Quality Built Homes Inc. v. Town of Carthage, 795 S.E.2d 436

Plaintiffs Quality Built Homes, Inc. and Stafford Land Co. paid water/sewer impact fees to the Town of Carthage and sued (Oct. 2013) seeking declaratory relief, refunds, and attorneys' fees after the Town adopted impact-fee ordinances in 2003.
The trial court granted summary judgment for the Town; the Court of Appeals affirmed; the N.C. Supreme Court reversed, holding the ordinances exceeded the Town's statutory authority.
Supreme Court remanded the case to the Court of Appeals to decide unresolved issues: applicable statute of limitations, estoppel by acceptance of benefits, and entitlement to attorneys' fees under N.C.G.S. § 6-21.7.
On remand the Court of Appeals considered whether plaintiffs’ refund claims are governed by the 10-year residual statute of limitations (N.C.G.S. § 1-56) or the 3-year statute (N.C.G.S. § 1-52(2)), whether estoppel by acceptance of benefits bars recovery, and whether attorneys’ fees must or may be awarded.
The court held the 10-year statute applies, plaintiffs paid within ten years, estoppel by acceptance of benefits does not bar recovery (because plaintiffs were legally entitled to development permits), and remanded for the trial court to enter judgment for plaintiffs and to make findings on attorneys’ fees (mandatory if abuse of discretion is found; otherwise discretionary).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicable statute of limitations for refund claims	§ 1-56 10-year residual period applies	§ 1-52(2) 3-year period applies (liability created by statute)	10-year § 1-56 applies; plaintiffs sued within 10 years, claims not time-barred
Estoppel by acceptance of benefits	Payment was not voluntary; estoppel doesn't bar refunds	Acceptance of benefits precludes challenging ordinance	Estoppel inapplicable because statute contemplates refunds even when permit/benefit received; payment was not a bar to recovery
Effect of Supreme Court holding invalidating ordinances	Plaintiffs entitled to judgment and refunds	Town argued prior summary judgment for Town should stand on other grounds	Supreme Court decision that ordinances exceeded authority controls; plaintiffs entitled to judgment as matter of law on remand
Attorneys' fees under N.C.G.S. § 6-21.7	Fees mandatory if Town abused its discretion in imposing/using illegal fees; otherwise court may award fees	Fees not warranted absent specific findings of abuse of discretion	Remanded for trial court to find (1) Town acted outside authority (already established by Supreme Court) and (2) whether action constituted abuse of discretion; if abuse found, fees mandatory; if not, court may exercise discretion

Quality Built Homes, Inc. v. Town of Carthage, 789 S.E.2d 454 (N.C. 2016) (N.C. Supreme Court held the Town exceeded its statutory authority in adopting the impact-fee ordinances)
Amward Homes, Inc. v. Town of Cary, 698 S.E.2d 404 (N.C. Ct. App. 2010) (discusses limitations and estoppel principles for ultra vires fee claims)
Point South Properties, LLC v. Cape Fear Pub. Util. Auth., 778 S.E.2d 284 (N.C. Ct. App. 2015) (applied § 1-56 residual 10-year period to ultra vires impact-fee claims)
Tommy Davis Constr., Inc. v. Cape Fear Pub. Util. Auth., 807 F.3d 62 (4th Cir. 2015) (affirmed application of 10-year limitation to state-law ultra vires fee claims)
Etheridge v. County of Currituck, 762 S.E.2d 289 (N.C. Ct. App. 2014) (interpreting § 6-21.7: fees discretionary if merely outside authority; mandatory if also abuse of discretion)