JVC Enters., LLC v. City of Concord

• Decision Date: 17 December 2019
• Docket Number: No. COA19-308,COA19-308
• Citation: 269 N.C.App. 13,837 S.E.2d 206
• Parties: JVC ENTERPRISES, LLC, as successor by merger to Geosam Capital US, LLC; Concord Apartments, LLC ; and the Villas of Winecoff, LLC f/k/a the Villas At Winecoff, LLC, Plaintiffs, v. CITY OF CONCORD, Defendant.
• Court: North Carolina Court of Appeals

269 N.C.App. 13
837 S.E.2d 206

JVC ENTERPRISES, LLC, as successor by merger to Geosam Capital US, LLC; Concord Apartments, LLC ; and the Villas of Winecoff, LLC f/k/a the Villas At Winecoff, LLC, Plaintiffs,
v.
CITY OF CONCORD, Defendant.

No. COA19-308

Court of Appeals of North Carolina.

Filed: December 17, 2019

Scarbrough & Scarbrough, PLLC, Concord, by James E. Scarbrough, John F. Scarbrough, and Madeline J. Trilling, and Ferguson, Hayes, Hawkins & DeMay, PLLC, Concord, by James R. DeMay, for Plaintiffs-Appellants.

Hamilton Stephens Steele + Martin, PLLC, Charlotte, by Keith J. Merritt, for Defendant-Appellee.

INMAN, Judge.

269 N.C.App. 14

JVC Enterprises, LLC, Concord Apartments, LLC, and the Villas of Winecoff, LLC, ("Plaintiffs") appeal the entry of summary judgment in favor of the City of Concord (the "City") and dismissing Plaintiffs’ complaint. The City cross-appeals a portion of the summary judgment order, contending the trial court impermissibly ruled on the constitutionality of a session law. After careful review, and able argument on behalf of the parties, we reverse the trial court's entry of summary judgment for the City and remand for further proceedings.

I. FACTUAL & PROCEDURAL HISTORY

The record below discloses the following:

837 S.E.2d 208

In 2004, the City enacted an ordinance requiring developers of residential subdivisions to pay water and wastewater capacity fees as a prerequisite for development approval by the City. The City assessed these fees at the pre-development stage, and developers were required to pay them before a subdivision plat would be accepted for recordation. The fees were distinct from ordinary installation and meter fees, as they were collected prior to the provision of water and sewer service and were used to fund future improvements to the City's water and sewer systems. Plaintiffs are all developers who built residential subdivisions inside the City prior to October of 2016. Each of the Plaintiffs paid the capacity fees required by the City's ordinance prior to development.

On 19 August 2016, our Supreme Court decided Quality Built Homes, Inc. v. Town of Carthage , 369 N.C. 15, 789 S.E.2d 454 (2016), and held that although cities could assess fees for water and sewer services actually furnished under the Public Enterprise Statutes, N.C. Gen. Stat. §§ 160A–11 to –338 (2015), those enabling statutes "fail[ed] to give [cities] the essential prospective charging power necessary to assess

269 N.C.App. 15

impact fees." Quality Built Homes, 369 N.C. at 22, 789 S.E.2d at 459. The City subsequently amended its capacity fee ordinance in response to Quality Built Homes in October of 2016, changing the timing of the collection of the fees from before the subdivision plat approval phase to before the issuance of a zoning clearance permit.

In 2017, Plaintiffs brought suit against the City seeking, among other things, a judgment declaring the fees ultra vires and awarding damages in the amount of fees paid to the City in connection with their developments. Three similar cases¹ were also filed against the City, and all parties filed a Joint Motion for Exceptional Case Designation under Rule 2.1 of the General Rules of Practice for the Superior and District Courts. That motion was granted in April 2018.

The City moved for partial summary judgement on 17 September 2018 on Plaintiffs’ claim that the City lacked authority to levy the fees. To support its motion, the City filed an affidavit by the city clerk which included as exhibits five session laws amending, revising, or consolidating the City's charter between 1959 and 1986. The first such session law authorized a now-defunct Board of Light and Water Commissioners of the City of Concord (the "Board") "[t]o fix and collect rates, fees and charges for the use of and for the services and facilities furnished or to be furnished in the form of electrical and water service." 1959 N.C. Sess. Laws ch. 66, § 1 (emphasis added).² Another session law attached to the affidavit revised and consolidated the City's charter, continued the existence of the Board and its powers, and repealed 108 scattered private, public, and session laws that previously composed the City's charter. 1977 N.C. Sess. Laws ch. 744, §§ 1, 5-6 (hereinafter the "1977 Charter"). A third session law—the one on which the City premised its motion for summary judgment—again consolidated the City's charter, dissolved the Board, and provided that "[a]ll powers and duties of said Board shall become powers and duties of the City of Concord[,]" 1985 N.C. Sess. Laws. ch. 861 § 2 (1986) (hereinafter the "1986 Act");³ at the same time,

