Rocky Mount Weh LP v. Langston

Full title: ROCKY MOUNT WEH LP, Plaintiff, v. ELMER DOUGLAS LANGSTON; ELIZABETH LUCAS…

Court: COURT OF APPEALS OF NORTH CAROLINA

Date published: May 3, 2016

No. COA15-988 (N.C. Ct. App. May. 3, 2016)

Opinion

No. COA15-988

05-03-2016

ROCKY MOUNT WEH LP, Plaintiff, v. ELMER DOUGLAS LANGSTON; ELIZABETH LUCAS LANGSTON; ALBERT E. BRICE; APRIL L. BRICE; and FIRST SOUTH BANK, Defendants.

Hannah Sheridan Loughridge & Cochran, LLP, by Paul A. Sheridan and Chad J. Cochran, for Plaintiff. Horack, Talley, Pharr & Lowndes, P.A., by Zipporah Basile Edwards, for Defendants Elmer Douglas and Elizabeth Lucas Langston, and Pendergrass Law Firm, PLLC, by James K. Pendergrass, Jr., for the Langstons and Defendants Albert E. and April L. Brice.

STEPHENS, Judge.

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. Nash County, No. 13 CVS 714 Appeal by Defendants and cross-appeal by Plaintiff from order entered 4 March 2015 by Judge Alma L. Hinton in Nash County Superior Court. Heard in the Court of Appeals 23 February 2016. Hannah Sheridan Loughridge & Cochran, LLP, by Paul A. Sheridan and Chad J. Cochran, for Plaintiff. Horack, Talley, Pharr & Lowndes, P.A., by Zipporah Basile Edwards, for Defendants Elmer Douglas and Elizabeth Lucas Langston, and Pendergrass Law Firm, PLLC, by James K. Pendergrass, Jr., for the Langstons and Defendants Albert E. and April L. Brice. STEPHENS, Judge.

In this appeal, we consider whether a superior court had original subject matter jurisdiction over neighboring property owners' claims and counterclaims in tort and seeking various declarations regarding restrictive covenants and rights to use of their real property. Because we conclude that the trial court here did have subject matter jurisdiction over all of the parties' claims and counterclaims, we reverse the court's dismissal of the matter and remand for further proceedings.

Factual and Procedural Background

In the early 2000s, Ford's Colony at Rocky Mount, LLC ("the LLC") began acquiring land surrounding a lake for the development of a golf course and subdivision that would eventually be known as Ford's Colony at Rocky Mount ("the development").¹ The LLC recorded plats for various parts of the development in the Nash County Public Registry, including, on 13 March 2006, a plat entitled "Final Plat, Model Home Lots, Lots 1, 2 & 3 Ford's Colony at Rocky Mount" recorded in Book 33, Pages 351-353 ("the plat"). After the plat was recorded, the LLC constructed model homes on each of the three lots with construction completed in early 2007.

1 Part of the land acquired for the development was apparently part of an existing subdivision known as Belmont Farms.

As a result of, inter alia, the national housing crisis, the development experienced significant financial difficulties and the subdivision was not completed. In 2010, lot 1 was conveyed by a deed in lieu² to Defendant First South Bank, while lots 2 and 3 were foreclosed on by a different bank. Lot 2 was conveyed to Defendants Albert E. and April L. Brice by deed recorded on 25 January 2012. Lot 3 was conveyed to Defendants Elmer Douglas and Elizabeth Lucas Langston³ by deed recorded on 19 February 2013.

2 Also known as a deed in lieu of foreclosure, a borrower uses this instrument to "convey[] in fee-simple title to a lender in satisfaction of a mortgage debt and as a substitute for foreclosure." Deed in lieu of foreclosure, Black's Law Dictionary (8th ed. 2004).

