Town of Midland v. Harrell

• Decision Date: 15 March 2022
• Docket Number: COA21-46
• Citation: 871 S.E.2d 392
• Parties: TOWN OF MIDLAND, a North Carolina municipal corporation, Plaintiff, v. Toney L. HARRELL, and T.L. Harrell's Land Development Company, Inc., a North Carolina business corporation, Defendants.
• Court: North Carolina Court of Appeals

871 S.E.2d 392

TOWN OF MIDLAND, a North Carolina municipal corporation, Plaintiff,

v.Toney L. HARRELL, and T.L. Harrell's Land Development Company, Inc., a North Carolina business corporation, Defendants.

No. COA21-46

Court of Appeals of North Carolina.

Filed March 15, 2022

Parker Poe Adams & Bernstein LLP, by Anthony Fox, Charlotte, & La-Deidre D. Matthews, for Plaintiff-Appellee.

Scarbrough, Scarbrough & Trilling, PLLC, by James E. Scarbrough, Concord, for Defendants-Appellants.

INMAN, Judge.

¶ 1 This is the second appeal arising from a dispute about substandard roads in a residential subdivision in the Town of Midland ("the Town") in Cabarrus County. Five years ago, this Court held that the subdivision's developers bore responsibility for repairing the roads subject to the Town's enforcement of road standards, and that only after those repairs were made would the Town assume responsibility to maintain the roads. The developers still failed and refused to repair the roads and contested penalties and fees assessed against them by the Town. The Town sued and obtained relief from which the developers now appeal.

¶ 2 Defendants-Appellants, Harrell's Land Development Company, and its president, Toney L. Harrell (collectively "Developers"), developed a residential subdivision in Midland, NC. The claims brought by the Town against Developers in this case arise out of a notice of zoning violation—substandard maintenance of privately owned roads—previously upheld by this Court. See In re Harrell v. Midland Bd. of Adjustment , 251 N.C. App. 526, 796 S.E.2d 340, 2016 WL 7984233, at *7 (2016) (unpublished).

¶ 3 In this appeal, Developers argue the trial court erred in: (1) granting summary judgment to the Town on the issue of civil penalties for Developers’ failure to repair the roads; (2) granting the Town a permanent mandatory injunction and order of abatement requiring Developers to repair and maintain the roads; and (3) denying Developers’ motion for attorney's fees. After careful review, we affirm the trial court's entry of summary judgment in the Town's favor regarding civil penalties. We remand the mandatory permanent injunction and order of abatement for additional findings of fact and a more specific decree. Finally, we reverse the trial court's denial of Developers’ motion for attorney's fees and remand for further proceedings.

I. FACTUAL & PROCEDURAL BACKGROUND

¶ 4 We rely on our previous decision's summary of the underlying facts giving rise to the dispute between the Town and Developers over road maintenance in the development.

¶ 5 In 2004, while Developers were constructing Bethel Glen ("the development" or "the subdivision"), Developers filed an application with the North Carolina Department of Transportation ("NCDOT") requesting the agency "assume responsibility for the maintenance of the subdivision roads." In re Harrell , 2016 WL 7984233, at *1. A District Engineer with NCDOT, D. Ritchie Hearne ("Mr. Hearne"), relayed Developers’ request to the Town, writing "I have informed [Developers] that acceptance of these roads would be a Town function under our normal policy .... The review of the street plans, inspection, and ultimate takeover of the roads would be the Town's responsibility" because the Town had incorporated earlier the same year. Id. In December 2005, Mr. Hearne advised the Town that he had again spoken with Developers and had informed Developers that NCDOT would not take responsibility for maintenance of the subdivision roads and that because the roads were within the Town's corporate limits, Developers would have to petition the Town for takeover. Id. In January 2006, the Town wrote to Mr. Hearne requesting a letter verifying that the roads were built to NCDOT standards. Id. The Town concluded, "When we receive this letter, we will proceed with adoption of said streets." Id. Nothing in the record reflected that the Town sent a copy of this letter to Developers or otherwise represented directly to Developers that the Town would take over maintenance of the subdivision roads. Id.

¶ 6 In April 2006, Mr. Hearne wrote in response to the Town, in a letter copied to Developers, that damage to the subdivision roads in the course of construction had left them in need of repair, and that until all phases of the subdivision had been completed, NCDOT generally would not assume responsibility for their maintenance. Id. at *2. This Court noted: "There is no indication [Developers] followed up with [the Town] in order to petition the Town to take over maintenance of the subdivision roads, or to check on the status of any process of taking over the subdivision roads that [the Town] might have initiated themselves." Id.

