IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA19-406

Filed: 18 February 2020

Rockingham County, No. 17 CVS 1645

STARLITES TECH CORP., Petitioner,

v.

ROCKINGHAM COUNTY, Respondent.

Appeal by petitioner from order1 entered 1 October 2018 by Judge William A. 

Wood in Rockingham County Superior Court. Heard in the Court of Appeals 30 

October 2019.

Nelson Mullins Riley & Scarborough LLP, by Stuart H. Russell and Lorin J. 

Lapidus, for petitioner-appellant.

The Brough Law Firm, PLLC, by G. Nicholas Herman and John M. Morris, for 

respondent-appellee. 

ZACHARY, Judge.

Petitioner Starlites Tech Corp. (“Starlites”) appeals from an order of the 

superior court affirming the Rockingham County Board of Adjustment’s

determination that the operation of Starlites’ business violated the special use permit 

requirements set forth in Rockingham County’s amended Unified Development 

Ordinance. After careful review, we reverse. 

 

1 We note that the judgment mistakenly refers to 17 CVS 1644.
STARLITES TECH CORP. V. ROCKINGHAM CTY.

Opinion of the Court

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Background

Starlites Tech Corp. owner and president Maurice Raynor operated multiple 

electronic gaming businesses. Raynor served as the president of M, M & K 

Developments, Inc. (“MM&K”), and was the owner and president of Starlites 

Technology, Inc.

On 30 September 2011, Danny D. Fulp conveyed the property located at 11652 

U.S. 220 Highway, Stoneville, North Carolina, (the “Property”), to MM&K. On 1 May 

2014, Rockingham County issued a zoning permit to MM&K, enabling it to “operate 

a sweepstakes business” in accordance with the County’s Unified Development 

Ordinance (the “Ordinance”). The permit designated MM&K as the owner of the 

property, and “Starlite Technologies” as the applicant and occupant. The permit’s 

description noted a “change of use to sweepstakes business” and the “addition of [a] 

28x45 shelter.” 

A few months later, on 2 September 2014, the County amended the Ordinance, 

setting forth permit requirements that “severely restricted the general operation of 

sweepstakes businesses in the county.” Article II of the amended Ordinance defined 

“Electronic Gaming Operations,” in pertinent part, as: “[a]ny for-profit business 

enterprise where persons utilize electronic machines or devices, including but not 

limited to, computers and gaming terminals, to conduct games of odds or chance, 

including sweepstakes[.]” 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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Article IX Section 9-11(ii) set forth new restrictions for electronic gaming 

operations and, by extension sweepstakes businesses. The restrictions included, in 

relevant part, a requirement that electronic gaming operations obtain a special use 

permit, which in turn, required that the facility be “setback[ ] 1500 feet from any 

protected facility.” Protected facilities included, inter alia, single- and multi-family 

dwellings. The amended Ordinance posed a problem for MM&K and Starlites 

Technology, Inc. because the Property was “approximately 680 feet from the nearest 

single family dwelling unit.” 

On 21 January 2015, articles of incorporation were filed for Starlites in order 

to turn “the Starlites Technology, Inc. S Corp into a corporation under the advice of 

[Raynor’s] attorney.” On 30 January 2015—approximately nine months after the 

zoning permit was issued—MM&K conveyed the Property to Starlites. Soon

thereafter, on 14 July 2015, articles of dissolution were filed for Starlites Technology, 

Inc. and MM&K. Following MM&K’s dissolution, no application was filed to amend 

the original zoning permit issued to MM&K on 1 May 2014 to indicate that the 

Property had been conveyed to Starlites. 

In November 2016, Officer Ben Curry of the Rockingham County Code 

Enforcement Division received a complaint about the Property and determined that 

the business constituted a development without a permit. Officer Curry issued 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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notices of violation to Starlites on 21 November 2016, 9 December 2016, and 3 

January 2017. 

Starlites appealed the initial notice of violation to the Rockingham County 

Board of Adjustment (“the Board”) on 21 December 2016. Starlites’ appeal came on 

for hearing by the Board on 14 August 2017. Starlites argued that the notices of 

violation were defective, that Starlites had never ceased operation and was not 

subject to the special use permit requirement, and that Starlites ran a “Promotional 

Gaming Establishment” rather than an “Electronic Gaming Operation.” Starlites 

presented Raynor’s testimony along with invoices that Raynor paid in conjunction 

with the continued operation of his businesses. 

