PF Dev. Grp. ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
Nos. COA19-533, COA19-534
Filed: 31 December 2020
Harnett County, Nos. 17 CVS 363, 17 CVS 1361
ANDERSON CREEK PARTNERS, L.P.; ANDERSON CREEK INN, LLC;
ANDERSON CREEK DEVELOPERS, LLC; FAIRWAY POINT, LLC; STONE
CROSS, LLC d/b/a STONE CROSS ESTATES, LLC; RALPH HUFF HOLDINGS,
LLC; WOODSHIRE PARTNERS, LLC; CRESTVIEW DEVELOPMENT, LLC;
OAKMONT DEVELOPMENT PARTNERS, LLC; WELLCO CONTRACTORS, INC.;
NORTH SOUTH PROPERTIES, LLC; W.S. WELLONS CORPORATION; ROLLING
SPRINGS WATER COMPANY, INC.; and STAFFORD LAND COMPANY, INC.,
Plaintiffs,
v.
COUNTY OF HARNETT, Defendant.
PF DEVELOPMENT GROUP, LLC, Plaintiff,
v.
COUNTY OF HARNETT, Defendant.
Consolidated appeal by Plaintiffs from order entered 26 November 2018 by
Judge Michael J. O’Foghludha in Superior Court, Harnett County. Heard in the
Court of Appeals 6 February 2020.
Ferguson, Hayes, Hawkins & Demay, PLLC, by James R. DeMay, and
Scarbrough & Scarbrough, PLLC, by James E. Scarbrough, Madeline J.
Trilling, and John F. Scarbrough, for Plaintiffs-Appellants.
Fox Rothschild LLP, by Kip David Nelson, Bradley M. Risinger, and Troy D.
Shelton, and Christopher Appel, for Defendant-Appellee.
McGEE, Chief Judge.
ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
Plaintiffs Anderson Creek Partners, L.P., et al. (“Anderson Creek”), and PF
Development Group, LLC (“PF Development”) (together, the “Developers”), each
brought suit seeking refunds for fees paid to Defendant Harnett County (the
“County”) for water and sewer services “to be furnished” to their future real estate
developments. Each of the two cases was designated to be an exceptional civil case
and the two cases were consolidated for a single decision in the trial court, as well as
consolidated for appeal to this Court.
The Developers appeal from the 26 November 2018 order of the trial court
granting the County’s motion for judgment on the pleadings. The Developers contend
that (1) the trial court erred by taking judicial notice of an interlocal agreement
between the County and its water and sewer districts; (2) the pleadings presented
material issues of fact with respect to whether the County was authorized to charge
fees for services “to be furnished;” and (3) the pleadings presented a viable
unconstitutional conditions claim.
We hold (1) that the trial court did not err in taking judicial notice of the
interlocal agreements because the agreements are public documents; (2) there were
no issues of material fact in the pleadings with respect to whether the County had
authority to charge prospective fees; and (3) the capacity use fees collected by the
County are not subject to review under the unconstitutional conditions doctrine. We
affirm the trial court’s order.
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
I. Factual and Procedural Background
A. Interlocal Agreements and Assessment of Fees
The Harnett County Board of Commissioners created a water and sewer
district in Buies Creek (the “Buies Creek District”) to collect wastewater within the
district. The County and the Buies Creek District entered into an interlocal
agreement in 1984 (the “1984 Buies Creek Agreement”), whereby the County agreed
to operate the Buies Creek District’s water and sewer system. The 1984 Buies Creek
Agreement was the subject of the North Carolina Supreme Court decision in McNeill
v. Harnett County, 327 N.C. 552, 398 S.E.2d 475 (1990). In McNeil, the North
Carolina Supreme Court held that counties could lawfully enter into and act upon an
interlocal agreement to operate a water and sewer system on behalf of a water and
sewer district, and could exercise the water and sewer district’s “rights, powers, and
functions” in carrying out those operations. Id. at 559–60, 398 S.E.2d at 479.
By 1998, the County created eight water and sewer districts (the “Districts”)
to manage wastewater across its entire jurisdiction. The County and the Districts
then entered into a joint interlocal agreement in May 1998 (the “1998 Agreement”),
whereby the County agreed to administer the Districts’ water and sewer systems.
Per the 1998 Agreement, the County and the Districts agreed that the County would
lease the Districts’ property; the Districts would transfer their intangible assets to
the County; the County would assume most of the Districts’ liabilities; and the
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Opinion of the Court
County would “administer all operations and maintenance” of the Districts’ water
and sewer systems.
The County then incorporated its duties under the 1998 Agreement into the
Harnett County Water and Sewer Ordinance (the “Ordinance”). See Harnett County,
N.C., Water and Sewer Ordinance (July 1, 2016) [hereinafter, Ordinance]. Pursuant
to section 28(h) of the Ordinance, the County charges landowners “capacity use” fees
(the “Fees”) for future water or sewer service as a mandatory condition prior to the
County issuing approvals and/or permits for developments to real property.
Ordinance § 28(h). The Fees for a single-family residential lot are a one-time, non-
negotiable payment of $1,000 for water and $1,200 for sewer. Ordinance § 28(h).
B. Anderson Creek’s Case
The Developers each sought to build a number of residences in the County in
or around 2017. Cumulatively, the County required the Developers to pay over
$25,000 in Fees prior to issuing its approval for the Developers’ proposed plans.
Anderson Creek filed a complaint against the County on 1 March 2017. The
complaint initially alleged six claims for relief, requesting:
(1) a declaration that the Ordinance and Fees were
unlawful because the County exceeded its authority under
N.C. Gen. Stat. § 153-277 in adopting and enforcing the
Ordinance and Fees, and/or because the Fees lacked an
“essential nexus” and “rough proportionality” to the impact
of the proposed developments on the County’s water and
sewer systems;
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
(2) a declaration that the Ordinance and Fees violated the
Developers’ rights to equal protection and substantive due
process under Article I, Section 19 of the North Carolina
Constitution;
(3) a refund to the Developers of all fees exacted by the
County, together with interest at the rate of 6% per annum
pursuant to N.C. Gen. Stat. § 153A-324;
(4) an award of costs, expenses, and attorneys’ fees
pursuant to N.C. Gen. Stat. § 6-21.7 and/or other applicable
law;
(5) an accounting of all fees exacted by the County from the
Developers; and
(6) an order allowing any future Fees required to be paid
into escrow pending the litigation resolution.
