Court Opinion

ID: 2726720
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:08:20.522818+00
Date Added: 2024-06-11T12:06:34.370600
License: Public Domain

NO. COA14-134

                     NORTH CAROLINA COURT OF APPEALS

                         Filed: 2 September 2014

RUTHERFORD ELECTRIC MEMBERSHIP
CORPORATION,
     Petitioner,

      v.                                   Rutherford County
                                           No. 13 SP 95
130 OF CHATHAM, LLC,
     Respondent.

      Appeal by petitioner from order entered 30 October 2013 by

Judge Hugh B. Lewis in Rutherford County Superior Court.                Heard

in the Court of Appeals 14 August 2014.

      Parker Poe Adams & Bernstein, LLP, by W. Edward Poe, Jr.,
      Thomas N. Griffin, III, and Benjamin Sullivan; and Law
      Offices of Elizabeth T. Miller, by Elizabeth T. Miller, for
      Petitioner-appellant.

      Roberts & Stevens, P.A., by Ann-Patton Hornthal and William
      Clarke; Sigmon, Clark, Mackie, Hanvey & Ferrell, PA, by
      Forrest Ferrell and Amber Reinhardt; and Kilpatrick,
      Townsend & Stockton, LLP, by Steven J. Levitas, for
      Respondent-appellee.

      HUNTER, JR., Robert N., Judge.

      Petitioner     Rutherford    Electric     Membership      Corporation

(“Rutherford Electric”) appeals from an order dismissing their

petition to condemn easements for a power line across Respondent

130   of   Chatham   LLC’s   (“Chatham”)    tract   of   land   (“Box   Creek
                                       -2-
Wilderness”) that spans across Rutherford and McDowell Counties

After careful review, we reverse the trial court’s order.

                        I. Facts & Procedural History

    Rutherford      Electric      filed     a    special       proceeding    petition

with the Rutherford County Superior Court on 24 January 2013 and

filed an amended petition on 15 February 2013.                       Both petitions

were filed pursuant to Chapter 40A of                       the General Statutes,

which allow for a private company to petition for exercise of

eminent   domain    “for    the    public    use       of   benefit.”       N.C.   Gen.

Stat. §§ 40A-3(a), 40A-20 (2013).                Chatham answered the amended

petition on 1 April 2013, which included a motion to dismiss

under   N.C.   R.   Civ.    P.    12(b)(1)       for    lack    of   subject   matter

jurisdiction, stating that “[a] portion of the property subject

of the Amended Petition lies in McDowell County, and the Clerk

of Court for Rutherford County has no jurisdiction over property

in McDowell County.”         The petition concerned a single tract of

land that lay in both Rutherford and McDowell counties.                             The

petition’s     stated    purpose    was     to    condemn       easements    so    that

Rutherford Electric may construct power lines and extend its

service to additional customers.                Rutherford Electric also filed

a separate petition to condemn easements for a second tract of

land also owned by Chatham that is entirely in McDowell County
                                     -3-
(“Copperleaf”).

     The   Rutherford    County    Clerk      of    Court     appointed     three

citizens of Rutherford County as commissioners to appraise and

determine the value of just compensation for the tract at issue

pursuant to N.C. Gen. Stat. § 40A-25 (2013).                 A hearing date of

28   May   2013   was   also   set       in   the    order     appointing     the

commissioners.     The hearing took place on 28 May 2013 and the

three   commissioners   returned     a     value    of   $71,686.00   for    the

easement on the tract of land at issue via a written report on

24 June 2013.     Both parties appealed for a de novo jury trial on

the amount of just compensation.

     A trial on the merits was set for August 2013.                 Rutherford

Electric also filed a separate petition for the Copperleaf tract

in McDowell County on 5 June 2013 to condemn certain land under

Chapter 40A of the General Statutes.               Chatham responded to the

petition on 24 June 2013.      The parties consented to an order to

consolidate the cases for trial which was filed on 20 September

2013.   The order set a trial date of 30 September 2013.

     On 24 September 2013, Chatham filed a Motion to Dismiss the

present matter for lack of subject matter jurisdiction.                     Judge

Lewis heard arguments on the motion to dismiss on 30 September

2013.   Judge Lewis then adjourned court and stated that he would
                                        -4-
rule on Chatham’s motion to dismiss the next morning.

      Judge Lewis then granted Chatham’s motion to dismiss and

explained the rationale for his decision.                 Rutherford Electric

made a motion under Rule 59(e) for leave to amend its petition

to include only the land in Rutherford County and to alter the

petition it filed in McDowell County concerning the Copperleaf

tract to include the McDowell County portions of the Box Creek

Wilderness.      The trial court denied the motion and declined to

hear the other case concerning the Copperleaf tract.                 The trial

court filed written orders granting Chatham’s motion to dismiss

and motion to amend on 30 October 2013. The trial court’s order

did     not   indicate      whether     Rutherford     Electric’s   claim   was

dismissed with or without prejudice.             Rutherford Electric filed

timely written notice of appeal from the orders on 15 November

2013.