On 11 September 2017, the Board entered an order denying Starlites’ appeal.

The Board concluded that Starlites’ business operation violated the County’s 

amended Ordinance, that Starlites failed to obtain a special use permit, and that 

Starlites was not exempt from the requirement to obtain a special use permit. 

Starlites appealed by filing a petition for writ of certiorari with the 

Rockingham County Superior Court on 10 October 2017, seeking review of the order 

for factual and legal errors. Starlites argued, in part, that the Board’s decision was 

erroneous, and that the order was:

b. In excess of the statutory authority conferred upon the 

Board; 

. . . .
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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d. Unsupported by substantial competent evidence in view 

of the entire record because there was no evidence 

contradicting Starlites’ showing that its business 

operations on the Property had been continuously operated 

since prior to the 2014 adoption of the disputed amendment 

to the DSO; 

e. Unsupported by substantial competent evidence in view 

of the entire record because there was no evidence to 

suggest that Starlites was operating an “electronic gaming 

operation” as defined by the Rockingham County [Unified

Development Ordinance]; 

f. Affected by other error of law; and 

g. Arbitrary or capricious since the Board should not have 

heard the Appeal due to lack of proper service of a Notice 

of Violation, because the Board was not impartial, and 

because there was no legal basis for the Decision. 

The case came on for hearing before the superior court on 25 September 2018.

On 1 October 2018, the superior court entered an order affirming the Board’s order 

and dismissing Starlites’ appeal. The superior court concluded, in pertinent part: 

2. On de novo review, upon dissolution of [MM&K] on July 

10, 2015, the business ceased and was no longer a legally 

permitted nonconforming use because [Starlites] never 

applied for an amended or new zoning permit; and, even if 

the business resumed as a nonconforming use at some 

point after dissolution of [MM&K], there was competent 

evidence under the whole record test for the [Board] to 

conclude that the business was discontinued for more than 

one year from and after July 2015 such that [Starlites] was 

required after this discontinuance to obtain zoning 

approval under the requirements of the 2014 [Ordinance] 

amendment for “electronic gaming operations.” 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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Starlites timely filed written notice of appeal to this Court.

Standard of Review

Our review “is limited to determining whether the superior court applied the 

correct standard of review, and to determin[ing] whether the superior court correctly 

applied that standard.” Overton v. Camden Cty., 155 N.C. App. 391, 394, 574 S.E.2d 

157, 160 (2002). We review a superior court’s interpretation of a zoning ordinance de 

novo, and “apply the same principles of construction used to interpret statutes.” Fort 

v. Cty. of Cumberland, 235 N.C. App. 541, 548-49, 761 S.E.2d 744, 749, disc. review 

denied, 367 N.C. 798, 766 S.E.2d 688 (2014).

Discussion

On appeal, Starlites argues, in part, that the superior court applied the wrong 

standard of review in affirming the Board’s decision. Specifically, Starlites maintains

that the superior court erroneously concluded, under de novo review, that the 

Property’s “change of ownership caused its use to discontinue, which prohibited 

Starlites from operating as a permissible prior non-conforming use under 

Rockingham County’s Unified Development Ordinance[,]” and that “change of 

ownership is an impermissible factor to support a determination that the Stoneville 

property became a non-conforming use under the 2014 amended [Ordinance].” We 

agree that a change of ownership does not constitute a change of use. 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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A county board of adjustment sits in a quasi-judicial capacity. Its decisions 

must “be based upon competent, material, and substantial evidence in the record.”

N.C. Gen. Stat. § 160A-388(e2)(1) (2019). Every quasi-judicial decision is “subject to 

review by the superior court by proceedings in the nature of certiorari pursuant to 

[N.C. Gen. Stat. §] 160A-393.” Id. § 160A-388(e2)(2). 

In reviewing the decision of a board of adjustment, the superior court sits as 

an appellate court. Its review is limited to “determinations of whether 1) the board 

committed any errors in law; 2) the board followed lawful procedure; 3) the petitioner 

was afforded appropriate due process; 4) the board’s decision was supported by 

competent evidence in the whole record; and 5) . . . the board’s decision was arbitrary 

and capricious.” Overton, 155 N.C. App. at 393, 574 S.E.2d at 159 (citation omitted). 

See also N.C. Gen. Stat. § 160A-393(k) (addressing the superior court’s scope of review 

on appeal).

