QUALITY BUILT HOMES INCORPORATED and STAFFORD LAND COMPANY, INC.
TOWN OF CARTHAGE
in the Supreme Court on 9 January 2018.
discretionary review pursuant to N.C. G.S. § 7A-31 of a
unanimous, unpublished decision of the Court of Appeals, ___
N.C.App. ___, 795 S.E.2d 436 (2016), reversing and remanding
an order allowing summary judgment entered on 17 October 2014
by Judge James M. Webb in Superior Court, Moore County, after
the Supreme Court of North Carolina remanded the Court of
Appeals' prior decision in this case, Quality Built
Homes Inc. v. Town of Carthage, 242 N.C.App. 521, 776
S.E.2d 897 (2015) (unpublished).
Ferguson, Hayes, Hawkins & DeMay, PLLC, by James R.
DeMay; and Scarbrough & Scarbrough, PLLC, by John F.
Scarbrough, Madeline J. Trilling, and James E. Scarbrough,
Cranfill Sumner & Hartzog LLP, by Susan K. Burkhart, for
& Winters LLP, by Stephen D. Feldman, Steven A. Scoggan,
and Paul M. Cox, for North Carolina Water Quality Association
and the Municipalities of Apex, Concord, Holly Springs,
Jacksonville, Kannapolis, Surf City, and Winston-Salem; and
F. Paul Calamita for North Carolina Water Quality
Association, amici curiae.
Bishop, Capitano & Moss, P.A., by J. Daniel Bishop and
Joseph W. Moss, Jr., for Union County, amicus curiae.
issues before us in this case involve when the claims that
plaintiffs Quality Built Homes Incorporated and Stafford Land
Company, Inc., have asserted against defendant Town of
Carthage accrued and whether plaintiffs' claims are
barred by the one-, two-, -three-, or ten-year statute of
limitations and the doctrine of estoppel by the acceptance of
benefits. After careful review of the claims asserted against
the Town in plaintiffs' complaint and the applicable law,
we conclude that plaintiffs' cause of action accrued upon
the Town's exaction of the unlawful impact fees against
plaintiffs and that plaintiffs' claims against the Town
arise from a liability created by statute that is subject to
the three-year statute of limitations contained in N.C. G.S.
§ 1-52(2). In addition, we further conclude that the
Town's assertion that plaintiffs' claims are barred
by the doctrine of estoppel by the acceptance of benefits
lacks merit. As a result, we affirm the Court of Appeals'
decision, in part; reverse the Court of Appeals'
decision, in part; and remand this case to the Court of
Appeals for further remand to the Superior Court, Moore
County, for further proceedings not inconsistent with this
Town operates a public water and sewer system for the benefit
of its residents. In 2003, the Town adopted two ordinances
providing for the assessment of water and sewer impact fees
known, respectively, as Ordinance § 51.076 and Ordinance
§ 51.097. According to the Town, the required impact
fees were to "be used to cover the cost of expanding the
water [and sewer] system[s], " with fee payments due and
owing at the time of final plat approval or at the time at
which the payment of a separate fee intended to cover the
cost of connecting end-user customers to the Town's water
and sewer system was made. As of the time that this action
was commenced, Quality Built Homes had paid the Town $66,
000.00 in water and sewer impact fees and placed an
additional $4, 000.00 into an escrow account following the
filing of its complaint and Stafford Land had paid the Town
$57, 000.00 in water and sewer impact fees.
October 2013, plaintiffs filed a complaint against the Town
in the Superior Court, Moore County. In their complaint,
plaintiffs asked the trial court "to determine whether
[the Town] has authority to enact and enforce portions of its
ordinance regulating the collection of [the water and sewer]
impact fees" and sought to recover the unlawful impact
fees that they had paid to the Town, plus interest, as
authorized by N.C. G.S. § 160A-363(e), and
attorneys' fees, as authorized by N.C. G.S. §
6-21.7. On 23 June 2014, plaintiffs amended their complaint
to include claims asserting that the challenged impact fees
violated the equal protection and due process provisions of
the North Carolina Constitution, resulted in unreasonable
discrimination in violation of N.C. G.S. § 160A-314, and
contravened the Town's impact fee ordinances. On 29
August 2014, the Town filed an answer to plaintiffs'
amended complaint in which it denied the material allegations
of the amended complaint and asserted a number of affirmative
defenses, including claims that the challenged impact fees
had adequate statutory authorization and that plaintiffs'
claims were barred by the applicable statute of limitations
and the doctrine of waiver or estoppel through the acceptance
of benefits. After the parties filed cross-motions for
summary judgment, the trial court entered an order on 17
October 2014 granting summary judgment in favor of the Town.
Plaintiffs noted an appeal from the trial court's order
to the Court of Appeals.
