Devonwood-Loch Lomond Lake Ass'n v. City of Fayetteville

DEVONWOOD-LOCH LOMOND LAKE ASSOCIATION INC., a North Carolina non-profit corporation, et al. Plaintiffs, v. CITY OF FAYETTEVILLE, Defendant

No. 5:18-CV-270-D

United States District Court, E.D. North Carolina, Western Division

August 6, 2021

ORDER

JAMES C. DEVER III UNITED STATES DISTRICT JUDGE

On June 8, 2018, Devonwood-Loch Lomond Lake Association, Inc., Arran Lake Homeowners Association, Inc., Rayconda Homeowners Association, Inc., Strickland Bridge Road Homeowners Association, Inc., John C. Lee, Catherine A. Lee, Martin Young, Ann Young, Gerald L. Ellison, J. F. Dunn Ellison, Dana E. Pike, and Nancy P. Pike (collectively “plaintiffs”) filed a complaint against the City of Fayetteville (“Fayetteville” or “the City”) and City of Fayetteville Public Works Commission (“P WC”) (collectively “defendants”), alleging violations of federal law and state law arising from damage to private property. See [D.E. 1]. In plaintiffs' federal claim, plaintiffs allege that the City's stormwater mismanagement, when coupled with flooding from Hurricane Matthew, resulted in a taking of their property. Plaintiffs seek damages under 42 U.S.C § 1983 and the Fifth Amendment Takings Clause. On June 29, 2018, plaintiff filed an amended complaint [D.E. 20]. On August 15, 2019, the court dismissed PWC from the action [D.E. 49].

On September 15, 2020, the City moved for summary judgment [D.E 73] and filed a memorandum in support [D.E. 74], statement of material facts [D.E. 75], and an appendix [D.E. 76]. On October 5, 2020, plaintiffs responded in opposition [D.E. 77] and filed a statement of material facts [D.E. 78] and an appendix [D.E. 79]. On October 26, 2020, Fayetteville replied [D.E. 82]. As explained below, the court grants the City's motion for summary judgment on the federal takings claim and dismisses plaintiffs' state law claims without prejudice.

I.

The case concerns four lakes and dams that the four plaintiff homeowners' associations (“HOAs”) own. See [D.E. 75] ¶¶ 1-4; Rayconda Dep. [D.E. 79-18] 29; Arran Lake Dep. [D.E. 7919] 69-70. The lakes were created by placing dams on tributaries to the Cape Fear River and impounding the waters. See [D.E. 75] ¶ 1; [D.E. 78] ¶ 1. Private landowners constructed all four dams before 1961. See [D.E. 75] ¶ 2; [D.E. 78] ¶ 2. The private landowners built the dams for recreational purposes, and the North Carolina Department of Environmental Quality (“NCDEQ”) lists the dams as “amenity” dams. See [D.E. 75] ¶ 3; [D.E. 78] ¶ 3.

The City annexed Devonwood-Loch Lomond in 1996 and annexed the other three HOA properties in 2005. See [D.E. 75] ¶¶ 2, 14; [D.E. 78] ¶¶ 2, 14. The City maintains infrastructure to manage stormwater. See [D.E. 79-1, 79-2, 79-3, 79-4, 79-5, 79-6, 79-7]. Stormwater drains into and passes through the four dams and lakes. See Jewell Rep. [D.E. 79-8] 12, 19, 31; Jewell Dep. [D.E. 79-9] 147-49, 163; Bromby Dep. [D.E. 79-10] 19; Devonwood Dep. [D.E. 79-11] 48-50, 106-08, 117-18. Several regulations, including the Stormwater Ordinance, regulate the City's stormwater infrastructure. See [D.E. 79-15, 79-16]. The City also holds a federal National Pollutant Discharge Elimination System (“NPDES”) permit, which authorizes the City to discharge stormwater from its separate storm sewer system (“MS4") into State waters. See Thomas-Ambat Decl. [D.E. 76-3] 5 &¶2; [D.E. 79-17].

In October 2016, Hurricane Matthew hit Fayetteville, North Carolina. See Rutledge Decl.. [D.E. 76-1] ¶¶ 6-7. Hurricane Matthew generated up to 11.22 inches of rain over a twenty-four-hour period, and 7.39 inches of rain over a six-hour period, in the relevant watersheds. See id. ¶ 6. Hurricane Matthew was significantly more intense than the “100-year storm, ” which is 8.41 inches in twenty-four hours and 6.04 inches in six hours. See id, ¶ 7.^[1]

During Hurricane Matthew, all four of the relevant dams overtopped, meaning that flood waters rose above the crest of each dam. See id. ¶ 10. Three dams (Devonwood-Loch Lomond, Upper Rayconda, and Arran Lake) breached and lost the ability to impound water. See Id. ¶ 11; Jewell Rep. [D.E. 79-8] 10, 15-16, 21; Jewell Dep. [D.E. 79-9] 33. Thus, the lakes returned to their natural state, with the tributaries meandering through the lakebeds. See Rutledge Decl. [D.E. 76-1] ¶ 11. The fourth dam, Strickland Bridge Road, did not breach but suffered severe damage. See Id. ¶ 12; Jewell Rep. [D.E. 79-8] 27; Jewell Dep. [D.E. 79-9] 33.

