Court Opinion

ID: 9856275
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:43:39.090167+00
Date Added: 2024-06-11T09:38:32.303966
License: Public Domain

TYSON, Judge
dissenting.
The majority’s opinion: (1) holds the superior court erred when it considered the operation of restrictive covenants when it reached its conclusion that the Resource Conservation District (“RCD”) left Chapel Hill Title and Abstract Co., Inc. (“Chapel Hill Title”) and Jonathan and Lindsay Starr (“the Starrs”) (collectively, “petitioners”) with no legally reasonable use of their property and (2) reverses the superior court’s order. I vote to affirm the superior court’s order and respectfully dissent.
I. Issues
The Town of Chapel Hill (“the Town”) and the Town of Chapel Hill Board of Adjustment (“the Board”) (collectively, “respondents”) and Robert B. Ferrier, Hanson R. Malpass, and Betsy J. Malpass (collectively, “intervenors”) argue the superior court erred when it concluded that: (1) the RCD left petitioners with no legally reasonable use and (2) the denial of the variance request would result in extreme hardship..
II. Standard of Review
When a superior court reviews the decision of a town council or administrative body, it should:
(1) review the record for errors of law, (2) ensure that procedures specified by law in both statute and ordinance are followed, (3) ensure that appropriate due process rights of the petitioner are *498protected, including the right to offer evidence, cross-examine witnesses, and inspect documents; (4) ensure that the decision is supported by competent, material, and substantial evidence in the whole record; and (5) ensure that the decision is not arbitrary and capricious.
The task of this Court in reviewing a superior court order is (1) to determine whether the [superior] court exercised the proper scope of review, and (2) to review whether the [superior] court correctly applied this scope of review.
Humane Soc’y of Moore Cty., Inc. v. Town of Southern Pines, 161 N.C. App. 625, 628-29, 589 S.E.2d 162, 165 (2003) (internal quotations omitted).
III. Proper Scope of Review
When the superior court reviewed the Board’s decision, petitioners had only raised questions of law and the superior court “applied the de novo standard of review.” There is no dispute that the superior court exercised the proper scope of review. Id. at 629, 589 S.E.2d at 165.
IV. Application of Proper Scone of Review
The only question before this Court is whether the superior court correctly applied its de novo scope of review. Id. Respondents and intevenors argue the superior court erred when it found the Board’s conclusions of law numbered 2 and 3 “legally erroneous.” I disagree.
The Town’s Land Use Management Ordinance states:
The Board . . . shall grant a variance, subject to the protections of this Article, if it finds:
(1.) That the provisions of this Article leave an owner no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain; and
(2.) That a failure to grant the variance would result in extreme hardship.
Chapel Hill, N.C., Land Use Mgmt. Ordinance § 3.6.3(j)(2)(A) (2004) (emphasis supplied). “Any owner of property applying to the Board . . . for a variance . . . shall have the burden of establishing that such variance should be granted by the Board.” Chapel Hill, N.C., *499Land Use Mgmt. Ordinance § 3.6.3(j)(6). “[A] showing that the portion of the [RCD] outside of a regulatory floodplain overlays more than seventy-five percent (75%) of the area of a zoning lot, shall establish a rebuttable presumption that the [RCD] leaves the owner no legally reasonable use of the zoning lot outside of the regulatory floodplain.” Chapel Hill, N.C., Land Use Mgmt. Ordinance § 3.6.3(j)(7) (emphasis supplied). The burden then shifts to the Town to rebut the presumption of no legally reasonable use. Id.
A. Legally Reasonable Use
Respondents and intevenors argue, and the majority’s opinion agrees, that the superior court erred when it concluded that the RCD left petitioners with no legally reasonable use. I disagree.
On remand from this Court, the Board entered conclusion of law numbered 2, which stated:
This rebuttable presumption that the provisions of the [RCD] leave no legally reasonable use of the portion of the [property] outside the regulatory floodplain has been rebutted by evidence that a Building Permit was issued by the Town ... in December 2002 for a single-family residence on this property that met the limitations of the [RCD] without the need for a variance. Therefore, this evidence shows that there is sufficient area on this lot outside the [RCD] on which to build a residential structure in compliance with Town regulations. The Board . . . concludes that the provisions of the [RCD] are not responsible for the owner having no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain.