                  II. Jurisdiction & Standard of Review

      Jurisdiction in this Court is proper pursuant to N.C. Gen.

Stat. § 7A-27(b) (2013) (stating a right of appeal lies with

this Court from the final judgment of a superior court).

      “A      motion   to     dismiss     for   lack     of   subject   matter

jurisdiction is reviewed de novo pursuant to Rule 12 of the

North Carolina Rules of Civil Procedure.”                 Johnson v. Antioch
                                       -5-
United Holy Church, Inc., 214 N.C. App. 507, 510, 714 S.E.2d
806, 809 (2011); see also Burgess v. Burgess, 205 N.C. App. 325,

327, 698 S.E.2d 666, 668 (2010).                 Further, when an argument

presents an issue of statutory interpretation, full review is

appropriate,     and   the    trial    court’s    conclusions     of    law   are

reviewed de novo.      Romulus v. Romulus, 216 N.C. App. 28, 32, 715
S.E.2d 889, 892 (2011) (citations omitted).              “If the language of

the statute is clear, this Court must implement the statute

according to the plain meaning of its terms.”              Whitman v. Kiger,

139 N.C. App. 44, 46, 533 S.E.2d 807, 808 (2000), aff’d per

curiam,   353 N.C. 360,    543 S.E.2d 476   (2001)   (citation     and

quotation marks omitted).

      “Under de novo review, we examine the case with new eyes.”

Templeton Properties LP v. Town of Boone, ___ N.C. App. ___,

___, 759 S.E.2d 311, 317 (2014).                “[D]e novo means fresh or

anew; for a second time, and an appeal de novo is an appeal in

which the appellate court uses the trial court’s record but

reviews the evidence and law without deference to the trial

court’s rulings.”       Parker v. Glosson, 182 N.C. App. 229, 231,

641 S.E.2d 735,   737    (2007)    (quotation     marks    and    citations

omitted).
                                              -6-
    The        second    issue       on   appeal        is   whether   the     trial   court

improperly       denied    a        request       for    leave    to   amend     Rutherford

Electric’s complaint under N.C. R. Civ. P. 59, and is reviewed

under     an     abuse     of       discretion          standard.         House     Healers

Restorations,       Inc.       v.    Ball,    112       N.C.    App.   783,     785–86,   437
S.E.2d 383, 385 (1993) (“Leave to amend should be granted when

‘justice so requires,’ or by written consent of the adverse

party . . . . The granting or denial of a motion to amend is

within the sound discretion of the trial judge, whose decision

is reviewed under an abuse of discretion standard.” (internal

citation omitted)).             “When discretionary rulings are made under

a misapprehension of the law, this may constitute an abuse of

discretion.”       Gailey v. Triangle Billiards & Blues Club, Inc.,

179 N.C. App. 848, 851, 635 S.E.2d 482, 484 (2006); Bartlett

Milling Co., L.P. v. Walnut Grove Auction and Realty Co., Inc.,

192 N.C. App. 74, 89, 665 S.E.2d 478, 490 (2008) (holding that

refusal    to    grant     a    motion       to    amend       “without   any    justifying

reason and without a showing of prejudice to the defendant is

considered an abuse of discretion.” (citation omitted)).

                                       III. Analysis

    Rutherford Electric asks this Court to reverse the trial

court based on a reading of N.C. Gen. Stat. § 40A-20 and other
                                             -7-
sections within Chapter 40A allowing for a condemnation action

involving     property           in   multiple       counties.         Chatham        points

primarily to N.C. Gen. Stat. § 40A-25 within Chapter 40A, which

allows an answer to the petition for condemnation and allows the

county     clerk     to     appoint        three     commissioners       to     value    the

property who “shall be [residents] of the county wherein the

property     being        condemned        lies . . . .”         Id.          These     three

commissioners      are      required        to     take   an   oath    to     “fairly    and

impartially appraise the property in the petition.”                             N.C. Gen.

Stat. § 40A-26 (2013).