The County filed an amended1 answer, counterclaims, and motion for sanctions
in response to Anderson Creek’s complaint on 19 May 2017. Anderson Creek then
filed a motion to amend its complaint on 23 August 2017. The trial court granted the
motion, and Anderson Creek filed an amendment to its complaint asserting a seventh
and eighth claim for relief:
(7) alleging that the County breached the terms of a 4 April
2018 agreement with Anderson Creek, specifically; and
(8) requesting a declaration regarding the severability of a
provision of the agreement with Anderson Creek relating
to the payment of fees from Anderson Creek’s development
properties.
1 The County’s original answer, counterclaims, and motion for sanctions is not included in the
record on appeal.
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
The Anderson Creek case was designated an exceptional civil case under Rule
2.1 of the General Rules of Practice for the Superior and District Courts on 27
September 2017 and was reassigned to another Superior Court Judge in Chatham
County.
The County filed an answer and counterclaim in response to Anderson Creek’s
amended complaint on 1 February 2018.2 The County’s counterclaim requested a
declaration that the 1998 Agreement gave the County authority to collect fees
through the Ordinance.
On 12 February 2018, the County filed a Rule 12(c) motion for judgment on the
pleadings as to claims 1 through 6 and 8 of Anderson Creek’s amended complaint,
and filed a motion to join necessary parties or, in the alternative, motion for
permissive joinder of parties. The County attached to its motions the 1984 Buies
Creek Agreement at issue in McNeill, as well as the subsequent 1998 Agreement.
The motions were heard at the 6 August 2018 civil session of Chatham County,
Superior Court.
C. PF Development’s Case
2 The record indicates that the trial court did not grant Anderson Creek’s motion to amend its
complaint until 22 February 2018 and that Anderson Creek’s amended complaint was not filed until
16 March 2018. According to these filing dates, the County filed its answer, counterclaims, and motion
for judgment on the pleadings in response to Anderson Creek’s amended complaint over one week
before the trial court granted the motion to amend and over a month before the amended complaint
was filed. Nevertheless, the County’s answer, counterclaims, and motions evidence its receipt of the
amended complaint and the parties do not bring any arguments regarding the timeliness or
authenticity of the amended complaint.
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
PF Development’s complaint was filed against the County on 19 July 2017. Six
claims for relief were alleged in PF Development’s complaint. These claims were
identical to the claims raised in Anderson’s Creek initial complaint. The County filed
an answer denying the material allegations of the complaint and a counterclaim for
declaratory relief on 9 October 2017. PF Development filed a reply to the
counterclaim on 9 November 2017.
The County filed a Rule 12(c) motion for judgment on the pleadings as to all
six of PF Development’s claims, and a motion to join necessary parties or, in the
alternative, motion for permissive joinder of parties on 12 February 2018. The PF
Development case was designated an exceptional civil case on 4 October 2018 and
also reassigned to the same Superior Court Judge in Chatham County.
D. Consolidation for Decision and Appeal
The Developers initially filed a motion to consolidate their cases before the trial
court on 30 January 2018. After consideration of the pleadings, arguments of counsel
at the 6 August 2018 hearing in Anderson Creek’s case, and materials submitted to
the trial court, the trial court informed the Developers that the County’s Rule 12(c)
motion would be partially allowed in Anderson Creek’s case. The Developers again
filed a joint consent motion to consolidate their cases with the trial court on 5 October
2018. The trial court entered an order granting the consent motion to consolidate on
26 November 2018. The parties to the PF Development case elected to accept the
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Opinion of the Court
result of the Anderson Creek case and did not request additional oral argument for
PF Development’s case.
On 26 November 2018, the trial court entered an order (the “Consolidated
Order”) resolving each case, granting: (1) in the Anderson Creek case, the County’s
motion for judgment on the pleadings on claims 1 through 6 and 8 and dismissing
each with prejudice; and (2) in the PF Development case, the County’s motion for
judgment on the pleadings on all claims and dismissing all with prejudice. The
Consolidated Order noted that the court had “taken judicial notice of public
documents appended to [the County’s] Rule 12(c) Motion [] which are May 1998 and
July 1984 Agreements entered into among and between [the County] and other North
Carolina governmental units that are relevant to the matters involved in this action.”
The Consolidated Order also stated that the County’s motions to join necessary
parties or, in the alternative, motions for permissive joinder of parties in each of the
Developers’ cases were moot based on its decision. The Developers filed a
consolidated notice of appeal on 21 December 2018.
II. Analysis
A. Judicial Notice of Public Contracts
We first address the Developers’ argument that the trial court erred by (1)
taking judicial notice of the 1984 Buies Creek Agreement and the 1998 Agreement,
each of which the County attached to its motion for judgment on the pleadings, and
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Opinion of the Court
(2) considering the documents in the determination of its Consent Order. The
Developers contend that the Consent Order is, “in essence, a motion for summary
judgment by ambush” because they were not “afford[ed] an opportunity to reasonably
confront these documents.” Essentially, the Developers claim that they were unduly
surprised by the County’s presentation of the agreements, and placed in the
“untenable position” of having to “defend matters external to the allegations of their
Complaint[.]” We disagree.
The Developers are correct that “[i]f, on a motion for judgment on the
pleadings, matters outside the pleadings are presented to and not excluded by the
court, the motion shall be treated as one for summary judgment and disposed of as
provided in Rule 56[.]” N.C. Gen. Stat. § 1A-1, Rule 12 (2017). However, in deciding
a Rule 12(c) motion for judgment on the pleadings, our Court has held that “courts
must consider the complaint in its entirety, as well as other sources courts ordinarily
examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents
incorporated into the complaint by reference, and matters of which a court may take
judicial notice.” QUB Studios, LLC, v. Marsh, 262 N.C. App. 251, 260, 822 S.E.2d
113, 120–21 (2018) (emphasis added) (adopting the United States Supreme Court’s
language in Tellabs, Inc., v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 168 L.
Ed. 2d 179, 193 (2007)). To be clear, a court may take judicial notice of matters
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Opinion of the Court
outside the pleadings, where appropriate, without causing the proceeding to convert
from a Rule 12(c) motion to one for summary judgment under Rule 56. Id.Judicial notice is appropriate where a fact is “not subject to reasonable dispute
in that it is either (1) generally known within the territorial jurisdiction of the trial
court or (2) capable of accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned.” N.C. Gen. Stat. § 8C-1, Rule 201 (2017).
