Coventry Woods Neighborhood Ass'n Inc. v. City of Charlotte

713 S.E.2d 162

COVENTRY WOODS NEIGHBORHOOD ASSOCIATION INC., a North Carolina non-profit corporation, John F. Bordsen and wife, Patricia Bresina, Martha L. McAulay, and Joan E. Provost, Eva Cole Matthews, Chris Johnson and wife, Shannon Jones, Rebecca S. Gardner, John White, Ronald Matthews and wife, Evelyn Matthews, and Shirley Jones, and Thomas R. Myers, Plaintiffs,

v.CITY OF CHARLOTTE, North Carolina, a municipal corporation, Charlotte–Mecklenburg Planning Commission, an agency of the City of Charlotte, and Independence Capital Realty, LLC, a North Carolina limited liability corporation, Defendants.andCoventry Woods Neighborhood Association, Inc., a North Carolina non-profit corporation, Petitioner,

v.City of Charlotte, North Carolina, a municipal corporation, Charlotte Zoning Board of Adjustment, an agency of the City of Charlotte, and Independence Capital Realty, LLC, a North Carolina limited liability corporation, Respondents.

No. COA10–1551.

Court of Appeals of North Carolina.

July 5, 2011.

OPINION TEXT STARTS HERE

Appeal by plaintiffs/petitioner(s) and their counsel from judgment entered 3 August 2010 by Judge Forrest D. Bridges in Mecklenburg County Superior Court. Heard in the Court of Appeals 11 May 2011.

Kenneth T. Davies, Charlotte, for plaintiffs/petitioner(s) appellants.

Kenneth T. Davies, Charlotte, pro se, appellant.Robinson, Bradshaw & Hinson, P.A., Charlotte, by Richard A. Vinroot and Matthew F. Tilley, for Independence Capital Realty, LLC, defendant/respondent appellee.

McCULLOUGH, Judge.

Plaintiffs/petitioner(s), Coventry Woods Neighborhood Association, Inc., John F. Bordsen, Patricia Bresina, Martha L. McAulay, Joan E. Provost, Eva Cole Matthews, Chris Johnson, Shannon Jones, Rebecca S. Gardner, John White, Ronald Matthews, Evelyn Matthews, Shirley Jones, and Thomas R. Myers (collectively, “plaintiffs/petitioner(s)”), and their counsel, Kenneth T. Davies (collectively, the “appellants”) appeal from an amended order and judgment imposing sanctions under Rule 11 of the North Carolina Rules of Civil Procedure. After careful review, we reverse.

I. Background

This appeal concerns the imposition of sanctions by the trial court pursuant to Rule 11 for three successive actions filed by appellants, each against the Charlotte–Mecklenburg Planning Commission (“the Commission”), the City of Charlotte (“the City”), and Independence Capital Realty, LLC (“Independence”).

The individual plaintiffs/petitioner(s) in each action are individuals who either own property located in or reside within the Coventry Woods subdivision or the Cedars East subdivision, both located in Charlotte, North Carolina. Plaintiff/petitioner Coventry Woods Neighborhood Association (“CWNA”) is a North Carolina non-profit corporation representing the common interests of the property owners and residents of the Coventry Woods subdivision. Both the Coventry Woods and Cedars East subdivisions abut an approximately sixteen-acre tract of real property owned by Independence.

On 14 February 2005, Independence submitted a new residential subdivision plan for its sixteen-acre tract to the City's planning staff for preliminary approval. The proposed subdivision plan, denominated Independence Woods, requested a “density bonus” that allowed up to 72 single-family homes to be built within the proposed subdivision, as opposed to the limit of 58 residences allowed in areas zoned R–4, the current zoning designation for Independence's sixteen-acre tract. Independence had previously petitioned the City to have the sixteen-acre tract rezoned from R–4 to R–12MF, which CWNA publicly opposed, but Independence's rezoning petition was denied by the Charlotte City Council. Planning staff granted preliminary approval of Independence's subdivision plan, including the density bonus, on 13 December 2006. Plaintiffs/petitioner(s) did not receive notice of the submission of Independence's subdivision plan to the Commission, nor did they receive notice of its preliminary approval at that time, as the Subdivision Ordinance of the City of Charlotte (“the Subdivision Ordinance”) requires only that notice of preliminary subdivision approvals be given to the developer. However, the Subdivision Ordinance provides a ten-day period from the date of preliminary approval within which “aggrieved parties” can appeal the decision of the planning staff to the Commission.