3 The hearing transcript indicates that April L. Brice is the Langstons' daughter.

Plaintiff Rocky Mount WEH LP ("RMW") is a North Carolina limited partnership and developer based in Maryland. By quitclaim deed recorded on 17 December 2012, RMW acquired title to a portion of land in the development adjacent to lots 1, 2, and 3. RMW planned to use that property, along with additional property it acquired in the area, to complete the development as a luxury subdivision to be called Belmont Lake Preserve. On 23 May 2013, RMW filed a complaint for declaratory judgment and injunctive relief against Defendants, alleging that the model homes now owned by Defendants "were never intended to be used as . . . residence[s], they were crammed onto small pieces of land[,] . . . lack amenities which are necessary for use as" residences, and thus do not comply with applicable local ordinances or the development's restrictive covenants. Specifically, RMW alleged that Defendants' use of the lots "as personal dwellings violates local ordinances concerning the required amount of parking" and restrictive covenants regarding, inter alia, set-backs, fences, "for sale" signs, parking, and accessory structures such as storage buildings. RMW also alleged:

68. [The] Brice[s] constructed a driveway across [RMW's] land and connected it to [RMW's] private roadway without valid permission.

69. First South Bank utilizes a handicap wood ramp and concrete sidewalks to access Lot 1. A portion of the wood ramps and sidewalks unlawfully sit [sic] on [RMW's] real property.

70. Upon information and belief, [the] Langston[s] have inserted and maintain unauthorized landscaping next to Lot 3 on [RMW's] property.

71. Upon information and belief, all Defendants utilize utility connections to their properties which cross [RMW's] real property without permission or authorization.

. . . .

73. Defendants repeatedly utilize [RMW's] private roadways to access Lots 1, 2, and 3.

Based upon those allegations, RMW asserted claims for declaratory relief regarding, inter alia:

a. Restrictive covenant violations which exist on Lot 1, Lot 2, and Lot 3;

b. The extent to which Defendants' vehicular access practices violate [RMW's] property rights;

c. The extent to which Defendants' utility connections violate [RMW's] property rights;

d. The extent to which Defendants' personal property practices (e.g., parking, basketball goal placement, etc.) violate [RMW's] property rights; and

e. The extent to which Lot 1, Lot 2, and Lot 3 improvements (e.g., Lot 2 driveway, access ramp, landscaping, etc.) intrude onto [RMW's] property and/or violate [RMW's] property rights.

RMW also sought (1) an order enjoining Defendants from using Lots 1, 2, and 3 as personal residences until all restrictive covenant violations are removed, requiring Defendants to cease acts and uses that violate RMW's property rights, and decreeing that Defendants' have no easements over RMW's real property; (2) compensation for damages; and (3) attorney fees and court costs.

On 5 August 2013, the Brices filed a motion to dismiss for failure to join a necessary party, an answer, and affirmative defenses, as well as a counterclaim for implied easement by necessity. On 7 August 2013, First South Bank and the Langstons filed a joint motion to dismiss for failure to join a necessary party, an answer, and affirmative defenses, as well as counterclaims for declaratory judgment, implied easement by necessity, and easements implied by map. RMW answered Defendants' counterclaims on 26 September 2013. On 22 January 2015, Defendants filed a joint motion for summary judgment, asserting that there were no genuine issues of material fact regarding either RMW's claims or Defendants' counterclaims and that Defendants were entitled to dismissal of all of RMW's claims and granting of its own counterclaims.

The motion was heard on 2 February 2015 in Nash County Superior Court, the Honorable Alma L. Hinton, Judge presiding. At the hearing, Defendants' counsel characterized RMW's arguments as based on three contentions:

They're also contending that . . . Defendants are not allowed to utilize the utility easements that are reflected

on this map. That's their first contention. The second contention is that these properties, these three lots are subject to and in violation of certain restrictive covenants of record. And the third contention is that these lots are subject [to] and are in violation of certain local Rocky Mount ordinances.

However, as Defendants' counsel went on to note:

Until about two weeks ago, we didn't even know what ordinances they were referring to. . . . Nonetheless, . . . the bottom-line is this [c]ourt does not have subject matter jurisdiction over [RMW's] claim for alleged violations of the zoning ordinances. We've cited several cases in our brief and again, the law is not fuzzy. What they clearly say is before an individual can bring a lawsuit in civil court to complain about alleged zoning violations, the Plaintiff first has to exhaust its administrative remedies, which makes sense. . . . Until that has happened, this [c]ourt does not have subject matter jurisdiction. And there is no evidence that [RMW has] done really anything let alon[e] exhaust [its] administrative remedies. So, quite simply, the [c]ourt does not have subject matter jurisdiction. Any claims about the alleged violations of ordinances must be dismissed as a matter of law and those claims can be found in their fourth claim for relief [for private nuisance].

