Frazier v. Town of Blowing Rock ( 2022 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
2022-NCCOA-782
No. COA21-388
Filed 6 December 2022
Watauga County, No. 20CVS188
CHAD FRAZIER, Petitioner-Appellee,
v.
TOWN OF BLOWING ROCK and MORGAN HORNER, Respondent-Appellants.
Appeal by Respondent from Order entered 15 March 2021 by Judge Gary M.
Gavenus in Watauga County Superior Court. Heard in the Court of Appeals 23
February 2022.
Deal, Moseley & Smith, LLP, by Bryan P. Martin, for Respondent-Appellant.
Nexsen Pruet, PLLC, by David S. Pokela, for Petitioner-Appellee.
CARPENTER, Judge.
¶1 The Town of Blowing Rock (“Town”) seeks review of the superior court’s 15
March 2021 Amended Order reversing the Town of Blowing Rock Board of
Adjustment’s (“BOA”) decision denying Petitioner’s appeal of a Final Notice of
Violation (“NOV”) for operating a short-term rental property in violation of a local
zoning ordinance. After careful review, we affirm the Amended Order of the
superior court.
FRAZIER V. TOWN OF BLOWING ROCK
2022-NCCOA-782
Opinion of the Court
I. Factual and Procedural Background
¶2 On 29 June 2016, Chad Frazier (“Petitioner”) acquired a three-unit property
at 163 Wilmot Circle (“Property”) in the Town from the prior owners, who had
owned the Property since 1981. Petitioner owns and maintains the Property for
short-term rentals.
¶3 The phrase “tourist homes and other temporary residences renting by the day
or week” existed in the Town’s Ordinances since 1984. In 2000, the Town’s
Ordinances were amended (“2000 Amendment”) to define “short-term rentals” as
the “rental, lease, or use of an attached or detached residential dwelling unit that is
less than 28 consecutive days,” and to establish a short-term rental overlay district
in multi-family residential districts. The Town, however, did not
contemporaneously add “short-term rentals” to its Table of Permissible Uses.1 On
13 August 2019, another amendment was enacted (“2019 Amendment”) to add
“short-term rental of a residential dwelling unit” to the Table of Permissible Uses,
replacing “tourist homes and other temporary residences renting by the day or
week[.]”
1 The Table of Permissible Uses is contained within Article X of the Town’s Land Use
Ordinances. Through December 1985, it was located at Section 16-146. As of the date of
the 2019 Amendment, it was found at Section 16-10.1.
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¶4 On 13 September 2019, Petitioner was cited by the Town’s Planning Director
with a NOV for purportedly violating a local ordinance prohibiting short-term
rentals in R-15 zoning districts. The NOV explained, “[a] short-term rental is a
home or dwelling unit that is rented for a period less than 28 days.” The parties do
not dispute the Property is located in a R-15 zoning district, the Property has at all
relevant times been zoned residential by the Town, and the Property is not within
the short-term rental overlay district created by the 2000 Amendment.
¶5 Petitioner timely appealed the NOV to the BOA, contending his use of the
Property amounted to a grandfathered, nonconforming use as a short-term rental.
Petitioner maintained he used and intended to use the Property for short-term
rentals before, as of, and after the effective date of the new short-term rental
ordinance, and during his ownership, there were no periods of 180 days or more in
which he did not use the Property for short-term rentals. Over two hearing dates in
January and February of 2020, the BOA considered Petitioner’s appeal of the NOV.
On 2 March 2020, the BOA issued its decision, concluding Petitioner’s use of the
Property as a short-term rental was an illegal, non-conforming use.
¶6 Petitioner sought review of the BOA’s decision by filing a petition for writ of
certiorari with the Watauga County Superior Court. The writ was granted, a
hearing was held before the superior court, and the Amended Order was entered on
15 March 2021. In the Amended Order, the superior court reversed the BOA’s
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decision, concluding Petitioner’s use of the Property as a short-term rental was “a
grandfathered and valid non-conforming use . . . which may be continued.” The
superior court concluded as a matter of law that the language of the Town’s 1984
Land Use Act prohibiting “temporary residences renting by the day or week” in
residentially zoned areas was vague and ambiguous, and therefore the Town had no
enforceable restriction against “short-term rentals of less than 28 days” until the
enactment of the 2019 Amendment.2 The Town filed notice of appeal from the
Amended Order on 15 April 2021.