North Carolina Courts have long held that “important public documents will be
judicially noticed.” State ex rel. Utils. Comm’n v. S. Bell Tel. & Tel. Co., 289 N.C. 286,
287, 221 S.E.2d 322, 323 (1976) (citing Staton v. Atl. Coast Line Rail Co., 144 N.C.
135, 145, 56 S.E. 794, 797 (1907)). “Important public documents” in this context have
been held to include, among other things, a Utilities Commission order modifying a
joint venture agreement, Town of Midland v. Morris, 209 N.C. App. 208, 214, 704
S.E.2d 329, 335 (2011); a vehicle insurance classification scheme composed by the
North Carolina Rate Bureau, State ex rel. Com’r of Ins. v. N.C. Auto. Rate Admin.
Office, 293 N.C. 365, 381, 239 S.E.2d 48, 58 (1977); and contractual agreements
between a Native American tribe and both the state government and private entities,
Hatcher v. Harrah’s N.C. Casino Co., LLC, 169 N.C. App. 151, 154, 610 S.E.2d 210,
212 (2005). “[A] trial court’s decision concerning judicial notice will not be overturned
absent an abuse of discretion.” Muteff v. Invacare Corp., 218 N.C. App. 558, 568, 721
S.E.2d 379, 386 (2012) (citation omitted).
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
The 1984 Buies Creek Agreement and the 1998 Agreement are public contracts
between government entities, Harnett County and its municipal water and sewer
districts. See N.C. Gen. Stat. § 132-1 (2017) (defining documents created by
municipalities, counties, and special districts “in connection with the transaction of
public business” to be public records). These documents are subject to public review,
N.C. Gen. Stat. § 132-1, and their existence is therefore “not subject to reasonable
dispute.” The agreements are important public documents germane to the resolution
of this case; indeed, some of the Developers reference—or even incorporate—the 1998
Agreement in their pleadings. The Developers’ position was far from “untenable.”
The trial court took judicial notice of the existence of the agreements and of the
language therein, then interpreted that language as a matter of law. It was,
therefore, not an abuse of discretion for the trial court to take judicial notice of the
1984 Buies Creek Agreement and the 1998 Agreement and to consider the documents
in its review of the parties’ pleadings.
B. Preemptive Collection of Fees
The Developers primarily contend that the trial court erred in granting the
County’s motion for judgment on the pleadings because the pleadings presented
material issues of fact with respect to whether the County had authorization to
prospectively collect fees for water and sewer services “to be furnished” in the future.
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
We hold that the County had authority to collect prospective fees by virtue of the 1998
Agreement.
i. Standard of Review
“We review de novo a trial court’s order granting a motion for judgment on the
pleadings under Rule of Civil Procedure 12(c).” Tully v. City of Wilmington, 370 N.C.
527, 532, 810 S.E.2d 208, 213 (2018) (citation omitted). The moving party must show
that, after considering all well-pleaded factual allegations in the nonmoving party’s
pleadings as true, “no material issue of fact exists and that he is entitled to judgment
as a matter of law.” Id. A defendant moving for judgment on the pleadings must
prove, essentially, that the plaintiff’s pleadings “fail[] to allege facts sufficient to state
a cause of action or admit[] facts which constitute a complete legal bar to a cause of
action.” CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 51–52, 790
S.E.2d 657, 659–60 (2016) (citations and quotation marks omitted).
This case also requires our review of two interlocal agreements between the
parties. “Generally, ‘the purport of a written instrument is to be gathered from its
four corners, and the four corners are to be ascertained from the language used in the
instrument.’” China Grove 152, LLC, v. Town of China Grove, 242 N.C. App. 1, 9, 773
S.E.2d 566, 572 (2015) (citation omitted).
ii. Authorization to Collect Prospective Fees
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
A clear understanding of the question before us first requires discussion of the
statutes and seminal cases which comprise the relevant fee-collecting authority of the
municipal entities involved. Municipalities are entities born purely from “legislative
will” and have no authority or powers apart from those given to them by the General
Assembly. Lutterloh v. City of Fayetteville, 149 N.C. 65, 69, 62 S.E. 758, 760 (1908)
(citations omitted). The General Assembly allows for the creation of municipalities
and expressly delegates powers and authorities to them via enabling statutes. N.C.
Const. art. VII, § 1; Lanvale Props., LLC, v. County of Cabarrus, 366 N.C. 142, 150,
731 S.E.2d 800, 807 (2012) (citations omitted). Acts taken by a municipality that
extend beyond the scope of the powers and authorities statutorily granted to it are
void. City of Asheville v. Herbert, 190 N.C. 732, 735, 130 S.E. 861, 863 (1925)
(citations omitted).
When the Developers sought development permits in early 2017, the County
had the statutory authority only to collect fees for past and present “services
furnished.” The governing statute then stated:
A county may establish and revise from time to time
schedules of rents, rates, fees, charges, and penalties for
the use of or the services furnished by a public enterprise.
N.C. Gen. Stat. § 153A-277(a) (2015) (emphasis added).
The North Carolina Supreme Court held that a nearly identical statute
regarding the fee-collecting authorities of cities did not authorize the collection of
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Opinion of the Court
prospective impact fees in its 2016 decision in Quality Built Homes Inc. v. Town of
Carthage, 369 N.C. 15, 789 S.E.2d 454 (2016). In Quality Built Homes, the town of
Carthage required developers to pay a progressively scaling fee prior to final approval
of the developers’ plats and building permits. Id. at 17, 789 S.E.2d at 456. Carthage
claimed authority to charge these prospective fees under N.C. Gen. Stat. § 160A-314,
which then read:
A city may establish and revise from time to time schedules
of rents, rates, fees, charges, and penalties for the use of or
the services furnished by a public enterprise.
