242 N.C. App. 1
N.C. Ct. App.2015Background
- Land developers may recover damages, including interest, for impact fees illegally exacted by cities as a condition of development.
- China Grove APFO required a $54,284 fee to obtain development approval for Miller's Grant Subdivision (Feb 8, 2008).
- Lanvale Properties v. Cabarrus County (Aug 2012) invalidated APFOs not specifically authorized by statute.
- Plaintiffs requested reimbursement with interest in light of Lanvale; defendant refunded $54,284 (Sept 5, 2013) and issued a mutual release.
- Plaintiffs filed suit in Apr 2014 for interest on the illegally exacted fee; trial court ordered interest at 6% from Feb 8, 2008 to Sept 11, 2013.
- Court affirmed judgment on pleadings, denied defendant’s dismissal, and held the fee illegal and interest recoverable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the APFO an illegal fee not specifically authorized by law? | Lanvale invalidates APFOs that are not statute-authorized. | APFO is a valid subdivision control ordinance under statutes. | APFO invalid; fee recoverable with 6% interest. |
| Can plaintiffs recover interest under § 160A-363(e) when the principal was voluntarily refunded? | Statute allows interest on illegally exacted fees regardless of refund. | Refund of principal bars interest recovery. | Interest recoverable; statute unambiguous. |
| Does accord and satisfaction bar the interest claim? | Mutual release only covered APFO obligations, not statutory interest. | Acceptance of settlement releases all obligations. | No bar; statutory interest not released. |
| Was the trial court correct to deny defendant's motion to dismiss and grant judgment on the pleadings? | Complaint states a claim for interest under § 160A-363(e). | No underlying basis for interest because principal refunded. | Correct to deny dismissal and grant judgment on pleadings. |
Key Cases Cited
- Durham Land Owners Ass'n v. County of Durham, 177 N.C.App. 629 (2006) (interest may not be awarded against the State unless authorized; refunds allowed)
- Lanvale Properties, LLC v. County of Cabarrus, 366 N.C. 142 (2012) (APFOs not specifically authorized by statute are invalid)
- Shavitz v. City of High Point, 177 N.C.App. 465 (2006) (interest against municipalities requires statutory authorization)
- In re Helms, 127 N.C.App. 505 (1997) (distinguishes between findings of fact and conclusions of law)
- Westmoreland v. High Point Healthcare, Inc., 218 N.C.App. 76 (2012) (review of conclusions of law de novo when label obscures them as findings)