Watts v. North Carolina Dep't Of Envtl., COA09-1499

• Decision Date: 20 July 2010
• Docket Number: I.C. No. TA-18068,NO. COA09-1499,COA09-1499
• Court: Court of Appeal of North Carolina (US)
• Parties: KERRY WATTS, Plaintiff, v. NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL AND NATURAL RESOURCES,Defendant.

KERRY WATTS, Plaintiff,

v.NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL AND NATURAL RESOURCES, Defendant.

NO. COA09-1499

I.C. No. TA-18068

Court of Appeals of North Carolina

July 20, 2010

James, McElroy & Diehl, P.A., by Preston O. Odom, III and John R. Buric, for plaintiff-appellant.

Roy Cooper, Attorney General, by Olga Vysotskaya, Assistant Attorney General, for defendant-appellee.

Appeal by plaintiff from Decision and Order entered 2 0 July 2009 by the Full Commission of the North Carolina Industrial Commission. Heard in the Court of Appeals 26 April 2010.

MARTIN, Chief Judge.

Plaintiff appeals from a Decision and Order of the North Carolina Industrial Commission awarding plaintiff damages against the North Carolina Department of Environmental and Natural Resources ("NCDENR") and dismissing plaintiff's claim against the Montgomery County Health Department ("the Health Department") for lack of subject matter jurisdiction. We affirm in part, reverse inpart, and remand for entry of an award consistent with this opinion.

While a full recitation of the facts and procedural history of this case may be found at Watts v. N.C. Dep't of Environment & Natural Resources (Watts I), 182 N.C. App. 178, 641 S.E.2d 811, disc, review as to additional issues denied, 361 N.C. 704, 653 S.E.2d 878 (2007), disc, review allowed, 362 N.C. 349, 660 S.E.2d 899, modified and aff'd per curiam, 362 N.C. 497, 666 S.E.2d 752 (2008), we limit our discussion in this opinion to the facts and procedural history that are relevant to the issues before us. On 2 July 2003, plaintiff Kerry Watts filed a complaint with the North Carolina Industrial Commission under the North Carolina Tort Claims Act alleging NCDENR, the Health Department, and David Ezzell, an employee of the Health Department, negligently caused plaintiff to sustain monetary damages when defendants issued, and subsequently revoked, an improvement permit authorizing plaintiff to build a three-bedroom residence on his property. After a hearing, the Deputy Commissioner dismissed the claim against David Ezzell and found NCDENR and the Health Department jointly and severally liable for $267,733 in compensatory damages; $18,611.07 in attorneys' fees pursuant to N.C.G.S. § 1A-1, Rule 11, § 6-13, § 6-14, § 6-20, § 6-21.5, § 7A-305(d)(3), § 143-291, § 143.291.1, and § 143.291.2; and $13,034 in litigation costs. NCDENR appealed this decision to the Full Commission.

In a Decision and Order filed 3 October 2005, the Full Commission found it had jurisdiction over NCDENR and the Health Department and affirmed the award of compensatory damages, attorneys' fees, and litigation costs as ordered by the Deputy Commissioner. In doing so, it made the following relevant findings of fact:

21. Plaintiff has presented evidence, and the Full Commission so finds, that it has and will cost plaintiff the sum of approximately $96,024.30 to purchase Lot 861, and construct a suitable septic system on Lot 861, which is broken down as follows:

• $70,000.00-purchase additional lot

• $5,000.00-closing costs

• $5,100.00-installation of upgraded septic system on Lot 871

• $150.00-perk test on Lot 861

• $5,380.49-taxes on Lot 861 prorated over 30 years

• $513.81-Lake Tillery taxes on Lot 861

• $250.00-April 6, 2004, appraisal

• $500.00-August 9, 2004, appraisal

• $9,15 0.00-homeowner's dues over 30 years on Lot 861

22. The Full Commission finds that since the time in which plaintiff intended to construct his residence in 2002 and 2003, the cost for construction has increased by at least 5.8%. As a result, Plaintiff will spend at least $21,200.00 more dollars to construct his residence, if he is able to complete construction by mid-2005.

23. During the hearing of this matter before the Deputy Commissioner, plaintiff offeredevidence, and the Full Commission finds as fact, that as a result of not being able to start construction as intended, plaintiff will incur higher interest costs to perform construction. The undersigned finds that had plaintiff been permitted and allowed to begin construction as anticipated, he would have locked in an interest rate of 5%. Since that time, interest rates have increased. The Full Commission finds that as a result of defendants' negligence and the resulting delay in construction, plaintiff will incur an increased interest rate of at least 1.5% over the term of its loan. The cost of this 1.5% increase in interest is $174,745.54.

