Opinion
No. COA11–1302.
2012-10-2
STATE Of North Carolina Ex rel. N.C. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, Plaintiff, v. David PHARR, Michelle Pharr and Michael Fearing, Defendants.
Attorney General Roy Cooper, by Assistant Attorney General Scott A. Conklin and Assistant Attorney General Christine Anne Goebel, for plaintiff-appellant. Davis Hartman Wright, PLLC, by I. Clark Wright, Jr., for defendants-appellees.
Appeal by plaintiff from judgment entered 17 September 2010 by Judge Richard L. Doughton in Hyde County Superior Court. Heard in the Court of Appeals 20 March 2012. Attorney General Roy Cooper, by Assistant Attorney General Scott A. Conklin and Assistant Attorney General Christine Anne Goebel, for plaintiff-appellant. Davis Hartman Wright, PLLC, by I. Clark Wright, Jr., for defendants-appellees.
GEER, Judge.
Plaintiff North Carolina Department of Environment and Natural Resources (“DENR”) appeals from a judgment following a bench trial concluding that DENR had not established the presence of marshlands or coastal wetlands on two of defendants' lots and, therefore, that defendants' activities were not in violation of the Coastal Area Management Act (“CAMA”), N.C. Gen.Stat. § 113A–100 (2011)et seq. According to the trial court, DENR did not, therefore, have authority to bar defendants from engaging in fill activities on their lots. Based on our review of the record, we hold that the trial court's conclusions of law were supported by its findings of fact which were, in turn, supported by competent evidence.
DENR, however, argues on appeal that the trial court improperly considered the Army Corps of Engineers' issuance of a nationwide permit under Section 404 of the Clean Water Act, 33 U.S.C. § 1344 (2006), that allowed the fill activities. DENR points out that the North Carolina definition of wetlands is different than the definition under the Clean Water Act and that the permit tipped the balance for the trial court in favor of defendants. We disagree and hold that any consideration of the nationwide permit by the trial court was harmless.
Facts
CAMA was adopted by the General Assembly in 1974, 1974 N.C. Sess. Laws ch. 1284, § 1, and includes the following goals:
(1) To provide a management system capable of preserving and managing the natural ecological conditions of the estuarine system, the barrier dune system, and the beaches, so as to safeguard and perpetuate their natural productivity and their biological, economic and esthetic values;
(2) To insure that the development or preservation of the land and water resources of the coastal area proceeds in a manner consistent with the capability of the land and water for development, use, or preservation based on ecological conditions....
N.C. Gen.Stat. § 113A–102(b) (2011).
To implement these goals, DENR has promulgated rules that state:
One of the basic purposes of North Carolina's Coastal Area Management Act (CAMA or the act) is to establish a state management plan that is capable of rational and coordinated management of coastal resources. The act recognizes that the key to more effective protection and use of the land and water resources of the coast is the development of a coordinated approach to resource management. The Coastal Area Management Act provides two principal mechanisms to accomplish this purpose. First, the formulation of local land use plans articulating the objectives of local citizens and translating these objectives into future desired land use patterns; and second, the designation of areas of environmental concern for the protection of areas of statewide concern within the coastal area.
N.C. Admin. Code tit. 15A, r. 7H.0101(a) (June 2012) (emphasis
This case involves the designation of Areas of Environmental Concern (“AECs”). In order to control inappropriate or damaging development activities within AECs, North Carolina requires every person undertaking any development within an AEC to first obtain a permit. N.C. Gen.Stat. § 113A118 (2011); N.C. Admin. Code tit. 15A, r. 7H.0102 (June 2012).