The standard of review applied by the superior court depends upon the 

substantive nature of each issue presented on appeal. Morris Commc’ns Corp. v. City 

of Bessemer City Zoning Bd. of Adjustment, 365 N.C. 152, 155, 712 S.E.2d 868, 870

(2011) (citation omitted). “When the petitioner questions (1) whether the agency’s 

decision was supported by the evidence or (2) whether the decision was arbitrary or 

capricious, then the reviewing court must apply the whole record test.” Mann Media, 

Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1, 13, 565 S.E.2d 9, 17 (2002) (citation 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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and internal quotation marks omitted). On the other hand, de novo review is proper 

when the petitioner contends that the board’s decision was based on an error of law. 

Id.

Under de novo review, an appellate “court considers the case anew and may 

freely substitute its own interpretation of an ordinance for a [board’s] conclusions of 

law.” Morris Commc’ns Corp., 365 N.C. at 156, 712 S.E.2d at 871; see id. (noting that 

this Court has previously determined that “the superior court, sitting as an appellate 

court, could freely substitute its judgment for that of [the board] and apply de novo

review as could the Court of Appeals with respect to the judgment of the superior 

court” (citations omitted)). Thus, “reviewing courts may make independent 

assessments of the underlying merits of board of adjustment ordinance 

interpretations,” which, in turn, “emphasizes the obvious corollary that courts 

consider, but are not bound by, the interpretations of administrative agencies and 

boards.” Id. (citations and internal quotation marks omitted). We employ this 

approach for our de novo analysis below. 

After a hearing, the Board entered an order denying Starlites’ appeal,

concluding that Starlites’ business operation violated the Ordinance, that Starlites 

did not obtain a special use permit, and that Starlites was not exempt from the 

requirement to obtain a special use permit as a permissible nonconforming use. The 

Board also made the following relevant findings of fact: 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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14. At no time prior to submitting an appeal did [Raynor]

file documentation establishing his business constituted a 

grandfathered, non-conforming use that has continuously 

operated since 2014 thereby exempted from the special use 

requirements of [the Ordinance], Chapter 2, Article IX, 

Section 9-11(ii). 

. . . .

18. At the hearing, [Starlites] presented invoices from 

White Sands Technology billed to NC-Starlites Technology 

Inc. from January 2014 to July 2015 and invoices from 

[R]edibids billed to NC-[Starlites] from July 2015 to 

September 2015. 

19. At the hearing, [Starlites] presented Articles of 

Incorporation from the North Carolina Secretary of State 

indicating that [Starlites] was not created until January 

21, 2015. 

20. At the hearing, [Starlites] presented additional 

invoices from Baracuda [sic] Enterprises billed to [Raynor]

[by] email . . . from January 2016 2015 [sic] to August 2017. 

21. At no time prior to submitting an appeal did [Raynor]

file to amend his zoning permit issued to [MM&K] on May 

1, 2014. 

On appeal to the superior court, Starlites, challenged, inter alia, the following 

of the Board’s conclusions:

2. [Raynor’s] electronic gaming operation has not 

continuously operated since 2014.

3. [Raynor’s] electronic gaming operation is not an exempt 

non-conforming use.

. . . .
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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6. [Raynor’s] electronic gaming operation is in violation of 

the special use permit requirements as set forth in [the

Ordinance], Chapter 2, Article IX, Section 9-11(ii) because 

he is operating without a special use permit.

7. Based on the foregoing Findings of fact and Conclusions 

of Law, the [Board] concludes that the applicant has not 

met his burden on appeal. 

Starlites argued, inter alia:

15. The Decision erroneously contends that Starlites has 

not been continuously operating its business on the 

Property since 2014. However, Starlites produced 

uncontested evidence in the form of testimony and business 

receipts showing that its business on the Property had been 

continuously operating an electronic gaming business prior 

to 2014 and had not been closed for more than a year. 

16. The Decision erroneously contends that Starlites’ 

business on the Property is not an exempt non-conforming 

use. But since Starlites has been continuously operating 

an electronic gaming business on the Property since before 

2014, its business on the Property is in fact an exempt nonconforming use under Chapter 2, Article XII of the 

[Ordinance]. 

17. The Decision erroneously contends that Starlites is in 

violation of the [Ordinance] because it has not obtained a 

special use permit for its business on the Property. But 

Starlites is not required to obtain a special use permit 

because its business is an exempt non-conforming use. 

