Rutherford Electric Membership Corp. v. 130 of Chatham, LLC

NO. COA14-134
NORTH CAROLINA COURT OF APPEALS
Filed: 2 September 2014
RUTHERFORD ELECTRIC MEMBERSHIP
CORPORATION,
Petitioner,
v. Rutherford County
No. 13 SP 95
130 OF CHATHAM, LLC,
Respondent.
Appeal by petitioner from order entered 30 October 2013 by
Judge Hugh B. Lewis in Rutherford County Superior Court. Heard
in the Court of Appeals 14 August 2014.
Parker Poe Adams & Bernstein, LLP, by W. Edward Poe, Jr.,
Thomas N. Griffin, III, and Benjamin Sullivan; and Law
Offices of Elizabeth T. Miller, by Elizabeth T. Miller, for
Petitioner-appellant.
Roberts & Stevens, P.A., by Ann-Patton Hornthal and William
Clarke; Sigmon, Clark, Mackie, Hanvey & Ferrell, PA, by
Forrest Ferrell and Amber Reinhardt; and Kilpatrick,
Townsend & Stockton, LLP, by Steven J. Levitas, for
Respondent-appellee.
HUNTER, JR., Robert N., Judge.
Petitioner Rutherford Electric Membership Corporation
(“Rutherford Electric”) appeals from an order dismissing their
petition to condemn easements for a power line across Respondent
130 of Chatham LLC’s (“Chatham”) tract of land (“Box Creek
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Wilderness”) that spans across Rutherford and McDowell Counties
After careful review, we reverse the trial court’s order.
I. Facts & Procedural History
Rutherford Electric filed a special proceeding petition
with the Rutherford County Superior Court on 24 January 2013 and
filed an amended petition on 15 February 2013. Both petitions
were filed pursuant to Chapter 40A of the General Statutes,
which allow for a private company to petition for exercise of
eminent domain “for the public use of benefit.” N.C. Gen.
Stat. §§ 40A-3(a), 40A-20 (2013). Chatham answered the amended
petition on 1 April 2013, which included a motion to dismiss
under N.C. R. Civ. P. 12(b)(1) for lack of subject matter
jurisdiction, stating that “[a] portion of the property subject
of the Amended Petition lies in McDowell County, and the Clerk
of Court for Rutherford County has no jurisdiction over property
in McDowell County.” The petition concerned a single tract of
land that lay in both Rutherford and McDowell counties. The
petition’s stated purpose was to condemn easements so that
Rutherford Electric may construct power lines and extend its
service to additional customers. Rutherford Electric also filed
a separate petition to condemn easements for a second tract of
land also owned by Chatham that is entirely in McDowell County
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(“Copperleaf”).
The Rutherford County Clerk of Court appointed three
citizens of Rutherford County as commissioners to appraise and
determine the value of just compensation for the tract at issue
pursuant to N.C. Gen. Stat. § 40A-25 (2013). A hearing date of
28 May 2013 was also set in the order appointing the
commissioners. The hearing took place on 28 May 2013 and the
three commissioners returned a value of $71,686.00 for the
easement on the tract of land at issue via a written report on
24 June 2013. Both parties appealed for a de novo jury trial on
the amount of just compensation.
A trial on the merits was set for August 2013. Rutherford
Electric also filed a separate petition for the Copperleaf tract
in McDowell County on 5 June 2013 to condemn certain land under
Chapter 40A of the General Statutes. Chatham responded to the
petition on 24 June 2013. The parties consented to an order to
consolidate the cases for trial which was filed on 20 September
2013. The order set a trial date of 30 September 2013.
On 24 September 2013, Chatham filed a Motion to Dismiss the
present matter for lack of subject matter jurisdiction. Judge
Lewis heard arguments on the motion to dismiss on 30 September
2013. Judge Lewis then adjourned court and stated that he would
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rule on Chatham’s motion to dismiss the next morning.
Judge Lewis then granted Chatham’s motion to dismiss and
explained the rationale for his decision. Rutherford Electric
made a motion under Rule 59(e) for leave to amend its petition
to include only the land in Rutherford County and to alter the
petition it filed in McDowell County concerning the Copperleaf
tract to include the McDowell County portions of the Box Creek
Wilderness. The trial court denied the motion and declined to
hear the other case concerning the Copperleaf tract. The trial
court filed written orders granting Chatham’s motion to dismiss
and motion to amend on 30 October 2013. The trial court’s order
did not indicate whether Rutherford Electric’s claim was
dismissed with or without prejudice. Rutherford Electric filed
timely written notice of appeal from the orders on 15 November
2013.