Coastal wetlands and contiguous areas necessary to protect those wetlands may be designated as an AEC. N.C. Admin. Code tit. 15A, r. 7H.0102. CAMA specifies, N.C. Gen.Stat. § 113A–113(b)(1), that “[c]oastal wetlands” are “as defined in G.S. 113–229(n)(3).” N.C. Gen.Stat. § 113–229(n)(3) (2011), part of the Dredge and Fill Law, in turn provides: “ ‘Marshland’ means any salt marsh or other marsh subject to regular or occasional flooding by tides, including wind tides (whether or not the tidewaters reach the marshland areas through natural or artificial watercourses), provided this shall not include hurricane or tropical storm tides. Salt marshland or other marsh shall be those areas upon which grow some, but not necessarily all, of the following salt marsh and marsh plant species: [listing 10 plant species].”
In the regulations for the AECs, “[c]oastal wetlands” are defined as “any salt marsh or other marsh subject to regular or occasional flooding by tides, including wind tides (whether or not the tide waters reach the marshland areas through natural or artificial watercourses), provided this does not include hurricane or tropical storm tides.” N.C. Admin. Code tit. 15A, r. 7H.0205 (June 2012). The definition then also includes the same list of 10 marsh plant species found in the statutory definition of marshland. Id.
The federal government, for purposes of Section 404 of the Clean Water Act, defines wetlands differently. The pertinent regulation, 33 C.F.R. § 328.3(b) (2011), defines wetlands generally as “those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.” On the other hand, “tidal wetlands” are wetlands that are inundated by tidal waters, which are defined as “those waters that rise and fall in a predictable and measurable rhythm or cycle due to the gravitational pulls of the moon and sun. Tidal waters end where the rise and fall of the water surface can no longer be practically measured in a predictable rhythm due to masking by hydrologic, wind, or other effects.” 33 C.F.R. § 328.3(f).
The distinction between federal “tidal wetlands” and North Carolina's “coastal wetlands” or “marshlands” is that the Clean Water Act looks only at lunar tides. CAMA and the Dredge and Fill Law, however, also include tidal flooding due to wind tides.
Regulations implementing Section 404 of the Clean Water Act prohibit any fill from being placed on wetland sites without a permit. Permits can either be for a specific site or authorized under a general permit approved on a state, regional, or nationwide basis. 33 U.S.C. § 1344. These general permits may be issued “for any category of activities involving discharges of dredged or fill material if the Secretary determines that the activities in such category are similar in nature, will cause only minimal adverse environmental effects when performed separately, and will have only minimal cumulative adverse effect on the environment.” 33 U.S.C. § 1344(e)(1). Nationwide permits (“NWPs”) authorize activities “that have minimal individual and cumulative adverse effects on the aquatic environment.” 72 Fed.Reg. 11092 (Mar. 12, 2007).
In this case, defendants owned five lots identified as Lots 6 through 10, Block D, in the Jackson Dunes subdivision on Ocracoke Island. The lots involved in this case are Lots 6 and 7, both initially undeveloped. On 5 December 2002, the North Carolina Division of Coastal Management (“DCM”), “the agency to which [the Coastal Resources Commission] has delegated its permitting authority,” Pamlico Tar River Found., Inc. v. Coastal Res. Comm'n of the State of N.C., 103 N.C.App. 24, 25, 404 S.E.2d 167, 169 (1991), wrote Mr. Pharr to warn that it had observed intensive mowing and burning activities on the five lots despite the presence of “Coastal Wetlands/Marsh” vegetation on those lots. Although Mr. and Mrs. Pharr had not begun to mow on Lots 9 and 10 until the Fall of 2002, they had been mowing Lots 6, 7, and 8 continuously since the early 1990s without any objection by DCM.
On 19 May 2005, defendants had Lots 6 through 10 surveyed by the Army Corps of Engineers for wetlands jurisdiction purposes. On 1 June 2005, defendants received a notification of jurisdiction from the Corps, which stated that “[t]here are wetlands on the above described property subject to the permit requirements of Section 404 of the Clean Water Act (CWA) (33 USC § 1344).” Based on the survey, the Corps created a Section 404 wetlands delineation map showing the location of the wetlands on defendants' property.