II. Jurisdiction
¶7 This Court has jurisdiction to address the Town’s appeal from a final
judgment pursuant to N.C. Gen. Stat. § 7A-27(b) (2021) and N.C. Gen. Stat. § 1-277(2021).
III. Issues
¶8 The issues raised on appeal are whether: (1) the superior court erred as a
matter of law in reversing the BOA’s decision, and (2) omissions of the superior
court deprived Petitioner of alternative bases in law for supporting the Amended
Order.
IV. Standard of Review
2 We are not called upon to determine or otherwise address the constitutionality of
the 2019 Amendment within the scope of this appeal.
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Opinion of the Court
¶9 A local zoning board, such as a board of adjustment, acts as “a quasi-judicial
body.” Refining Co. v. Bd. of Aldermen, 284 N.C. 458, 469, 202 S.E.2d 129, 136–37
(1974). At the time of the BOA hearings and decision, former North Carolina
General Statute § 160A-388 provided that “[e]very quasi-judicial decision shall be
subject to review by the superior court by proceedings in the nature of certiorari[.]”
N.C. Gen. Stat. § 160A-388(e2)(2) (2019) (repealed by S.L. 2019-111, § 2.3 as
amended by S.L. 2020-25, § 51(b), eff. June 19, 2020) (recodified as N.C. Gen. Stat. §
160D-406(k) (2021)).
¶ 10 Decisions issued by quasi-judicial bodies are “subject to review by the
superior court by proceedings in the nature of certiorari,” wherein the superior
court sits as an appellate court, and not as a trier of facts. Tate Terrace Realty
Invs., Inc. v. Currituck Cnty., 127 N.C. App. 212, 217, 488 S.E.2d 845, 848 (1997)
(quoting Capricorn Equity Corp. v. Town of Chapel Hill, 334 N.C. 132, 135–36, 431
S.E.2d 183, 186 (1993)). If the board’s decision is challenged as resting on an error
of law, the proper standard of review for the superior court is de novo. Bailey &
Assocs., Inc. v. Wilmington Bd. of Adjustment, 202 N.C. App. 177, 189, 689 S.E.2d
576, 586 (2010).
¶ 11 “However, if the petitioner contends the Board’s decision was not supported
by the evidence or was arbitrary and capricious, then the reviewing court must
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apply the ‘whole record’ test.” NCJS, LLC v. City of Charlotte, 255 N.C. App. 72, 76,
803 S.E.2d 684, 688 (2017) (quoting Four Seasons Mgmt. Servs. Inc. v. Town of
Wrightsville Beach, 205 N.C. App. 65, 75, 695 S.E.2d 456, 462 (2010)). “The whole
record test requires the reviewing court to examine all competent evidence (the
whole record) in order to determine whether the agency decision is supported by
substantial evidence[,]” which is evidence that “a reasonable mind would consider
sufficient to support a particular conclusion . . . .” Thompson v. Union Cnty., 2022-
NCCOA-382, ¶ 12 (citation and internal quotations omitted). “In reviewing the
sufficiency and competency of evidence before the Superior Court, the question is
not whether the evidence supported the Superior Court’s order . . . [t]he question is
whether the evidence before the BOA was supportive of the BOA’s decision.” Id. at
¶ 13 (citing Dellinger v. Lincoln Cnty., 248 N.C. App. 317, 323, 789 S.E.2d 21, 26
(2016)).
¶ 12 The Court of Appeals, on a writ of certiorari considering the decision of a
quasi-judicial body, has the authority to review a superior court judgment as it is
“derivative of the power of the superior court to review the action.” Tate Terrace
Realty Invs., Inc., 127 N.C. App. at 219, 488 S.E.2d at 849 (citing Sherrill v. Town of
Wrightsville Beach, 76 N.C. App. 646, 649, 334 S.E.2d 103, 105 (1985)). “An
appellate court’s review of the trial court’s zoning board determination is limited to
determining whether the superior court applied the correct standard of review, and
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. . . whether the superior court correctly applied that standard.” Bailey & Assocs.,
Inc., 202 N.C. App. at 190, 689 S.E.2d at 586.