II. Jurisdiction & Standard of Review
Jurisdiction in this Court is proper pursuant to N.C. Gen.
Stat. § 7A-27(b) (2013) (stating a right of appeal lies with
this Court from the final judgment of a superior court).
“A motion to dismiss for lack of subject matter
jurisdiction is reviewed de novo pursuant to Rule 12 of the
North Carolina Rules of Civil Procedure.” Johnson v. Antioch
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United Holy Church, Inc., 214 N.C. App. 507, 510, 714 S.E.2d
806, 809 (2011); see also Burgess v. Burgess, 205 N.C. App. 325,
327, 698 S.E.2d 666, 668 (2010). Further, when an argument
presents an issue of statutory interpretation, full review is
appropriate, and the trial court’s conclusions of law are
reviewed de novo. Romulus v. Romulus, 216 N.C. App. 28, 32, 715
S.E.2d 889, 892 (2011) (citations omitted). “If the language of
the statute is clear, this Court must implement the statute
according to the plain meaning of its terms.” Whitman v. Kiger,
139 N.C. App. 44, 46, 533 S.E.2d 807, 808 (2000), aff’d per
curiam, 353 N.C. 360, 543 S.E.2d 476 (2001) (citation and
quotation marks omitted).
“Under de novo review, we examine the case with new eyes.”
Templeton Properties LP v. Town of Boone, ___ N.C. App. ___,
___, 759 S.E.2d 311, 317 (2014). “[D]e novo means fresh or
anew; for a second time, and an appeal de novo is an appeal in
which the appellate court uses the trial court’s record but
reviews the evidence and law without deference to the trial
court’s rulings.” Parker v. Glosson, 182 N.C. App. 229, 231,
641 S.E.2d 735, 737 (2007) (quotation marks and citations
omitted).
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The second issue on appeal is whether the trial court
improperly denied a request for leave to amend Rutherford
Electric’s complaint under N.C. R. Civ. P. 59, and is reviewed
under an abuse of discretion standard. House Healers
Restorations, Inc. v. Ball, 112 N.C. App. 783, 785–86, 437
S.E.2d 383, 385 (1993) (“Leave to amend should be granted when
‘justice so requires,’ or by written consent of the adverse
party . . . . The granting or denial of a motion to amend is
within the sound discretion of the trial judge, whose decision
is reviewed under an abuse of discretion standard.” (internal
citation omitted)). “When discretionary rulings are made under
a misapprehension of the law, this may constitute an abuse of
discretion.” Gailey v. Triangle Billiards & Blues Club, Inc.,
179 N.C. App. 848, 851, 635 S.E.2d 482, 484 (2006); Bartlett
Milling Co., L.P. v. Walnut Grove Auction and Realty Co., Inc.,
192 N.C. App. 74, 89, 665 S.E.2d 478, 490 (2008) (holding that
refusal to grant a motion to amend “without any justifying
reason and without a showing of prejudice to the defendant is
considered an abuse of discretion.” (citation omitted)).
III. Analysis
Rutherford Electric asks this Court to reverse the trial
court based on a reading of N.C. Gen. Stat. § 40A-20 and other
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sections within Chapter 40A allowing for a condemnation action
involving property in multiple counties. Chatham points
primarily to N.C. Gen. Stat. § 40A-25 within Chapter 40A, which
allows an answer to the petition for condemnation and allows the
county clerk to appoint three commissioners to value the
property who “shall be [residents] of the county wherein the
property being condemned lies . . . .” Id. These three
commissioners are required to take an oath to “fairly and
impartially appraise the property in the petition.” N.C. Gen.
Stat. § 40A-26 (2013).