The superior court found the Board’s conclusion of law numbered 2 to be “legally erroneous.” The superior court stated:
With respect to the Board’s second conclusion of law, the Court notes that the restrictive covenants that apply to the property in question were adopted in 1959, and that these covenants impose a 50' setback requirement from the front (street) property line, which setback is more restrictive than the setback line established by [the Town’s] ordinance (28'). This covenant remains enforceable, as demonstrated by the April 21, 2003 order of this Court enjoining the property owner from constructing a house in a location that violates this covenant. Prior to the adoption of the RCD provisions of the ordinance, the lot in question could have been developed consistent with the provisions of the ordinance *500then in effect as well as the restrictive covenants. However, when the RCD provisions . . . were adopted in the 1980’s, the RCD covered approximately 79% of the subject lot. As a result, following the adoption of the RCD ordinance, the lot is no longer developable. Because the ordinance establishes a rebuttable presumption that the property owner is left with no reasonable use of a lot if the RCD overlays more than 75% of the lot, and because the restrictive covenants were in place at the time the RCD ordinance was adopted, the Court concludes that the RCD in this case leaves the owner no legally reasonable use of the property.
The property and the applicable covenants were created as part of a subdivision in 1959, more than twenty years prior to the enactment of the RCD. Because the fifty-foot street setback limitation contained in the restrictive covenants did not render the lot undevelopable prior to the enactment of the RCD more than twenty years later, the RCD, not the covenants, left Chapel Hill Title with “no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain . . . .” Chapel Hill, N.C., Land Use Mgmt. Ordinance § 3.6.3(j)(2)(A)(l).
The majority’s holding that the Board need not consider preexisting restrictive covenants when determining whether a variance is warranted sets a dangerous precedent. It is undisputed that Chapel Hill Title cannot comply with both the restrictive covenants and the RCD ordinance. Without a variance, Chapel Hill Title is not only left with no legally reasonable or “economically beneficial or productive use[,]” but is left with no affirmative use other than for the property to remain in its natural state. Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015, 120 L. Ed. 2d 798, 813 (1992). Chapel Hill Title will be forced to attack application of the ordinance to its property. See id. at 1015, 120 L. Ed. 2d at 812-13 (internal citations omitted) (“We have . . . described at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical invasion of his property. . . . The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land.”); see also Responsible Citizens v. City of Asheville, 308 N.C. 255, 264, 302 S.E.2d 204, 210 (1983) (internal quotations omitted) (“[A] zoning ordinance would be deemed unreasonable and confiscatory, as applied to a particular piece of property, if the owner of the affected property *501was deprived of all practical use of the property and the property was rendered of no reasonable value.”).
If before the enactment of the ordinance provision in question, a lot was developable, and after the adoption of the ordinance it is not, the adoption of the ordinance has created the hardship. Conversely, if before the adoption of a restrictive covenant the property could be developed consistent with then applicable zoning regulations, and after the adoption of a restrictive covenant the property is undevelopable, the restrictive covenant has created the hardship. Here, “the provisions of [the RCD] leave [Chapel Hill Title] no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain . . . .” Chapel Hill, N.C., Land Use Mgmt. Ordinance § 3.6.3(j)(2)(A)(l).
A board of adjustment must take into consideration all preexisting characteristics of a lot in question, including restrictions imposed by private covenants, when deciding whether a subsequently enacted zoning ordinance has deprived the property owner of any reasonable use of his land and imposed hardships subject to remedy by a variance. See Capitol Hill Restoration Soc. v. Zoning Com’n, 380 A.2d 174, 185 (D.C. 1977) (“The existence of lawful private restrictions on land use is an actuality properly to be considered in zoning decisions.”), rev’d on other grounds, Citizens Asso. of Georgetown v. Zon. Com’n Etc., 392 A.2d 1027 (D.C. 1978).
