High Rock Lake Partners, LLC v. North Carolina Department of Transportation

NO. COA13-1010

NORTH CAROLINA COURT OF APPEALS

Filed: 17 June 2014

HIGH ROCK LAKE PARTNERS, LLC, a

North Carolina Limited Liability

Company, and JOHN DOLVEN,

Petitioners-Appellants,

v. Mecklenburg County

No. 07 CVS 18706

NORTH CAROLINA DEPARTMENT OF

TRANSPORTATION,

Respondent-Appellee.

Appeal by Petitioners from order entered 22 May 2013 by

Judge Richard D. Boner in Superior Court, Mecklenburg County.

Heard in the Court of Appeals 4 March 2014.

Van Winkle, Buck, Wall, Starnes and David, P.A., by Craig

D. Justus, for Petitioners-Appellants.

Attorney General Roy Cooper, by Special Deputy Attorney

General James M. Stanley, Jr., Assistant Attorney General

Scott K. Beaver, and Assistant Attorney General Jennifer S.

Watson, for Respondent-Appellee.

McGEE, Judge.

High Rock Lake Partners, LLC (“High Rock”) purchased

approximately 190 acres in Davidson County (“the property”) in

August 2005. High Rock intended to develop the property into a

sixty-lot residential subdivision. High Rock purchased the

property for $5,200,000.00. John Dolven, M.D. (“Dolven”)

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provided $3,600,000.00 of the purchase price through a secured

loan. High Rock and Dolven are petitioners (“Petitioners”) in

this matter. In December 2005, the Davidson County Board of

Commissioners approved the preliminary plat, based on High

Rock’s “meeting all the County requirements for subdivision

approval.”

The only way to access the property was by way of State

Road 1135 (“SR 1135”), which was maintained by Respondent North

Carolina Department of Transportation (“DOT”), as part of the

State Highway System. As part of High Rock’s initial

development phase, it sought to extend SR 1135 ‒ which dead-

ended on the property ‒ in order to provide a driveway

connection into the planned subdivision.

In October 2005, High Rock applied to DOT for a permit to

construct a driveway. The proposed driveway connection point

was located on SR 1135, approximately one-quarter mile from a

railroad crossing (“the railroad crossing”). Due to the

location of a railroad yard near the railroad crossing, idling

locomotives sometimes blocked the crossing.

In a letter dated 12 December 2005, Chris Corriher, DOT

District Engineer for Davidson County, denied High Rock’s

application. High Rock timely appealed this denial to DOT

Division Engineer, Pat Ivey (“Ivey”). Ivey granted High Rock’s

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permit application, with the conditions that High Rock widen the

railroad crossing and secure the necessary permissions from the

railroad companies to do so. High Rock appealed DOT’s

conditions to the DOT Driveway Permit Appeals Committee (“DOT

Appeals Committee”). The DOT Appeals Committee upheld the

conditions set out by Ivey. High Rock filed a Petition for

Judicial Review in Superior Court, Mecklenburg County, on 17

September 2007.

Dolven acquired the property through a foreclosure

proceeding on 10 December 2007. High Rock assigned its rights

in development approvals, including the driveway permit, to

Dolven. High Rock sought to join Dolven as a party to the case

pending in Mecklenburg County Superior Court. On 26 August

2008, the trial court ruled, inter alia, that Dolven could not

be added as a party. The trial court also ruled that DOT’s

actions regarding the driveway permit were statutorily

authorized but that the conditions related to High Rock’s

obtaining railroad consent were unconstitutional.

Dolven appealed and, on 18 May 2010, this Court vacated the

trial court’s 26 August 2008 ruling and remanded the case for a

new hearing on the merits, with Dolven joined as a party. High

Rock Lake Partners, LLC v. N.C. Dep’t of Transp., 204 N.C. App.

55, 693 S.E.2d 361 (2010) (“High Rock I”). The trial court, as

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directed by this Court, joined Dolven by order entered 1

November 2010 and, in judgment entered 24 November 2010, ruled

that DOT had not acted (1) in excess of its statutory authority,

(2) arbitrarily and capriciously, or (3) in violation of either

the United States or North Carolina constitutions. Petitioners

appealed, and this Court affirmed the judgment of the trial

court. High Rock Lake Partners, LLC v. North Carolina DOT, __

N.C. App. __ , 720 S.E.2d 706 (2011) (“High Rock II”). Our

Supreme Court granted discretionary review and reversed High

Rock II, determining that the conditions placed on the driveway

permit were not authorized under the plain language of N.C. Gen.

