Applewood Properties, LLC v. New South Properties, LLC , 366 N.C. 518 ( 2013 )

IN THE SUPREME COURT OF NORTH CAROLINA
No. 161A12
FILED 13 JUNE 2013
APPLEWOOD PROPERTIES, LLC and APPLE CREEK EXECUTIVE GOLF
CLUB, LLC
v.
NEW SOUTH PROPERTIES, LLC; APPLE CREEK VILLAGE, LLC; HUNTER
CONSTRUCTION GROUP, INC.; and URBAN DESIGN PARTNERS
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel
of the Court of Appeals, ___ N.C. App. ___, 725 S.E.2d 360 (2012), affirming an
order granting partial summary judgment for defendants entered on 16 April 2010
by Judge Jesse B. Caldwell, III in Superior Court, Gaston County. Heard in the
Supreme Court on 14 November 2012.
Womble Carlyle Sandridge & Rice, LLP, by Raboteau T. Wilder, Jr. and
Amanda G. Ray, for plaintiff-appellants.
Dean & Gibson, PLLC, by Jeremy S. Foster and Michael G. Gibson, for
defendant-appellee Hunter Construction Group, Inc.
Roy Cooper, Attorney General, by John F. Maddrey, Solicitor General; James
C. Gulick, Senior Deputy Attorney General; Jennie Hauser, Special Deputy
Attorney General; and Anita LeVeaux, Assistant Attorney General, for State of
North Carolina ex rel. Dee Freeman, Secretary of North Carolina Department
of Environment and Natural Resources, Division of Land Resources, amicus
curiae.
JACKSON, Justice.
In this appeal we consider whether an injured person may bring a civil action
against a defendant pursuant to the civil relief provision of the Sedimentation
APPLEWOOD PROPS. V. NEW SOUTH PROPS.
Opinion of the Court
Pollution Control Act of 1973 (“SPCA”) when the defendant has received notices of
noncompliance, but has not been cited for a violation of a relevant law, rule, order,
or erosion and sedimentation control plan. We hold that before an injured person
can have standing to bring a civil action pursuant to section 113A-66 of the SPCA,
the defendant must have been cited for a violation of a law, rule, ordinance, order,
or erosion and sedimentation control plan. Accordingly, we modify and affirm the
opinion of the Court of Appeals majority.
On 1 September 2005, plaintiff Applewood Properties, LLC sold a parcel of
land located adjacent to the Apple Creek Executive Golf Club, LLC to defendants
New South Properties, LLC and Apple Creek Village, LLC for development as a
residential community. Subsequently, New South hired defendant Urban Design
Partners to design erosion control measures, site plans, storm water collection and
control systems, and utilities for the project. On 15 September 2005, New South
obtained approval of its erosion and sedimentation control plan from the Gaston
County Natural Resources Department (“GNRD”). New South then hired defendant
Hunter Construction Group, Inc. to prepare the parcel for construction of new
homes in accordance with the approved plan. Hunter cleared and graded the parcel
and built erosion control structures and devices, including a silt collection basin.
On 28 March 2006, the GNRD inspected the parcel and found that New
South had “[f]ail[ed] to [t]ake [a]ll [r]easonable [m]easures” to control erosion and
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Opinion of the Court
sedimentation as required by Title 15A, Chapter 04B, Section .0105 of the North
Carolina Administrative Code. The GNRD indicated in its report that corrective
actions were necessary, including “a revision with an added berm with stone wier to
the draw in the center of the property to reduce the concentrated flow to the basin
that is it’s [sic] outlet.” The GNRD sent New South a “Notice of Non-Compliance,”
which informed New South of its “[f]ailure to take all reasonable measures” and
mandated that it take the aforementioned corrective actions by 11 April 2006. New
South forwarded the notice to Hunter and instructed the contractor to correct the
problems. After inspecting the parcel again on 5 May 2006, the GNRD found that
the site was in compliance with the SPCA, but indicated that additional corrective
actions were needed, including “[m]ak[ing] sure all basins are cleaned and
maintained, per our conversation.”