N.C. Gen. Stat. § 160A-314 (2015) (emphasis added). Our Supreme Court held the
plain language of N.C. Gen. Stat. § 160A-314 “clearly and unambiguously
empower[ed] Carthage to charge for the contemporaneous use of water and sewer
services—not to collect fees for future [] spending.” Id. at 20, 789 S.E.2d at 458(emphasis added) (citation omitted). The statute’s provisions were “operative in the
present tense.” Id.Our Court addressed similar language enabling a utilities commission to
collect fees in Kidd Construction Group, LLC, v. Greenville Utilities Commission, ___
N.C. App. ___, 845 S.E.2d 797 (2020). In Kidd, the Greenville Utilities Commission
(the “GUC”), a local government entity created by our General Assembly to provide
water and sewer services to Pitt County, collected prospective capacity fees “as a
precondition to development approval, to the issuance of building permits, and to
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Opinion of the Court
receiving service.” Id. at ___, 845 S.E.2d at 799. The charter establishing creation of
the GUC and outlining its powers authorized the GUC to “fix uniform rates for all
services rendered[.]” Id. at ___, 845 S.E.2d at 801. This Court held that the operative
language in GUC’s charter was “functionally equivalent” and “nearly identical” to the
enabling language at issue in Quality Built Homes, and “also fail[ed] to confer
prospective charging authority by lacking the critical ‘to be’ language.” Id. (“Just as
the ‘services furnished’ language did not empower Carthage to impose impact fees
prior to any service being provided, so too does ‘services rendered’ fail to empower
GUC to impose impact fees on builders and developers as a condition of final
development approval.” (citation omitted)).
The only difference between the text of N.C. Gen. Stat. § 160A-314 reviewed in
Quality Built Homes and the text of N.C. Gen. Stat. § 153A-277(a) subject to our
review in this case is the substitution of the word “city” for “county.” We interpret
the nearly identical, plain language of N.C. Gen. Stat. § 153A-277(a) in the same
manner. N.C. Gen. Stat. § 153A-277(a) authorized the County only to assess fees for
the “contemporaneous use” of its water and sewer systems, and otherwise “clearly
and unambiguously fail[ed] to give [the County] the essential prospective charging
power necessary to assess [the Fees].” Quality Built Homes, 369 N.C. at 22, 789
S.E.2d at 459.
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
In response to the Quality Built Homes decision, our General Assembly
modified both N.C. Gen. Stat. § 153A-277(a) and N.C. Gen. Stat. § 160A-314 to
authorize counties and cities to collect fees for “services furnished or to be furnished
by any public enterprise.” N.C. Gen. Stat. § 153A-277(a) (2019); N.C. Gen. Stat. §
160A-314 (2019). The General Assembly thus amended each statute to permit the
prospective fee-collecting acts complained of here. The amended language of N.C.
Gen. Stat. § 153A-277(a) became effective 1 October 2017; however, the General
Assembly specified that “[n]othing in th[e] act provides retroactive authority for any
system development fee, or any similar fee for water or sewer services to be furnished,
collected by a local governmental unit prior to October 1, 2017.” PUBLIC WATER
AND SEWER SYSTEM DEVELOPMENT FEE ACT, 2017 North Carolina Laws S.L.
2017-138 (H.B. 436).
The Districts, on the other hand, were authorized to collect prospective fees in
2016. Each of the Districts involved in this case are water and sewer districts created
under chapter 162A of the North Carolina General Statutes and governed by the
Harnett County Board of Commissioners. Water and sewer districts are bodies
corporate and politic which are and were, at all times relevant to this case, authorized
to “contract and be contracted with” and to “establish, revise and collect rates, fees or
other charges and penalties for the use of or the services furnished or to be
furnished[.]” N.C. Gen. Stat. § 162A-88 (2015) (emphasis added). Unlike the versions
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Opinion of the Court
of N.C. Gen. Stat. §§ 153A-277 and 160A-314 in effect when the Developers were
required to pay the Fees, N.C. Gen. Stat. § 162A-88 “included the language ‘services
furnished and to be furnished’ and thus ‘plainly allowed the charge for prospective
services[.]’” Kidd, ___ N.C. App. at ___, 845 S.E.2d at 800 (quoting Quality Built
Homes, 369 N.C. at 20, 789 S.E.2d at 458) (distinguishing N.C. Gen. Stat. § 160A-314
(2015) and N.C. Gen. Stat. § 162A-88 (2015)).
Additionally, local government entities may generally cooperate through
interlocal agreements to carry out their purposes. See N.C. Gen. Stat. §§ 153A-275,
153A-278 (2015). Our Supreme Court has made it clear that a county may contract
with another local government entity to enable the county to exercise authority given
to that entity. Specifically, this issue has been addressed with respect to the County
and its water and sewer districts. In McNeil v. Harnett County, our Supreme Court
held that the 1984 Buies Creek Agreement—the prior interlocal agreement between
the County and the Buies Creek District, one of the Districts in this case—properly
enabled the County to exercise all “rights, powers, and functions granted to water
and sewer districts as found in N.C.G.S. § 162A-88[.]” McNeill, 327 N.C. at 559, 398
S.E.2d at 479.
At all times relevant to this action, counties did not have the authority to
collect prospective fees themselves. However, the Districts each had the authority to
collect prospective fees and were free to contract with the County to enable the
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Opinion of the Court
County to collect prospective fees by exercising the statutory authority of the
Districts. Therefore, the only way the County could have had the authority to charge
any prospective fees would be pursuant to an interlocal agreement through which the
County could exercise authority held by the Districts.3
iii. Issues of Fact
Having explained that the County may only collect fees for services “to be
furnished” by virtue of an interlocal agreement granting such rights, the question
before this Court is whether the 1998 Agreement did grant the County the Districts’
authority to collect prospective fees under N.C. Gen. Stat. § 162A-88.
In McNeil, our Supreme Court held that the County could lawfully enter into
and act under an interlocal agreement to operate a water and sewer system on behalf
of its water and sewer districts:
[P]ursuant to an interlocal cooperative agreement and
pursuant to authority granted in article 15 of chapter
153A, a county may, among other things, operate a water
and/or sewer system for and on behalf of another unit of
local government, such as a water and sewer district, and
in conjunction therewith may exercise those rights, powers,
and functions granted to water and sewer districts as found
in N.C.G.S. § 162A-88 and those rights, powers, and
3 We note that the impact fees charged in Quality Built Homes were assessed on a progressively
scaling basis, whereas the Fees charged by the County in the present case are flat and non-negotiable
charges which the County deems “capacity use” fees. This difference is not material to our
consideration of the County’s prospective fee-collecting authority. The Fees charged by the County
here are “not assessed at the time of actual use, but are payable in full at the time of final subdivision
plat approval—a time when water, sewer, or other infrastructure might not have been built and only
a recorded plat exists” and “requir[e] [the County] to invoke prospective charging power” for future
services. Quality Built Homes, 369 N.C. at 21, 789 S.E.2d at 458–59 (quotation marks and brackets
omitted).
