In split decision, court sides with property owners in Oak Island sewer lawsuit, town plans to appeal

In split decision, court sides with property owners in Oak Island sewer lawsuit

OAK ISLAND, N.C. (WECT) - Reversing the decision of the lower court, the Court of Appeals of North Carolina ruled against the Town of Oak Island in a lawsuit raised by property owners of undeveloped lots, despite one judge on the panel dissenting.

The issue between property owners and the town dates back to 2015, when owners of undeveloped property on the island filed suit regarding the town’s sewer service fees.

According to the court’s filing, which was released Tuesday, Oak Island’s sewer system cost $140 million to install. In 2004, action from North Carolina’s General Assembly allowed the town to charge property owners fees related to the sewer system in order to help reduce the debt the town carried as a result of the sewer installation.

The action allows Oak Island to “impose annual fees for the availability of sewer service" on property owners who could or do benefit from the service. From 2010 to 2017, that resulted in developed property owners paying a total of $4,478.57 in fees, while undeveloped property owners would have paid $3,978.08. Additionally, the court pointed out in its ruling that from 2015 to 2017, the owners of undeveloped properties were actually paying more per year than those who owned developed lots.

The term “availability” is what the court’s decision ultimately hinged upon, because the plaintiff property owners argued that for those with undeveloped lots, the sewer system is not actually “available” to them. Therefore, they argued, they should not be subject to the fees.

They further argued charging undeveloped properties went beyond what the statute establishing the fees allows, and that the collection of the fees was unconstitutional.

The appeals court agreed, saying: “although the Session Laws do not define the term ‘availability’ for purposes of imposing the sewer service availability fees, it is clear that the enabling Session Laws do not, as a matter of law, apply to Plaintiffs’ undeveloped property.”

Originally, the plaintiffs wanted the court to declare the fees unconstitutional, as well as order the town to refund the fees paid by the owners of the undeveloped properties. In May 2018, when Brunswick County Superior Court Judge James Ammons found in favor of Oak Island, the plaintiffs attempted to change their plea, only asking for the refund.

However, the court declined their motion to amend, and instead ruled in favor of Oak Island’s counter-suit, therefore upholding the fee structure.

As far as those occurrences, the appeals court said it could not weigh in, because the matters were never ruled upon, and therefore couldn’t be appealed.

Judge Allegra Collins disagreed with her two fellow judicial colleagues, arguing the opposite with regard to the “availability” language.

Collins argues that just because property owners would have to go through the development process in order to connect to the sewer system, doesn’t mean that it isn’t “available” to them.

Despite the split decision, the Court of Appeals ruling reverses the ruling and remands the issue back to Brunswick County Superior Court.

Town Attorney Brian Edes said in an email Tuesday the town will likely appeal the decision to the state Supreme Court.

His statement read:

The North Carolina Court of Appeals issued a split opinion today ultimately holding that the subject 2006 N.C. Session Law does not authorize the Town of Oak Island to charge a sewer district fee to owners of undeveloped lots. Naturally, we are disappointed with this holding.

Copyright 2019 WECT. All rights reserved.