Tommy Davis Construction, Inc. v. Cape Fear Public Utility Authority
807 F.3d 62
4th Cir.2015Background
- Davis Construction developed Becker Woods (29 lots) in New Hanover County and arranged for private utility Aqua NC to provide water and sewer service.
- County required payment of one-time "impact fees" (collected on behalf of the New Hanover County Water and Sewer District) as a condition for building permits, even where the District did not provide service.
- Davis Construction paid $34,268.96 under protest (2005–2006) after objecting that the District would not furnish service and that Aqua NC already provided service.
- The Cape Fear Public Utility Authority (Authority) succeeded the Water and Sewer District in 2008; thereafter the County took a different policy and collected fees only when the Authority was the service provider.
- Davis Construction sued in state court (later removed), asserting ultra vires and due-process claims; the district court granted summary judgment for Davis, ordered refund plus interest, and awarded attorney fees; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether County/Authority acted ultra vires by collecting impact fees when they would not furnish service | Fees were invalid because District/Authority had no concrete plans or ability to provide service to Becker Woods; fees were collected for services not "to be furnished" | Defendants cited long-standing plans and expenditures (planning/design work) showing intent to expand service and thus authority under N.C. Gen. Stat. § 162A-88 | Court affirmed: collection was ultra vires — plans were too vague, no concrete steps or commitment to furnish service to Becker Woods, especially where Aqua NC was providing service |
| Whether Davis's state-law claims were time-barred | Timely under the 10-year catchall statute (N.C. Gen. Stat. § 1-56) because no specific limitations period governs ultra vires fee claims | Various shorter statutes of limitations apply (3‑yr § 1-52(2); 2‑yr § 1-53(1); 3‑yr § 1-52(5)) | Affirmed: state claims governed by 10‑year residual statute § 1-56 (Point South Properties persuasive), so timely |
| Whether federal due-process claim was time-barred | (Plaintiff argued timely) | Defendants argued federal claim barred by 3‑year limitations for § 1983 actions (borrowed from § 1-52(5)) | Court held federal due-process claim time-barred (action filed >3 years after last fee payment) |
| Whether court properly awarded attorney fees under N.C. Gen. Stat. § 6-21.7 | Plaintiff sought fees because County acted outside legal authority; statute permits fees when a city/county acted beyond authority | Defendants argued Water & Sewer District/Authority (not a city/county) was the actor so statute doesn't apply | Affirmed: County acted outside its authority by conditioning permits and collecting fees, so district court could award fees under § 6-21.7 |
Key Cases Cited
- Collins v. City of Harker Heights, 503 U.S. 115 (1992) (municipalities may be sued for constitutional deprivations under § 1983)
- Monell v. New York City Dept. of Social Services, 436 U.S. 658 (1978) (local governments are "persons" under § 1983)
- Wilson v. Garcia, 471 U.S. 261 (1985) (statute of limitations for § 1983 claims borrowed from state personal-injury limitations)
- Wallace v. Kato, 549 U.S. 384 (2007) (§ 1983 claim accrues when plaintiff can file and obtain relief)
- Nat’l Advertising Co. v. City of Raleigh, 947 F.2d 1158 (4th Cir. 1991) (North Carolina § 1-52(5) governs § 1983 limitations in this circuit)
- McNeill v. Harnett County, 398 S.E.2d 475 (N.C. 1990) (characterizing § 162A-88 as authorizing user fees for services "to be furnished")
- Cater v. Barker, 617 S.E.2d 113 (N.C. Ct. App. 2005) (laches is an equitable defense and does not bar purely legal claims)