Real Property – Non-Exclusive Easement – Res Judicata – Attorney’s Fees – Sanctions – Rule 11 – Administrative

Barris v. Town of Long Beach. (Lawyers Weekly No. 10-07-1211, 9 pp.) (Barbara Jackson, J.) Appealed from Brunswick County Superior Court. (Ola M. Lewis, J.) N.C. App. Click here for the full text of the opinion.

Holding: The plaintiffs failed to exhaust their administrative remedies in challenging the town’s permit application; therefore, the trial court erred by exercising authority over the issue.

Facts

Plaintiffs are owners of a non-exclusive easement for purposes of ingress, egress and regress. Their property is located adjacent to and abuts the western boundary of West Yacht Drive and the northern right-of-way line of Oak Island Drive, the dead end of which the town has attempted to regulate and develop.

Plaintiffs brought an action against the town in 2002 seeking declaratory and injunctive relief and alleging damage to their easement rights. After hearing competing motions for summary judgment, the trial court granted partial summary judgment to plaintiffs, affirmed their easement rights, and ordered the town to remove the park-like area at the street’s end.

The town gave notice of appeal, but the trial court entered an order dismissing the appeal, and the town removed the park. The town then filed an application with the N.C. Dept. of Natural Resources for a permit to build certain structures within plaintiffs’ easement.

Plaintiffs filed an objection to the permit application, arguing that the plan was precluded by previous court orders as well as that it violated their easement rights. The town’s permit application was denied. The town moved to modify the trial court’s original order and the permit decision. The trial court denied the motion.

After a trial on the question the amount to which plaintiffs were entitled for wrongful obstruction and interference with their right of access onto West Oak Island Drive, the jury returned a verdict of $36,501. The court denied the town’s post-trial motions, entered a judgment against it in the amount of the verdict and taxed costs and attorney’s fees against the town.

The town filed a notice of appeal and, subsequently, a petition for writ of certiorari. The appeal was ultimately dismissed with prejudice and sanctions were imposed against the town pursuant to N.C. R. Civ. P. 11.

The town again applied for a permit to construct a proposed site plan of development. Plaintiffs filed an objection to the permit application and moved to enforce prior orders of the court. The trial court granted the motion, sanctioned the town and awarded plaintiffs attorney’s fees, costs and expenses. It also noted that the town’s position was barred by res judicata, collateral estoppel, judicial estoppel and the law-of-the-case doctrine.

The town appealed.

Analysis

Plaintiffs’ easement is non-exclusive. Although the town cannot develop the street end as a park, it still retains its statutory authority to regulate the public right of way.

The town argued that the trial court erred by exercising jurisdiction over a permit issue properly governed by administrative law. The statute specifically demonstrates a preference for administrative agencies that possess specific knowledge in their fields of expertise addressing these types of issues initially.

Therefore, the trial court committed error in exercising authority over an issue that should have been examined first by DENR. Plaintiffs did not follow the proper protocol in challenging the town’s permit application and as a result, they failed to exhaust their administrative remedies.

Only after they comply with the statute’s required steps and DENR conducts an investigation may the court review the matter. We hold that the trial court erred by reviewing the issue of the second site plan prior to the completion of the DENR administrative process. The town also argued that the trial court erred in requiring sanctions from the town.

Because the town’s second site plan may or may not be materially different than its first site plan, depending on DENR’s expert determination, this case arguably still contains a justiciable issue. The trial court erred in sanctioning the town, and we remand to the trial court for action consistent with this decision.

Reversed and remanded.