Whiteco Industries, Inc. v. Harrelson

• Decision Date: 07 September 1993
• Docket Number: No. 9210SC486,9210SC486
• Citation: 434 S.E.2d 229,111 N.C.App. 815
• Parties: WHITECO INDUSTRIES, INC. t/a Whiteco Metrocom v. Thomas J. HARRELSON, as Secretary of Transportation of the State of North Carolina.
• Court: North Carolina Court of Appeals

Page 229

434 S.E.2d 229

111 N.C.App. 815

WHITECO INDUSTRIES, INC. t/a Whiteco Metrocom v. Thomas J. HARRELSON, as Secretary of Transportation of the

State of North Carolina.

No. 9210SC486.

Court of Appeals of North Carolina.

Sept. 7, 1993.

Wilson & Waller, P.A., by Betty S. Waller and Brian E. Upchurch, Raleigh, for petitioner-appellee.

Atty. Gen., Lacy H. Thornburg, by Asst. Atty. Gen., Elizabeth N. Strickland, Raleigh, for respondent-appellant.

McCRODDEN, Judge.

This is an appeal from the trial court's order granting attorney's fees to petitioner pursuant to N.C.Gen.Stat. § 6-19.1 (1986). The North Carolina Department of Transportation (DOT) presents for review four arguments representing nine assignments of error. We necessarily address the jurisdictional issue, but because of our analysis of the question of substantial justification, we need not reach DOT's additional arguments.

The facts of the case are as follows. Prior to 20 April 1990, DOT issued an outdoor advertising permit to petitioner Whiteco Industries, Inc. t/a Whiteco Metrocom for its outdoor advertising billboard. On 20 April 1990, a DOT official, District Engineer B. B. Isom (Isom), observed three men cutting limbs and trees on the highway right of way in front of the billboard owned by petitioner. Upon questioning the men, Isom learned that they were with Byrd's Lawn & Landscaping, and were hired by Jagdish G. Patel (Patel), owner of the Comfort Inn in Dunn, North Carolina. At the time of Isom's observation, the advertisement on the billboard featured the Dunn Comfort Inn.

On 21 April 1990, Sherwood Brock, DOT Engineering Technician, investigated the cutting and determined that ten trees had been cut from the highway right of way in front of petitioner's billboard, in violation of N.C.Admin.Code tit. 19A, r. 2E.0210(8) (December 1990). On the basis of the unlawful cutting of the trees, Isom revoked petitioner's outdoor advertising permit on 2 May 1990. DOT upheld the revocation on 22 September 1990.

On 26 September 1990, petitioner filed a petition for judicial review of DOT's final decision. On 6 May 1991, petitioner served DOT with affidavits of Patel and Robert Sykes, petitioner's Vice President and General Manager, and with a motion for summary judgment. On 7 June 1991, DOT reinstated the permit and requested that petitioner cancel the hearing on the motion for summary judgment scheduled for 10 June 1991, since the permit had been reinstated. At the hearing on 10 June 1991, the trial court directed petitioner to prepare an order denying summary judgment because it was moot. The order was filed 25 June 1991.

On 10 June 1991, petitioner filed a motion for attorney's fees pursuant to N.C.G.S. § 6-19.1 and N.C.Gen.Stat. § 1A-1, Rule 11 (1990). At the 2 July 1991 hearing, the trial judge made no ruling in open court, but suggested that the parties schedule a hearing in January 1992, when he returned to Wake County so that, if the fee request were granted, a hearing could be held on the reasonableness of the attorney's fees. On 30 October 1991, the trial judge made a notation to the courtroom clerk to place an entry in the court file finding that, pursuant to N.C.G.S. § 6-19.1, petitioner was entitled to costs and attorney's fees in the amount of $8,167.11.

On 10 January 1992, the trial judge heard arguments on the substantial justification of DOT's position in the underlying litigation and the reasonableness of attorney's fees requested by petitioner. On 21 January 1992, the trial judge entered an order granting petitioner's motion for attorney's fees and awarding fees in the amount of $9,822.43 and costs in the amount of $1,022.40.