(Emphasis added). Defendants' counsel cited this Court's holding in Sanford v. Williams,⁴ 221 N.C. App. 107, 727 S.E.2d 362, disc. review denied, 366 N.C. 246, 731 S.E.2d 144 (2012), for the proposition that, a party seeking to overturn a zoning ruling must appeal the decision to the board of adjustment, rather than bringing an initial claim in the superior court. RMW's counsel countered by arguing that there are no administrative remedies for the claims and counterclaims between these parties. RMW's counsel also noted that the City of Rocky Mount had not "been asked to make a ruling one way or the other" regarding any alleged zoning violations, distinguishing the issue of subject matter jurisdiction in RMW's case from that where a local government has made a ruling on an alleged zoning violation.

4 The facts and holding of Sanford are reviewed in detail in the discussion section of this opinion.

On 4 March 2015, the court entered an "ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT" ("the trial court order") that states:

After considering the pleadings, Responses to Interrogatories, deposition transcripts, documents of record in the Nash County Public Registry, Affidavits filed on behalf of Defendants and [RMW], and arguments of counsel, it appears to the [c]ourt that administrative remedies through the City of Rocky Mount Board of Adjustment should have been exhausted prior [to] seeking remedies with the Civil Superior Court. Accordingly, the [c]ourt lacks subject matter jurisdiction without a ruling from that board.

IT IS THEREFORE, ORDERED, ADJUDGED AND DECREED Defendants' motion for summary judgment is granted as the court lacks subject matter jurisdiction to rule upon the relief sought.

Defendants gave joint notice of appeal on 26 March 2015, and RMW gave notice of cross-appeal on 6 April 2015. On 29 September 2015, RMW and First South Bank filed with this Court a joint motion to withdraw their appeals as to claims and counterclaims against each other. On 1 October 2015, this Court allowed the motion and dismissed First South Bank's appeal and RMW's cross-appeal as to First South Bank.

Discussion

On appeal, the Brices and Langstons ("the remaining Defendants") bring forward six arguments, and RMW brings forward three arguments in its cross-appeal. However, we address only one issue—whether the trial court had subject matter jurisdiction over the claims and counterclaims of the parties. Both RMW and the remaining Defendants contend that the trial court erred in dismissing all claims and counterclaims for lack of subject matter jurisdiction. We agree. I. Standard of review

"Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation and internal quotation marks omitted; italics added). However, despite the caption of the trial court order and the statement therein that "Defendants' motion for summary judgment is granted[,]" the order explicitly states that "the court lacks subject matter jurisdiction to rule upon the relief sought." It is "[a] universal principle . . . that the proceedings of a court without jurisdiction of the subject matter are a nullity. Subject matter jurisdiction is the indispensable foundation upon which valid judicial decisions rest, and in its absence a court has no power to act . . . ." In re T.R.P., 360 N.C. 588, 590, 636 S.E.2d 787, 790 (2006) (citations and internal quotation marks omitted). Thus, having determined that it "lack[ed] subject matter jurisdiction to rule upon the relief sought[,]" the trial court could not have granted summary judgment and should instead have dismissed the case. Thus, we consider this matter not as an appeal and cross-appeal from an order denying summary judgment, but rather as arising from a trial court's order dismissing the case for lack of subject matter jurisdiction. "Whether a trial court has subject[]matter jurisdiction is a question of law," and, accordingly, we review that question de novo. McKoy v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d 590, 592 (2010) (citation omitted). II. Subject matter jurisdiction

Both the remaining Defendants and RMW argue that the trial court erred in holding that it lacked subject matter jurisdiction over all of the claims and counterclaims before it, to wit, (1) RMW's tort claims, (2) RMW's and the Langstons' requests for various declarations regarding their rights to use of their real property, and (3) the parties' claims and counterclaims regarding enforcement of restrictive covenants, quiet title, and access and utility easements. We agree.

Our General Statutes provide that,

[e]xcept for the original jurisdiction in respect of claims against the State which is vested in the Supreme Court, original general jurisdiction of all justiciable matters of a civil nature cognizable in the General Court of Justice is

vested in the aggregate in the superior court division and the district court division as the trial divisions of the General Court of Justice. . . .

