BOBBY G. BOLES, et al., Plaintiffs,
TOWN OF OAK ISLAND, Defendant.
in the Court of Appeals 17 January 2019.
by plaintiffs from order entered 2 May 2018 by Judge James
Ammons, Jr., in Brunswick County, No. 15 CVS 2214 Superior
James Rowlett & Cohen LLP, by Norman B. Smith, for
Parker, Poe, Adams, & Bernstein LLP, by Charles C. Meeker
and Stephen V. Carey; and Crossley, McIntosh & Collier,
by Brian E. Edes, for defendant-appellee.
owners of undeveloped parcels of property in Defendant Town
of Oak Island, challenge the sewer service availability fees
levied upon them pursuant to a 2004 local act enacted to help
service the debt incurred in constructing Oak Island's
sewer system. Plaintiffs argue that the fees are unauthorized
by statute, unconstitutional, and violative of certain tax
principles. After careful review, we conclude that Oak Island
exceeded its statutory authority by imposing the sewer
service availability fees on Plaintiffs' undeveloped
property that could not or does not benefit from the
availability of Oak Island's sewer system. Accordingly,
we reverse the trial court's order granting summary
judgment in favor of Oak Island and remand for further
Town of Oak Island constructed a sewer system at a cost of
$140 million. In 2004, the General Assembly enacted a local
designed to assist Oak Island in reducing its resultant
outstanding debt, which was approximately $117 million as of
October 2017. 2004 N.C. Sess. Laws 117, ch. 96. Specifically,
the General Assembly authorized Oak Island to "impose
annual fees for the availability of sewer service
within" its sewer treatment district. 2004 N.C. Sess.
Laws 117, 117, ch. 96, § 3. The Session Laws authorize
Oak Island to impose such sewer service availability fees
upon the "owners of each dwelling unit or parcel of
property that could or does benefit from the availability of
sewage treatment" within the district. 2004 N.C. Sess.
Laws 117, 117, ch. 96, § 4.
Island's sewer lines run in front of each parcel of
property on the island, both developed and undeveloped, and,
according to Oak Island, its system "has the capacity
and ability to serve all parcels, both developed and
undeveloped." Oak Island began to assess sewer service
availability fees against all properties within the district,
both developed and undeveloped.
in fiscal year 2009,  owners of developed property began paying
the availability fees via an additional charge reflected on
their monthly sewer bills. Owners of undeveloped parcels
began paying the availability fees on an annual basis in
fiscal year 2010, with the fees appearing on their property
tax bills. The total sewer service availability fees charged
to each parcel thus far are as follows:
recurring sewer service availability fees are in addition to
a one-time special assessment of $4, 200.00, which was
imposed upon all parcels of property at the outset of the
sewer system's establishment. It is also noteworthy that
for the years 2015 through 2017, owners of undeveloped lots
were paying more than the owners of developed lots that were
connected to and using the sewer system.
December 2015, Plaintiffs filed the instant action
challenging Oak Island's statutory authority to assess
the sewer service availability fees against Plaintiffs'
undeveloped property. Plaintiffs sought to recover the fees
paid from 2010 to 2014, and interest, together with a
declaratory judgment that the fees are unlawful. On 21 April
2017, Plaintiffs moved to certify a class of all undeveloped
parcel owners who have paid the sewer service availability
fees since 2009.
parties filed cross-motions for summary judgment in October
2017. Plaintiffs moved for summary judgment on the issue of
liability only, while Oak Island moved for summary judgment
on all issues. A hearing on the parties' summary judgment
motions was held on 16 April 2018. At the outset of the
hearing, Plaintiffs voluntarily dismissed their claim for
declaratory judgment without prejudice, leaving only their
claim for the recovery of fees paid from 2010 to 2014. At the
end of the hearing, Plaintiffs orally moved to amend the
pleadings pursuant to Rule 15(b) of the North Carolina Rules
of Civil Procedure, or alternatively, to supplement their
complaint pursuant to Rule 15(d), in order to bring claims
for recovery of sewer service availability fees paid in
fiscal years 2015 through 2017. Oak Island objected to the
ruling on Plaintiffs' motion to amend, the trial court
denied Plaintiffs' motion for partial summary judgment
and granted Oak Island's motion for summary judgment. In
light of these rulings, the trial court also did not rule
upon Plaintiffs' motion for class certification. On 2 May
2018, the trial court entered an order memorializing its
decision and taxing the costs against Plaintiffs. Plaintiffs
filed notice of appeal to this Court on 21 May 2018.