The superior court did not err when it found the Board’s conclusion of law numbered 2 “legally erroneous]]” and substantial evidence in the whole record supports the superior court’s conclusion that the RCD “leave[s] [Chapel Hill Title] no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain . . . .” Chapel Hill, N.C., Land Use Mgmt. Ordinance § 3.6.3(j)(2)(A)(l). Because I would hold the superior court did not err when it concluded the RCD left petitioners with no legally reasonable or “economically beneficial or productive use[,]” I address respondent’s second issue on appeal. Lucas, 505 U.S. at 1015, 120 L. Ed. 2d at 813.
B. Extreme Hardship
Respondents and intevenors argue the superior court erred when it concluded that the denial of the variance request would result in extreme hardship when petitioners: (1) acquired the property with knowledge of all governmental and private restrictions and (2) presented no evidence of hardship to the Board. I disagree.
*5021. Knowledge of Governmental and Private Restrictions
On remand from this Court, the Board entered conclusion of law numbered 3, which stated:
The failure to grant this variance would not result in extreme hardship because the hardship is self-created. This determination is based on evidence that Chapel Hill Title . . . purchased this property knowing that a variance would be necessary in order for the property to be used for a single-family residence. Therefore, the Board concludes that the hardship is self-created and is not one that arises out of application of the ordinance.
The superior court found the Board’s conclusion of law numbered 3 to be “legally erroneous.” The superior court stated:
With respect to the Board’s third conclusion of law, the Court concludes that the fact that. . . Chapel Hill Title . . . acquired the property with knowledge that a variance would be needed to develop it does not mean that the denial of the variance would not result in extreme hardship or that the hardship was self created. This Court agrees with the modem view . . . that a purchaser acquires all the rights of the predecessor owner of the property, including the right to obtain a variance.
(Emphasis supplied).
Whether purchasing property with knowledge of zoning limitations constitutes a self-created hardship is a matter of first impression in this State. Rathkopf’s The Law of Zoning, and Planning details and explains the past and emerging law in this area:
As early as 1927, it was considered self-created hardship if one purchased property with knowledge of zoning limitations, or with knowledge of a hardship suffered by the land arising from interaction of the zoning ordinance and the particular characteristics of the land. The concern was that a purchaser would attempt to create evidence of hardship by paying an excessive purchase price for restricted property assuming that the hardship thereby established would constitute the basis for a variance needed to use the land profitably. For years, therefore, the general rule was that one who purchased property with actual or constructive knowledge of the restrictions of a zoning ordinance was barred from securing a variance.
While this rule may still be applicable in a few jurisdictions, it has been altogether abandoned, or modified into nonexistence, in *503others. Two basic faults in the old rule have been recognized, and these faults are the reasons behind its demise. First, since hardship can neither be measured by the cost of the property to the owner nor by the difference between the value the land has as restricted and the value it would have if the variance were granted, there is no danger that a knowledgeable purchaser could create evidence of hardship by paying an excessive purchase price for property that is restricted. Second, the old rule failed to acknowledge that if the prior owner would have been entitled to a variance at the time the zoning ordinance restriction was enacted, the right is not lost to a purchaser simply because he bought with knowledge of the regulation.. . .
The “current trend” in the rule, that purchase with knowledge of restrictions either does not prohibit the granting of a variance, or is at most a nondeterminative factor to consider in the granting of a variance, has had proponents at least as early as 1957 when the Supreme Court of Rhode Island rejected the notion that purchase with knowledge of restrictions, in itself, constituted self-created hardship. The “traditional rule” has been relaxed to leave the decision of whether a purchaser with knowledge of restrictions should receive a variance up to the discretion of the board of [adjustment].
It should not be within the discretion of a board of [adjustment] to deny a variance solely because a purchaser bought with knowledge of zoning restrictions. Instead, the board of [adjustment] should be confined to considering knowledge of restrictions along with all other factors of the particular case. A purchaser denied a variance because of his knowledge of restrictions would be able to attack application of the ordinance to his property. To deny a purchaser a variance by such an application of the self-created hardship rule is inconsistent with the purpose of the variance, to prevent attacks on the ordinance as a whole.
