854 S.E.2d 1
N.C. Ct. App.2020Background
- Harnett County operated multiple water and sewer districts under interlocal agreements (notably a 1984 Buies Creek Agreement and a 1998 Agreement) and incorporated duties into a county Water and Sewer Ordinance.
- Ordinance §28(h) required non-negotiable, one-time "capacity use" fees ($1,000 water / $1,200 sewer per single-family lot) payable as a condition of development approvals; Developers paid over $25,000 cumulatively.
- Anderson Creek Partners and PF Development sued for refunds and constitutional relief, alleging lack of county authority to charge prospective fees and an unconstitutional-conditions claim; cases were consolidated.
- The County moved for judgment on the pleadings and appended the 1984 and 1998 interlocal agreements; the trial court took judicial notice of those public contracts and granted the County’s Rule 12(c) motions, dismissing the Developers’ claims with prejudice.
- On appeal, the Court of Appeals affirmed: it held the agreements were proper subjects of judicial notice, the 1998 Agreement vested the County with the districts’ statutory authority to charge prospective fees, and the Fees did not trigger unconstitutional-conditions review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial notice of interlocal agreements / use of documents on Rule 12(c) | Developers: Court improperly relied on agreements attached to County's Rule 12(c) motion without converting to summary judgment or giving Developers chance to respond. | County: Agreements are public contracts subject to judicial notice and properly considered on 12(c). | Court: Judicial notice proper; documents are public and not reasonably disputed; no abuse of discretion. |
| Authority to collect prospective ("to be furnished") fees under county enabling statute | Developers: N.C. Gen. Stat. §153A‑277 (pre‑2017) only authorized fees for services "furnished," not prospective fees. | County: Even if §153A‑277 lacked prospective language, the County could exercise the districts’ statutory authority via interlocal agreement. | Court: §153A‑277 pre‑amendment did not by itself authorize prospective fees, but County could collect such fees by exercising districts’ §162A‑88 authority under the 1998 Agreement. |
| Whether the 1998 interlocal agreement conveyed the districts’ prospective fee authority to the County | Developers: Factual disputes about whether County was operating district systems or its own system create material issues preventing judgment. | County: 1998 Agreement expressly recognizes districts’ authority to charge for "services furnished or to be furnished" and delegates administration to County. | Court: 1998 Agreement granted the County the districts’ prospective fee authority; factual questions about infrastructure ownership are immaterial to legal authority. |
| Unconstitutional-conditions (Nollan/Dolan/Koontz) challenge to the Fees | Developers: Mandatory pre-approval Fees function as coerced exactions and must meet nexus/proportionality review. | County: The Fees are generally applicable, legislatively set impact/user fees (not ad hoc exactions) and thus are not subject to Nollan/Dolan/Koontz scrutiny. | Court: Fees are predetermined, uniformly applied user/impact fees; they do not trigger unconstitutional-conditions review under Koontz/Nollan/Dolan as applied here. |
Key Cases Cited
- McNeill v. Harnett County, 327 N.C. 552, 398 S.E.2d 475 (N.C. 1990) (county may operate district system under interlocal agreement and exercise districts' §162A‑88 powers)
- Quality Built Homes, Inc. v. Town of Carthage, 369 N.C. 15, 789 S.E.2d 454 (N.C. 2016) (statute authorizing fees for services "furnished" does not authorize prospective impact fees)
- Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (U.S. 2013) (Nollan/Dolan principles extend to monetary exactions when directly linked to a parcel)
- Nollan v. California Coastal Comm’n, 483 U.S. 825 (U.S. 1987) (permit conditions must have an "essential nexus" to the public use sought)
- Dolan v. City of Tigard, 512 U.S. 374 (U.S. 1994) (permit exactions must meet "rough proportionality" test)
- Dabbs v. Anne Arundel County, 182 A.3d 798 (Md. 2018) (generally applicable, legislatively set impact fees are not subject to Nollan/Dolan/Koontz review)
- Franklin Rd. Props. v. City of Raleigh, 94 N.C. App. 731, 381 S.E.2d 487 (N.C. Ct. App. 1989) (defined "exaction" and applied a rational‑nexus proportionality analysis under state law)
- Kidd Constr. Grp., LLC v. Greenville Utils. Comm’n, 845 S.E.2d 797 (N.C. Ct. App. 2020) (charter language authorizing rates for "services rendered" did not authorize prospective impact fees)