On 27 June 2006, a dam that Hunter had constructed to form the silt
collection basin ruptured, causing mud, water, and other debris to flood the golf
course. The GNRD inspected the parcel and found that New South had taken
“Insufficient Measures to Retain Sediment on Site” in violation of section 113A-
57(3) of the North Carolina General Statutes and had “Fail[ed] to Take All
Reasonable Measures” to control erosion and sedimentation. The GNRD noted in
its report that sediment damage had occurred as a result of “Offsite sediment [being
deposited] onto [the] neighboring golf course.” The GNRD issued a “Notice of Non-
Compliance” to New South, which informed New South of these findings and
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Opinion of the Court
mandated that the company take corrective action, including “Restor[ing] adaquate
[sic] sediment control measures, to retain sediment on site” by 6 July 2006. New
South continued to forward these notices to Hunter.
Representatives from Hunter visited the site to assess the damage, and they
told New South’s project manager that “they were going to take care of it.”
Although Hunter initially undertook some cleanup and repair work following the
rupture, it ultimately suspended its efforts several weeks later before completing
the work. As a result, the silt collection basin repeatedly overflowed in the ensuing
months, depositing more mud and silt onto the golf course. The GNRD issued New
South another “Notice of Non-Compliance” on 13 July 2006, indicating that the
company had “Fail[ed] to submit [a] revised Plan” that showed the “changes to
topography and drainage area” that had occurred on the parcel. On 23 August
2006, the GNRD again issued New South a “Notice of Non-Compliance,” indicating
that the company had failed to: (1) “submit [a] revised Plan”; (2) “provide adequate
ground cover”; (3) “take all reasonable measures”; and (4) “maintain erosion control
measures.” The GNRD also mandated corrective actions, including submission of a
revised plan.
New South submitted a revised plan to the GNRD, but on 8 September 2006,
the GNRD “disapproved” the plan. Nonetheless, on 25 October 2006, the Gaston
County Environmental Review Board “resolved that no further action [wa]s
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Opinion of the Court
required on [the] site, provided that vegetation [wa]s established and [the] site
[wa]s adequate to retain sediment on site for the purpose of water quality.”
Meanwhile, the GNRD continued to issue “Notice[s] of Non-Compliance” to New
South through March 2009. In addition, on 8 January 2007, the North Carolina
Division of Water Quality issued New South a “Notice of Violation” for failing to
comply with the “State General Stormwater Permit” that was issued along with its
approved erosion and sediment control plan.
As a result of the damage to the golf course, on 4 December 2006, plaintiffs
filed an action against New South, Apple Creek Village, and Hunter, asserting
claims of negligence, nuisance, trespass, violations of the SPCA, negligence per se,
and intentional misconduct and gross negligence. Plaintiffs added Urban Design as
a defendant on 17 April 2009. On 3 August 2009, Hunter moved for partial
summary judgment on the SPCA claim. Apple Creek Village also moved for partial
summary judgment, and New South moved for summary judgment on all claims
against it. On 16 April 2010, the trial court granted these defendants’ motions for
summary judgment on the SPCA claim, but denied the motions as to all other
claims.
The remaining claims were heard in the Superior Court, Gaston County
beginning on 19 April 2010. At the conclusion of the evidence, the jury found that
plaintiffs were damaged by defendants’ negligence and concluded that plaintiffs
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Opinion of the Court
were entitled to $675,000.00 in damages. On 10 June 2010, the trial court entered
its judgment, awarding plaintiffs $675,000.00 in damages.