On 23 June 2005, defendants applied for NWPs for both Lots 6 and 7. The Corps issued the requested NWP approvals on 29 July 2005. The NWP approvals authorized defendants to place fill material on portions of Lots 6 and 7.
On 28 June 2005, after defendants' application for the NWPs but before their issuance, Steve Trowell of DCM discussed Lots 6 and 7 with an employee of the Corps. During that meeting, Mr. Trowell informed the Corps that he would be conducting a site visit to defendants' lots on the next day and intended to assert coastal wetlands jurisdiction over all of the Section 404 wetlands delineated on the Corps' map.
On 29 June 2005, Mr. Trowell and a second DCM employee, Terry Moore, conducted their site visit. They verbally informed Mr. and Mrs. Pharr that they were asserting coastal wetlands jurisdiction over essentially all of the Section 404 wetland areas on the Pharrs' five lots. DCM never sent defendants any written communications or other agency documentation regarding the conclusions reached by Mr. Trowell and Mr. Moore during their site visit.
On 17 March 2006, Mr. and Mrs. Pharr visited the DCM office of Mr. Trowell pursuant to a public records request. During that visit, no one provided the Pharrs with any written evidence of the existence of a coastal wetlands/marshlands delineation on the Pharrs' lots. Mr. Trowell only showed the Pharrs an unsigned map that Mr. Trowell identified as the map he received from the Corps with Mr. Moore's handwritten notes made at an unknown time. The map did not contain any words indicating that it was a coastal wetlands delineation. As the trial court found, other than that map, “no document has ever been provided to [t]he Pharr Defendants purporting to document or contain a map showing a coastal wetlands or marshlands delineation for [t] he Pharr Lots.”
Two and a half years after the first site visit, DCM Director Jim Gregson conducted another visit to Lots 6 and 7 on 6 December 2007. He notified the Pharrs that he would not change the DCM's decision regarding the existence of coastal wetlands. On 8 February 2008, Mr. and Mrs. Pharr nonetheless directed a contractor to place fill material on Lots 6 and 7.
A year later, on 16 January 2009, DENR filed a verified complaint and motion for preliminary injunction, asserting that defendants did not obtain the necessary State permits “before excavating or filling coastal wetlands.” The complaint alleged that DENR had advised Mr. Pharr of the permit requirements, issued a Notice of Violation (“NOV”) and Continuing Notice of Violation (“CNOV”), and asked for the fill material to be removed, but Mr. Pharr had refused.
On 27 March 2009, Mr. and Mrs. Pharr filed an answer, denying the material allegations of the complaint. Defendant Michael Fearing, Mrs. Pharr's brother, waived his right to contest the allegations by consent order filed 12 June 2009.
The case was tried in a bench trial. The trial court noted in its judgment entered on 17 September 2010 that DENR agreed that the Pharrs' placement of fill on Lots 6 and 7 was not subject to regulation by the State unless DENR established that the filled areas met CAMA's definition of “coastal wetlands” or the Dredge and Fill Law's definition of “marshlands” under N.C. Gen.Stat. § 113–229(n)(3). The trial court concluded that “[t]he ‘marshlands' and ‘coastal wetlands' definitions consist of a two-part test: (1) The presence of ‘some, but not necessarily all’ of the ten listed marsh species; and (2) regular or occasional flooding by tides other than those from certain excluded weather events.”
With respect to the first prong, the court found that defendants did not dispute that several of the 10 species listed in the “marshlands” and “coastal wetlands” definitions were present on Lots 6 and 7 prior to placement of the fill. The court further found “that at least three, and perhaps as many as five of the ten listed” marsh species were present immediately prior to the fill placement.
As for the second prong, the court found that the parties had stipulated that Lots 6 and 7 are not regularly flooded. The court, therefore, observed in its order that “the first issue before the Court is whether Plaintiff can carry its burden of proof and establish that Lots 6 and 7 are ‘occasionally flooded’ by tidal waters” sufficient to constitute “coastal wetlands” or “marshlands.”