While there is apparent conflict between statutes in
Chapter 40A on whether a multi-county private condemnation
action may be filed, we reverse the trial court because the
trial court very clearly did have subject matter jurisdiction
over at least the portions of the Box Creek Wilderness that were
in Rutherford County and did not grant Rutherford Electric’s
motion to amend its pleading. See N.C. Gen. Stat. §§ 40A-20,
40A-21, 40A-25, 40A-28, 40A-67 (2013). This Court leaves to the
General Assembly whether or not Chapter 40A contemplates a
multi-county private condemnation action via the procedure that
Rutherford Electric attempted here and would urge the General
Assembly to clarify the procedure to avoid future issues of this
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type.1
A. Subject Matter Jurisdiction
The trial court’s proper action in this matter, rather than
dismissing the entire claim under Chapter 40A for want of
subject matter jurisdiction would be to encourage or allow
Rutherford Electric to amend its claim under Rule 15 or Rule 59
of the Rules of Civil Procedure or to dismiss only the portion
of the claim for which it thought jurisdiction was lacking.
While courts shall “not take jurisdiction” when it is not
granted, likewise courts “must take jurisdiction” when there is
an express grant. Cohens v. State of Virginia, 6 Wheat. 264, 19
U.S. 264, 404 (1821); Union Pac. R. Co. v. Bhd. of Locomotive
Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558
U.S. 67, 71 (2009) (“[W]hen jurisdiction is conferred, a court
may not decline to exercise it.”).
Section 40A-20 provides a procedure for a private condemnor
to file a petition for condemnation with the county clerk of
court where “the real estate described in the petition is
1
An example where the General Assembly has provided clear
procedural instructions for a multi-county tract is in the
payment of excise taxes charged on parcels that span multiple
counties. See N.C. Gen. Stat. § 105-228.30(a) (2013). Another
example where the General Assembly provided jurisdiction to a
clerk of court for a single parcel spanning multiple counties is
also found in N.C. Gen. Stat. § 28A-17-1 (2013).
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situated.” N.C. Gen. Stat. § 40A-20. The procedure outlined in
Chapter 40A is a special proceeding, a variation of a routine
civil action, where the county clerk of court is given the
authority to appoint three commissioners who value the property
after taking evidence. N.C. Gen. Stat. § 40A-26. After the
commissioners complete their inquiry, they ascertain the
compensation the condemnor must make to the property owners and
report their award to the county clerk of court. Id. Service
of orders, notices, and any other papers are the same as those
made in other special proceedings found in the General Statutes.
N.C. Gen. Stat. § 40A-24 (2013).
A party may appeal the clerk’s order to the superior court
under N.C. Gen. Stat. § 40A-29 (2013). De novo appellate
jurisdiction is then granted to the superior court from the
clerk’s order and such jurisdiction provides for a jury trial to
resolve questions of fact such as the value of the property.
N.C. Gen. Stat. § 40A-29; see also High v. Pearce, 220 N.C. 266,
271, 17 S.E.2d 108, 112 (1941) (“Since 1868 the clerk of the
court has had no power except that which is given him by
statute. Where judicial power or jurisdiction has been
conferred upon him, his court is one of limited jurisdiction,
both as to subject matter and the territory in which it may be
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exercised.” (citation omitted)).
There is no violation of due process when a plaintiff
follows the statutory procedure allowed for in a special
proceeding nor is there want of subject matter jurisdiction for
either the clerk of court or the trial court. See N.C. Gen.
Stat. § 40A-20. In tandem, Sections 40A-20 and 40A-29 very
clearly provide the clerk of court and the trial court with
jurisdiction over at least the Rutherford County portion of the
Box Creek Wilderness property.
B. Motion to Amend
Rutherford Electric sought to amend its petition under Rule
59 after the trial court granted Chatham’s motion to dismiss.
In so doing, Rutherford Electric stated that they moved for
amendment because “the interest of our members also requires a
speedy adjudication by this Court . . . .” We hold that this
satisfied N.C. R. Civ. P. 59(a)(9), which allows for amending
judgments when a reason was previously recognized as a ground
for a new trial. These reasons include when “the ends of
justice will be met.” Sizemore v. Raxter, 58 N.C. App. 236,
236, 293 S.E.2d 294, 294 (1982). The motion to amend is also
considered with a general understanding that “[l]iberal
amendment of pleadings is encouraged by the Rules of Civil
Procedure in order that decisions be had on the merits and not
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avoided on the basis of mere technicalities.” Phillips v.