V. Analysis
A. 15 March 2021 Amended Order
¶ 13 The Town contends the superior court erred in concluding as a matter of law
that the Town’s Land Use Code did not prohibit or regulate short-term rentals until
the enactment of the 2019 Amendment. By applying the effective date of the 2019
Amendment, 13 August 2019, as the date by which the Petitioner’s “grandfathered”
status should be measured, the Town further asserts the superior court erred by
concluding that Petitioner established a prima facie case for the Property to be
“grandfathered” as a non-conforming use. Petitioner, on the other hand, claims the
superior court was correct in concluding that no clear ordinance purporting to
regulate short-term rentals existed in the Town prior to the 2019 Amendment.
Therefore, Petitioner asserts the superior court correctly determined that he had
established a prima facie case of a grandfathered and valid non-conforming use
based upon the facts found by the BOA.
¶ 14 We initially note the Town raises only issues of law on appeal, and neither
party disputes the superior court applied the appropriate standard of review, de
novo, in its appellate role. See id. at 189, 689 S.E.2d at 586. Our analysis is
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therefore limited to whether the superior court “correctly applied” its de novo review
to the BOA’s conclusions of law. See id. at 190, 689 S.E.2d at 586.
(1) The Town Did Not Properly Prohibit or Regulate “Short-Term Rentals of Less
Than 28 Days” Until 13 August 2019
¶ 15 The free use of property is favored in our State. Harry v. Crescent Res., Inc.,
136 N.C. App. 71, 80, 523 S.E.2d 118, 124 (1999).3 “Zoning ordinances are in
derogation of the right of private property, and where exemptions appear in favor of
the property owner, they must be liberally construed in favor of such owner.”
Hampton v. Cumberland Cnty., 256 N.C. App. 656, 665, 808 S.E.2d 763, 770 (2017)
(citation omitted). Because “[z]oning regulations are in derogation of common law
rights . . . they cannot be construed to include or exclude by implication that which
is not clearly . . . their express terms.” Byrd v. Franklin Cnty., 237 N.C. App. 192,
201, 765 S.E.2d 805, 810–11 (2014) (citation omitted) (Hunter, J. concurring in part
and dissenting in part), adopted per curiam, 368 N.C. 409, 778 S.E.2d 268 (2015).
“[W]hen there is ambiguity in a zoning regulation, there is a special rule of
construction requiring the ambiguous language to be ‘construed in favor of
3
During the pendency of this appeal, this Court rendered an opinion with broad implications on
local government authority to proscribe or otherwise restrict landowners’ rights to freely use their
property for rental purposes in the face of contrary state law. See Schroeder v. City of Wilmington, 282
N.C. App. 558, 2022-NCCOA-210 (holding non-severable provisions of local ordinance requiring local
government permits, permission, or registration to lease or rent real property was preempted by state
statute). This binding precedent is not dispositive on the issues before us, as the landowners there filed
for declaratory relief; therefore, our analysis here is limited to arguments asserted below and advanced on
appeal.
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the free use of real property.’” Visible Properties, LLC v. Vill. of Clemmons, 2022-
NCCOA-529, ¶ 11 (quoting Morris Commc’ns Corp. v. City of Bessemer, 365 N.C.
152, 157, 712 S.E.2d 868, 871 (2011)); see also Yancey v. Heafner, 268 N.C. 263, 266,
150 S.E.2d 440, 443 (1966) (“[W]ell-founded doubts as to the meaning
of obscure provisions of a Zoning Ordinance should be resolved in favor of the free
use of property.”).
¶ 16 The Town would have us infer, based upon the evolution of its local Land Use
Ordinances, that it has been prohibiting or regulating short-term rentals since
1984, or alternatively, 2000. In support of its argument, the Town directs us to
Section 1.620 of its 1984 Land Use Ordinance, which established the use category
“[t]ourist homes and other temporary residences renting by the day or week” in the
Town’s Table of Permissible Uses and restricted its use to non-residential zoning
districts. The Town amended its Ordinances again in 2000, establishing a short-
term rental overlay district in multi-family residential districts and defining “short-
term rental of a dwelling unit” as the “rental, lease, or use of an attached or
detached residential dwelling unit that is less than 28 consecutive days,” without
adding this newly defined use or eliminating the use “temporary residences renting
by the day or week” from the Town’s Table of Permissible Uses.
