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.