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The first argument we consider is DOT's contention that the trial court did not have jurisdiction to rule on petitioner's motion for attorney's fees pursuant to N.C.G.S. § 6-19.1. DOT contends, inter alia, that petitioner filed its motion for attorney's fees prematurely because there was no final disposition of the case at the time the motion was filed and, therefore, the trial court did not have jurisdiction to award attorney's fees. We disagree.

The attorney's fee provision of N.C.G.S. § 6-19.1 provides that "[t]he party shall petition for the attorney's fees within 30 days following final disposition of the case." Black's Law Dictionary 630 (6th ed. 1990) defines "final disposition" as "[s]uch a conclusive determination of the subject-matter that after the award, judgment, or decision is made, nothing further remains to fix the rights and obligations of the parties, and no further controversy or litigation can arise thereon." The 30-day filing period contained in the statute is a jurisdictional prerequisite to the award of attorney's fees, cf., J.M.T. Mach. Co., Inc. v. United States, 826 F.2d 1042, 1047 (Fed.Cir.1987) (interpreting the Equal Access to Justice Act (EAJA), which provides for the recovery of attorney's fees against the U.S. government), and it begins to run after the decision has become final and it is too late to appeal. Cf., Taylor v. United States, 749 F.2d 171 (3rd Cir.1984) (interpreting the EAJA). We reject as too narrow DOT's argument that the 30-day period establishes a starting point as well as a deadline, cf., McDonald v. Schweiker, 726 F.2d 311 (7th Cir.1983) (interpreting the EAJA), and hence we find that petitioner's motion for attorney's fees, filed well before final judgment, was timely. The trial court, consequently, had jurisdiction to hear the matter.

(We would note, however, that judicial economy favors the hearing of petitioner's motion for attorney's fees only after the judgment has become final, thereby avoiding piecemeal litigation of the issue. In this particular case, but for our analysis of the issue of substantial justification, this would have presented problems since the trial court heard the motion prior to final judgment.)

DOT's second contention is that the trial court erred in awarding attorney's fees because DOT was substantially justified in revoking petitioner's outdoor advertising permit. N.C.G.S. § 6-19.1 grants a trial court the power to require the State to pay attorney's fees under certain conditions:

In any civil action, other than an adjudication for the purpose of establishing or fixing a rate, or a disciplinary action by a licensing board, brought by the State or brought by a party who is contesting State action pursuant to G.S. 150A-43 or any other appropriate provisions of law, unless the prevailing party is the State, the court may, in its discretion, allow the prevailing party to recover reasonable attorney's fees to be taxed as court costs against the appropriate agency if:

(1) The court finds that the agency acted without substantial justification in pressing its claim against the party; and

(2) The court finds that there are no special circumstances that would make the award of attorney's fees unjust.

In order to award reasonable attorney's fees under this statute, the trial judge had to determine first that the petitioner was the "prevailing party". DOT does not argue that the trial court erred in finding that petitioner was the prevailing party since petitioner's petition demanded reinstatement of its outdoor advertising permit and DOT ultimately reinstated it.

Additionally, the trial court had to determine that DOT acted without substantial justification in pressing its claim against petitioner and revoking petitioner's outdoor advertising permit. In reviewing DOT's argument on this issue, our first task is to determine the standard of review of the trial court's decision that DOT lacked substantial justification. Petitioner argues that the standard is abuse of discretion, i.e., that the trial court's ruling is discretionary and that this Court cannot alter that ruling unless there is an abuse of discretion. We disagree. In Tay v. Flaherty, 100 N.C.App. 51, 55, 394 S.E.2d 217, 219, disc. review denied, 327 N.C. 643, 399 S.E.2d 132 (1990), this Court treated substantial justification as a conclusion of law, reviewable on appeal. Indeed, the language of the statute is clear that the court's determination of whether there is substantial justification is not discretionary, but mandatory. We follow Tay in treating substantial justification as a conclusion of law and hence review the court's determination.

This Court has relied on the case of Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988), to define substantial justification as justification "to a degree that could...