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Opinion of the Court
functions granted to counties in N.C.G.S. ch. 153A, art. 15.
McNeil, 327 N.C. at 559, 398 S.E.2d at 479. The McNeil Court recognized that the
County and the Buies Creek District had entered into the 1984 Buies Creek
Agreement “on 23 July 1984 wherein it was agreed that the [Buies Creek District’s]
sewer system, which had been completed that year, would be operated by Harnett
County through its Department of Public Utilities.” Id. The McNeil Court held that,
pursuant to the 1984 Buies Creek Agreement, the County was “clothed” with “those
powers granted to the [Buies Creek District] in N.C.G.S. § 162A-88[,]” as well as
“those powers set forth in chapter 153A, article 15 of the General Statutes[.]” Id.
Therefore, the 1984 Buies Creek Agreement granted the County the power, among
other things, to “establish, revise and collect rates, fees or other charges and penalties
for the use of or the services furnished or to be furnished by any sanitary sewer
system, water system or sanitary sewer and water system” and to “exercise those
powers[.]” N.C. Gen. Stat. § 162A-88 (emphasis added); McNeil, 327 N.C. at 559, 398
S.E.2d at 479.
The terms of the 1984 Buies Creek Agreement stated, in relevant part, that
the County and the Buies Creek District “agreed to enter into [the] contract for . . .
the operation of the wastewater collection system as a County operated sewer and
wastewater collection system[.]” The contract provided that a newly constructed
“wastewater treatment plant owned by the County” would be operated by the County
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Opinion of the Court
to serve the sewer and wastewater needs of the Buies Creek District. In so doing, the
County was “entitled to fund or cause to be funded the construction of any sewer line
to be connected to the [Buies Creek District’s] system as an extension . . . for the
purpose of serving needy users with wastewater utility services[.]” Notably, the 1984
Buies Creek Agreement made no direct reference to N.C. Gen. Stat. § 162A-88.
The 1998 Agreement provides the County with substantially the same rights
as it was granted in the 1984 Buies Creek Agreement and more clearly incorporates
the Districts’ prospective fee-collecting authority. The 1998 Agreement opens by
acknowledging that it exists pursuant to statutory authority, which includes a
number of statutes “[w]ithout limitation.” The enumerated statutory authorities
include the authority of “two or more . . . units of local government [to] cooperate” in
the “joint provision of enterprisory services” as granted by N.C. Gen. Stat. § 153A-
278. The 1998 Agreement then expressly recognizes that the Districts have the
ability to assess fees for “services furnished or to be furnished” pursuant to N.C. Gen.
Stat. § 162A-88. In a section labeled “Purpose of the Agreement,” the 1998 Agreement
states that its purpose is to “provide a cost efficient method for the administration,
operation, maintenance and expansion of water and . . . wastewater services to each
of the Districts through [the County’s] Department of Public Utilities.” Like the 1984
Buies Creek Agreement, the 1998 Agreement does not make a specific reference to
the County’s receipt of the Districts’ authority to collect prospective fees, but does
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
wholly acknowledge an intent between the parties to have the County step into the
Districts’ shoes to efficiently provide water and sewer services throughout each
District. We therefore hold that the 1998 Agreement granted the County the ability
to exercise the Districts’ prospective fee-collecting authority, and that the pleadings
failed to present a material issue of fact regarding the County’s authority to collect
prospective fees.
The Developers’ argue that this case turns, instead, on a different issue:
whether the pleadings show a material issue of fact regarding how the County
assessed the Fees, either by managing the Districts’ infrastructure or by operating
its own county infrastructure. In the Developers’ view, this case presents a “complex
puzzle regarding the Ordinance, the Fees, and the true relationship of the County
and the Districts in the provision of water and sewer service.” The Developers
contend the County had no authority to collect the Fees because “[t]he clear inference
from the [1998 Agreement] is that the County is operating its own, countywide water
and sewer system—not the systems of the Districts.”
We disagree with the Developers’ statement of the issue in this case. The
pleadings may show an issue of fact with respect to whose infrastructure the County
used to assess the Fees, and whether the District even maintained any water and
sewer system of its own, but these issues are not material to the resolution of this
case. Regardless of whether the County is operating its own physical water and sewer
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
infrastructure, the Districts’ infrastructure, infrastructure it acquired from the
Districts, or a combination thereof, the issue is whether the County had the authority
to use any means to assess prospective fees for water and sewer services to be
furnished in the future.4 Indeed, the McNeil Court found that the County had this
authority where the 1984 Buies Creek Agreement specified that the County would
operate a “wastewater treatment plant owned by the County” and a “wastewater
treatment facility owned by the County[,]” which were located within the boundaries
of the Buies Creek District and thereafter referred to as “the [Buies Creek District’s]
wastewater collection system” and “the [Buies Creek District’s] wastewater
treatment facility[.]” It was immaterial to the holding of McNeil that the County
owned the infrastructure used. We hold that the 1998 Agreement gave the County
the rights to exercise the Districts’ fee-collecting authority—by any legal means—and
therefore affirm the Consolidated Order.
4 After hearing arguments from counsel regarding the County’s motion for judgment on the
pleadings, the trial court properly understood the issue in this case to be the same:
Legally, it doesn’t matter how they do it; legally, it matters can they
legally do it? But, how they do it doesn’t matter. Isn’t that kind of
irrelevant?
....
They have to have the authority, but, as long as they continue to have
the authority, that’s—that’s the legal threshold issue.
....
[T]he threshold issue for me to decide in this case is whether the [1998
Agreement] is legally—legally different than the [1984 Buies Creek
Agreement] and whether the [1998 Agreement] is not done pursuant to
[N.C. Gen. Stat. § 162A].
(Emphasis added).
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Opinion of the Court
C. Unconstitutional Conditions Doctrine
Lastly, the Developers argue that the pleadings presented a material issue of
fact of whether assessment of the Fees constituted an unconstitutional condition
under the United States Supreme Court’s decision in Koontz v. St. Johns River Water
Management District, 570 U.S. 595, 186 L. Ed. 2d 697 (2013). The Developers’
pleadings claim that, assuming the County had the authority to assess the Fees, the
Fees were nonetheless an unconstitutional condition on the exercise of their property
rights. Thus, this Court is asked to determine whether a generally applicable fee
assessed as a condition precedent to approval of a land-use permit warrants review
under the “unconstitutional conditions doctrine.” For the reasons below, we hold that
it does not and further affirm the Consolidated Order.