With respect to DENR's evidence, the trial court noted that DENR presented seven witnesses, including three neighbors of the Pharrs who had taken photographs of water on defendants' lots and who expressed opposition to defendants' activities on their lots, three current DCM employees, and a surveyor employed by the N.C. Geodetic Survey. The court made findings challenging the credibility of the neighbors' testimony and pointing to the Assistant DCM Director's testimony that marshlands or coastal wetlands calls cannot be made on the basis of photographs showing water on a property.
With respect to the determination of Mr. Moore and Mr. Trowell on 29 June 2005, the court made various findings challenging the credibility of the two DCM employees, including findings regarding the men's behavior that suggested bias. The court found regarding their site visit on 29 June 2005 that significant amounts of rainfall had fallen on defendants' lots and that neither Mr. Trowell nor Mr. Moore had obtained or evaluated rainfall or wind data before their site visit. The court further found that DCM never set out the delineation of wetlands in writing.
The court noted that DENR had not tendered a witness qualified in the areas of weather analysis, tide analysis, rainfall analysis, runoff or drainage analysis, stormwater analysis, or hydrogeology. Plaintiff's sole expert witness was the Assistant DCM Director.
The trial court made a series of findings setting out the Assistant DCM Director's opinion regarding how storms or other extreme or unusual weather events should be treated when deciding whether tidal flooding had occurred. The court also found that DENR's expert had “testified that a number of the secondary indicators used by DCM field representatives to document tidal flooding can also be indicators of freshwater flooding.” The court then made findings showing that Mr. Trowell and other DCM employees had reached their opinions regarding defendants' lots by applying standards contrary to those of the Assistant DCM Director. The court also made numerous findings setting out reasons that other opinions of the Assistant DCM Director relied upon by DENR were not credible or were not entitled to much weight.
In contrast, the trial court found credible the testimony of defendants' four expert witnesses. The court found that those witnesses had testified that Lots 6 and 7 do not contain coastal wetlands or marshlands, that DENR had not documented occasional tidal flooding, and that Lots 6 and 7 received instead flooding from rainfall and drainage runoff. The court found that photographic evidence from 1992 through the present established the increased development around the Pharr lots, which because of the topography resulted in the Pharr lots receiving rainfall and drainage from surrounding areas. The court also found that the Hyde County Soils Survey classified the soil on Lots 6 and 7 as “ ‘Duckston Sand, rarely flooded,’ “ as defendants' expert witnesses had also concluded.
Based on the testimony, the trial court found that defendants' lots “are occasionally flooded by freshwater associated with heavy rainfall events and rainfall runoff into the lots from nearby developed areas.” The court further found that defendants' rainfall data was credible evidence that flooding observed by Mr. Trowell and identified by him as tidal flooding was the result of freshwater rainfall and not tidal flooding.
In its conclusions of law, the court concluded that DENR had shown that the first prong of the coastal wetlands and marshlands definitions—the existence of marsh species—was met. The court concluded, however, that “[f]reshwater flooding on [t]he Pharr Lots associated with rainfall and rainfall drainage into [t]he Pharr Lots from surrounding developed areas does not constitute tidal flooding within the meaning of the ‘marshlands' or ‘coastal wetlands' definitions.” The court then found that “issuance by the Corps of [the Nationwide Permits] provides additional information indicating that the wetlands contained on Lots 6 and 7 are freshwater, non-riparian in character, and are not ‘coastal wetlands' or ‘marshlands.’ “ The court then held that the State had not established the presence of “marshlands” or “coastal wetlands” on Lots 6 and 7. DENR timely appealed to this Court.
Discussion
Because DENR's claims were ultimately resolved by a bench trial, “[t]he standard of review on appeal ... is whether there is competent evidence to support the trial court's findings of fact and whether the findings support the conclusions of law and ensuing judgment.” Cartin v. Harrison, 151 N.C.App. 697, 699, 567 S.E .2d 174, 176 (2002) (internal quotation marks omitted).