On 23 September 2010, plaintiffs appealed the trial court’s order granting
defendants’ motions for summary judgment on the SPCA claim. Subsequently,
plaintiffs filed a motion to withdraw their appeal against all defendants except
Hunter. The Court of Appeals allowed plaintiffs’ motion on 1 July 2011. The Court
of Appeals later affirmed the trial court’s order in a divided opinion. Applewood
Props., LLC v. New S. Props., LLC, ___ N.C. App. ___, 725 S.E.2d 360 (2012). The
majority concluded that the SPCA did not apply because “a ‘land-disturbing activity’
requires an element of deposition into a body of water” and there was no evidence in
this case that sediment had been deposited into a body of water. Id. at ___, 725
S.E.2d at 362. The dissent disagreed and argued that the relevant statutory
provisions indicate that “a ‘land-disturbing activity’ subject to the provisions of the
SPCA is one which ‘may cause or contribute to sedimentation,’ rather than one
which actually does result in sedimentation.” Id. at ___, 725 S.E.2d at 366 (Ervin,
J., dissenting) (citation omitted). Therefore, the dissent concluded that
sedimentation “cannot be understood to incorporate a deposition into a body of
water requirement.” Id. at ___, 725 S.E.2d at 366 (quotation marks omitted).
Plaintiffs appealed to this Court as of right pursuant to section 7A-30(2) of
the North Carolina General Statutes. Without considering the merits of plaintiffs’
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Opinion of the Court
appeal, we conclude that plaintiffs lacked standing to bring an SPCA claim against
Hunter.
Whether plaintiffs had standing to bring an SPCA claim against Hunter
hinges on the proper interpretation of section 113A-66 of the North Carolina
General Statutes, which provides injured persons a private cause of action pursuant
to the SPCA. As a result, “[t]his matter presents a question of statutory
interpretation, which we review de novo. The primary rule of construction of a
statute is to ascertain the intent of the legislature and to carry out such intention to
the fullest extent.” Dickson v. Rucho, ___ N.C. ___, ___, 737 S.E.2d 362, 368 (2013)
(citations and internal quotation marks omitted). It is well settled that:
[W]hen the language of a statute is ambiguous, this Court
will determine the purpose of the statute and the intent of
the legislature in its enactment. In these situations, the
history of the legislation may be considered in connection
with the object, purpose and language of the statute in
order to arrive at its true meaning. However, [w]hen 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.
In re Foreclosure of Vogler Realty, Inc., 365 N.C. 389, 392, 722 S.E.2d 459, 462
(2012) (alterations in original) (citations and internal quotation marks omitted).
Subsection 113A-66(a) states in pertinent part:
(a) Any person injured by a violation of this Article or
any ordinance, rule, or order duly adopted by the
Secretary or a local government, or by the initiation or
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Opinion of the Court
continuation of a land-disturbing activity for which an
erosion and sedimentation control plan is required other
than in accordance with the terms, conditions, and
provisions of an approved plan, may bring a civil action
against the person alleged to be in violation (including the
State and any local government). The action may seek
any of the following:
(1) Injunctive relief.
(2) An order enforcing the law, rule, ordinance,
order, or erosion and sedimentation control
plan violated.
(3) Damages caused by the violation.
N.C.G.S. § 113A-66(a) (2011) (emphases added). The plain language of subsection
113A-66(a) indicates that the legislature intended to provide injured persons a
private cause of action when there has been a violation of: (1) the SPCA; (2) a
relevant ordinance, rule, or order; or (3) an erosion and sedimentation control plan.
