structures Committee's denial of her petition for a variance on May 14, 2002, and Plaintiff has filed a writ of certiorari with the North Carolina Superior Court of Rutherford County from that ruling in accordance with N.C. Gen. Stat. § 160A-388. Id., ¶ 31.a. Sixth and finally, that the denial of her request for a variance regarding the side setbacks and location of the boathouse was arbitrary and capricious.

After an opposing party has filed a responsive pleading, Rule 15(a) provides, "a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and...