Shell Island Homeowners Ass'n v. Tomlinson

• Decision Date: 20 July 1999
• Docket Number: No. COA98-1197.,COA98-1197.
• Court: North Carolina Court of Appeals
• Parties: SHELL ISLAND HOMEOWNERS ASSOCIATION, INC., a North Carolina non-profit corporation, Plaintiff, v. Eugene B. TOMLINSON, Chairman North Carolina Coastal Resources Commission; North Carolina Coastal Resources Commission; Department of Environment, Health, and Natural Resources for the State of North Carolina; and State of North Carolina, Defendants.

517 S.E.2d 401

134 NC App. 286

SHELL ISLAND HOMEOWNERS ASSOCIATION, INC., a North Carolina non-profit corporation, Plaintiff, v. Eugene B. TOMLINSON, Chairman North Carolina Coastal Resources Commission; North Carolina Coastal Resources Commission; Department of Environment, Health, and Natural Resources for the State of North Carolina; and State of North Carolina, Defendants.

No. COA98-1197.

Court of Appeals of North Carolina.

July 20, 1999.

Shanklin & McDaniel, L.L.P., by Kenneth A. Shanklin and Susan J. McDaniel, Wilmington, for plaintiff-appellant.

Attorney General Michael F. Easley, by Special Deputy Attorney General J. Allen Jernigan and Special Deputy Attorney General Robin W. Smith, for defendant-appellees.

MARTIN, Judge.

Plaintiff Shell Island Homeowners Association, Inc., is an association of all unit owners of the Shell Island Resort Hotel Condominium located at the north end of Wrightsville Beach, North Carolina, just south of Mason's Inlet. Plaintiff filed this action on 7 November 1996 against Eugene B. Tomlinson, Chairman of the North Carolina Coastal Resources Commission, the North Carolina Coastal Resources Commission ("CRC"), the Department of Environment, Health, and Natural Resources for the State of North Carolina ("DEHNR"), and the State of North Carolina (hereinafter collectively "defendants"), challenging the constitutionality of regulations within the Coastal Area Management Act, G.S. § 113A-100, et seq., ("CAMA") pertaining to the construction of erosion control structures, and claiming that defendants' denials of plaintiff's requests to build erosion control structures constitutes a taking of plaintiff's property without just compensation.

The facts pertinent to the issues on appeal are as follows. On 25 May 1985, the State of North Carolina, through a local permitting officer, issued a CAMA Minor Development Permit to plaintiff's predecessor for construction of the Shell Island hotel. However, issuance of the permit was based on an error in the location of the regulatory construction line on Wrightsville Beach, and the hotel, which exceeded development standards under CAMA's Inlet Hazard Areas of Environmental Concern, should not have been built at the permitted location. At the time the CAMA permit was issued, the CRC had already adopted regulations prohibiting the use of hardened erosion control structures on ocean and inlet beaches, and the hotel's CAMA permit specifically noted the restrictions on use of such structures.

Since the hotel's construction, Mason's Inlet has migrated to the south, causing the shoreline around Shell Island to erode. On 25 September 1995 plaintiff applied for a CAMA Minor Development Permit to erect a steel sheetpile inlet migration barrier to protect its property from the waters of Mason's Inlet. The Division of Coastal Management ("DCM") denied the permit, and on 27 October 1995 plaintiff applied to the CRC for a variance from the size limitations in the regulations pursuant to G.S. § 113A-120.1 and 15A NCAC 7J.0700, et seq. The CRC denied the variance request on 6 February 1996. On 12 June 1996 New Hanover County, as agent for plaintiff, applied for an emergency CAMA general permit to construct a temporary sandbag revetment on private property located adjacent to Mason's Inlet. The DCM denied the request, and again, on 5 August 1996 the CRC denied the county's request for a variance from the application of the erosion control structure regulations.

On 30 August 1996, New Hanover County and the Town of Wrightsville Beach, acting as agents for plaintiff, jointly submitted an emergency CAMA permit application to construct a slightly smaller sandbag revetment on private property. The redesigned revetment still exceeded dimensions allowed under the regulations, and the permit was denied. On 5 September 1996 a variance from the regulations was sought, and by final order dated 10 October 1996, the CRC denied the request. Plaintiff did not seek administrative review of any of the agency decisions denying permits or variances, but filed the present action in the Superior Court of New Hanover County on 7 November 1996 seeking (1) a declaration that the statutory remedy for a regulatory takings claim under CAMA, G.S. § 113A-123(b), is unconstitutionally vague and denies plaintiff due process; (2) alternatively, a judgment pursuant to G.S. § 113A-123(b) that the CRC's 5 August 1996 denial of plaintiff's variance request for construction of a sandbag revetment constitutes a taking without just compensation; and (3) a declaration that CAMA regulations pertaining to the construction of erosion control structures for the protection of private property are unconstitutional. On 6 January 1997, plaintiff amended its complaint to include a fourth claim for relief, alleging that the CRC's denial, on 10 October 1996, of the 5 September 1996 variance request was also a taking of plaintiff's property without just compensation.