Also, Starlites’ business on the Property is not an 

Electronic Gaming Operation as defined by Chapter 1 

Article II of the [Ordinance]. Thus, Starlites’ business on 

the Property does not require a special use permit. 

On review of the Board’s interpretation of the amended Ordinance as it 

pertains to nonconforming use, we “apply the same principles of construction used to 
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interpret statutes.” Fort, 235 N.C. App. at 549, 761 S.E.2d at 749. “In interpreting a 

municipal ordinance the basic rule is to ascertain and effectuate the intent of the 

legislative body. Intent is determined according to the same general rules governing 

statutory construction, that is, by examining (i) language, (ii) spirit, and (iii) goal of 

the ordinance.” Capricorn Equity Corp. v. Chapel Hill, 334 N.C. 132, 138, 431 S.E.2d 

183, 187-88 (1993) (internal citations and quotation marks omitted). Because “zoning 

ordinances are in derogation of common-law property rights, limitations and 

restrictions not clearly within the scope of the language employed in such ordinances 

should be excluded from the operation thereof.” Id. at 139, 431 S.E.2d at 188. 

Article II of the amended Ordinance defines “nonconformance” as “[a] lot, 

structure or land use that is inconsistent with current zoning requirements, but 

which was entirely lawful when it was originally established.” Article XIII Section 

13-4(f) addresses the impact on nonconforming uses of structures that were in 

existence when the amended Ordinance was enacted: 

When any nonconforming use of a structure is discontinued 

for a period of one year, any future use of the structure 

shall be limited to those uses permitted in that district 

under the provisions of this ordinance. Vacancy and/or 

non-use of the building, regardless of the intent of the 

owner or tenant, shall constitute discontinuance under this 

provision. 

The amended Ordinance also provides that:
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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No Special Use Permit shall be granted by the Planning 

Board unless each of the following findings is made 

concerning the proposed special use: 

(a) That the use or development is located, designed, 

and proposed to be operated so as to maintain or promote 

the public health, safety, and general welfare; 

(b) That the use or development complies with all 

required regulations and standards of this ordinance and 

with all other applicable regulations; 

(c) That the use or development is located, designed, 

and proposed to be operated so as to maintain or enhance 

the value of contiguous property or that the use or 

development is a public necessity; and 

(d) That the use or development conforms with the 

general plans for the land use and development of 

Rockingham County as embodied in this chapter and in the 

Rockingham County Development Guide. 

There shall be competent, material and substantial 

evidence in the record to support these conclusions and the 

Planning Board must find that all of the above exist or the 

application will be denied. 

Approximately four months before the amended Ordinance was enacted, 

Rockingham County issued a zoning permit allowing MM&K to operate a 

sweepstakes business on the Property, in compliance with the County’s then-existing 

Ordinance. The permit designated MM&K as the Property’s owner, and “Starlite 

Technologies” as the applicant and occupant. The County’s approval of MM&K’s 

permit application indicates that, at the time the permit was issued, the Property 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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met and complied with the requirements for such a permit. The Property’s 

subsequent change of ownership had no impact on the use of the Property. 

Starlites maintains that section 13-4(f) of the amended Ordinance essentially 

constitutes a “grandfather clause,” allowing a prior permissible nonconforming use to 

continue so long as such use was not discontinued for a period of one year. We agree. 

We base our decision, first and foremost, upon the plain language of section 13-4(f) of 

the amended Ordinance. Moreover, we note that the amended Ordinance contains

no provision that a change in ownership will constitute a “new” use or otherwise 

invalidate a prior permissible nonconforming use.

This Court previously addressed a similar issue in Graham Court Associates v. 

Town Council of Chapel Hill, 53 N.C. App. 543, 281 S.E.2d 418 (1981). In Graham 

Court, we examined “whether the power to control the uses of property through zoning 

extends to control of the manner in which the property is owned.” 53 N.C. App. at

544, 281 S.E.2d at 419. Specifically, we considered whether a “change in ownership 

. . . constitutes a change in use which the town can regulate by its zoning ordinance[,]”

and ultimately held that it does not. Id. at 547, 281 S.E.2d at 420. 

