Here's that last case in our 2014 opinion queue, from way back in July. It's also coincidentially the 2,500th post on the blog.
In Sawn Beach Corolla, LLC v,.County of Currituck, No. COA13-1272 (July 1, 2014), the North Carolina Court of Appeals considered vested rights and takings claims in a fact pattern than streched back decades.
In 1966, the owners purchased 1400 acres for residential development. In 1969, the owners recorded a subdivision plat, to make both residential and commerical uses. The county had no zoning ordinance in place at that time. The owners spent $425,000 on preliminary work and infrastructure, such as surveying, engineering and grading. Big bucks in 1960's dollars.
The county adopted a zoning ordinance in 1971, zoning the property for "RO2," which prohibits most businesses, including those contemplated by the owners. "Nevertheless, plaintiffs continued to believe that they would be allowed to commerically develop their property." Slip op. at 4.
They were wrong. Flash forward to 2004. The owners sought to develop the commerical portions of the land, to build a convenience store, offices, a post office, and a restaurant. The county said no. Three years of trying to convince the county otherwise was to no avail. The owners filed suit. The trial court dismissed for failure to state a claim, apparently accepting the county's argument the owners had not exhausted administrative remedies, the defendants had immunity, and the statute of limitations had expired. You know the drill.
The court of appeals reversed the dismissal in part, holding that the owners exhausted their administrative remedies, and "sufficiently pled" their vested rights claims. There was no need to avail themselves of more administrative procedures, "because the Currituck County Board of Adjustment would not be authorized to hear plaintffs' common law vested rights claim." Slip op. at 10. The role of the agency is only to interpret and apply the zoning ordinance and whether to grant a variance. These type of boards do not have jurisdiction to adjudicate constitutional claims. Seems about right to us.
As to vested rights, the owners alleged:
their property was not zoned at the time they made their expenditures to prepare the business lots. They have alleged that this use was lawful at the time the expenditures were made and that the expenditures were made in good faith reliance on that fact. They have alleged that they expended over $400,000 on the development. They allege that they are prejudiced by the zoning ordinance because their intended commercial use would not be permitted under the ordinance.
Slip op. at 17-18. That was enough, because under North Carolina decisional law, a vested rights claim is based on substantial expenditures made in reliance on a lack of zoning.
The court also concluded that the defendants were not immune from the federal constitutional claims (section 1983, equal protection, due process).
The court upheld the dismissal of the owners' claim that the county had to allow business development of the property because for years it had taxed the property as business property.