N.C. Gen. Stat. § 7A-240 (2015). Further, at the time the complaint was filed, "the superior court division [was] the proper division for the trial of all civil actions in which the amount in controversy exceeds ten thousand dollars ($10,000)." N.C. Gen. Stat. § 7A-243 (2011).⁵

5 N.C. Session Laws 2013-159, s. 2, effective 1 August 2013 and applying to complaints filed on or after that date, substituted "twenty-five thousand dollars ($25,000)" for "ten thousand dollars ($10,000)" in this portion of section 7A-243. RMW's complaint was filed on 23 May 2013, and thus the amendment does not apply in this matter. RMW's complaint alleges damages in excess of $10,000.

However,

where the legislature has provided by statute an effective administrative remedy, that remedy is exclusive and its relief must be exhausted before recourse may be had to the courts. If a plaintiff has failed to exhaust its administrative remedies, the court lacks subject matter jurisdiction and the action must be dismissed.

Sanford, 221 N.C. App. at 116-17, 727 S.E.2d at 368 (citations and internal quotation marks omitted; emphasis added). As this Court noted in Sanford, a

board of adjustment is an administrative body with quasi-judicial power whose function is to review and decide appeals which arise from the decisions, orders, requirements or determinations of administrative officials, such as building inspectors and zoning administrators. North Carolina General Statutes § 160A-388(b) confers on the board of adjustment appellate jurisdiction to review the acts of those charged with enforcing the zoning ordinance. Specifically, N.C. Gen. Stat. § 160A-388(b) . . . provides that the board of adjustment shall hear and decide appeals from and review any order, requirement, decision, or

determination made by an administrative official charged with the enforcement of that ordinance. Once the municipal official has acted, for example by granting or refusing a permit, any person aggrieved may appeal to the board of adjustment.

Id. at 117, 727 S.E.2d at 369 (citations, internal quotation marks, and brackets omitted).

Here, although the trial court order refers to "administrative remedies through the City of Rocky Mount Board of Adjustment [that] should have been exhausted" before RMW filed its complaint in Nash County Superior Court, none of the claims or counterclaims in this matter are in any way governed by the authority of the Board of Adjustment. Indeed, it is undisputed that our General Statutes do not provide any administrative remedies for the claims and counterclaims brought by RMW and Defendants.⁶ Thus, the trial court had jurisdiction over those matters and erred in holding otherwise. Accordingly, we reverse the trial court's dismissal and remand this case for consideration of Defendants' motion for summary judgment.

6 At the summary judgment hearing, Defendants argued that the trial court lacked subject matter jurisdiction over RMW's private nuisance claim because that claim was actually an attempt to enforce local zoning ordinances. "To recover in nuisance, [a] plaintiff[] must show an unreasonable interference with the use and enjoyment of [its] property." Whiteside Estates, Inc. v. Highlands Cove, LLC, 146 N.C. App. 449, 455, 553 S.E.2d 431, 436 (2001) (citation and internal quotation marks omitted), disc. review denied, 356 N.C. 315, 571 S.E.2d 219-20 (2002).

The mere violation of a municipal ordinance does not constitute a nuisance, but if the actual thing is a nuisance or in the nature thereof and it is done or maintained in violation of a municipal ordinance, it may constitute such nuisance as against which relief may be obtained by one who suffers special and peculiar injury of an irreparable nature therefrom.

Jones v. Queen City Speedways, Inc., 276 N.C. 231, 240, 172 S.E.2d 42, 48 (1970) (citation omitted). Thus, a claim for private nuisance against a landowner is not the same as an attempt to enforce a zoning ordinance, and, accordingly, a plaintiff need not exhaust any administrative remedies related to any relevant ordinance before bringing a private nuisance action in the superior court. For example, in Jones, this Court considered the plaintiffs' claim for private nuisance in the form of noise created by a local speedway and noted that the evidence "clearly show[ed] a violation [of the local noise ordinance]." Id. This Court expressed no concern about subject matter jurisdiction in holding that the "plaintiffs were entitled to a judgment restraining its operation in the manner which caused the nuisance." Id. at 243, 172 S.E.2d at 50. Likewise, as Defendants acknowledge on appeal, RMW was not required to exhaust any administrative remedies related to the alleged zoning violations by Defendants before bringing a private nuisance claim in Nash County Superior Court.

REVERSED AND REMANDED.

Judges BRYANT and McCULLOUGH concur.

Report per Rule 30(e).