The first clause of subsection 113A-66(a) unambiguously states that a private cause
of action will lie when there has been a violation of the SPCA or a relevant
ordinance, rule, or order. Although the term “violation” does not appear in the
second clause of subsection 113A-66(a), the legislature’s use of the term “violated” in
subdivision 113A-66(a)(2), which also refers to “law, rule, ordinance, [and] order,”
demonstrates the General Assembly’s intent that a violation of, rather than mere
noncompliance with, an erosion and sedimentation control plan must have occurred
to give rise to a private cause of action pursuant to this clause. See id. § 113A-
66(a)(2). Furthermore, the directive in subsection 113A-66(a) that injured persons
“may bring a civil action against the person alleged to be in violation” evidences the
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legislature’s intent that a defendant actually have been cited for a violation before a
private cause of action can arise. See id. § 113A-66(a) (emphasis added). “We
presume that the General Assembly carefully chose each word used in drafting the
legislation.” Dickson, ___ N.C. at ___, 737 S.E.2d at 371 (internal quotation marks
omitted). The legislature could have used the word “noncompliance,” or another
broader term to describe the conduct necessary to trigger a private cause of action,
but chose not to do so. Instead, it opted to use the narrow term “violation.” As
such, we conclude that the legislature intended to create a private cause of action
only when the defendant has been cited for a violation pursuant to the SPCA.
This interpretation is consistent with our decision in Holly Ridge Associates,
LLC v. North Carolina Department of Environment & Natural Resources, in which
we recognized that an aggrieved party might be entitled to bring a civil action
pursuant to section 113A-66 in a case in which the defendant had been cited for a
violation of the SPCA. See 361 N.C. 531, 533, 538, 648 S.E.2d 830, 833, 836 (2007)
(stating that the defendant previously had received “a Notice of Violations of” the
SPCA and had been assessed a civil penalty by the Department of Environment and
Natural Resources and observing that the intervening parties’ “allegations of injury
could be an appropriate basis . . . to file a private claim under the SPCA”).
Moreover, this interpretation does not leave an injured person without recourse
when the offending party has not been cited for a violation because the injured
person alternatively may bring a traditional tort action in nuisance for any damages
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Opinion of the Court
caused by the offending party’s actions. In fact, in the case sub judice plaintiffs did
pursue such a successful claim. Therefore, we hold that for an injured person to
have standing to bring a civil action against a defendant pursuant to section 113A-
66, the defendant previously must have been cited for a violation of a law, rule,
ordinance, order, or erosion and sedimentation control plan as described by this
section. Were we to hold otherwise, a defendant could be subject to civil liability
pursuant to the SPCA even if its actions had not risen to the level of a violation.1
The legislature certainly did not intend such an absurd result, especially in cases
such as this in which the enforcing agency has given the offending party an allotted
time period in which to take corrective actions before being subjected to any
penalties pursuant to the SPCA. See Nationwide Mut. Ins. Co. v. Mabe, 342 N.C.
482, 494, 467 S.E.2d 34, 41 (1996) (“[T]h[is] Court will, whenever possible, interpret
a statute so as to avoid absurd consequences.” (quotation marks omitted)).
In the case sub judice it is apparent that the GNRD issued New South
numerous “Notice[s] of Non-Compliance” during the eight months leading up to the
filing of plaintiffs’ SPCA claim. These notices were sent to New South, but not
Hunter, and informed the recipient of numerous violations of relevant ordinances,
statutes, and administrative code provisions and recommended appropriate
corrective actions. Although the GNRD repeatedly warned New South about these
1 In the instant case, this holding is even more compelling because the notices of
noncompliance were issued to New South, rather than Hunter. As such, Hunter never was
directly put on notice that it potentially could be held responsible for any of the violations.
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violations, neither New South nor Hunter ever was issued a “Notice of Violation”
before plaintiffs initially brought their SPCA claim.2 Instead, the GNRD repeatedly
informed New South that it would have the opportunity to take corrective actions
within a specified time period before being subject to any penalties pursuant to the
SPCA. Although it is notable that none of these “Notice[s] of Non-Compliance” were
directed at Hunter, that fact is immaterial in the case before us. Because Hunter
never was cited for a violation, we must conclude that plaintiffs lacked standing to
bring a civil action against Hunter pursuant to section 113A-66. Therefore, the trial
court properly granted defendants’ motions for summary judgment on plaintiffs’
SPCA claim against Hunter. Accordingly, we modify and affirm the opinion of the
Court of Appeals majority.