The “unconstitutional conditions doctrine” rests on the principle that “the
government may not deny a benefit to a person because he exercises a constitutional
right,” Regan v. Taxation With Representation of Wash., 461 U.S. 540, 545, 76 L. Ed.
2d 129, 136–37 (1983) (citation omitted), and works to “vindicate[] the Constitution’s
enumerated rights by preventing the government from coercing people into giving
them up[,]” Koontz, 570 U.S. at 604, 186 L. Ed. 2d at 708. The United States Supreme
Court has held that the unconstitutional conditions doctrine is particularly relevant
in the context of the land-use permitting process, as landowners are especially
vulnerable to the government’s broad discretion in imposing potentially
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Opinion of the Court
“[e]xtortionate demands” on the grant of land-use permits. Koontz, 570 U.S. at 605,
186 L. Ed. 2d at 708. Government conditions that request the landowner deed land
as an easement or designate a portion of his or her land for a particular use “can
pressure an owner into voluntarily giving up property for which the Fifth Amendment
would otherwise require just compensation.” Id.; U.S. Const. amend. V. However,
where a landowner’s proposed use of real property “threaten[s] to impose costs on the
public” the government may constitutionally require the landowner to “internalize
the negative externalities of their conduct” and make contributions of real property
or finances to mitigate the public costs imposed. Id.The Supreme Court recognized these competing realities in Nollan v.
California Coastal Commission, 483 U.S. 825, 97 L. Ed. 2d 677 (1987), and Dolan v.
City of Tigard, 512 U.S. 374, 129 L. Ed. 2d 304 (1994). In Nollan and Dolan, the
Court ruled that the government is allowed to condition approval of land-use permits
by requiring the landowner to mitigate the impact of his or her proposed use. Dolan,
512 U.S. at 391, 129 L. Ed. 2d at 320; Nollan, 438 U.S. at 837, 97 L. Ed. 2d at 689.
The government may require that the landowner agree to a particular public use of
the landowner’s real property, as long as there is an “essential nexus” and “rough
proportionality” between the public impact of the landowner’s proposed developments
and the government’s requirements. Dolan, 512 U.S. at 391, 129 L. Ed. 2d at 320;
Nollan, 438 U.S. at 837, 97 L. Ed. 2d at 689.
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Opinion of the Court
In Koontz, the Court extended the application of Nollan/Dolan’s “essential
nexus” and “rough proportionality” requirements to government demands for
monetary contributions where there is a “direct link between the government’s
demand and a specific parcel of real property.” Koontz, 570 U.S. at 614, 186 L. Ed.
2d at 714 (footnote omitted). The plaintiff in Koontz was required to obtain a
Wetlands Resource Management Permit before he could make improvements to his
property which would, among other impacts, raise the elevation of the improved
property. Id. at 599–602, 186 L. Ed. 2d at 704–06. The plaintiff offered to deed a
portion of his property as a conservation easement to the water district to mitigate
the environmental impact of his proposed improvements. Id. The water district
considered the plaintiff’s offer inadequate, and refused to grant the plaintiff’s permit
unless he either (1) agreed to increase the amount of property encumbered by the
proposed conservation easement, or, in the alternative, (2) to deed the conservation
easement as offered and to also pay for environmental improvements to district-
owned real property several miles away. Id. The Koontz Court held that the district’s
second condition also warranted Nollan/Dolan review because such demands for
money operated, essentially, “in lieu of” relinquishments of real property rights, were
therefore “functionally equivalent to other types of land use exactions[,]” and
accomplished the same diminution in the landowner’s property rights: the landowner
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
could comply with the request, or be denied the right to use his or real property in
the desired way. Id. at 612, 186 L. Ed. 2d at 713.
In the case before us, the County assessed the Fees as a condition precedent to
its approval of the Developers’ building permits; if the Developers declined to pay the
Fees, the County would have denied the Developers’ permission to begin their desired
construction projects. The Fees in this case were categorized as impact fees and
referred to as “capacity use fees,” despite the County’s requirement that the fees be
paid prior to approval of a developer’s permits.
The Koontz Court stressed that taxes and fees do not trigger review under the
unconstitutional conditions doctrine, and stated: “It is beyond dispute that ‘[t]axes
and user fees . . . are not “takings.”’” Id. at 615, 186 L. Ed. 2d at 715 (citation omitted).
The Koontz Court explained that its holding did “not affect the ability of governments
to impose property taxes, user fees, and similar laws and regulations that may impose
financial burdens on landowners.” Id. But the Koontz Court otherwise provided little
guidance on how courts should tread the fine line between unconstitutional exactions
and constitutional, routine taxes and fees. See Michael B. Kent, Jr., Viewing the
Supreme Court’s Exactions Cases Through the Prism of Anti-Evasion, 87 U. COLO. L.
REV. 827, 871 (2016); Adam Lovelady, The Koontz Decision and Implications for
Development Exactions, Coates’ Canons: N.C. Local Government Law Blog (Dec. 17,
2020), https://canons.sog.unc.edu/the-koontz-decision-and-implications-for-
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Opinion of the Court
development-exactions/ (opining that the majority opinion in Koontz did not provide
a clear test for distinguishing permissible taxes and fees from potentially
unconstitutional exactions). Indeed, the dissenting justices in Koontz warned that
the majority’s decision extended the “notoriously ‘difficult’ and ‘perplexing’
standards” of the Fifth Amendment Takings Clause “into the very heart of local land-
use regulation and service delivery[,]” including the levy of fees to “cover the direct
costs of providing services like sewage or water to [a] development.” Koontz, 570 U.S.
at 626, 186 L. Ed. 2d at 722 (Kagan, J., dissenting) (citations omitted). The dissenting
justices concluded that these fees—such as the Fees at issue in the present case—
“now must meet Nollan and Dolan’s nexus and proportionality tests.” Id. at 627, 186
L. Ed. 2d at 722.
Neither party in this case briefed any North Carolina precedent, and our own
review has found no precedent, which speaks directly to the application of the
unconstitutional conditions doctrine to monetary exactions in North Carolina. Cf.
