Pamlico Tar River Foundation, Inc. v. Coastal Resources Com'n of State

• Decision Date: 21 May 1991
• Docket Number: No. 902SC769,902SC769
• Citation: 103 N.C.App. 24,404 S.E.2d 167
• Parties: PAMLICO TAR RIVER FOUNDATION, INC., Petitioner-Appellant, v. COASTAL RESOURCES COMMISSION OF the STATE of North Carolina, Respondent-Appellee, and Weyerhaeuser Real Estate Company, Intervenor-Respondent-Appellee.
• Court: North Carolina Court of Appeals

Page 167

404 S.E.2d 167

103 N.C.App. 24

PAMLICO TAR RIVER FOUNDATION, INC., Petitioner-Appellant, v. COASTAL RESOURCES COMMISSION OF the STATE of North Carolina Respondent-Appellee and Weyerhaeuser Real Estate Company, Intervenor-Respondent-Appellee.

No. 902SC769.

Court of Appeals of North Carolina.

May 21, 1991.

Derb S. Carter, Jr. and Lark Hayes, Chapel Hill, for petitioner-appellant.

Lacy H. Thornburg, Atty. Gen. by Robin W. Smith, Asst. Atty. Gen., Raleigh, for the State.

Kenneth M. Kirkman, Morehead City, for intervenor-respondent-appellee.

GREENE, Judge.

On 28 September 1989, petitioner, Pamlico Tar River Foundation, Inc. (PTRF), requested that respondent, Coastal Resources Commission (CRC), grant a contested case hearing to PTRF regarding Major Development Permit No. 181-89, which permitted intervenor, Weyerhaeuser Real Estate Company (Weyerhaeuser), to build a marina in the open waters of Chocowinity Bay. PTRF was denied a contested case hearing and petitioned the Superior Court of Beaufort County for judicial review of CRC's decision. The court affirmed CRC's decision by an order filed 6 April 1990. PTRF appeals.

Weyerhaeuser owns a tract of land containing approximately 874 acres along the shoreline of a relatively undeveloped portion of Chocowinity Bay in Beaufort County. Weyerhaeuser proposes to construct on this property 865 residential units. In the adjacent waters of Chocowinity Bay, Weyerhaeuser proposes to construct a 302 slip marina, these slips to be sold to the owners of the residential units. The construction of the marina is the only portion of the project relevant to this appeal.

In April, 1989, pursuant to the Coastal Area Management Act, N.C.G.S. § 113A-100 et seq., Weyerhaeuser applied with the Division of Coastal Management (DCM), the agency to which CRC has delegated its permitting authority, for a permit for the construction of the marina. DCM received comments from numerous state and federal agencies and from other entities, including PTRF, regarding the advisability of issuing the permit requested by Weyerhaeuser. A permit was issued on 11 September 1989, listing twenty-five conditions to the permit, fifteen of which pertain specifically to the construction and operation of the marina.

On 28 September 1989, PTRF submitted to CRC a request for a contested case hearing. On 26 October 1989, the chairman of CRC executed an order denying the request for a contested case hearing. The relevant basis for the denial was PTRF's failure to make any showing that the permit was in violation of any applicable statutes or agency rules, and that PTRF had not met its burden of showing that it had a substantial likelihood of prevailing at a contested case hearing, a prerequisite to obtaining a contested case hearing under N.C.G.S. § 113A-121.1(b).

On 29 November 1989, PTRF petitioned the Superior Court of Beaufort County for judicial review of the decision of CRC's chairman. PTRF also requested that the superior court allow PTRF to present additional evidence, and further moved the court to remand the case for a contested case hearing and for the taking of additional evidence. The additional evidence proffered is in the form of an affidavit by a licensed landscape architect stating that there are feasible alternative sites for the marina. The affidavit was executed on 16 November 1989. After a hearing, and by order dated 5 April 1990, the superior court ordered that "the decision of the Coastal Resources Commission, acting through its Chairman, be and the same is hereby AFFIRMED." The order did not address PTRF's request to present additional evidence.

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The issues are: (I) whether PTRF was entitled to a contested case hearing based upon the record before CRC on 28 September 1989; and (II) whether PTRF is entitled to present new evidence to CRC on the issue of its entitlement to a contested case hearing.

I

The administrative review of a permit decision of DCM is governed by a statute which provides in part:

A person other than a permit applicant or the Secretary who is dissatisfied with a decision to deny or grant a minor or major development permit may file a petition for a contested case hearing only if the Commission determines that a hearing is appropriate. A request for a determination of the appropriateness of a contested case hearing shall be made in writing and received by the Commission within 20 days after the disputed permit decision is made. A determination of the appropriateness of a contested case shall be made within 15 days after a request for a determination is received and shall be based on whether the person seeking to commence a contested case:

(1) Has alleged that the decision is contrary to a statute or rule;

(2) Is directly affected by the decision; and

(3) Has a substantial likelihood of prevailing in a contested case.

If the Commission determines a contested case is appropriate, the petition for a contested case shall be filed within 20 days after the Commission makes its determination. A determination that a person may not commence a contested case is a final agency decision and is subject to judicial review under Article 4 of Chapter 150B of the General Statutes.

N.C.G.S. § 113A-121.1(b) (1989).

For the purposes of this appeal, we find three important provisions in this statute. First, if a party other than the applicant or Secretary, such as PTRF, is dissatisfied with the decision to issue a permit, the party may request a contested case hearing. Second, in requesting a contested case hearing, the party requesting the hearing has the burden of alleging that the permit decision is contrary to a statute or rule, of showing that the party is directly affected by the permit decision, and of showing that the party has a substantial likelihood of prevailing in a contested case. Third, the denial of a contested case hearing is a final agency decision, and such denial is subject to judicial review under Article 4 of Chapter 150B. Here, CRC determined that PTRF had alleged that the permit decision was contrary to a statute or rule and had shown that they were affected by the permit decision. No party to this appeal questions those determinations by CRC. PTRF complains only of CRC's determination that it was not entitled to a contested case hearing.

The applicable statute pertaining to the standard of judicial review, found under Article 4 of Chapter 150B, provides in relevant part:

... the court reviewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional provisions;

(2) In excess of the statutory authority or jurisdiction of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, 150B-31 in view of the entire record as submitted; or

(6) Arbitrary or capricious.

N.C.G.S. § 150B-51 (1987).

For purposes of this appeal, this statute instructs us that in order to obtain a modification or reversal of an agency decision, the party alleging error has the burden of showing that the agency's final decision may have prejudiced that party's substantial rights in that the agency's findings, inferences, conclusions, or decisions are defective because of one of the six reasons stated under N.C.G.S. § 150B-51.

Our review on this appeal is of CRC's decision to deny PTRF a contested case hearing. Our review, however, is limited to the assignments of error and issues raised by PTRF. Walls & Marshall Fuel Co. v. N.C. Dept. of Revenue, 95 N.C.App. 151, 154, 381 S.E.2d 815, 817 (1989). Here, PTRF's essential basis for asserting error is in its contention that CRC's finding that PTRF failed to show a substantial likelihood of prevailing in a contested case hearing is unsupported by substantial evidence. Under N.C.G.S. § 150B-51(b)(5), we review CRC's decision according to the "whole record" test. Id. "The 'whole record' test requires the reviewing court to examine all the competent...