On 20 December 1996, in response to defendants' consistent recommendations that plaintiff reduce the size and scope of its permit applications for a sandbag revetment such that the revetment would not, in effect, act like a permanent hardened structure prohibited by CRC rules, plaintiff submitted an emergency permit application for construction of a smaller and re-engineered revetment. This was the first CAMA permit application which proposed that the revetment be at least partially located on hotel property. Following denial of the permit by the DCM, plaintiff applied for a variance, and on 4 February 1997 the CRC granted plaintiff's variance request. Construction of the 410-foot sandbag revetment was completed on 17 September 1997 and currently protects the hotel. Under the terms of the CAMA permit the revetment must be removed in September 1999.

On 31 October 1997 defendants moved to dismiss plaintiff's complaint pursuant to Rule 12(b)(1) of the North Carolina Rules of Civil Procedure on the grounds that the granting of plaintiff's variance request has mooted plaintiff's claims. Plaintiff moved to consolidate this case with another action pending in the Superior Court of New Hanover County, case no. 98 CvS 38, in which plaintiff and others seek declaratory, injunctive, and monetary relief from defendants. On 12 August 1998, the trial court entered an order denying plaintiff's motion to consolidate and granting defendants' motion to dismiss all of plaintiff's claims as moot. Plaintiff appeals.

The dispositive issue is whether the trial court erred by granting defendants' Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction on the grounds that plaintiff's claims are moot. Subject matter jurisdiction is a prerequisite for the exercise of judicial authority over any case or controversy. Harris v. Pembaur, 84 N.C.App. 666, 353 S.E.2d 673 (1987). "Whenever during the course of litigation it develops that the relief sought has been granted or that the questions originally in controversy between the parties are no longer at issue, the case should be dismissed, for courts will not entertain an action merely to determine abstract propositions of law." Simeon v. Hardin, 339 N.C. 358, 370, 451 S.E.2d 858, 866 (1994) (citing In re Peoples, 296 N.C. 109, 147, 250 S.E.2d 890, 912 (1978)). "If the issues before the court become moot at any time during the course of the proceedings, the usual response is to dismiss the action." Id. "The issue of mootness is not determined solely by examining facts in existence at the commencement of the action." North Carolina Press Ass'n, Inc. v. Spangler, 87 N.C.App. 169, 170-71, 360 S.E.2d 138, 139 (1987) (citing Peoples, 296 N.C. at 147-48,250 S.E.2d at 912).

The essence of the relief sought by plaintiff in this action is a determination that defendants' denials of plaintiff's requests for variances under G.S. § 113A-123(b) have effected a regulatory taking of plaintiff's property. Plaintiff's second and fourth claims for relief allege that the CRC's 5 August 1996 and 10 October 1996 denials of plaintiff's variance requests, respectively, deprive plaintiff of the practical use of its land, thereby constituting a taking. Plaintiff's first and third claims for relief seek declaratory rulings as to the constitutionality of the statute involved.

The action of the CRC on 4 February 1997, granting plaintiff's fourth variance request, renders moot the issues relating to the earlier variance requests. Plaintiff sought variances to construct an erosion control structure, plaintiff was granted permission to construct such a structure, and did in fact, complete construction of the revetment on 17 September 1997. Issuance of the variance provided plaintiff with the relief originally sought in the complaint.

Plaintiff argues that the physical invasion of its property by inlet waters during the time period in which its variance requests were denied constitutes a compensable taking, a claim that was not mooted by the granting of the subsequent variance. Plaintiff makes this constitutional argument for the first time on appeal, however, and will not be allowed to do so. See Croker v. Yadkin, Inc., 130 N.C.App. 64, 502 S.E.2d 404,

disc. review denied, 349 N.C. 355, ___ S.E.2d ___ (1998) (citation omitted) (where record does not affirmatively indicate constitutional issue was both raised and passed upon in the trial court, appellate court will not consider the claim for the first time on appeal). Here, in both its original and amended complaints, plaintiff based its claims of a compensable taking on defendants' denial of its variance requests. Plaintiff alleged that such denials restricted "the use of [p]laintiff's property as to deprive it of the practical uses thereof." But, a compensable taking based on a theory of physical invasion is an altogether separate category of regulatory takings. See King By and Through Warren v. State, 125 N.C.App. 379, 385, 481 S.E.2d 330, 333-34,

disc. review denied, 346...