As our Court explained, “zoning is the regulation by a municipality of the use

of land within that municipality, and of the buildings and structures thereon – not 

regulation of the ownership of the land or structures.” Id. at 546, 281 S.E.2d at 420 

(citation omitted). “The test of nonconforming use is ‘use’ and not ownership or 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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tenancy.” Id. at 547, 281 S.E.2d at 420 (citation omitted). Consequently, “[c]hanging 

the type of ownership of real estate upon which a nonconforming use is located will 

not destroy a valid existing nonconforming use.” Id. at 550, 281 S.E.2d at 422

(citation omitted). “[W]e do not regard a mere change from tenant occupancy to owner 

occupancy as an extension or alteration of the previous non-conforming use of the 

dwellings. And there is no question as to the right of [alienability] of property along 

with its attendant valid non-conforming use.” Id. at 548, 281 S.E.2d at 421 (citation 

omitted).

MM&K conveyed the Property to Starlites on 30 January 2015—nine days 

after Starlites was incorporated on 21 January 2015, and approximately nine months 

after the zoning permit was issued. A few months later, on 14 July 2015, articles of 

dissolution were filed for both Starlites Technology, Inc. and MM&K. 

At the hearing before the Board, Raynor testified that he dissolved both 

entities “when the sweepstakes was officially . . . not allowed to operate anymore 

according to the State.” Raynor further testified that the decision to dissolve Starlites 

Technology, Inc. and MM&K was also based, in part, on “consolidat[ion]” because he 

determined that he “had too many companies[.]” According to Raynor, “Watts Group 

was a separate company that had stores of its own as well as Starlites Technology, 

Inc., has stores of its own. MM&K was just a development company. It only owns 

the property. That’s all—that’s all it ever has.” 
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In addition, Raynor testified about the use of certain software at the Property, 

and proffered invoices to evidence the resulting expenses incurred during the 

disputed “continuous use” of the Property. When a member of the Board asked 

Raynor whether Raynor had “change[d] . . . the type of business” conducted, Raynor 

replied that the business was “still underneath the same promotional—getting 

promotional items. Still using the desktop computers. Everything was still the same. 

It’s just a different kind of format they made.” In sum, Raynor testified that the use 

of the Property remained the same, and that there had merely been a change in 

ownership due to the consolidation of his companies. 

In his closing argument, Starlites’ defense counsel summarized the evidence

as follows:

[Raynor] has been operating his business at this location 

well before the ordinance at issue was passed. The 

ordinance that the County maintains he’s got to comply 

with was passed, again, in September 2014. It’s an 

electronic gaming ordinance. Well before September 2014 

and on a continuous basis, he was offering his customers 

promotional games. 

The software changed. When the sweepstakes laws 

changed, he adopted a skill test, but all throughout, he’s 

been operating a business there and he’s been offering his 

customers promotional games. So he is a prior 

nonconforming use. He’s grandfathered in. This ordinance 

doesn’t apply to him, and that’s why he hasn’t applied for 

it[.] 
STARLITES TECH CORP. V. ROCKINGHAM CTY.

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In addition, to demonstrate “continuous use” of the Property, Raynor submitted 

invoices showing his payment of expenses both before and after September 2014, 

when the amended Ordinance was enacted.

Accordingly, the Board improperly concluded that under the provisions of the 

amended Ordinance, a change in ownership constituted a change in use, and that 

Starlites was required to amend its zoning permit in order to legally continue the 

same use of the Property. 

“Remand is not automatic when an appellate court’s obligation to review for 

errors of law can be accomplished by addressing the dispositive issue(s).” Morris

Commc’ns Corp., 365 N.C. at 158, 712 S.E.2d at 872 (citation and internal quotation 

marks omitted). “Under such circumstances the appellate court can determine how 

the trial court should have decided the case upon application of the appropriate 

standards of review.” Id. at 158-59, 712 S.E.2d at 872. Here, we can “reasonably 

determine from the record[,]” id. at 159, 712 S.E.2d at 872-73 (citation omitted), that

Starlites’ challenge to the Board’s interpretation of the amended Ordinance warrants 

reversal of the Board’s ultimate decision. 

Because this issue is dispositive, we need not address Starlites’ additional 

arguments. 

Conclusion
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“In sum, the rule of construction that zoning ordinances are strictly construed 

in favor of the free use of real property is appropriately applied here.” Id. at 162, 712 

S.E.2d at 874. The Board improperly concluded that Starlites was in violation of the 

2014 amended Ordinance. Accordingly, because the Board’s interpretation of its 

amended Unified Development Ordinance constituted an error of law, we reverse.

REVERSED.

Judges STROUD and MURPHY concur.