NCDENR appealed to this Court. Watts I, 182 N.C. App. at 181, 641 S.E.2d at 815. In an opinion filed 20 March 2007, this Court affirmed the Commission's conclusion that plaintiff's claim was not barred by the public duty doctrine as well as the Commission's conclusion that NCDENR admitted to negligent conduct. Id. at 18485, 641 S.E.2d at 817. However, we reversed the award of future interest rate damages as being too speculative, and the award of attorneys' fees as not being authorized by any of the statutes relied upon by the Commission. Id. at 186-87, 641 S.E.2d at 81819.

NCDENR appealed to the North Carolina Supreme Court. Watts v. N.C. Dep't of Env't & Nat. Res. (Watts II), 362 N.C. 497, 497, 666 S.E.2d 752, 752 (2008). In a per curiam opinion, the Court affirmed "the opinion of the Court of Appeals to the extent it h[eld] that the Industrial Commission did not err in failing to apply the public duty doctrine." Id. at 497-98, 666 S.E.2d at 753. None of the other issues addressed in our opinion were properlybefore the Supreme Court, and our decision as to those issues was left undisturbed. Id. at 498, 666 S.E.2d at 753.

Upon remand to the Commission, plaintiff filed a Motion to Enter a Corrected Amended Decision and Order pursuant to Rule 60(a) of the North Carolina Rules of Civil Procedure. In this motion, plaintiff requested the Commission to "[c]orrect [a]ll [e]rroneous [m]athematical [C]omputations." Specifically, plaintiff asked that $20 be added to the total damage amount set forth in the Commission's previous Finding of Fact 21 to reflect the proper sum of the figures identified therein. Plaintiff also requested that the Commission change its previous Conclusion of Law 4 because it "miscalculate[d] the sum of the damages specifically delineated in Findings of Fact 21-23." Thus, he requested that the total amount of damages, after proper calculations, be $291,989.84, instead of the $267,733 which the Commission had awarded. Plaintiff also requested that the Commission's new order "[a]ccurately [r]eflect [t]he [p]resent [p]osture [o]f [t]his [a]ction" by holding both NCDENR and the Health Department liable for his injuries. NCDENR filed a reply opposing plaintiff's Rule 60(a) motion and arguing that the Commission lacked subject matter jurisdiction over the Health Department.

After considering plaintiff's motion and the mandate of this Court, the Commission entered its revised Decision and Order on 2 0 July 2009. In this order, the Commission corrected the computational error in its previous Finding of Fact 21 and awarded compensatory damages of $96,044.30 to remedy the injury caused bydefendant's breach of duty. The Commission, however, awarded no damages for the increased cost of construction due to the delay caused by defendant's negligence. In accordance with the decision of this Court, the Commission declined to award damages for future interest rate costs and declined to award attorneys' fees. The Commission further concluded that it had no subject matter jurisdiction over the Health Department and dismissed the Health Department as a party. As a result, the Commission's final order held NCDENR solely liable to plaintiff for $96,044.30 in compensatory damages and $13,034 in litigation costs. Plaintiff appeals.

Plaintiff argues that the Commission erred in amending its 3 October 2005 Decision and Order by concluding, in its Decision and Order on remand, that it did not have subject matter jurisdiction over the Health Department. Specifically, plaintiff suggests that the law of the case doctrine precluded the Commission from making this change.

In discussing the law of the case doctrine, our Supreme Court has stated that

[a]s a general rule, when an appellate court passes on questions and remands the case for further proceedings to the trial court, the questions therein actually presented and necessarily involved in determining the case, and the decision on those questions become the law of the case, both in subsequent proceedings in the trial court and on a subsequent appeal, provided the same facts and the same questions, which were determined in the previous appeal, are involved in the second appeal.

Tennessee-Carolina Transp., Inc. v. Strick Corp., 286 N.C. 235, 239, 210 S.E.2d 181, 183 (1974) (internal quotation marks omitted), appeal after remand, 289 N.C. 587, 223 S.E.2d 346 (1976), opinion withdrawn on reh'g, 291 N.C. 618, 231 S.E.2d 597 (1977). Recently, in Boje v. D.W.I.T., L.L.C., 195 N.C. App. 118, 670 S.E.2d 910 (2009), this Court stated that the law of the case doctrine additionally "provides that when a party fails to appeal from a tribunal's decision that is not interlocutory, the decision below becomes 'the law of the case' and cannot be challenged in subsequent proceedings in the same case." 118 N.C. App. at 122, 670 S.E.2d at 912. Thus, in Boje, this Court held that "since [the defendant] did not appeal Deputy Commissioner Berger's 2003 opinion and award finding that it did not have workers' compensation insurance coverage on the date of plaintiff's accident," this finding was the law of the case and the defendant "was barred from relitigating that issue in subsequent proceedings." Id.

However, "[t]he doctrine of the law of the case is not an inexorable command, or a constitutional requirement, but is, rather, a flexible discretionary policy which promotes the finality and efficiency of the judicial process." Goetz v. N.C. Dep't of Health & Hum. Servs., _ N.C. App. _, _, 6 92 S.E.2d 3 95, 4 03 (2010) (internal quotation marks omitted)....