The State classifies the four dams as small, “high hazard dams, ” meaning that they must be able to withstand a storm generating one-third of the “probable maximum precipitation” (“1/3 PMP”) over a six-or twenty-four-hour period in the area. See Rutledge Decl. [D.E. 76-1] ¶¶ 8-9, 13; Jewell Dep. [D.E. 79-9] 87-88. Even though Hurricane Matthew exceeded the 100-year storm, it did not exceed 1/3 PMP. See Rutledge Decl. [D.E. 76-1] ¶ 9. The dams did not meet the 1/3 PMP standard when Hurricane Matthew struck. See id. ¶ 14.

Freese and Nichols, an engineering consulting firm specializing in water resources, conducted hydrologic modeling of the four relevant watershed sub-basins. See id. ¶¶ 1-5, 15-20. Hydrologists study the movement, distribution, and management of water. Methodologies include modeling and projecting the rise and peak of stormwater in a waterway under storm conditions and accounting for land use conditions in the watershed affecting the rate and volume of stormwater runoff. See id. ¶ 15. Hydrologists can use hydrologic modeling to model the rate and volume of stormwater based on historical land use conditions.

Freese and Nichols used hydrologic modeling to determine how high the water would have risen if Hurricane Matthew had occurred at an earlier date. See id. ¶¶ 16-18. In doing so, Freese and Nichols accounted for stormwater runoff in watersheds above the dams and the amount of impervious surfaces in the watersheds in the years for which it ran models. See id. ¶¶ 5, 20.

Freese and Nichols produced a hydrologic model showing what would have happened if Hurricane Matthew had occurred in 1961, shortly after the four dams were constructed and before significant urbanization in the watersheds above the dams. See id. ¶ 18. The model showed that all four dams would have overtopped in 1961 even if no urbanization had occurred in the watersheds between 1961 and 2016. See id. ¶¶ 21-23; cf [D.E. 78] ¶¶ 19-20.

Freese and Nichols also ran hydrologic models showing what would have happened if Hurricane Matthew had occurred in 1996 (when the City annexed Devonwood-Loch Lomond) and 2005 (when the City annexed the other three communities). See Rutledge Decl. [D.E. 76-1] ¶ 18. The models showed that all four dams would have overtopped in 1996 or 2005 even if no urbanization had occurred between annexation and 2016. See id. ¶¶ 24-26; cf. [D.E. 78] ¶ 21. The models also showed that the four dams did not meet 1/3 PMP at the time of annexation. See Rutledge Decl. [D.E. 76-1] ¶ 27.

Freese and Nichols produced a hydrologic model for 2016, which predicted what actually occurred - all four dams overtopped. See id. ¶¶ 28-29. Together, the models showed that the increase in stormwater generated in the water basins above the dams between annexation and 2016 was negligible and that the majority of stormwater runoff due to urbanization occurred before the City annexed the four properties. See id. ¶¶ 30, 32-33; cf. [D.E. 78] ¶ 23.

Plaintiffs allege a Fifth Amendment takings claim under 42 U.S.C. § 1983. See Am. Compl. [D.E. 20] ¶¶ 57-62. Plaintiffs also allege North Carolina state law claims for breach of easements, inverse condemnation, negligence, negligence per se, nuisance, trespass, and unjust enrichment See id. ¶¶ 63-101. Plaintiffs seek monetary and injunctive relief. See id. at 22-23.

II.

Summary judgment is appropriate when, after reviewing the record as a whole, the court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Scott v. Harris, 550 U.S. 372, 378 (2007); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The party seeking summary judgment must initially demonstrate the absence of a genuine issue of material fact or the absence of evidence to support the nonmoving party's case. See Celotex Corp, v. Catrett, 477 U.S. 317.325 (1986). Once the moving party has met its burden, the nonmoving party may not rest on the allegations or denials in its pleading, see Anderson, 477 U.S. at 248-49, but “must come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis and quotation omitted). A trial court reviewing a motion for summary judgment should determine whether a genuine issue of material fact exists for trial. See Anderson, 477 U.S. at 249. In making this determination, the court must view the evidence and the inferences drawn therefrom in the light most favorable to the nonmoving party. See Harris, 550 U.S. at 378.

A genuine issue of material fact exists if there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. See Anderson, 477 U.S. at 249. “The mere existence of a scintilla of evidence in support of plaintiff's position [is] insufficient....” Id. at 252; see Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985) (“The nonmoving party, however, cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.”). Only factual disputes that affect the outcome under substantive law properly preclude summary judgment. See Anderson, 477 U.S. at 248.

III.

Plaintiffs seek reliefunder 42 U.S.C. § 1983 and the Fifth Amendment Takings Clause. See Am....