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COA weighs due process rights for opponents of local decisions

The North Carolina Court of Appeals has issued an opinion that promises to give municipalities across the state more guidance on when those who object to local government decisions can argue their case in court.

In short, the appeals court said it doesn’t matter what a municipality calls its decision-making process. If municipal officials “exercise discretion” when making a decision, it should be considered “quasi-judicial,” meaning those who want the decision to be reversed must be afforded fair-trial rights, the court said.

The court’s unanimous May 17 ruling came in Butterworth v. City of Asheville, which centers on a lawsuit filed by a group of Asheville residents who objected to the city’s decision to grant a developer an exemption to Asheville’s regulations regarding street widths.

Asheville’s Planning and Zoning Commission approved the exemption, which the developer called a “modification,” believing it to be an administrative or ministerial decision. The North Carolina Supreme Court has said previously that administrative and ministerial decisions do not require fair-trial rights be granted to a decision’s opponents.

Asheville won at the trial level after convincing a Buncombe County judge to dismiss the lawsuit challenging the commission’s decision because the group opposing the exemption was not entitled to a court proceeding.

But the Court of Appeals found that the trial court got it wrong. By granting the motion to dismiss, the trial court violated the challengers’ right to due process, the appeals court said.

Land use attorneys in North Carolina said the appeals court’s opinion helps to clarify a long-debated issue in the state, namely, what process should municipalities use to determine whether a decision is quasi-judicial or whether it is administrative.

“It’s been hard for city attorneys to know what advice they should give municipal leaders on this issue because the law has been in such flux. This opinion is a good roadmap for municipal attorneys, county attorneys and practicing attorneys to follow when they face these kinds of questions,” said Thomas Johnson, chair of Nexsen Pruet’s zoning and land use law practice subgroup.

Exemption objection

The exemption at issue in Butterworth v. City of Asheville was granted by the commission in 2014, when developer Farmbound Holdings submitted a plan to build a 14-lot subdivision called Brynn Subdivision.

The plans for Brynn Subdivision included streets with a 25-foot right of way. But Asheville’s regulations typically require a minimum 45-foot right of way for new streets.

To get around that obstacle, Farmbound filed a request with the city for the subdivision to be approved with a “modification,” which would allow the project to move forward with the narrower right of way.

In October 2014, the commission held a public meeting on the proposed subdivision and heard a presentation by Asheville’s urban planner that described the project. The commission also received a report from the city’s Technical Review Committee, which recommended that the subdivision be approved with the modification.

But when the commission turned its attention to comments from the city’s residents, it found there were a number of homeowners in a neighboring subdivision who opposed the project. Despite those concerns, the commission voted to approve the Brynn Subdivision with the requested street-width modification. The commission’s decision was based on findings from the city’s fire and transportation departments that the narrower rights of way were “safe and adequate.”

Two months later, the neighbors who opposed the project filed a petition for certiorari in Buncombe County Superior Court, seeking review of the commission’s decision. Asheville and Farmbound fired back with a motion to dismiss the neighbors case.

On April 24, 2015, the trial court tossed the case, accepting the argument put forward by Asheville and Farmbound that the decision to grant the exemption was administrative. As such, the trial court found that it lacked subject matter jurisdiction to consider the neighbors’ case.

A ‘routine’ decision?

On appeal, the neighbors argued the commission’s decision was not administrative but was, in fact, quasi-judicial in nature.

The distinction between the two types of municipal decisions is key and served as the basis of the Court of Appeals’ decision to reverse the trial court’s ruling.

Writing for the appeals court, Judge Christopher Dillon said administrative decisions are “routine” and “nondiscretionary” and may be delegated to a single individual. Administrative decisions also involve the application of “specific, neutral and objective criteria as set out in the municipality’s governing code,” Dillon said.

By contrast, Dillon said, quasi-judicial decisions involve two essential elements: the finding of facts regarding the specific proposal and the exercise of some discretion in applying the standards of the ordinance. Those types of decision may not be delegated to a single individual, Dillon said.

Quasi-judicial proceedings also entail fair-trial rights, Dillon said, which include the right to hold evidentiary hearings, hear sworn testimony, cross-examine witnesses, inspect documents and have written findings of fact. That is not the case for administrative cases, which do not require any sort of hearing, Dillon said.

The confusion about how to categorize Asheville’s decision to grant Farmbound an exemption appears to stem from vague language in Asheville’s Code of Ordinances.

The code states that the Planning and Zoning Commission is allowed to grant exemptions to the city’s regulations in cases where a developer can demonstrate a “physical hardship.” Physical hardships generally involve cases where applying city regulations would create “unusual and unnecessary” problems due to topography, the condition of adjoining properties or other unusual characteristics of the property being considered for development.

However, the code also says the commission’s decisions on whether to approve a development plan “shall be ministerial [or administrative] in nature.” The code does not include a separate provision for cases involving purported physical hardships.

So when the commission was told by the city’s Technical Committee that Farmbound’s exemption should be approved, Dillon said, the commission did not believe it had the authority to reject the development plan. That belief led the commission to act as though the decision were administrative, rather than quasi-judicial, Dillon said.

But Dillon went on to say that the code only matters up to a point. Regardless of whether the code said the decision was administrative, if it involved discretion, it was quasi-judicial, Dillon said.

“Notwithstanding the provisions of the Asheville Code suggesting otherwise, the decision regarding the Developer’s proposed modification required a determination of whether the Developer would suffer ‘physical hardship’ if the modification was not allowed,” Dillon said. “We hold that this determination required an exercise of discretion in the application of this generally stated standard, rendering the Commission’s decision quasi-judicial in nature.”

The appeals court remanded the case to the trial court for further proceedings.

Additional complaints

Now that the case will be allowed to proceed, it is likely that the neighbors will raise concerns about the proposed subdivision that go beyond the narrow right of way exemption.

Lachicotte Zemp of Roberts & Stevens in Asheville, who is representing the neighbors opposing the subdivision, said his clients oppose any development on the tract of land under consideration for Brynn Subdivision. Zemp said the tract is heavily sloped toward a creek, and his clients worry that development could create environmental and safety problems.

“Any roads would be a concern, but it just so happens the development plan had narrower streets. That’s what we decided to focus on at this stage,” Zemp said. “But there are a whole host of issues that would arise if a development is put in that location.”

Zemp said he does not know when the trial in his clients’ case will begin.

Asheville City Attorney Robin Currin could not be reached for comment.

The issue of whether municipal decisions are administrative or quasi-judicial has been one that has plagued cities and counties across the state for years. Some cities have opted to avoid the question altogether and have adopted an approach where all decisions are viewed as quasi-judicial. Nexsen Pruet’s Johnson said Raleigh went that direction several years ago “to avoid any problems.”

As a former city councilman for Greenville, North Carolina, Johnson said he sympathizes with local government officials who have to make those kinds of decisions. He said they have to approve requests, knowing that if they don’t follow the right procedure, it could set off a lengthy and expensive court fight.

Johnson said he thinks the Court of Appeals got it right when it found that Asheville’s decision to grant Farmbound’s exemption was quasi-judicial.

“The court laid it out very well, and that’s going to be helpful for municipal officials going forward,” Johnson said. “You really need to look at the substance of the decision, rather than the language of the ordinance. And just because you call it one thing, that doesn’t mean it is not another.”

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