¶ 17 While the Town asserts the 2000 Amendment “provided further clarity”
regarding “in which zoning districts . . . short-term rentals [were] allowed[,]” the
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expressed purpose of the 2019 Amendment indicates the opposite is true. The 2019
Amendment was the result of a “Short-term Rental Task Force of the Planning
Board . . . formed to evaluate the current Land Use Code Regulations and establish
goals for a new ordinance to regulate short-term rentals[.]” These “goals” included:
1. To clearly define short-term rental so everyone
understands what is and is not allowed;
2. To clearly identify where short-term rentals are
permitted;
...
10. To communicate transparently with 3rd party rental
listing companies.
(emphasis added).
¶ 18 It is apparent from the plain language of the 2019 Amendment that a lack of
clarity and transparency existed and was known to exist with respect to the Town’s
regulation of short-term rentals between the 2000 Amendment and the 2019
Amendment. Ambiguity logically follows where two comparable, yet apparently
distinct land use definitions simultaneously exist in the Town’s Ordinances, but
only one is clearly prohibited by the Town’s Table of Permissible Uses. We will not
construe “short-term rentals” as defined by the 2000 Amendment, to be impliedly
prohibited by cross-reference to a less definite, albeit related, land use category. See
Byrd, 237 N.C. App. at 201, 765 S.E.2d at 810–11. Our jurisprudence is clear that
in the event of doubts or ambiguity, zoning regulations are to be construed in favor
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of the free use of property. See Visible Properties, LLC, 2022-NCCOA-529, ¶ 11; see
also Hullett v. Grayson, 265 N.C. 453, 454, 144 S.E.2d 206, 207 (1965).
¶ 19 The Town’s arguments pursuant to Section 16-149 of its 1984 Land Use
Ordinance are not considered on appeal for two reasons. First, these arguments
were not raised before the BOA. Contentions not raised and argued below may not
be raised and argued for the first time in the appellate court, because “the law does
not permit parties to swap horses between courts in order to get a better mount[.]”
Wood v. Weldon, 160 N.C. App. 697, 699, 586 S.E.2d 801, 803 (2003) (quoting Weil v.
Herring, 207 N.C. 6, 10, 175 S.E. 836, 838 (1934)). Second, neither the BOA nor the
superior court relied upon these theories in reaching their decisions. See Godfrey v.
Zoning Bd. of Adjustment of Union Cnty., 317 N.C. 51, 64, 344 S.E.2d 272, 279–80
(1986) (Courts examining the propriety of quasi-judicial determinations must
conduct review “solely on the grounds invoked by the agency.”).
¶ 20 As the superior court correctly noted, “until August 19, 2019[,] the regulation
of ‘short term rentals of less than 28 days’ as well as [t]ourist homes and other
temporary residences renting by the day or week, [was] vague and ambiguous and
left the rights of landowners to the unguided discretion of the [BOA].” The
ambiguity present here flows from the Town’s ineffective attempt to simultaneously
prohibit two distinct land uses, where only one use was lawfully prohibited by the
Town’s Table of Permissible Uses—not from either land use category being
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independently and sufficiently ambiguous on its face. The superior court properly
recognized that this ambiguity left the Town’s purported regulation of short-term
rentals between 2000 and2019 in a state of uncertainty, which in turn, “left the
rights of landowners to the unguided discretion of the [BOA].”
¶ 21 When the 2019 Amendment took effect on 13 August 2019, replacing
“temporary residences renting by the day or week” with the previously defined
“short-term rental of a dwelling unit” in the Town’s Table of Permissible Uses, the
Town achieved the goals of the 2019 Amendment by properly regulating “short-term
rentals of less than 28 days” for the first time. Accordingly, the superior court did
not err by concluding the Town’s Ordinances existing prior to 13 August 2019 did
not properly regulate short-term rentals of less than 28 days.
(2) The BOA Erred by Concluding Petitioner’s Short-Term Rental Use Was Not
“Otherwise Lawful”
¶ 22 The Town next contends the superior court erred in determining the BOA
erred in concluding Petitioner’s nonconforming short-term rental use was not
“otherwise lawful” pursuant to Section 16-8.1 of the Town’s 1984 Land Use
Ordinance. We disagree.