Stat. § 136–18(29), and holding that DOT had exceeded its

statutory authority by imposing those conditions. High Rock

Lake Partners, LLC v. N.C. Dep't of Transp., 366 N.C. 315, 323,

735 S.E.2d 300, 306 (2012) (“High Rock III”). A more extensive

factual and procedural history may be found in these prior

opinions.

Petitioners filed a motion for attorney’s fees pursuant to

N.C. Gen. Stat. § 6-19.1 on 14 January 2013. The trial court

heard Petitioners’ motion on 8 April 2013 and, in an order

entered 22 May 2013, denied Petitioners’ motion. Petitioners

appeal.

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Petitioners argue that the trial court erred in denying

their motion for attorney’s fees based upon the trial court’s

conclusion that “DOT’s positions in this case from the initial

denial of the driveway permit through to the Supreme Court’s

decision in High Rock [III] were substantially justified under

G.S. § 6-19.1.” Petitioners further argue that, because of this

alleged error, this Court should instruct the trial court to

award Petitioners their attorney’s fees. We disagree.

N.C. Gen. Stat. § 6-19.1 states in relevant part:

(a) In any civil action, . . . unless the

prevailing party is the State, the court

may, in its discretion, allow the prevailing

party to recover reasonable attorney's fees,

including attorney's fees applicable to the

administrative review portion of the case,

in contested cases arising under Article 3

of Chapter 150B, to be taxed as court costs

against the appropriate agency if:

(1) The court finds that the agency

acted without substantial justification

in pressing its claim against the

party; and

(2) The court finds that there are no

special circumstances that would make

the award of attorney's fees unjust.

N.C. Gen. Stat. § 6-19.1 (2013) (emphasis added). By the clear

language of the statute, once the trial court makes the

appropriate findings required in subsections (1) and (2) of

N.C.G.S. § 6-19.1(a), its decision on whether or not to award

attorney’s fees is discretionary.

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It is well settled that “[a]ppellate review

of matters left to the discretion of the

trial court is limited to a determination of

whether there was a clear abuse of

discretion.” Furthermore, “[a] trial court

may be reversed for abuse of discretion only

upon a showing that its actions are

manifestly unsupported by reason.” “A

ruling committed to a trial court's

discretion is to be accorded great deference

and will be upset only upon a showing that

it was so arbitrary that it could not have

been the result of a reasoned decision.”

Smith v. Beaufort County Hosp. Ass'n., 141 N.C. App. 203, 210,

540 S.E.2d 775, 780 (2000) (citations omitted). In Crowell

Constructors, Inc. v. State ex rel. Cobey, our Supreme Court has

recognized the prerequisites required before a trial court can

exercise its discretion to award attorney’s fees pursuant to

N.C.G.S. § 6-19.1, as follows:

Thus, in order for the trial court to

exercise its discretion and award reasonable

attorney's fees to a party contesting State

action in one of the prescribed ways, the

prevailing party must not be the State, the

trial court must find the State agency acted

“without substantial justification” in

pressing its claim and the trial court must

find no special circumstances exist which

make an award of attorney's fees unjust.

Crowell Constructors, Inc. v. State ex rel Cobey, 342 N.C. 838,

843, 467 S.E.2d 675, 678 (1996) (emphasis added). Stated

another way, if the trial court determines that: (1) a State

agency acted “without substantial justification,” and (2) no

special circumstances exist which make an award of attorney's

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fees unjust, then the trial court’s discretionary power to award

attorney’s fees manifests. The trial court is not, however,

required to award attorney’s fees subsequent to making these

determinations, and its discretionary decision to award or not

to award attorney’s fees may only be overturned upon a showing

that its decision constituted an abuse of its discretion.

However, if the trial court determines that the State agency did

not act “without substantial justification,” or that some

special circumstances do exist which make an award of attorney's

fees unjust, then the trial court lacks discretion, and cannot

award attorney’s fees.

The trial court, in its 22 May 2013 order, acknowledged

that it only had discretion to award attorney’s fees pursuant to

N.C.G.S. § 6-19.1 if it found that DOT acted without substantial

justification and no special circumstances existed that made the

award of attorney’s fees unjust. The trial court found as fact

that DOT did not argue the “special circumstances” prong of

N.C.G.S. § 6-19.1. The trial court then concluded that DOT “was

justified [in its handling of this action] to a degree that

could satisfy a reasonable person[.]” It further concluded, “in

its discretion, that attorney’s fees should not be awarded in

this matter.”

In this instance, even assuming, arguendo, the trial court

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erred in concluding that DOT acted with substantial

justification, the trial court also denied the award of

attorney’s fees in its discretion. Because the discretion to

award attorney’s fees could only be present absent a conclusion

that DOT acted with substantial justification, the trial court’s

conclusion that, “in its discretion, . . . attorney’s fees

should not be awarded in this matter[,]” constitutes an

alternative basis for the denial of Petitioners’ motion.