    While        there      is    apparent         conflict    between        statutes    in

Chapter    40A     on     whether      a    multi-county       private        condemnation

action may be filed, we reverse the trial court because the

trial court very clearly did have subject matter jurisdiction

over at least the portions of the Box Creek Wilderness that were

in Rutherford County and did not grant Rutherford Electric’s

motion to amend its pleading.                    See N.C. Gen. Stat. §§ 40A-20,

40A-21, 40A-25, 40A-28, 40A-67 (2013).                     This Court leaves to the

General    Assembly        whether     or     not    Chapter     40A   contemplates        a

multi-county private condemnation action via the procedure that

Rutherford Electric attempted here and would urge the General

Assembly to clarify the procedure to avoid future issues of this
                                        -8-
type.1

A. Subject Matter Jurisdiction

     The trial court’s proper action in this matter, rather than

dismissing   the     entire     claim    under   Chapter        40A   for    want   of

subject   matter    jurisdiction        would    be   to   encourage        or   allow

Rutherford Electric to amend its claim under Rule 15 or Rule 59

of the Rules of Civil Procedure or to dismiss only the portion

of the claim for which it thought jurisdiction was lacking.

While    courts   shall    “not   take    jurisdiction”         when    it    is    not

granted, likewise courts “must take jurisdiction” when there is

an express grant.        Cohens v. State of Virginia, 6 Wheat. 264, 19
U.S. 264, 404 (1821); Union Pac. R. Co. v. Bhd. of Locomotive

Engineers & Trainmen Gen. Comm. of Adjustment, Cent. Region, 558
U.S. 67, 71 (2009) (“[W]hen jurisdiction is conferred, a court

may not decline to exercise it.”).

     Section 40A-20 provides a procedure for a private condemnor

to file a petition for condemnation with the county clerk of

court    where    “the   real   estate    described        in   the    petition     is

1
  An example where the General Assembly has provided clear
procedural instructions for a multi-county tract is in the
payment of excise taxes charged on parcels that span multiple
counties. See N.C. Gen. Stat. § 105-228.30(a) (2013). Another
example where the General Assembly provided jurisdiction to a
clerk of court for a single parcel spanning multiple counties is
also found in N.C. Gen. Stat. § 28A-17-1 (2013).
                                            -9-
situated.”     N.C. Gen. Stat. § 40A-20.                  The procedure outlined in

Chapter 40A is a special proceeding, a variation of a routine

civil   action,      where    the    county       clerk    of   court    is    given    the

authority to appoint three commissioners who value the property

after taking evidence.              N.C. Gen. Stat. § 40A-26.                  After the

commissioners        complete       their     inquiry,          they    ascertain       the

compensation the condemnor must make to the property owners and

report their award to the county clerk of court.                          Id.     Service

of orders, notices, and any other papers are the same as those

made in other special proceedings found in the General Statutes.

N.C. Gen. Stat. § 40A-24 (2013).

    A party may appeal the clerk’s order to the superior court

under   N.C.    Gen.       Stat.    § 40A-29      (2013).         De    novo    appellate

jurisdiction is then granted to the superior court from the

clerk’s order and such jurisdiction provides for a jury trial to

resolve questions of fact such as the value of the property.

N.C. Gen. Stat. § 40A-29; see also High v. Pearce, 220 N.C. 266,

271, 17 S.E.2d 108, 112 (1941) (“Since 1868 the clerk of the

court   has    had    no    power    except       that    which    is    given    him   by

statute.       Where        judicial    power       or     jurisdiction         has    been

conferred upon him, his court is one of limited jurisdiction,

both as to subject matter and the territory in which it may be
                                          -10-
exercised.” (citation omitted)).

      There     is    no   violation      of    due    process    when       a       plaintiff

follows     the      statutory    procedure       allowed       for     in       a    special

proceeding nor is there want of subject matter jurisdiction for

either the clerk of court or the trial court.                           See N.C. Gen.

Stat. § 40A-20.            In tandem,      Sections 40A-20 and 40A-29 very

clearly provide the clerk of court and the trial court with

jurisdiction over at least the Rutherford County portion of the

Box Creek Wilderness property.

B. Motion to Amend
      Rutherford Electric sought to amend its petition under Rule

59 after the trial court granted Chatham’s motion to dismiss.

In so doing,         Rutherford Electric          stated that they moved for

amendment because “the interest of our members also requires a

speedy adjudication by this Court . . . .”                        We hold that this

satisfied N.C. R. Civ. P. 59(a)(9), which allows for amending

judgments when a reason was previously recognized as a ground

for   a   new     trial.       These   reasons        include    when    “the         ends   of

justice will be met.”             Sizemore v. Raxter, 58 N.C. App. 236,

236, 293 S.E.2d 294, 294 (1982).                  The motion to amend is also

considered        with     a    general        understanding          that       “[l]iberal

amendment       of   pleadings    is   encouraged        by     the    Rules         of   Civil

Procedure in order that decisions be had on the merits and not
                                     -11-
avoided   on    the   basis   of   mere    technicalities.”      Phillips     v.