¶ 23 Section 16-8.1 provides in relevant part, “nonconforming situations that were
otherwise lawful on the effective date of this chapter may be continued[.]” The
authority of a local board of adjustment to render decisions as a quasi-judicial body
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is provided by statute, and each decision shall “determine contested facts . . . and
their application to applicable standards.” N.C. Gen. Stat. § 160A-388(e2)(1)
(2019) (repealed by S.L. 2019-111, § 2.3 as amended by S.L. 2020-25, § 51(b), eff.
June 19, 2020) (recodified as N.C. Gen. Stat. § 160D-406(j) (2021))4. Appellate
review of the BOA’s decision is strictly limited to the grounds invoked by the BOA.
See Godfrey, 317 N.C. at 64, 344 S.E.2d at 279–80.
¶ 24 Here, the effective date, within the meaning of Section 16-8.1, is the date of
the 2019 Amendment, 13 August 2019, as properly determined by the BOA.
Petitioner was twice cited by the Town for violating the Town’s purported ban on
short-term rentals, once before and once after the 2019 Amendment. The record is
clear that the alleged violation in each instance was specific to the Town’s
proscription against “short-term rentals of less than 28 days.” In neither instance
did the Town cite Petitioner for violating the Town’s regulation of “temporary
residences renting by the day or week.” Accordingly, the question of whether
Petitioner’s property use violated the Town’s regulation of “temporary residences
renting by the day or week” was neither a contested fact between the parties nor the
standard applicable to this case. See N.C. Gen. Stat. § 160A-388(e2)(1) (2019)
4 For a detailed discussion of the General Assembly’s recent reorganization of our
land use statutes, see Schroeder v. City of Wilmington, 282 N.C. App. 558, 2022-NCCOA-
210.
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(repealed by S.L. 2019-111, § 2.3 as amended by S.L. 2020-25, § 51(b), eff. June 19,
2020) (recodified as N.C. Gen. Stat. § 160D-406(j) (2021)).
¶ 25 Thus, the BOA erred and exceeded its quasi-judicial authority to determine
contested facts upon applicable standards by mischaracterizing the nature of
Petitioner’s property use, implicating a land use category he was not cited for
violating, to attain a particular outcome. By denying Petitioner's claim pursuant to
the "otherwise lawful" provision of Section 16-8.1 of the Town's 1984 Land Use
Ordinances—a standard not implicated by the NOV—the BOA erred and exceeded
its quasi-judicial authority conferred by statute. See N.C. Gen. Stat. § 160A-
388(e2)(1) (2019) (repealed by S.L. 2019-111, § 2.3 as amended by S.L. 2020-25, §
51(b), eff. June 19, 2020) (recodified as N.C. Gen. Stat. § 160D-406(j) (2021)).
¶ 26 Therefore, the superior court properly concluded the BOA had erred by
concluding Petitioner’s short-term rental use was not “otherwise lawful” under the
local ordinance through its improper reference to an inapplicable standard.
(3) The Superior Court Did Not Err in Concluding Petitioner’s Property Use
Became a Nonconforming Use Effective 13 August 2019
¶ 27 For the reasons expressed in Section A(1) supra, including the ambiguity or
obscurity caused by simultaneous regulation of two substantially similar land use
categories between 2000 and 2019, the superior court did not err in concluding that
short-term rentals, as defined in the 2000 Amendment, were not regulated by the
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Town until the 2019 Amendment took effect. Since Petitioner obtained the Property
on 29 June 2016, during the ineffective period of the Town’s attempts to regulate
short-term rentals, it follows that Petitioner’s use first acquired a nonconforming
character on the effective date of the 2019 Amendment.
(4) The BOA Erred and Exceeded its Authority by Failing to Conclude Petitioner
Established a Prima Facie Case of Nonconforming Use and Denying His
Claim
¶ 28 “[T]he burden of proving the existence of an operation in violation of the local
zoning ordinance is on [the Town].” Shearl v. Town of Highlands, 236 N.C. App.
113, 116–17, 762 S.E.2d 877, 881 (2014) (quoting City of Winston–Salem v. Hoots
Concrete Co., Inc., 47 N.C. App. 405, 414, 267 S.E.2d 569, 575 (1980)).