3 Arden H. Rathkopf & Daren A. Rathkopf, Rathkopf s The Law of Zoning and Planning § 58:22 (Edward H. Zeigler, Jr., ed., 2006) (citations omitted) (emphasis supplied). The great majority of sister states, who have considered this issue, support this analysis. Spence v. Board of Zoning Appeals, 496 S.E.2d 61, 63-64 (Va. 1998) (rejected the argument that the purchase of property with knowledge that a variance was needed to build a house constituted a self-inflicted hardship that barred a lot owner’s variance request); Bd. of Adjustment of *504Oklahoma City v. Shanbour, 435 P.2d 569, 575 (Okla. 1967) (citation omitted) (“[I]t is our opinion that the better rule and the one followed in a number of jurisdictions, is that [a purchase of property with knowledge, actual or presumed, of zoning restrictions] does not prohibit the granting of a variance.” ); Twigg v. Town of Kennebunk, 662 A.2d 914, 918 (Me. 1995) (“[A]ctual or constructive knowledge of the zoning ordinances prior to purchase of the property may be considered by the Board as a factor in evaluating self-created hardship, but it is not determinative of such hardship.”); Sydoriak v. Zoning Bd. of Appeals, 879 A.2d 494, 502 (Conn. App. Ct. 2005) (internal citation and emphasis omitted) (“Where . . . the hardship is created by the enactment of a zoning ordinance and the owner of the parcel could have sought a variance, a subsequent purchaser has the same right to seek a variance and, if his request is supported in law, to obtain the variance. This right is not lost merely because the subsequent purchaser takes with the knowledge that the current zoning regulations would prohibit the use. Rather, the nonconformity must be attributable to the purchaser or his predecessor in interest in order for the hardship to be considered self-created.”). See Baker v. Connell, 488 A.2d 1303, 1308 (Del. 1985); Town of Orrville v. S & H Mobile Homes, Inc., 872 So. 2d 856 (Ala. Civ. App. 2003); Reinking v. Metropolitan Bd. of Zoning Appeals, 671 N.E.2d 137 (Ind. Ct. App. 1996); Stansbury v. Jones, 812 A.2d 312 (Md. Ct. App. 2002); Graham v. Itasca County Planning Comm’n, 601 N.W.2d 461 (Minn. Ct. App. 1999); Harrington v. Town of Warner, 872 A.2d 990 (N.H. 2005); Jock v. Zoning Bd. of Adjustment, 878 A.2d 785 (N.J. 2005); Solebury Twp. v. Solebury Twp. Zoning Hearing Bd., 914 A.2d 972 (Pa. Commw. Ct. 2007); Lewis v. Pickering, 349 A.2d 715 (Vt. 1975); Hoberg v. City of Bellevue, 884 P.2d 1339 (Wash. Ct. App. 1994); Schalow v. Waupaca County, 407 N.W.2d 316 (Wis. Ct. App. 1987).
The modern and majority view holds that the fact that a lot owner has some prior knowledge of the existing zoning regulations applicable to the land does not preclude the right to a variance; it is merely an element to be considered in determining the existence of hardship. In view of the facts before us, this analysis is particularly relevant at bar. The superior court correctly found the Board’s conclusion of law numbered 3 “legally erroneous.”
2. Evidence of Hardship
Respondents and intevenors argue for the first time on appeal that petitioners presented no evidence of hardship to the Board. *505Respondents and intevenors cannot assert a new and different theory on appeal not previously asserted before the superior court or the Board. See Weil v. Herring, 207 N.C. 6, 10, 175 S.E. 836, 838 (1934) (“An examination of the record discloses that the cause was not tried upon that theory, and the law does not permit parties to swap horses between courts in order to get a better mount [on appeal].”); see also Westminster Homes, Inc. v. Town of Cary Zoning Bd. of Adjustment, 354 N.C. 298, 309, 554 S.E.2d 634, 641 (2001) (citations omitted) (“This Court has long held that issues and theories of a case not raised below will not be considered on appeal____”). This assignment of error should be dismissed.
V. Conclusion
The superior court exercised “the proper scope of [de novo] review” and “correctly applied this scope of review.” Humane Soc’y of Moore Cty., Inc., 161 N.C. App. at 629, 589 S.E.2d at 165. The superior court’s order should be affirmed. I respectfully dissent.