IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA16-1057

                                Filed: 1 August 2017

Moore County, No. 16 CVS 374

ADAM T. CHEATHAM, SR., Plaintiff,

             v.

TOWN OF TAYLORTOWN, NORTH CAROLINA, A MUNICIPAL CORPORATION,
Defendant.


      Appeal by Adam T. Cheatham, Sr. from an order allowing defendant’s motion

to dismiss entered 18 April 2016 by Judge James M. Webb in Moore County Superior

Court. Heard in the Court of Appeals 3 May 2017.


      Adam T. Cheatham, Sr., pro se.

      The Law Offices of William C. Morgan, Jr., PLLC, by William Morgan, for
      defendant-appellee.


      MURPHY, Judge.


      Adam T. Cheatham, Sr. (“Cheatham”) appeals from the trial court’s order

allowing Town of Taylortown’s (“Taylortown”) motion to dismiss for lack of subject

matter jurisdiction. On appeal, he contends that the trial court erred by granting the

motion to dismiss for lack of subject matter jurisdiction because Taylortown’s

attempts to enforce its minimum housing standards: (1) violated his property rights;

(2) obstructed justice; and (3) deprived him of procedural due process. We disagree

that the trial court erred to the extent Cheatham’s claims arise from enforcement
                        CHEATHAM V. TOWN OF TAYLORTOWN

                                  Opinion of the Court



actions made pursuant to Taylortown’s Minimum Housing Ordinance (“the

Ordinance”) because Cheatham failed to exhaust his administrative remedies as to

these claims before filing his complaint. However, we agree with Cheatham that the

dismissal was not proper as to his claims that arose prior to the adoption of the

Ordinance. The trial court incorrectly determined all of Cheatham’s claims arose

from actions taken pursuant to the Ordinance. We reverse and remand for the trial

court to reconsider whether subject matter jurisdiction exists as to Cheatham’s claims

accruing prior to the Ordinance’s adoption.

                                   Background

      Sometime in early 2014, Taylortown affixed a “condemned” sign to the home

at 128 Burch Drive in Taylortown (“the Property”) after finding it to be in deplorable

condition. The owner of the Property, Cheatham, claims he removed the sign in

March 2014. It is unclear whether this occurred before or after 4 April 2014, when

Moore County Building Inspections investigated a complaint that sewage was

standing around the Property’s well. At the time of the investigation, the Property

was unoccupied.     As a result of the investigation, the Moore County Health

Department’s Environmental Section reported that the standing water around the

well “appears to be run off water and not sewage.” It recommended that the well be

abandoned if public water was available, or, if public water was not available, the

well be tested before used for human consumption.



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                            CHEATHAM V. TOWN OF TAYLORTOWN

                                       Opinion of the Court



       On 27 May 2014, Cheatham attended a town meeting to request an

explanation as to the condemnation of the Property. That same day, he submitted a

letter documenting this request. In response, Taylortown sent him a letter, dated 30

May 2014, notifying Cheatham that his house had been inspected, and, due to the

condition of the house and the land, a hearing would be scheduled. The letter further

explained Cheatham would be informed of a hearing date by certified mail.

Cheatham subsequently filed a lawsuit in Moore County Superior Court against

Taylortown.1 Well over a year after the condemned sign was posted and Cheatham

was notified that a hearing would be scheduled, Cheatham took a voluntary dismissal

in his first case against Taylortown.2

       After sending the 30 May 2014 letter, Taylortown made no effort to schedule a

hearing or condemn the Property.            On 19 June 2015, Taylortown adopted the

Ordinance pursuant to N.C.G.S. §§ 160A-441 through 160A-450 (2015). Cheatham

filed a new complaint on 21 March 2016, which is now before us on appeal.

       On 22 March 2016, before Cheatham served Taylortown with the summons

and complaint, Taylortown investigated the Property pursuant to the authority and

procedures in the Ordinance. On 25 March 2016, once Taylortown received the

summons and complaint, it filed a motion to dismiss for lack of subject matter



       1 The record is not clear as to the date Cheatham filed this first suit.
       2 Subsequent to the dismissal, Cheatham made a motion to set aside his voluntary dismissal,
which the trial court denied on 10 December 2015.

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                                       Opinion of the Court



jurisdiction under North Carolina Rule of Civil Procedure 12(b)(1) based on

Cheatham’s failure to exhaust administrative remedies and under 12(b)(6) for failure

to state a claim. In response, Cheatham filed a motion to deny the motion to dismiss,

attaching 15 exhibits, including 6 letters that Cheatham maintains he sent to

Taylortown about the Property from June 2014 up until after the motion to dismiss

was filed in April 2016.

       Judge Webb heard Taylortown’s motion to dismiss on 11 April 2016. During

the hearing, Cheatham “request[ed] that [Taylortown] stop continuing to be reckless,

malicious and unlawful condemning the property for a second time, and stop the

retaliation against [him] by condemning the property for a second time.” Judge Webb

granted Taylortown’s motion, and ordered the dismissal of the action under Rule

12(b)(1), finding “[Cheatham’s] claims arise out of [Taylortown’s] attempts to enforce

its Minimum Housing Ordinance and that [Cheatham] has fail[ed] to exhaust his

administrative remedies, as provided in N.C.G.S. § 160A-446.”3 Cheatham timely

appealed the trial court’s order.

                                           Analysis

       Cheatham argues that the motion to dismiss for lack of subject matter

jurisdiction should have been denied because Taylortown’s attempts to enforce its

minimum housing standards: (1) violate the “Bundle of Rights” given to all property


       3 Having dismissed the case in accordance with Rule 12(b)(1), the trial court did not reach
Taylortown’s 12(b)(6) motion.

