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The Curious Case of Fairway Outdoor Advertising

March 14, 2013

Last week, the North Carolina Court of Appeals filed its opinion in Fairway Outdoor Advertising v. Town of Cary, COA 12-518. The dispute can be traced back to an administrative decision by the Town, which Fairway appealed to the Town’s Board of Adjustment (the “BOA”). The BOA is a quasi-judicial body and serves as the finder of fact in these matters.

When a party elects to appeal a BOA decision, it is heard via certiorari by the Superior Court, which sits in an appellate capacity – an often unfamiliar role as it traditionally serves as the fact finder in the judicial system. As such, its review is limited. With respect to questions of law, its review is de novo, meaning it may largely disregard the conclusions made by the BOA and substitute its own judgment freely. However, with respect to questions of fact, review is conducted under the whole record test, which provides that the BOA’s findings will not be disturbed if they are supported by competent, material and substantial evidence in the record. Relatively recently, these standards were even codified by the General Assembly in N.C. Gen. Stat. § 160A-393(k).

In analyzing any quasi-judicial land use decision, the first step is always sorting out which issues fall under which standard (and occasionally there is some crossover, which only complicates the analysis further). In the Fairway opinion, the Court of Appeals (“COA”) appears to have omitted that crucial step.

Clue #1 is that the COA failed to recite the standard of review in appeals from a BOA decision, which is an almost ubiquitous transition between the factual narratives and legal analysis in land use cases. Clue #2 is the repeated references and citations to the factual findings of the Superior Court. Except in narrow circumstances not at issue here, it is error for the Superior Court to make its own findings of fact in these types of cert actions. The COA’s error ended up being two-fold: first, the Court misidentified the fact finder; and second, the Court should have been conducting its analysis as to the timeliness of Fairway’s BOA appeal de novo.

In fact, § 160A-393(k)(2) states in no uncertain terms that when “the issue before the court is whether the decision‑making board erred in interpreting an ordinance, the court shall review that issue de novo. The court shall consider the interpretation of the decision‑making board, but is not bound by that interpretation, and may freely substitute its judgment as appropriate.” Given that the opinion devotes a full-page at the start of its timeliness analysis to the rules of statutory construction and their application to zoning ordinances, there’s not a lot of wiggle room to explain the Court’s approach.

In the end, the COA may have reached the correct determination of the issues presented (although that is not at all clear from the opinion). Nonetheless, the perils and complexity of land use litigation are underscored when even the Court occasionally struggles with some of its nuances. Perhaps this oversight explains why Judge Hunter concurred in the result only.

COA Rules Developer Does Not Have Common Law Vested Rights and Voids Building Permit

May 17, 2011

In an opinion filed today, the NC Court of Appeals held that a developer had not made substantial expenditures in reliance on a validly issued permit and, therefore, could not have acquired a common law vested right to have a site plan approved under a previous ordinance. Wilson v. City of Mebane Board of Adjustment, COA10-971. Consequently, the COA ruled that the building permit granted to the developer to construct a Walgreens was void ab initio, meaning it’s as if the permit never existed.

I’ll refrain from providing too much commentary because I represent the Petitioner and litigation is still pending.  The Court’s analysis of communications between developers and the City’s planning department does serve as an important reminder that property owners must be careful not to make assumptions about what constitutes a valid approval of their project.

Vested Rights Versus Nonconformity

April 12, 2011

Generally speaking, the doctrine of vested rights addresses a property owner’s right to complete a project under one set of requirements without fear that those requirements will be altered to his or her detriment at the eleventh hour.

Once the project is complete and a use is operational, changes to applicable zoning regulations can render the use or structure noncompliant.  The result is a nonconforming use or structure.  The right to continue to operate that nonconformity is typically governed by the express language of the applicable local ordinance.  The NCCOA’s recent decision in APAC-Atlantic, Inc. v. City of Salisbury, COA10-591, analyzes this nonconformity issue.

Defining “Valid Government Approval”

April 8, 2011

In order to establish a common law vested right, a party must have made substantial expenditures in good faith reliance on a valid government approval and show that it would be harmed by a change in requirements.  What constitutes a “valid government approval” is an evolving area of the common law and can create some uncertainty for both local governments and developers/businesses.

Although it didn’t reach the CLVR issue raised by petitioner in S.T. Wooten Corporation v. Board of Adjustment of the Town of Zebulon, COA10-515, the NCCOA did contribute to a better understanding of the threshold for establishing a valid government approval.  Such approvals are easy to identify when they come in permit form, but when can a property owner (or a person/entity with a right to use a certain property) rely on communications with a zoning administrator?  The Court in Wooten provides an excellent discussion of criteria (e.g. final decision, binding force or effect, appealable) that I believe will be instructive for courts considering the valid government approval element of CLVR in the future.

Who Can Make Findings of Fact?

March 16, 2011

Disputed vested rights issues often follow the quasi-judicial path:  appeal to a board of adjustment and judicial review in the nature of certiorari.  In an unpublished decision, Edwards v. County of Bladen, COA10-1029, the NCCOA provides an overview on findings of fact in quasi-judicial proceedings. Among the key points covered:  (1) the quasi-judical body must identify the basic facts upon which it relied with enough specificity to show what induced its decision, (2) failure of a local board to make sufficient findings is not fatal if “the record sufficiently informs [the court] of the basis of decision of the material issues or if the facts are undisputed and different inferences are not permissible,” and (3) where findings of fact from the local board are wanting, the trial court cannot make its own findings, but rather its function is limited to determining “whether the findings of fact made by the Board are supported by the evidence before the Board and whether the Board made sufficient findings of fact.”

COA Decision Highlights Important Practice Reminder

March 2, 2011

The North Carolina Court of Appeals decision in CRLP Durham v. Durham City/County Board of Adjustment, COA10-120, underscores the importance of a carefully assembled record on appeal.  As is often the case in many zoning cases, including vested rights, two or more ordinances are at issue.  In CLRP Durham, the petitioners only included excerpts from one of the two ordinances that had been adopted by the City.  Noting that N.C. Courts will not take judicial notice of municipal ordinances and that “[a]ppellate review is based solely upon the record on appeal . . . ,” the COA dismissed the appeal.

The Court also discussed Overton v. Camden County, 155 N.C. App. 391, 574 S.E.2d 157 (2002), as it pertains to determining which ordinance applies in circumstances where the facts and relevant time period span the adoption of multiple ordinances.  I have an article idea that includes analysis of Overton that I hope to get out the incubation phase soon!

Origins of Vested Rights

December 11, 2010

I recently stumbled across Prof. Gordon Wood’s lecture published in the Virginia Law Review entitled The Origins of Vested Rights in the Early Republic, 85 Va. L. Rev. 1421 (1999).  An interesting read for the history buffs out there.