On 5 January 2007, notice of the planning staff's preliminary approval of the Independence Woods subdivision plan was posted on the Commission's website. However, plaintiffs/petitioner(s) did not learn of the preliminary approval until early July 2007. Thereafter, plaintiffs/petitioner(s) filed a petition with the Charlotte Zoning Board of Adjustment (“ZBA”) on 28 September 2007 challenging the planning staff's preliminary approval of Independence's subdivision plan without providing notice to plaintiffs/petitioner(s). Plaintiffs/petitioner(s) argued they are “aggrieved persons” under the Subdivision Ordinance because Independence Woods, as approved, would be a high-density development with the only means of ingress and egress through the neighborhoods of plaintiffs/petitioner(s), resulting in decreased property values and increased levels of noise, pollution, and traffic. The ZBA rejected plaintiffs/petitioner(s)' challenge, finding the Subdivision Ordinance did not require individual notice to be given to them. Plaintiffs/petitioner(s) also filed an appeal of the planning staff's decision to the Commission on 15 February 2008, which was denied as untimely pursuant to the Subdivision Ordinance.

Plaintiffs/petitioner(s) then commenced three separate actions in Mecklenburg County Superior Court, each raising constitutional challenges to the Commission's actions and the relevant Subdivision Ordinance provisions. The first action, No. 08–CVS–3251, filed on 18 February 2008, sought a declaratory judgment that the Subdivision Ordinance was unconstitutional both facially and as applied and requested a preliminary injunction prohibiting Independence from further construction of Independence Woods. The factual background for this first action is more fully set forth in our prior opinion, Coventry Woods Neighborhood Ass'n v. Charlotte, ––– N.C.App. ––––, 688 S.E.2d 538 (2010) (hereinafter Coventry Woods I ). The second action, No. 08–CVS–7582, filed on 3 April 2008, petitioned the trial court for review in the nature of certiorari, seeking to challenge the Commission's ruling that plaintiffs/petitioner(s)' appeal was untimely. The factual background for this second action is more fully set forth in our prior opinion, Coventry Woods Neighborhood Ass'n v. Charlotte, No. COA09–537, –––N.C.App. ––––, 2010 WL 358096 (N.C.Ct.App. Feb. 2, 2010) (hereinafter Coventry Woods II ). The third action, No. 08–CVS–9821, filed on 25 April 2008, also petitioned the trial court in the nature of certiorari, seeking to challenge the ZBA's ruling that plaintiffs/petitioner(s) were not entitled to individual notice prior to the planning staffs' preliminary approval of the Independence Woods subdivision plan.

On 29 February 2008, shortly after commencing the first action, CWNA published a newsletter on its website entitled “CWNA Sues City Hall,” announcing their action and seeking donations to cover litigation expenses. The newsletter states that CWNA was informed by its counsel, Kenneth Davies (“Davies”), that its case was “very strong” and that, as a result of the lawsuit, the financing and development of Independence Woods would likely be delayed, or “grind to a stop.” The newsletter also states that CWNA's “Number One priority” is stopping the development of Independence Woods “once and for all” and that a “successful lawsuit will benefit all neighborhoods.” As a result of the posting, Independence included a motion for sanctions pursuant to Rule 11 in its answers and counterclaims filed in response to each of appellants' actions.

On 6 August 2008, the trial court entered orders dismissing each of appellants' actions, holding that appellants had no statutory or constitutional right to individual notice and that appellants had failed to timely bring their claims. Appellants appealed the decision in their first action to this Court, which was affirmed on 2 February 2010. Coventry Woods I, –––N.C.App. ––––, 688 S.E.2d 538. Appellants then appealed our decision in Coventry Woods I to our Supreme Court, which was dismissed for failure to present a substantial constitutional question on 14 April 2010. Coventry Woods Neighborhood Ass'n v. Charlotte, 364 N.C. 128, 695 S.E.2d 757 (2010). Appellants also appealed the trial court's decision in their second action to this Court, which was also affirmed on 2 February 2010. Coventry Woods II, No. COA09–537.

Following the trial court's dismissal of all three actions, Independence filed a consolidated motion under all three of appellants' actions renewing its motion for sanctions against appellants under Rule 11. After all of appellants' appeals were final, the trial court held two separate hearings on 25 May 2010 and 2 June 2010 to consider Independence's motion for sanctions.

Following those hearings, the trial court entered an order and judgment on 3 August 2010, concluding there was substantial evidence to show that appellants filed their three actions for an improper purpose and imposing sanctions on appellants in the sum of $33,551.79. Appellants now appeal the imposition of sanctions to this Court.

II. Standard of review

“The trial court's decision to impose or not to impose mandatory sanctions under N.C.G.S. § 1A–1, Rule 11(a) is reviewable de novo as a legal issue.” Turner v. Duke University, 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989).

In the de novo review, the appellate court will determine (1) whether the trial court's conclusions of law support its judgment or determination, (2) whether the trial court's conclusions of law are supported by its findings of fact, and (3) whether the...