Ordinarily, once a town meets its burden to establish the
existence of a current zoning violation, the burden of proof
shifts to the landowner to establish the existence of a
legal nonconforming use or other affirmative defense. . . .
The defendant, of course, has the burden of establishing
all affirmative defenses, whether they relate to the whole
case or only to certain issues in the case. As to such
defenses, he is the actor and has the laboring oar. The city
had the burden of proving the existence of an operation in
violation of its zoning ordinance.
Id. at 118, 762 S.E.2d at 882 (cleaned up).
¶ 29 Section 16-2.2 of the Town’s Land Use Ordinances defines a “Nonconforming
Use” as, “[a] nonconforming situation that occurs when the property is used for a
purpose or in a manner made unlawful by the use regulations applicable to the
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district in which the property is located.” “[N]onconforming situations that were
otherwise lawful on the effective date of this chapter may be continued[,]”provided
the grandfathered nonconforming use is not “discontinued for a consecutive period
of 180 days” or “discontinued for any period of time without a present intention to
reinstate the nonconforming use[.]” Sections 16-8.1, 16-8.6.
¶ 30 Here, the BOA found, based upon the evidence established at the hearing,
that “[s]ince [Petitioner] bought the Property there has been no 180 day period that
he did not rent a unit for less than 28 days.” This unchallenged fact found by the
BOA is binding on appeal. See Massey v. City of Charlotte, 145 N.C. App. 345, 348,
550 S.E.2d 838, 841 (2001). Having previously concluded the superior court
properly identified the date Petitioner’s use transformed into a nonconforming use
as 13 August 2019, that court similarly did not err by concluding the BOA erred in
failing to recognize that Petitioner made out a prima facie case of nonconforming
use under the Town’s ordinances.
¶ 31 Furthermore, the BOA exceeded its authority by mischaracterizing
Petitioner’s nonconforming use of a short-term rental as a “temporary residence
renting by the day or week[,]” which was not a contested fact between the parties or
the legally applicable standard, given the nature of the violation alleged in the
NOV.
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(5) The BOA Decision Was Not Supported by Competent, Material, and
Substantial Evidence
¶ 32 The Town further contends the superior court’s conclusion that “the BOA’s
decision was not based upon competent, material, and substantial evidence
appearing in the record[,]” without further explanation, constitutes error as a
matter of law. After careful review, we agree with the Town that this conclusion is
derived from the superior court’s prior conclusions of law. See Thompson, 2022-
NCCOA-382, ¶ 13 (quoting Dellinger, 248 N.C. App. at 324–25, 789 S.E.2d at 27)
(“[W]hether competent, material and substantial evidence is present in the record is
a conclusion of law.”).
¶ 33 Absent the BOA’s erroneous invocation of “tourist homes and other
temporary residences renting by the day or week[,]” unchallenged findings of fact by
the BOA and unrebutted testimony by Petitioner would have established a valid
situation of grandfathered, nonconforming short-term rental use. Since unrebutted
testimony supported Petitioner’s claim of grandfathered, nonconforming use, the
superior court did not err in exercising whole record review and concluding the
BOA’s decision to deny Petitioner’s claim of nonconforming use was not supported
by competent evidence. See Thompson, 2022-NCCOA-382, ¶ 13. In short, we
discern no error in the superior court’s conclusion that the evidence before the BOA
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was not supportive of the BOA’s decision, absent the BOA’s invocation of an
inapplicable standard. See id.
B. Alternative Bases to Support the 15 March 2021 Amended Order
¶ 34 Petitioner asserts that the Amended Order failed to review several issues and
arguments he advanced before the BOA in support of the superior court’s reversal of
the BOA decision, thus depriving Petitioner of alternative bases in law to support
the Amended Order. See N.C. R. App. P. 10(c), 28(c). Having affirmed the superior
court’s Amended Order, we do not reach Petitioner’s alternative theories of relief.
VI. Conclusion
¶ 35 Based on the forgoing, we conclude the superior court correctly applied the
appropriate standard of review in reversing the BOA’s denial of Petitioner’s claim of
grandfathered, nonconforming use. See Bailey & Assocs., Inc., 202 N.C. App. at 190,
689 S.E.2d at 586. Therefore, we affirm the Amended Order.
AFFIRMED.
Judges TYSON and JACKSON concur.