269 N.C.App. 16

that session law also expressly repealed all but two sections of the 1977 Charter. Id. at §§ 2, 6.

At the summary judgment hearing, the City argued that it was authorized to assess the capacity fees because the session laws: (1) authorized the Board to levy prospective water and sewer fees; and (2) transferred

837 S.E.2d 209

those powers to the City in the 1986 Act. Plaintiffs countered by arguing the 1986 Act: (1) extinguished the Board; and (2) eliminated any power to levy prospective fees allowed in the 1977 Charter by repealing that charter. Plaintiffs further contended that the "powers and duties of said Board" that the 1986 Act transferred to the City were simply those powers that would have otherwise resided in the Board consistent with the general Public Enterprise Statutes. Plaintiffs relied on the doctrine of constitutional avoidance, asserting that the City's interpretation of the pertinent session laws ran the risk of violating the North Carolina Constitution's prohibition against local acts relating to health and sanitation. See N.C. Const. art. II, § 24 (1)(a).

The trial court granted summary judgment in the City's favor and dismissed all of Plaintiffs’ claims with prejudice on 10 October 2018. In its order, the trial court construed the 1986 Act as transferring the Board's ability to levy prospective fees to the City; it then interpreted two local act decisions by our Supreme Court, Town of Boone v. State , 369 N.C. 126, 794 S.E.2d 710 (2016), and City of Asheville v. State , 369 N.C. 80, 794 S.E.2d 759 (2016), and concluded that the 1986 Act was constitutional. Plaintiffs appealed the order in its entirety, while the City cross-appealed the portion of the order addressing the constitutionality of the 1986 Act.

II. ANALYSIS

A. Standard of Review

We review the trial court's entry of summary judgment de novo , and will affirm the ruling "when the record shows that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." In re Will of Jones , 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation and quotation marks omitted).

The de novo standard also applies to questions of statutory interpretation. Armstrong v. State Bd. of Dental Examiners , 129 N.C. App. 153, 156, 499 S.E.2d 462, 466 (1998). In discerning the effect of a statute, we "look[ ] first to the plain meaning of the words of the statute itself[.]" State v. Ward , 364 N.C. 157, 160, 694 S.E.2d 729, 731 (2010) (citation omitted). "When determining the extent of legislative power conferred

269 N.C.App. 17

upon a municipality, the plain language of the enabling statute governs." Quality Built Homes , 369 N.C. at 19, 789 S.E.2d at 457 (citation omitted). If the statutory language is unambiguous, we apply its "plain and definite meaning. Id. (citation and quotation marks omitted). "But where a statute is ambiguous or unclear in its meaning, resort must be had to judicial construction to ascertain the legislative will, and the courts will interpret the language to give effect to the legislative intent." In re Banks , 295 N.C. 236, 239, 244 S.E.2d 386, 389 (1978) (citations omitted). Canons of statutory interpretation are employed "[i]f the language of the statute is ambiguous or lacks precision, or is fairly susceptible of two or more meanings[.]" Abernethy v. Bd. of Comm'rs , 169 N.C. 631, 636, 86 S.E. 577, 580 (1915).

B. Plaintiffs’ Appeal

Plaintiffs first contend that the 1977 Charter failed to give the Board authority to charge prospective water and sewer fees. Alternatively, Plaintiffs argue that the provisions in the 1986 Act revoking the 1977 Charter's grant of powers to the Board but transferring the Board's powers to the City created an ambiguity as to what powers were actually conveyed to the City by the General Assembly. We address each argument in turn.

We disagree with Plaintiffs’ assertion that the 1977 Charter did not authorize the Board to levy fees for future service. The 1977 Charter enabled the Board to:

Fix and collect rates, fees and charges for the use of and for the services and facilities furnished or to be furnished in the form of electrical, sewer and water service to be paid by the owner, tenant or occupant of each lot or parcel of land

...