MODIFIED AND AFFIRMED
Justice BEASLEY did not participate in the consideration or decision of this
case.
2 As we have noted, the record indicates that the Division of Water Quality issued
New South a “Notice of Violation” for failing to comply with the “State General Stormwater
Permit” on 8 January 2007, nearly one month after plaintiffs brought their SPCA claim on
4 December 2006. Since this notice was issued after plaintiffs filed their original complaint,
it could not have conferred standing on plaintiffs to bring their SPCA claim on 4 December
2006. However, we also note that the record indicates that plaintiffs filed an amended
complaint on 17 April 2009, well after New South was issued the “Notice of Violation.”
Nevertheless, we need not decide the effect of plaintiffs’ amended complaint because the
“Notice of Violation” was issued to New South, and we are concerned only with plaintiffs’
standing to sue Hunter in the case sub judice.
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EDMUNDS, J., dissenting
Justice EDMUNDS dissenting.
I believe the majority opinion incorrectly restricts the reach of N.C.G.S. §
113A-66(a) by giving State and local agencies gatekeeping powers nowhere found or
implied in Chapter 113A. Under the majority’s interpretation, a plaintiff may not
seek redress against a party under this statute unless a violation notice has been
issued to that party. In other words, a plaintiff must wait and see whether a
governmental body such as the GNRD or the North Carolina Division of Water
Quality will exercise its unbridled discretion to issue a violation notice before that
plaintiff can bring a civil action under section 113A-66. Applying that reasoning
here, the majority concludes that, because the GNRD chose for whatever reason not
to issue a notice of violation to defendant Hunter, plaintiff has no recourse and
simply has to write off section 113A-66 as a source of relief. I find problematic the
majority’s holding that the statute is triggered not by a plaintiff’s injury but by an
administrative decision whether to issue a violation notice. Allowing an injured
plaintiff to seek redress is not an “absurd result” as the majority states; rather, it is
precisely what the statute allows.
In its analysis, the majority misreads subsection 113A-66(a). That statute
creates two bases for a claim. The first applies when a plaintiff is “injured by a
violation of this Article or any ordinance, rule, or order duly adopted by the
Secretary or a local government.” N.C.G.S. § 113A-66(a) (2011). The second applies
APPLEWOOD PROPS., LLC V. NEW S. PROPS., LLC
EDMUNDS, J., dissenting
when a plaintiff is injured “by the initiation or continuation of a land-disturbing
activity for which an erosion and sedimentation control plan is required other than
in accordance with the terms, conditions, and provisions of an approved plan.” Id.
Under either circumstance, an injured plaintiff may bring suit using subsection
113A-66(a) “against the person alleged to be in violation.” Id. The statute as
written does not require plaintiff to await action by the GNRD or by anyone else.
Here, relying on the second basis, the injured plaintiff brought suit against a
defendant alleged to be “engaged in land-disturbing activity . . . without installing
erosion and sedimentation control devices” and “without filing or complying with
erosion and sedimentation control plans with the governing agency.” This
allegation is sufficient to confer standing.
The gatekeeping function created today serves to limit the remedies available
to an injured plaintiff. Holly Ridge Associates, LLC v. North Carolina Department
of Environment & Natural Resources, 361 N.C. 531, 648 S.E.2d 830 (2007), cited by
the majority, is not to the contrary. In Holly Ridge, the defendant had already been
issued Notices of Violations and assessed several civil penalties by the time suit was
brought under the Sedimentation Pollution Control Act. Id. at 533-34, 648 S.E.2d
at 833. Consequently, Holly Ridge gives little guidance in the case at bar.
Because I believe that subsection 113A-66(a) gives plaintiff standing, I
respectfully dissent from the majority holding.
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EDMUNDS, J., dissenting
Justice HUDSON joins in this dissenting opinion.
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