appeal, Plaintiffs contend that the trial court erred by
granting Oak Island's motion for summary judgment because
(1) the statutory phrase "availability of sewer
service" precludes Oak Island from assessing sewer
service availability fees against undeveloped properties; (2)
Oak Island provided a full credit or rebate of the
availability fees to owners of developed parcels, thereby
violating Plaintiffs' constitutional rights and certain
tax principles; and (3) refunds were provided to owners of
developed parcels in violation of N.C. Gen. Stat. §
l05-380(a). Finally, Plaintiffs argue that the trial court
erred in failing to grant their motion to amend the
Standard of Review
judgment is proper "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled
to a judgment as a matter of law." N.C. Gen. Stat.
§ 1A-1, Rule 56(c) (2017). Our standard of review on
appeal from an order granting summary judgment is de
novo. In re Will of Jones, 362 N.C. 569, 573,
669 S.E.2d 572, 576 (2008).
Statutory Authority to Assess Sewer Service Availability
first address Plaintiffs' argument that the trial court
erred in granting summary judgment in favor of Oak Island
because Oak Island exceeded its statutory authority under the
Session Laws by assessing the sewer service availability fees
against Plaintiffs' undeveloped properties. Specifically,
Plaintiffs argue that their undeveloped properties are not
ones that "could or do benefit from the
availability" of Oak Island's sewage treatment
services. We agree, and therefore reverse the trial
court's order granting summary judgment in favor of Oak
Island on this ground.
creations of the legislature, municipalities have only those
powers delegated to them by the General Assembly."
Quality Built Homes, Inc. v. Town of Carthage, 369
N.C. 15, 16, 789 S.E.2d 454, 455 (2016). "The General
Assembly delegates express power to municipalities by
adopting an enabling statute, which includes implied powers
essential to the exercise of those which are expressly
conferred." Id. at 19, 789 S.E.2d at 457
(quotation marks and alteration omitted). Otherwise,
"[a]ll acts beyond the scope of the powers granted to a
municipality are invalid." Id.
determining the extent of legislative power conferred upon a
municipality, the plain language of the enabling statute
governs." Id. "When the language of a
statute is clear and without ambiguity, it is the duty of
this Court to give effect to the plain meaning of the
statute, and judicial construction of legislative intent is
not required." Diaz v. Div. of Soc. Servs., 360
N.C. 384, 387, 628 S.E.2d 1, 3 (2006) (citation omitted).
instant case, although the Session Laws do not define the
term "availability" for purposes of imposing the
sewer service availability fees, it is clear that the
enabling Session Laws do not, as a matter of law, apply to
Plaintiffs' undeveloped property.
the event that the General Assembly uses an unambiguous word
without providing an explicit statutory definition, that word
will be accorded its plain meaning." Fid. Bank v.
N.C. Dep't of Revenue, 370 N.C. 10, 19, 803 S.E.2d
142, 149 (2017). The plain meaning of the unambiguous,
undefined word "availability" is "the quality
or state of being available." Availability,
visited May 31, 2019). "Available" means
"present or ready for immediate use." Available,
visited May 31, 2019).
noted in Oak Island's answer to Plaintiffs' first set
of interrogatories, in order to "benefit from the
availability" of Oak Island's sewer system, the
owner of an undeveloped parcel of property would first be
required to (1) obtain the requisite building permits; (2)
construct a dwelling or building with a sewer system
connection on the property; (3) have the improvements pass
municipal inspection; (4) obtain a plumbing permit; (5)
submit an application for service; and (6) meet any
additional requirements governing the improvement of property
set forth in the Town of Oak Island Code of Ordinances.
Should the system have the capacity to add and serve the
parcel, an owner of undeveloped property who wished to
connect to the system would also have to pay the requisite
fees to Oak Island in order to obtain the various permits.