The question for this Court is whether the trial court's conclusion that there were no “marshlands” or “coastal wetlands” on Lots 6 and 7 was supported by the trial court's findings of fact. We agree with the trial court that in order for property to be classified as a “marshland” or “coastal wetland,” two requirements must be met: (1) the presence of marsh species; and (2) regular or occasional tidal flooding. N.C. Admin. Code tit. 15A, r. 7H.0205. This appeal revolves around only the second element and whether DENR showed that the lots were subject to tidal flooding.
On that second element, because of the parties' stipulations, the sole issue before the trial court was whether the lots were “occasionally flooded” by tidal waters. Based on the defense experts' testimony, which the trial court specifically found credible, and other evidence corroborating that testimony, the trial court made findings of fact that any occasional flooding was due to rainfall and rainfall runoff and not tidal flooding. None of these findings of fact are challenged on appeal. They are, therefore, binding on appeal. See Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) (“Where no exception is taken to a finding of fact by the trial court, the finding is presumed to be supported by competent evidence and is binding on appeal.”). Those findings support the trial court's conclusion of law that plaintiff did not establish that the lots had “marshlands” or “coastal wetlands.”
DENR, however, points to the trial court's determination, “as a mixed question of fact and law, that issuance by the Corps of [the Nationwide Permits] provides additional information indicating that the wetlands contained on Lots 6 and 7 are freshwater, non-riparian in character, and are not ‘coastal wetlands' or ‘marshlands.’ “ DENR argues that “[i]t is apparent from the record that the trial court believed that the issuance of NWP Authorizations in this case was evidence that the Corps had determined that the Pharr Lots did not contain Coastal Wetlands, and that this erroneous belief factored prominently in the trial court's decision.” DENR further contends that “[t]his erroneous belief ... had the effect of providing the defense witnesses with the illusion of additional credibility, making it appear the Corps agreed with their conclusions that the Pharr lots did not contain Coastal Wetlands.”
All parties agree that the test under federal law for determining the existence of tidal waters differs from the test under North Carolina law. While the Corps considers only tidal flooding tied to the lunar cycles, DCM has jurisdiction if occasional flooding results from wind tides. We do not believe that the trial court disregarded this distinction.
The trial court's pertinent conclusions of law included the following:
12. The Court concludes as a mixed question of law and fact that the Section 404 wetlands delineated by the Corps were considered and classified by the Corps as freshwater, non-riparian wetlands.
....
14. Freshwater flooding on [t]he Pharr Lots associated with rainfall and rainfall drainage into [t]he Pharr Lots from surrounding developed areas does not constitute tidal flooding within the meaning of the “marshlands” or “coastal wetlands” definitions.
15. The July 29, 2005 issuance by the Corps of four NWP approvals specifically authorizing the Pharrs to fill the same portions of Lots 6 and 7 now complained of by Plaintiff does not directly preempt Plaintiff from asserting jurisdiction under CAMA or the Dredge and Fill Law. However, the Court does find, as a mixed question of fact and law, that issuance by the Corps of these permits provides additional information indicating that the wetlands contained on Lots 6 and 7 are freshwater, non-riparian in character, and are not “coastal wetlands” or “marshlands.”
(Emphasis added.)
The court's acknowledgement that the Corps' issuance of permits did not preclude exercise of jurisdiction by DENR constituted a recognition that the Corps' characterization of the wetlands was not dispositive of the issue before the court. We do not believe that the trial court intended to say, in its conclusion of law, that the Corps' delineation provided evidence that there was no tidal flooding within the meaning of the North Carolina definitions of “marshlands” and “coastal wetlands.” Instead, the conclusion simply says that the Corps' findings provided “additional information” that “the wetlands contained on Lots 6 and 7 are freshwater, non-riparian in character.” We read the court's conclusion as saying only that the Corps' characterization indicated that the water (the wetlands) on Lots 6 and 7—as opposed to the flooding—was freshwater from rainfall. SeeN.C. Admin. Code tit. 15A, r. 2R.0102(2) (June 2012) (“ ‘Non-riparian wetlands' means Class WL wetlands as defined in 15A NCAC 2B .0101(c)(8) whose major source of water is precipitation.”).