Phillips, 46 N.C. App. 558, 561, 265 S.E.2d 441, 443 (1980)

(citation      omitted).      Further,     “[t]he   philosophy   of   Rule   15

should apply not only to pleadings but also to motions where

there is no material prejudice to the opposing party.”                  Taylor

v.   Triangle    Porsche-Audi,     Inc.,    27   N.C.   App.   711,   714,   220
S.E.2d 806, 809 (1975), cert. denied, 289 N.C. 619, 223 S.E.2d
396 (1976).

      In response to Rutherford Electric’s motion, Judge Lewis

stated at the hearing:

            The issue is in all three matters [sic] the
            fact that you are dealing in the arenas of
            due process and by consequence subject
            matter jurisdiction.

            The request is basically to preempt due
            process that is outlined in Chapter 40A,
            which through all of the eleven pages of
            text that I was reading is premised on the
            North Carolina Constitution relating to
            property-like rights, and that is to be
            strictly adhered to.

            There is not an ability to agree, consent,
            to circumvent that process.    You need to
            follow the statutes in the timeline as
            designated in the statutes period on all
            properties.   The one property that you’re
            asking for me to take a look at outside of
            Rutherford County has not even had any
            hearings or proceedings or orders signed by
            the Clerk in the other county.

            The timeline of how things occur and move to
                                        -12-
            Superior   Court  are   designated  in  the
            statutes. They need to be followed in order
            to protect the citizens, the owners of that
            property, period.

            As to the amendment issue, that is also
            denied because you need to make sure that
            all the T’s are crossed and all the I’s are
            dotted in all proceedings, because the issue
            of   subject  matter  jurisdiction   can  be
            brought up at all times, it can not be
            waived. For this to be clean and brought to
            a final end for both tables so that it
            doesn’t come back because there haven’t been
            some – because someone raises subject matter
            jurisdiction at a later time, even though
            they do not voice it now, is imperative.
            That’s what justice requires.   That is what
            necessary is.

            I’m denying both of the condemnor’s request
            [sic] at this point in time. The one order
            will stand.    An additional order denying
            those requests will also need to be drafted
            by your table as well.

Thereafter, the trial court filed an order which stated that

Rutherford Electric made an oral motion pursuant to N.C. R. Civ.

P. 59(e) seeking leave to amend under N.C. R. Civ. P. 15(a).

The trial court stated that the “oral motion was made subsequent

to the Court having found that [Rutherford Electric] had no

authority    to    condemn        the   property    as     described   in   this

condemnation      action    and    entering    a   final   dismissal   of   this

action pursuant to Rule 12(b)(1) of the North Carolina Rules of

Civil Procedure.”          The trial court then concluded its order by
                                      -13-
stating “[a]fter hearing arguments of counsel, the Court in its

discretion DENIES the Petitioner’s oral motion.”

       The    foregoing    constitutes     an   abuse     of     discretion.       The

trial court had jurisdiction to hear at least a portion of the

case.       Three private citizens from Rutherford County were chosen

to provide a valuation of certain property in Rutherford County.

While there was also property in McDowell County which may or

may not have been properly included in the action, Rutherford

Electric sought leave to amend to correct their misunderstanding

of    the    statute.      Rather   than     grant       leave    to   amend   their

pleading, the trial court instead denied their motion.                      In doing

so,   the     trial   court    misapprehended      its    ability      to   hear   the

present matter, and also provided no rationale for denying the

motion under N.C. R. Civ. P. 59(e).

       “A trial court abuses its discretion only where no reason

for the ruling is apparent from the record.”                        JPMorgan Chase

Bank,   Nat’l     Ass’n   v.   Browning,     ___   N.C.    App.     ___,    ___,   750
S.E.2d 555, 561 (2013) (citation omitted).                     “A motion to amend

may be denied for ‘(a) undue delay, (b) bad faith, (c) undue

prejudice, (d) futility of amendment, and (e) repeated failure

to    cure    defects     by   previous    amendments.’”            Strickland      v.

Lawrence, 176 N.C. App. 656, 666–67, 627 S.E.2d 301, 308 (2006)
                                           -14-
(quoting Carter v. Rockingham Cnty. Bd. of Educ., 158 N.C. App.
687, 690, 582 S.E.2d 69, 72 (2003)).

      Here,      the      trial    court   did     not     address     any    of     these

categories and simply denied the motion after misapprehending

the     law.       This     constitutes      an    abuse     of      discretion,      and

accordingly, the trial court is reversed.                         We remand to the

trial    court     with    instructions      to    allow    Rutherford       Electric’s

motion to amend its action to remove the McDowell County portion

of    the      petition     from    its    Box    Creek     Wilderness       claim    and

thereafter       proceed     with    the   trial    on     the    Rutherford       County

portions of the Box Creek Wilderness tract in Rutherford County

Superior Court.

                                    IV. Conclusion

      For the reasons stated above, the decision of the trial

court is

      REVERSED AND REMANDED.

      Judges STEELMAN and GEER concur.