The complex, costly additional requirements-many of them
conditional- that the owner of an undeveloped lot must
fulfill in order to benefit from Oak Island's sewer
services foreclose any conclusion that such services are
"present or ready for immediate use" by those
conclusion is supported by Ricks v. Town of Selma,
99 N.C.App. 82, 392 S.E.2d 437 (1990), disc. review
improvidently allowed, 328 N.C. 567, 402 S.E.2d 400
(1991), in which this Court addressed the validity of an
availability charge in the context of water and sewer
treatment services. At issue in Ricks was the
validity of the defendant Town of Selma's ordinance that
set "rates for . . . sewer service available but not
received[.]" 99 N.C.App. at 84, 392 S.E.2d at 438. The
plaintiffs were the owners of a 41-unit mobile-home park
located inside the Town's limits, which utilized its own
private septic tanks instead of the Town's sewer system.
Id. at 83, 392 S.E.2d at 438. The Town assessed
availability charges against the plaintiffs, who contended
that the Town had exceeded the scope of its statutory
authority, in that the plaintiffs were not using the
Town's services. Id. at 84, 392 S.E.2d at
438-39. We disagreed.
authorizing statute in Ricks permitted the Town to
enact an ordinance "establish[ing] rates for the use of
or the services furnished by any public enterprise."
Id. at 84-85, 392 S.E.2d at 439 (quotation marks
omitted) (citing N.C. Gen. Stat. § 160A-314(a)). The
question presented thus was "whether making sewer
service available is 'furnishing a service' within
the meaning of the statute." Id. at 85, 392
S.E.2d at 439. We held that the Town's ordinance was
statutorily authorized as against the plaintiffs, concluding
that "a city's power to set rates for services
furnished by a sewer system includes the power to charge for
services available but not received," where the property
is developed, but the owner chooses not to connect.
Id. at 86, 392 S.E.2d at 440.
the term "available" was not explicitly defined in
Ricks or the relevant statute, the facts that were
held to evidence "availability of service" are
clearly distinguishable from those of the case at bar. In
Ricks, the Town had extended water and sewer service
to the plaintiffs' mobile home park; the plaintiffs
chose to "tap onto the municipal water
service, but . . . never connected any of their 41 housing
units to the . . . sewer system[, ]" preferring instead
to use their existing septic tanks. Id. at 83, 392
S.E.2d at 438. In other words, the Town's sewer services
were present and ready for immediate use by the
Ricks plaintiffs, who simply opted not to connect to
the system. Moreover, unlike the undeveloped property in the
present case, the plaintiffs' property in Ricks
was already developed and generating sewage, and the Town had
authorized the units' connection to the system.
holding finds further support in the circumstances under
which property may be subject to an "availability
charge" pursuant to N.C. Gen. Stat. § 160A-317,
which governs a municipality's authority to require
property owners to connect to its sewer facilities and to
charge for such connections. Specifically, the statute
authorizes municipalities to "require an owner of
developed property on which there are situated one or
more residential dwelling units or commercial
establishments . . . to connect the owner's premises
with the [city's] . . . sewer line." N.C. Gen. Stat.
§ 160A-317(a) (emphasis added). Alternatively,
municipalities may subject such owners to "a periodic
availability charge" in lieu of connection. Id.
Session Laws' language "could . . . benefit from the
availability of sewage treatment" follows the same logic
of section 160A-317. 2004 N.C. Sess. Laws 117, 117, ch. 96,
§ 4. The fact that it would be outside the scope of Oak
Island's authority under N.C. Gen. Stat. § 160A-317
to charge Plaintiffs an "availability charge" for
its sewer services suggests that those services are similarly
not "available" to Plaintiffs for purposes of the
Session Laws. See, e.g., In re Halifax Paper
Co., 259 N.C. 589, 594, 131 S.E.2d 441, 445 (1963)
("[I]t is the duty of the courts to reconcile laws and
adopt the construction of a statute which harmonizes it with
other statutory provisions.").
instructive, though lacking precedential value, is Holmes
Harbor Sewer Dist. v. Holmes Harbor Home Bldg. LLC, 123
P.3d 823 (Wash. 2005), in which the Washington Supreme Court
directly addressed the meaning of "availability" of
sewer services. 123 P.3d at 825-26. Similar to the statutory
scheme at issue in this case, the Washington statute
permitted the district to "fix rates and charges for
furnishing sewer and drainage service and facilities to those
to whom service is available." Id. at
824-25. The Washington Supreme Court held in favor of an
owner of unimproved property who had refused to pay the
availability charges. Id. at 827. Specifically, the
Court concluded that "unimproved lots are not properties
to which sewer service is available," and therefore,
"the charges at issue [we]re not statutorily
authorized." Id. at 823.