Homebuilders Ass’n of Charlotte, Inc., v. City of Charlotte, 336 N.C. 37, 46, 442 S.E.2d
45, 51 (1994) (assessing the legality of the city’s user fees without reviewing their
constitutionality); River Birch Assocs. v. City of Raleigh, 326 N.C. 100, 120–22, 388
S.E.2d 538, 550–51 (1990) (applying Nollan and holding no constitutional taking
occurred where the city required a dedication of real property as condition precedent
to permit approval, but the plaintiff’s permit was denied for other valid reasons). At
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Opinion of the Court
a minimum, this is the first time North Carolina appellate courts have been asked to
address this issue since the United States Supreme Court decided Koontz in 2013.
This Court most closely addressed the constitutionality of government
exactions in any form as takings in its 1989 decision in Franklin Road Properties v.
City of Raleigh, 94 N.C. App. 731, 381 S.E.2d 487 (1989). In Franklin Road, the city
of Raleigh refused to issue building permits for a subdivision requested by the
plaintiff because the plaintiff would not comply with city ordinances which required
the plaintiff to “dedicate and pave a portion of its property as part of [a] right-of-way”
prior to approval of a building permit. Franklin Rd., 94 N.C. App. at 734, 381 S.E.2d
at 489. The plaintiff sued seeking a declaratory judgment of its rights with respect
to the city ordinances, and the trial court granted summary judgment to the
defendant city of Raleigh. Id. This Court reviewed the constitutionality of the city
ordinance’s requirement that the plaintiff dedicate a portion of its land as a public
right-of-way. Id.The Franklin Road Court concluded that the city ordinance was an “exaction”
which required constitutional scrutiny under North Carolina’s “rational nexus” test,
adopted only six months earlier in the 1989 opinion of Batch v. Town of Chapel Hill,
92 N.C. App. 601, 376 S.E.2d 22 (1989), rev’d, 326 N.C. 1, 387 S.E.2d 655 (1990). Id.
at 737, 381 S.E.2d at 491. The Franklin Road Court explained:
In [a] portion of our opinion in Batch we concluded that the
town’s requirement that plaintiff dedicate a portion of her
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ANDERSON CREEK PARTNERS, L.P., V. COUNTY OF HARNETT
Opinion of the Court
property as a right-of-way for the proposed [parkway] was
an “exaction.” In defining “exaction” we stated:
[A]n exaction is a condition of development permission that
requires a public facility or improvement to be provided at
the developer’s expense. Most exactions fall into one of four
categories: (1) requirements that land be dedicated for
street rights-of-way, parks, or utility easements and the
like; (2) requirements that improvements be constructed or
installed on land so dedicated; (3) requirements that fees
be paid in lieu of compliance with dedication or
improvement provisions; and (4) requirements that
developers pay “impact” or “facility” fees reflecting their
respective prorated shares of the cost of providing new
roads, utility systems, parks, and similar facilities serving
the entire area.
We further stated that “Not all exactions are constitutional
takings.” To aid a trial court in determining whether an
exaction is an unconstitutional taking, we adopted the
following rational nexus test:
To determine whether an exaction amounts to an
unconstitutional taking, the court shall: (1) identify the
condition imposed; (2) identify the regulation which caused
the condition to be imposed; (3) determine whether the
regulation substantially advances a legitimate state
interest. If the regulation substantially advances a
legitimate state interest, the court shall then determine (4)
whether the condition imposed advances that interest; and
(5) whether the condition imposed is proportionally related
to the impact of the development.
Id. at 736, 381 S.E.2d at 490 (emphasis added) (citing Batch, 92 N.C. App. at 613–14,
621, 376 S.E.2d at 30, 34).
Notably, though, the North Carolina Supreme Court reversed Batch a year
later, holding that the Town of Chapel Hill properly denied the plaintiff’s request for
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Opinion of the Court
a subdivision building permit because the permit failed to comply with town
ordinances requiring permits to contemplate coordination with the town’s
transportation plans. Batch v. Town of Chapel Hill, 326 N.C. 1, 13, 387 S.E.2d 655,
663 (1990). Based on this holding, the Court declined to address any other reason
why the permit was or may have been denied, and, particularly, did “not find it
necessary to review or decide any of [the] plaintiff’s constitutional claims or other
issues arising upon her complaint.” Id. at 13, 14, 387 S.E.2d at 663.
As a result, North Carolina law in regard to exactions as takings is without
foundation and has not been updated following Dolan and Koontz. The definition of
“exaction” and the “rational nexus” test presented in Franklin Road (and derived
from the Court of Appeals decision in Batch) were developed after the United States
Supreme Court decided Nollan, but prior to its decisions in Dolan and Koontz.
Nonetheless, Franklin Road addressed potentially unconstitutional exactions in
North Carolina by employing a “rational nexus” test which in many ways mirrors the
“essential nexus” and “rough proportionality” requirements of Nollan/Dolan, and
which also preemptively addressed Koontz’s later extension of those requirements to
monetary exactions “in lieu of” physical takings of land or as recompensation for the
impact of a proposed development.
The Developers cite to decisions from other states that have issued rulings
regarding the thin line between unconstitutional exactions and constitutional user
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Opinion of the Court
fees. However, we find most of these cases unpersuasive because they involve these
courts’ attempts to apply the real property-focused decisions in Nollan/Dolan alone
to exactions and fees, prior to the United States Supreme Court’s decision in Koontz.
See Home Builders Ass’n of Dayton & the Miami Valley v. City of Beavercreek, 729
N.E.2d 349, 356 (Ohio 2000); Trimen Dev. Co. v. King Cty., 877 P.2d 187, 194 (Wash.
1994); N. Ill. Home Builders Ass’n, Inc. v. Cty. of Du Page, 621 N.E.2d 1012, 1020 (Ill.
App. Ct. 1993), aff’d in part, rev’d in part, 649 N.E.2d 384 (Ill. 1995). These cases
were part of the pre-Koontz division of authority over whether a demand for money
could give rise to an unconstitutional conditions claim under Nollan/Dolan—a
division which Koontz settled in the affirmative. See Koontz, 570 U.S. at 603, 186 L.
Ed. 2d at 707.
