Recovering Attorneys' Fees in Land Use/Condemnation Cases

Like in most States, the general rule in North Carolina is that litigants must bear their own costs and expenses when litigating, regardless of success or failure. Generally, this includes bearing the costs of attorneys' fees. However, with respect to land use cases, there is a statutory exception contained in N. Car. Gen. Stat., § 6-21.7, which provides:

"In any action in which a city or county is a party, upon a finding by the court that the city or county violated a statute or case law setting forth unambiguous limits on its authority, the court shall award reasonable attorneys' fees and costs to the party who successfully challenged the city's or county's action. In any action in which a city or county is a party, upon finding by the court that the city or county took action inconsistent with, or in violation of, G.S.160D-108(b) or G.S.143-755, the court shall award reasonable attorneys' fees and costs to the party who successfully challenged the local government's failure to comply with any of those provisions."

The phrase "unambiguous limits" is defined to mean statutory or case law limits on authority that are "not reasonably susceptible to multiple constructions."

Note that there are two separate and distinct types of actions where attorneys' fees SHALL be awarded.

The first sentence of the statute applies to ANY sort of case -- including land use or permitting disputes -- between a landowner and a county/city. Thus, this part of section 6-27.1 ALSO applies to disputes involving a condemnation proceeding where a county or city condemns private land for public use. In those cases, the trial court must make some sort of finding that the city/county violated statutes OR case law that set forth "unambiguous limits on its authority."

The second sentence of the statute applies more particularly to disputes involving land use and permitting. In those cases, in order to award attorneys' fees, the trial court must make some sort of finding that the city/county "... took action inconsistent with, or in violation of, G.S.160D-108(b) or G.S.143-755."

The rules set forth at N. Car. Stat., § 143-755 involve a land developer's right to choose permit regulatory frameworks if the regulations/laws are changed between application submittal and approval. For example, subsection (a) states that:

“If a development permit applicant submits a permit application ... and a rule or ordinance is amended ... between the time the development permit application was submitted and a development permit decision is made, the development permit applicant may choose which adopted version of the rule or ordinance will apply to the permit and use of the building, structure, or land indicated on the permit application."

The rules set forth at N. Car. Stat., § 160D-108(b) also relate to permit choice providing that §143-755 is applicable in an additional circumstance. Developers may also make a permit choice where "... a land development regulation is amended after a development permit decision has been challenged and found to be wrongfully denied or illegal..."

To trigger a court's requirement to award attorneys' fees under N. Car. Gen. Stat., § 6-21.7, a litigant must include a declaratory judgment count as part of the pleadings. In general, it involves asking the court to declare that the city/county exceeded their authority or otherwise violated statutes or case law.

The case of Phillips v. Orange County Health Department, 765 S.E.2d 811 (NC Court of Appeals 2014) is one good example. That case involved the County's effort to inspect and regulate the landowner's wastewater discharge system. The court ultimately held that the County's efforts were preempted by North Carolina state statutes and that the County exceeded its powers and authority. Under the old version of section 6-21.7, the trial court awarded attorneys' fees. This was upheld by the Court of Appeals.

Attorneys' fees were also approved in the case McLamb v. Town of Smithfield, Case No. COA18-1235 (NC Court of Appeals 2019) (unpublished). In that case, an application for a conditional use permit ("CUP") was denied. The County Superior Court reversed the Town's denial of the CUP and ordered the City to issue the permit. The trial court also made an award of attorneys' fees in favor of the developer. On appeal, the trial court's decision was affirmed including the award of attorneys' fees. However, the case was returned to the trial court for specific findings with respect to the attorneys' fees. When awarding attorneys' fees, North Carolina trial courts must make specific findings of fact with respect to the time and labor expended, the skill required, the customary fee for similar types of legal work, and the experience or ability of the attorney submitting the fee petition.

For more information, and to schedule a confidential consultation with experienced and dedicated zoning and land use attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning and condemnation legal matters in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.