While the conclusion of law could have been drafted more precisely, we do not agree with DENR's contention that this conclusion indicated the trial court believed more generally that the Corps' determination was evidence that the lots were not coastal wetlands under the State definitions. Our review of the entire judgment reveals that the trial court not only recognized the distinction between the State and federal definitions, but that it made numerous, detailed findings of fact regarding the source of the flooding—whether it was the result of wind tides, as DENR contended, or rainfall and rainfall runoff from development, as defendants contended.
Although the trial court referenced the proceedings before the Corps and its ultimate determination, it made far more extensive findings regarding rainfall data, the sporadic nature of any flooding, the topography of the land, the soil classification, and, most importantly, the opinions of the Pharrs' expert witnesses based on their personal inspection of the property and review of “weather data (including rainfall, wind and tide data), regulatory documents related to the NWP process, the Hyde County Soil Survey, and many dozens of surface and aerial photographs spanning a two decade period of time.”
Moreover, we do not agree with DENR that any consideration of the Corps' determination tipped the scales for the trial court. It is immediately apparent when reading the trial court's findings of fact that it found DENR's evidence substantially inadequate and lacking in credibility. The court spent much of its judgment setting out numerous reasons that it found DCM's decision regarding the lots and the opinions of DCM's employees not credible or worthy of any weight. The court weighed defendants' extensive showing from expert witnesses, which it found corroborated by substantial other evidence, against the actions of the DCM employees, the evidence of bias, the contradictions regarding the standards applied by DCM, the lack of expert testimony, the inadequacies of the sole expert's review, and the inadequacies of the DCM site investigations. Given the court's findings, we cannot conclude that the trial court would have reached a different result in the absence of consideration of the Corps' determination as “additional information.”
DENR, in addition, however, argues that the trial court erred in making the following finding of fact:
31. Prior to issuance to the Pharrs by the Corps of the four NWP approvals authorizing the placement of fill material in Section 404 wetlands on Lots 6 and 7, the official Corps documents admitted into evidence, uncontradicted by any other testimony, indicate that Plaintiff received notice of the NWP process—including the classification of the wetland areas proposed to be filled as “freshwater, non-riparian.”
DENR also challenges the portion of finding of fact 35 stating that “the fill activities authorized under the NWPs 14 and 18 issued by the Corps specifically had been confirmed by Plaintiff as being consistent with Plaintiff's federal approved Coastal Management Program, including CAMA and the Dredge and Fill law, pursuant to relevant provisions of the Federal Coastal Zone Management Act....”
DENR argues that finding of fact 35 “directly impacted” the decision in favor of defendants and that finding of fact 31 “was prejudicial because it makes apparent the fact that the trial court believed that Plaintiff had notice of the NWP process through the EEP program, implying that Plaintiff had agreed with a ‘classification’ of the wetlands on the Pharr Lots other than Coastal Wetlands.” We disagree.
Reviewing those findings in context and in their entirety reveals that the trial court was, in those findings of fact, addressing DENR's argument that the Pharrs failed to follow the proper permitting process. It appears to us that the trial court was observing that DENR had notice and an opportunity to assume lead permitting status without the Pharrs seeking a permit from the State.
However, nothing in the trial court's ultimate findings of fact and conclusions of law suggests that the court relied upon these findings in determining that the flooding on Lots 6 and 7 was due to rainfall and rainfall runoff rather than wind tides—the dispositive—issue. Consequently, these findings were not material to the ultimate conclusion. We, therefore, affirm.
Affirmed. Judges McGEE and STEELMAN concur.
Report per Rule 30(e).