The most persuasive case cited by the parties is the 2018 decision of Maryland’s
highest court in Dabbs v. Anne Arundel County, 182 A.3d 798 (Md. 2018), which cites
to Koontz in holding that a generally applicable fee does not invoke the
unconstitutional conditions doctrine. In Dabbs, the plaintiffs sought refunds for
impact fees paid to their county in connection with real estate developments; the fees
were collected to facilitate future improvements to transportation and education
infrastructure within the county. Id. at 801–02. The impact fees at issue were
“legislatively-imposed[,] predetermined, based on a specific monetary schedule, and
applie[d] to any person wishing to develop property in the district.” Id. at 811. The
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Opinion of the Court
plaintiffs argued that the impact fees were takings subject to the “essential nexus”
and “rough proportionality” requirements of Nollan/Dolan. Id. at 807–08. The
Dabbs Court acknowledged that Koontz extended the protections of Nollan/Dolan to
instances where there is a “‘direct link between the government’s demand and a
specific parcel of real property[,]’” but noted Koontz’s insistence that “‘taxes [and] user
fees . . . that may impose financial burdens on [land]owners’” are not takings under
Nollan/Dolan. Id. at 809–10 (citing Koontz, 570 U.S. at 614, 615, 186 L. Ed. 2d at
714, 715).
The Dabbs Court held that the impact fees were not subject to scrutiny under
Nollan/Dolan because, “[u]nlike Koontz, the Ordinance [did] not direct a [land]owner
to make a conditional monetary payment to obtain approval of an application for a
permit of any particular kind, nor [did] it impose the condition on a particularized or
discretionary basis.” Id. at 811 (citation omitted). Instead, the ordinance at issue in
Dabbs “applied on a generalized district-wide basis, making no determination as to
whether an actual permit will issue to a payor individual with a property interest.”
Id. (citing Koontz, 570 U.S. at 628, 186 L. Ed. 2d at 723 (Kagan, J., dissenting)
(commenting that the majority’s holding should apply “only to permitting fees that
are imposed ad hoc, and not to fees that are generally applicable”)). The Dabbs Court
further based its decision on its understanding that Dolan recognized that impact
fees “imposed on a generally applicable basis are not subject to a rough
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Opinion of the Court
proportionality or nexus analysis.” Id. (citing Dolan, 512 U.S. at 385, 129 L. Ed. 2d
at 316).
We find the holding of Dabbs persuasive and find it in harmony with both the
United States Supreme Court’s decision in Koontz and the definition of “exaction”
employed by this Court in Franklin Road. In Franklin Road, this Court defined
“exaction” to include fees assessed “in lieu of compliance with dedication or
improvement provisions” or fees “reflecting [developers’] respective prorated shares
of the cost of providing new [infrastructure.]” Franklin Rd., 94 N.C. App. at 736, 381
S.E.2d at 490. This definition did not include fees assessed on a generally applicable
basis in a static quantity indifferent to the particular developers’ prorated share of
any resulting impact. We hold that impact and user fees which are imposed by a
municipality to mitigate the impact of a developer’s use of property, which are
generally imposed upon all developers of real property located within that
municipality’s geographic jurisdiction, and which are consistently imposed in a
uniform, predetermined amount without regard to the actual impact of the
developers’ project do not invoke scrutiny as an unconstitutional condition under
Nollan/Dolan nor under North Carolina precedent.
The Fees assessed in the present case are similar to those assessed in Dabbs.
The parties agree that, under Section 28(h) of the Ordinance, any landowner who
wishes to develop a single-family residential lot in the County must pay one-time fees
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Opinion of the Court
of $1,000 for water and $1,200 for sewer. Ordinance § 28(h). The Fees are
predetermined, set out in the Ordinance, and non-negotiable; the Fees are not
assessed on an ad hoc basis or dependent upon the landowner’s particular project.
Ordinance § 28(h). The Fees are assessed in conjunction with the landowner’s intent
to make use of real property located within the County’s jurisdiction, but, unlike the
conditions imposed in Koontz, the County does not view a landowner’s proposed
project and then make a demand based upon that specific parcel of real property.
Koontz, 570 U.S. at 613, 186 L. Ed. 2d at 714 (holding Nollan/Dolan scrutiny applied
where there is a “direct link between the government’s demand and a specific parcel
of real property”).
We recognize that Dabbs is distinguishable from the present case in that the
Fees here were assessed prior to the County’s grant of building permits, thus making
them a condition of approval. The Dabbs Court expressly based its holding, in part,
on the fact that the fees at issue were not “a conditional monetary payment to obtain
approval of an application for a permit of any particular kind[.]” Dabbs, 182 A.3d at
811. This distinction speaks directly to the types of coercive harms that the United
States Supreme Court sought to prevent in Koontz: the unconstitutional conditions
doctrine seeks to prevent the government from leveraging its legitimate interest in
mitigating harms by imposing “[e]xtortionate demands” which may “pressure a[]
[land]owner into voluntarily giving up property for which the Fifth Amendment
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Opinion of the Court
would otherwise require just compensation.” Koontz, 570 U.S. at 605–06, 186 L. Ed.
2d at ___; but see id. at 607, 186 L. Ed. 2d at 709 (“Our unconstitutional conditions
cases have long refused to attach significance to the distinction between conditions
precedent and conditions subsequent.” (citation omitted)). Nonetheless, we do not
find the distinction material in this case. Regardless of whether the Fees were to be
paid prior to or after the Developers began their projects, the fees were predetermined
and are uniformly applied—not levied against the Developers on an ad hoc basis—
and thus do not suggest any intent by the County to bend the will or twist the arm of
the Developers.
Therefore, we hold that the Developers’ pleadings failed to present a
constitutional takings claim under current federal and state unconstitutional
conditions jurisprudence as a matter of law. The trial court had no duty to apply the
unconstitutional conditions doctrine to the Fees; rather, the court needed only ensure
that, if the County “[did] have the authority to assess user fees to defray the costs of
[future services to be rendered,] such fees [were not] upheld if they [were]
unreasonable.” Homebuilders Ass’n of Charlotte, 336 N.C. at 46, 442 S.E.2d at 51
(citation omitted).
III. Conclusion
We hold that the trial court did not abuse its discretion in taking judicial notice
of the 1984 Buies Creek Agreement and the 1998 Agreement. Further, we hold that
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Opinion of the Court
the 1998 Agreement granted the County the contractual right to exercise the
Districts’ prospective fee-collecting authority, and the County properly exercised that
authority in collecting the Fees. We further hold that the Developers failed to present
a viable constitutional claim because generally applicable impact and user fees, such
as the Fees in this case, are not subject to the unconstitutional conditions doctrine.
We affirm the trial court’s Consolidated Order.
AFFIRMED.
Judges STROUD and BROOK concur.
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