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                          CHEATHAM V. TOWN OF TAYLORTOWN

                                    Opinion of the Court



owners under the law of the land, describing these rights as the owner’s right to enter,

use, sell, lease, or give away the land as he chooses; (2) obstruct justice; and (3) violate

procedural due process.

       We disagree to the extent Taylortown’s enforcement efforts were made

pursuant to the Ordinance. Cheatham’s suit was properly dismissed for failure to

exhaust administrative remedies as to any efforts made after 19 June 2015 – the

effective date of the Ordinance. However, the trial court incorrectly determined that

all of Cheatham’s claims arose out of Taylortown’s attempts to enforce the Ordinance,

which is factually incorrect as Taylortown adopted the Ordinance after alleged

wrongs in the complaint took place.

       North Carolina Rule of Civil Procedure 12(b)(1) “permits a party to contest, by

motion, the jurisdiction of the trial court over the subject matter in controversy.”

Trivette v. Yount, 

, 482, 

, 735 (2011). Rule 12(b)(1)

motions to dismiss for lack of subject matter jurisdiction are reviewed by our court de

novo, and matters outside the pleadings may be considered. 

720 S.E.2d at

735 (citation omitted).

       The legislature enacted N.C.G.S § 160A-441 et seq. to ensure “that minimum

housing standards would be achieved in the cities and counties of this State.” Harrell

v. City of Winston-Salem, 

, 391, 

, 806 (1974). To do

so, section 160A-441 “confers upon cities and counties the power to exercise their



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                        CHEATHAM V. TOWN OF TAYLORTOWN

                                     Opinion of the Court



police powers by adopting and enforcing ordinances ordering a property owner to

repair, close, or demolish dwellings that are determined to be unfit for human

habitation and therefore dangerous and injurious to the health and safety of the

public.” Newton v. City of Winston-Salem, 

, 449, 

, 490

(1988). Such city ordinances must contain procedures to provide owners with notice,

a hearing, and a reasonable opportunity to bring deficient dwellings into conformity

with the code. N.C.G.S. § 160A-443. N.C.G.S. § 160-446 delineates the remedies

available in N.C.G.S. § 160A-441 et seq.

      Taylortown adopted the Ordinance pursuant to N.C.G.S. §§ 160A-441 through

160A-450, setting out the necessary procedures for the city to follow in minimum

housing cases. The procedure set out in the Ordinance and N.C.G.S. §§ 160A-441

through   160A-450    cannot    be     circumvented;        plaintiffs   must   exhaust   the

administrative remedies available provided by statute “before recourse may be had

to the courts.” Justice for Animals, Inc. v. Robeson Cty., 

, 369, 

, 775 (2004) (quotation omitted); 

, 206

S.E.2d at 806 (citations omitted). If administrative remedies specifically provided by

statute are not exhausted before alternative recourse is sought through the courts,

“the court lacks subject matter jurisdiction and the action must be dismissed.” Justice

for Animals, 

, 595 S.E.2d at 775 (citation omitted).




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                         CHEATHAM V. TOWN OF TAYLORTOWN

                                   Opinion of the Court



      Under the Ordinance, Cheatham did not exhaust his administrative remedies

before seeking judicial review as required by statute. The proper course of action for

a person aggrieved under the Ordinance would be to present the case at a minimum

housing hearing pursuant to N.C.G.S. § 160A-441 et seq., and then, if he remained

unsatisfied, to appeal that decision to the Board as permitted by statute. N.C.G.S. §

160A-446. If his appeal to the Board was unsuccessful, he would then have the ability

to seek review in Superior Court by proceedings in the nature of certiorari. 

      Instead of following this procedure, Cheatham ignored N.C.G.S. § 160A-441 et

seq. and the Ordinance, attempting to collaterally attack the minimum housing

standards enforcement proceedings through this independent action. Thus, as he

failed to follow statutory procedure, to the extent his claims arose after 19 June 2015

out of Taylortown’s attempts to enforce the Ordinance, it was proper for the trial court

to dismiss this action for lack of subject matter jurisdiction. See Axler v. City of

Wilmington, 

, 111, 

, 511-12 (1975) (dismissing the

action because the plaintiff failed to exhaust the administrative remedies available

in N.C.G.S. § 160A-446).

      However, Cheatham’s claims arising prior to the Ordinance’s enactment on 19

June 2015 do not arise out of Taylortown’s attempts to enforce the Ordinance. Thus,

the trial court’s determination that Cheatham’s “claims arise out of [Taylortown’s]



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                        CHEATHAM V. TOWN OF TAYLORTOWN

                                  Opinion of the Court



attempts to enforce its Minimum Housing Ordinance” is in error. We remand for the

trial court to reconsider whether Cheatham’s claims arising on or prior to 19 June

2015 may be subject to dismissal under either Rule 12(b)(1) or 12(b)(6) of the North

Carolina Rules of Civil Procedure.

                                      Conclusion

      For the reasons stated above, the trial court correctly dismissed Cheatham’s

case for lack of subject matter jurisdiction to the extent the claims involve

enforcement actions made after 19 June 2015 pursuant to the Ordinance. However,

the trial court incorrectly determined that all of Cheatham’s claims were made

pursuant to the Ordinance. We remand for further consideration as to enforcement

actions occurring on or prior to 19 June 2015, the effective date of the Ordinance.

      AFFIRMED IN PART; REMANDED FOR FURTHER CONSIDERATION IN

PART.

      Judges CALABRIA and DIETZ concur.




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