Island did, the sewer district in Holmes Harbor
initially charged a special assessment to all property owners
of both improved and unimproved parcels and later imposed
additional availability charges. The availability charges
were assessed against unimproved properties, unconnected to
the system and generating no sewage, as well as those
developed, connected, and actually receiving services.
Moreover, as here, owners of unimproved property had "no
guaranteed right to connect to the sewer system."
Id. at 824. Should there be sufficient capacity, the
Washington sewer district reserved the right to authorize any
new connections. However, "[b]efore authorizing
connection, the [d]istrict [had to] approve the hookup
application, and upon approval by the [d]istrict, property
owners [then had to] pay for the installation of on-site
facilities and connection to the sewer system."
Id. at 827. Finding that the initial assessment had
compensated the district for "the special benefit of
potentially increased property values resulting from the
construction of the sewer system," id. at 826
n.5, the Court concluded that justifying the availability
charges would require more than a nebulous opportunity to
connect to the system at some undetermined future date.
See id. at 826-27. Accordingly, the Court held that
sewer service was not available where "the properties at
issue are not improved, are not connected to the sewer
system, and have no guaranteed right to connect upon
improvement." Id. at 827.
here, Plaintiffs' undeveloped properties are not ones
that "could or do benefit from the
availability of" Oak Island's sewer treatment
services. 2004 N.C. Sess. Laws 117, 117, ch. 96, § 4
(emphasis added). The undeveloped properties are not
connected to or being served by the municipal sewer service,
and "have no guaranteed right to connect."
Holmes Harbor, 123 P.3d at 827. Thus, the sewer
service is not available to the owners of such properties.
Consequently, beyond the initial assessment imposed, Oak
Island's additional and ongoing charges to Plaintiffs, as
owners of undeveloped properties, for sewer service
availability was not a valid exercise of statutory authority
pursuant to Session Law 2004-96.
light of our decision, we do not address Plaintiffs'
additional arguments concerning the tax credit provided to
developed property owners and not to undeveloped property
Motions to Amend Pleadings
Plaintiffs argue that the trial court erred by failing to
grant their oral motions to amend or supplement their
complaint pursuant to Rule 15(b) and (d) of the North
Carolina Rules of Civil Procedure. However, because
Plaintiffs failed to obtain rulings on these motions, there
is no judicial action for this Court to review at this time.
order to preserve an issue for appellate review, a party must
have presented to the trial court a timely . . . motion,
stating the specific grounds for the ruling the party desired
the court to make if the specific grounds were not apparent
from the context." N.C. R. App. P. 10(a)(1). "It is
also necessary for the complaining party to obtain a ruling
upon the party's . . . motion." Id.
outset of the hearing, Plaintiffs took a voluntary dismissal
of their declaratory judgment claim. At that point, Defendant
noted that "[s]ince the damages requested are only from
2010 to 2014, now there's no request for beyond
2015." At the end of the hearing, Plaintiffs moved to
amend their complaint, pursuant to Rule 15(b), to include
damages for sewer service availability fees paid during
fiscal years 2015 through 2017. Plaintiffs argued that
damages for these years had been tried by consent because Oak
Island's Exhibit D included sewer service availability
fees charged to landowners for fiscal years 2010 through
2017. In the alternative, Plaintiffs argued that they should
be allowed to supplement their complaint pursuant to Rule
15(d). Oak Island objected to Plaintiffs' motion to amend
their complaint, arguing that it did not try the issue of
damages in those years by consent.
the hearing, the trial court announced its decision to deny
Plaintiffs' motion for partial summary judgment and grant
Oak Island's motion for summary judgment. However, the
trial court did not decide or rule upon Plaintiffs' Rule
15 motions. Because Plaintiffs did not obtain rulings upon
their Rule 15 motions, they failed to preserve for appeal any
arguments concerning the same. See id.; Gilreath
v. N.C. Dep't of Health & Human Servs., 177
N.C.App. 499, 501, 629 S.E.2d 293, 294 (holding that the
plaintiff's argument that the trial court erred in
failing to grant the plaintiff's motion to strike
paragraphs from affidavits was ...