August 2015, the Court of Appeals filed an unpublished
opinion holding that the Town had "acted within the
authority conferred by North Carolina General Statutes,
sections 160A[-]312, -313, and -314 to collect a water and
sewer impact fee." Quality Built Homes Inc. v. Town
of Carthage, 242 N.C.App. 521, 776 S.E.2d 897, 2015 WL
4620404, at *5 (2015) (unpublished). On 5 November 2015, this
Court allowed discretionary review of the Court of
Appeals' decision. On 19 August 2016, this Court filed an
opinion reversing the Court of Appeals' decision on the
grounds that the challenged impact fee ordinances were
unlawful. Quality Built Homes, Inc. v. Town of
Carthage, 369 N.C. 15, 22, 789 S.E.2d 454, 459 (2016).
More specifically, we determined that, "[w]hile the
enabling statutes allow [the Town] to charge for the
contemporaneous use of its water and sewer systems, the plain
language of the Public Enterprise Statutes clearly fails to
empower the Town to impose impact fees for future
services." Id. at 19-20, 789 S.E.2d at 458. In
light of this determination, we remanded this case to the
Court of Appeals in order to allow it to address whether
plaintiffs' claims were barred by the applicable statute
of limitations or the doctrine of estoppel by the acceptance
of benefits. Id. at 18 n.2, 22, 789 S.E.2d at
457 n.2, 459.
December 2016, the Court of Appeals filed an unpublished
opinion holding that plaintiffs' claims against the Town
were subject to the ten-year statute of limitations set out
in N.C. G.S. § 1-56, Quality Built Homes Inc. v.
Town of Carthage, ___ N.C. App. ___, 795 S.E.2d 436,
2016 WL 7984235, at *2 (2016) (unpublished), on the grounds
that "North Carolina courts have held that ultra vires
claims for charging fees without statutory authority have a
ten-year statute of limitations, " id. (quoting
Tommy Davis Constr. Inc. v. Cape Fear Pub. Util.
Auth., No. 7:13-CV-2-H, 2014 WL 3345043, at *3 (E.D.
N.C. July 8, 2014), aff'd, 807 F.3d 62 (2015)).
As a result, given that plaintiffs had paid the challenged
impact fees within ten years before filing their complaint in
this case, the Court of Appeals held that plaintiffs'
claims were not time-barred. Id. at *3. In addition,
the Court of Appeals held that plaintiffs were not estopped
from pursuing their claims against the Town on the grounds
that "[o]ne cannot be estopped by accepting that which
he would be legally entitled to receive in any event"
and that the General Assembly "clearly contemplated that
even if a party received a 'benefit' . . . in
exchange for paying an illegal fee, the party should still
receive a recovery of that fee." Id. (first
alteration in original) (first quoting Beck v. Beck,
175 N.C.App. 519, 525, 624 S.E.2d 411, 415 (2006); and then
citing N.C. G.S. § 160A-363(e)). As a result, the Court
of Appeals reversed the trial court's order and remanded
this case to the Superior Court, Moore County, for the
purpose of "mak[ing] the appropriate findings of fact as
to (1) whether defendant abused its discretion making
attorneys' fee mandatory and (2) a reasonable
attorneys' fees award to plaintiff, whether discretionary
or mandatory." Id. at *4. We granted the
Town's request for discretionary review of the Court of
Appeals' remand decision.
seeking relief from the Court of Appeals' decision before
this Court, the Town argues that the Court of Appeals had
ignored the fundamental legal principle that a claim accrues
when the right to maintain an action arises, which, in this
case, was the date upon which the challenged ordinances
became effective, citing Williams v. Blue Cross Blue
Shield of North Carolina, 357 N.C. 170, 177-78, 581
S.E.2d 415, 423 (2003). According to the Town, the
"continuing wrong" doctrine has no application in
this case given that, unlike the situation at issue in
Williams, "the [p]laintiffs, in this case, who
are in the business of developing property, knew at the
moment the Ordinances were passed, that they would be subject
to the Ordinances' requirement of the payment of water
and sewer impact fees." (Emphasis omitted.) In addition,
the Town argued that the "continuing wrong"
doctrine has no application to ultra vires claims.
Town's view, the applicable statute of limitations for
purposes of this case is the one-year statute of limitations
set out in 1-54(10) and N.C. G.S. §§ 160A-364.1(b),
which governs challenges to the validity of zoning and
development ordinances. According to N.C. G.S. §
160A-364.1(b), which applies to actions "challenging the
validity of any zoning or unified development ordinance or
any provision thereof adopted under [Article 19, Planning and
Regulation of Development], " N.C. G.S. §
160A-364.1(b) (2017), and N.C. G.S. § 1-54(10), which
applies to "[a]ctions contesting the validity of any
zoning or unified development ordinance or any provision
thereof adopted under . . . Part 3 of Article 19 of Chapter
160A of the General Statutes, " id. §
1-54(10) (2017), the applicable statute of limitations is one
year. The Town contends that N.C. G.S. § 160A-363(e)
should be harmonized and construed with N.C. G.S. §
160A-364.1(b) given that they address the same subject matter
and that the two statutory provisions ...