The standard of review for the trial court’s decision not

to award attorney’s fees on this basis is abuse of discretion,

and it is Petitioners’ duty to prove abuse of discretion in

order to prevail on appeal. Nationwide Mut. Fire Ins. Co. v.

Bourlon, 172 N.C. App. 595, 610, 617 S.E.2d 40, 50 (2005)

(citations omitted) (“To show an abuse of discretion and reverse

the trial court's order . . . appellant[] has the burden to show

the trial court's rulings are “‘manifestly unsupported by

reason,’” or “‘could not be the product of a reasoned

decision[.]’”). Petitioners have not argued that the trial

court abused its discretion by refusing to award them attorney’s

fees.

It appears Petitioners believe that the trial court was

required to award them attorney’s fees if DOT acted without

substantial justification in pressing its claim and no special

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circumstances existed which made an award of attorney's fees

unjust. Petitioners cite Crowell Constructors for the

proposition that DOT had to prove that its pursuit of this

action was substantially justified; otherwise, according to

Petitioners, the trial court was required to order DOT to pay

Petitioners’ attorney’s fees. In support of their argument,

Petitioners cite to a portion of Crowell Constructors in which

our Supreme Court looked to similar language in a federal

statute to define the term “substantial justification.” Crowell

Constructors, 342 N.C. at 843-44, 467 S.E.2d at 679. However,

the federal statute differs from N.C.G.S. § 6-19.1 in a major

respect. The federal statute states:

“Except as otherwise specifically provided

by statute, a court shall award to a

prevailing party other than the United

States fees and other expenses

. . . incurred by that party in any civil

action . . . brought by or against the

United States . . . unless the court finds

that the position of the United States was

substantially justified or that special

circumstances make an award unjust.”

Crowell Constructors, 342 N.C. at 843, 467 S.E.2d at 679

(emphasis changed), (quoting 28 U.S.C. § 2412(d)(1)(A) (1994)).

The federal statute makes the award of attorney’s fees mandatory

absent the proper showing of substantial justification or

special circumstances, whereas N.C.G.S. § 6-19.1 grants the

trial court discretion in making an award of attorney’s fees.

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N.C.G.S. § 6-19.1(a) (“[T]he court may, in its discretion, allow

the prevailing party to recover reasonable attorney's fees[.]”).

In Crowell Constructors, unlike in the present case, the

trial court had already ordered the State agency to pay

attorney’s fees to the prevailing party. Crowell Constructors,

342 N.C. at 841, 467 S.E.2d at 678. Therefore, if the State

agency could show on appeal that it had acted with substantial

justification in pressing its claim, it would show that the

trial court had lacked the discretion to impose attorney’s fees

and had therefore erred. Our Supreme Court held that it could

not say that the State agency was “without substantial

justification.” Id. at 846, 467 S.E.2d at 681. Therefore, the

award of attorney’s fees had been improper. Id. Another

opinion cited by Petitioners, Daily Express, Inc. v. Beatty, 202

N.C. App. 441, 688 S.E.2d 791 (2010), is similarly inapposite

because it also dealt with an appeal where the trial court

awarded attorney’s fees, not an appeal from the trial court’s

refusal to award attorney’s fees. Id. at 456, 688 S.E.2d at 802

(“[W]e conclude that [r]espondent's decision to proceed against

[p]etitioner was ‘substantially justified’ and that the trial

court erred by reaching a contrary conclusion in awarding

attorney's fees to [p]etitioner pursuant to N.C. Gen. Stat. § 6–

19.1”[.]).

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In the present matter, even assuming arguendo DOT lacked

substantial justification in pressing its claims, Petitioners

would have had to argue on appeal and show that the trial court

abused its discretion in denying Petitioners’ motion for

attorney’s fees. Bourlon, 172 N.C. App. at 610, 617 S.E.2d at

50; see also Willen v. Hewson, 174 N.C. App. 714, 722, 622

S.E.2d 187, 193 (2005). Because Petitioners have not argued on

appeal that the trial court abused its discretion in failing to

award them attorney’s fees pursuant to N.C.G.S. § 6–19.1, any

such argument is abandoned. N.C.R. App. P. 28(b)(6) (“Issues

not presented in a party's brief, or in support of which no

reason or argument is stated, will be taken as abandoned.”).

Petitioners’ argument is dismissed.

Because Petitioners’ second and third arguments rely upon

the success of their first, those arguments also fail. The 22

May 2013 order denying attorney’s fees is affirmed.

Affirmed.

Judges STEELMAN and ERVIN concur.