Phillips, 46 N.C. App. 558, 561, 265 S.E.2d 441, 443 (1980)
(citation omitted). Further, “[t]he philosophy of Rule 15
should apply not only to pleadings but also to motions where
there is no material prejudice to the opposing party.” Taylor
v. Triangle Porsche-Audi, Inc., 27 N.C. App. 711, 714, 220
S.E.2d 806, 809 (1975), cert. denied, 289 N.C. 619, 223 S.E.2d
396 (1976).
In response to Rutherford Electric’s motion, Judge Lewis
stated at the hearing:
The issue is in all three matters [sic] the
fact that you are dealing in the arenas of
due process and by consequence subject
matter jurisdiction.
The request is basically to preempt due
process that is outlined in Chapter 40A,
which through all of the eleven pages of
text that I was reading is premised on the
North Carolina Constitution relating to
property-like rights, and that is to be
strictly adhered to.
There is not an ability to agree, consent,
to circumvent that process. You need to
follow the statutes in the timeline as
designated in the statutes period on all
properties. The one property that you’re
asking for me to take a look at outside of
Rutherford County has not even had any
hearings or proceedings or orders signed by
the Clerk in the other county.
The timeline of how things occur and move to
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Superior Court are designated in the
statutes. They need to be followed in order
to protect the citizens, the owners of that
property, period.
As to the amendment issue, that is also
denied because you need to make sure that
all the T’s are crossed and all the I’s are
dotted in all proceedings, because the issue
of subject matter jurisdiction can be
brought up at all times, it can not be
waived. For this to be clean and brought to
a final end for both tables so that it
doesn’t come back because there haven’t been
some – because someone raises subject matter
jurisdiction at a later time, even though
they do not voice it now, is imperative.
That’s what justice requires. That is what
necessary is.
I’m denying both of the condemnor’s request
[sic] at this point in time. The one order
will stand. An additional order denying
those requests will also need to be drafted
by your table as well.
Thereafter, the trial court filed an order which stated that
Rutherford Electric made an oral motion pursuant to N.C. R. Civ.
P. 59(e) seeking leave to amend under N.C. R. Civ. P. 15(a).
The trial court stated that the “oral motion was made subsequent
to the Court having found that [Rutherford Electric] had no
authority to condemn the property as described in this
condemnation action and entering a final dismissal of this
action pursuant to Rule 12(b)(1) of the North Carolina Rules of
Civil Procedure.” The trial court then concluded its order by
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stating “[a]fter hearing arguments of counsel, the Court in its
discretion DENIES the Petitioner’s oral motion.”
The foregoing constitutes an abuse of discretion. The
trial court had jurisdiction to hear at least a portion of the
case. Three private citizens from Rutherford County were chosen
to provide a valuation of certain property in Rutherford County.
While there was also property in McDowell County which may or
may not have been properly included in the action, Rutherford
Electric sought leave to amend to correct their misunderstanding
of the statute. Rather than grant leave to amend their
pleading, the trial court instead denied their motion. In doing
so, the trial court misapprehended its ability to hear the
present matter, and also provided no rationale for denying the
motion under N.C. R. Civ. P. 59(e).
“A trial court abuses its discretion only where no reason
for the ruling is apparent from the record.” JPMorgan Chase
Bank, Nat’l Ass’n v. Browning, ___ N.C. App. ___, ___, 750
S.E.2d 555, 561 (2013) (citation omitted). “A motion to amend
may be denied for ‘(a) undue delay, (b) bad faith, (c) undue
prejudice, (d) futility of amendment, and (e) repeated failure
to cure defects by previous amendments.’” Strickland v.
Lawrence, 176 N.C. App. 656, 666–67, 627 S.E.2d 301, 308 (2006)
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(quoting Carter v. Rockingham Cnty. Bd. of Educ., 158 N.C. App.
687, 690, 582 S.E.2d 69, 72 (2003)).
Here, the trial court did not address any of these
categories and simply denied the motion after misapprehending
the law. This constitutes an abuse of discretion, and
accordingly, the trial court is reversed. We remand to the
trial court with instructions to allow Rutherford Electric’s
motion to amend its action to remove the McDowell County portion
of the petition from its Box Creek Wilderness claim and
thereafter proceed with the trial on the Rutherford County
portions of the Box Creek Wilderness tract in Rutherford County
Superior Court.
IV. Conclusion
For the reasons stated above, the decision of the trial
court is
REVERSED AND REMANDED.
Judges STEELMAN and GEER concur.