¶ 7 Beginning in 2012, after receiving complaints from residents about poor road conditions in the development, the Town asked Developers to repair the roads on at least three separate occasions. Id. at *2- 3. Despite a meeting and notice, Developers did not take corrective action to repair the roads. Id. at *3.

¶ 8 On 18 March 2014, the Town's Zoning Administrator issued a notice of violation to Developers for failure to properly construct and maintain the roads in the development in violation of a local ordinance. The notice warned that if Developers did not repair deficiencies in the roads, the Town could assess penalties and deny permits for further construction in the development.

¶ 9 Developers appealed the notice of violation to the Town's Board of Adjustment, which affirmed the Zoning Administrator's decision. Developers unsuccessfully appealed to Superior Court, and then unsuccessfully appealed to this Court and the North Carolina Supreme Court. In re Harrell , 2016 WL 7984233, at *7, disc. review denied by Harrell v. Midland Bd. of Adjustment , 369 N.C. 751, 800 S.E.2d 418 (2017). This Court held the notice of violation was valid:

The ordinance in question states that, until privately owned streets are accepted by the Town for public maintenance, "the developer shall be responsible for maintenance of those areas." Midland Development Ordinance, Article 16, § 16.1-8(A) (adopted 13 September 2011). It is undisputed that, at the time [the Town] filed the notice of violation, [the Town] had not taken over responsibility for maintenance of the subdivision roads.

....

Once [the Town] received complaints from subdivision residents, investigated the complaints, and failed to reach an agreement with [Developers] for the needed repairs, [the Town] correctly sent [Developers] the notice of violation.

Id. at *5.

¶ 10 While the Developers’ appeal was pending, on 14 October 2016, the Town's Zoning Administrator hand-delivered to Mr. Harrell a civil citation and a letter entitled "Bethel Glen Subdivision Streets and Covenants." It read:

This letter is to inform you that, pursuant to Article 23 of the Midland Development Ordinance, specifically subsections 23.6-2 Civil Penalties and 23.6-3 Denial of Permit or Certificate, the Town of Midland ("Midland") hereby assesses you civil penalties and will deny future permits and certificates based on your refusal to address inadequate street construction and inadequate maintenance of the streets within the Bethel Glen subdivision ("Development").

The citation assessed a penalty of $100 for the first violation and notified Developers that they would be assessed a penalty of $300 for a second violation and $500 for a third and all subsequent violations. The citation notified Developers that citations would continue "for each day the offense continues until the prohibited activity is ceased or abated."

¶ 11 By letter dated 22 December 2016, Developers’ counsel notified the Zoning Administrator that Developers were appealing the civil citation to the Town's Board of Adjustment. The Zoning Administrator responded via e-mail: "This matter was appealed previously to the Board of Adjustment in 2014 .... You can't appeal something twice."

¶ 12 On 17 January 2017, the Zoning Administrator hand-delivered to Mr. Harrell another letter referencing "Demand for Payment & Notice of Legal Action." The letter notified Developers that they owed $18,900 in penalties, and if not paid within 30 days, the Town would file a civil action "for the collection of the penalties, attorney's fees, interest, court costs, and other such relief as permitted by law." The letter was delivered with a batch of civil citations dating from 9 December 2016 to 17 January 2017.

¶ 13 On 6 March 2017, the Zoning Administrator hand-delivered a second batch of civil citations to Mr. Harrell's residence for violations dating 18 January 2017 through 2 March 2017. On 13 April 2017, the Zoning Administrator delivered a third batch of citations for 3 March 2017 through 13 April 2017. And on 16 June 2017, she delivered a final batch of citations for 14 April 2017 through 15 June 2017.

¶ 14 In total, the Town issued 189 civil citations against Developers. Counsel for Developers sent letters to the Town asserting appeals from each and every citation.

¶ 15 On 22 June 2017, the Town filed a civil action seeking an order of abatement and mandatory injunction against Developers as well as collection of civil penalties, costs, and attorney's fees. The parties filed cross-motions for summary judgment in June 2018; the motions came on for hearing a year later in June 2019.

¶ 16 After the hearing but before the trial court entered an order, Developers filed a motion to dismiss the action for lack of subject matter jurisdiction because the Town had not properly authorized the filing of the complaint. The Town Council then adopted, more than two years after the complaint had been filed, a resolution retroactively authorizing the lawsuit.

¶ 17 On 17 August 2020, the trial court entered orders denying Developers’ motion for summary judgment, allowing the Town's motions, and imposing a permanent injunction and an order of abatement. Developers filed notice of appeal from these orders. Developers also filed a motion for relief from judgment...