STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

BRUNSWICK COUNTY 02 EHR 1509

)

Lee Roy Smyre, )

Petitioner, )

v. ) DECISION

)

N.C. Dept. of Environment and )

Natural Resources, Division of )

Water Quality, )

Respondent. )

THIS CONTESTED CASE came before Administrative Law Judge Beryl E. Wade for hearing on March 25, 2003 in Wilmington, North Carolina. In this contested case, the Petitioner appealed the issuance of a stormwater permit to the Arboretum Residential Subdivision.

APPEARANCES

PETITIONER: Lee Roy Smyre, Pro Se

213 Narcissus Way

Oak Island, North Carolina 28465

RESPONDENT Mary Penny Thompson

ASSISTANT ATTORNEY GENERAL

NC Department of Justice

Post Office Box 629

Raleigh, North Carolina 27602-0629

STATUTORY SECTIONS AND RULES IN QUESTION

N.C. Gen. Stat. § 143-214.7 (“Stormwater runoff rules and programs”)

N.C. Admin. Code tit. 15A, r. 2H.1001 through .1013 (“Stormwater Management”)

ISSUES

1. Whether Petitioner met its burden of proof in establishing that Respondent erred by issuing a stormwater permit to the Arboretum Subdivision?

WITNESSES

PETITIONER: Lee Roy Smyre, pro se

RESPONDENT:

Bradley Bennett - Division of Water Quality, Supervisor of Stormwater and General Permits Unit

Alida “Linda” Lewis - Division of Water Quality, Wilmington Regional Office

Harold Newett - President, Arboretum Community Association

EXHIBITS RECEIVED INTO EVIDENCE

PETITIONER:

P-1 Review by Robert D. McHenry calculating acreage in the Arboretum Subdivision

P-2 Recorded Plat - Sheet 3 of 3

P-3 Recorded Plat - Sheet 2 of 3

P-4 Recorded Plat - Sheet 1 of 3 of the Final Plat of the Arboretum

P-5 Recorded Plat - Revised Final Plat of the Arboretum Phase II

P-6 Stormwater Permit No. SW8 880620 issued 7/22/02

P-7 Arboretum Community Association January ‘97 Newsletter

P-8 Records from Brunswick County Revenue Office

P-9 Caswell Beach Plantation, Inc. Articles of Incorporation

P-10 Restated Bylaws of Caswell Beach Plantation

P-11 Quitclaim Deed

P-12 Minutes of 3/8/96 Meeting of Arboretum Community Association

P-13 9/8/99 Letter from Town of Caswell Beach

RESPONDENT:

R-1 Guidance Document from Workshop

R-2 Report of Proceedings for 1988 Rules

R-3 Resume of Alida Lewis

R-4 Certification of Compliance

R-5 Certification of Compliance

R-6 Certification of Compliance

R-7 Certification of Compliance

R-8 Certification of Compliance

R-9 Certification of Compliance for Arboretum Subdivision

R-10 Compliance Inspection Cover Letter and Report

R-11 Vicinity Map of Arboretum Subdivision

R-12 Second Compliance Inspection Cover Letter and Report

R-13 Certified Mail Request to Developer for deed restrictions

R-14 Letter from Smyre to Rick Shiver

R-15 Letter from Lewis to Smyre

R-16 4/99 Compliance Inspection

R-17 Letter from Smyre regarding Arboretum Subdivision

R-18 Letter from Lewis to Newett

R-19 Letter from Newett to Lewis

R-20 Follow-up Letter from Newett to Lewis

R-21 Letter from Lewis to Newett

R-22 Preliminary application materials from Newett

R-23 Letter from Lewis to Newett

R-24 Application

R-25 Request for Additional Information

R-26 Request for Additional Information

R-27 Calculations prepared by Lewis

R-28 Letter from Lewis to Arboretum Community Association

R-29 Second Application from Arboretum Community Association

R-30 Permit issued to Arboretum Community Association

BASED UPON careful consideration of the testimony and evidence presented at the hearing, the documents and exhibits received into evidence, and the entire record in this proceeding, the undersigned makes the following findings of fact. In making the findings of fact, the undersigned has weighed the evidence and has assessed the credibility of the witnesses by taking into account the appropriate and traditional factors for judging credibility, such as the demeanor of each witness, any interest, bias, or prejudice the witness may have, the opportunity of the witness to see, hear, know or remember the factors or occurrences about which the witness testified, whether the testimony of the witness is reasonable, and whether the testimony is consistent with all other believable evidence in the case.

FINDINGS OF FACT

1. Petitioner is an individual residing at 213 Narcissus Way, Oak Island, NC 28465. (Petition). Petitioner lives in the Arboretum Subdivision and is a member of the Arboretum Community Association. (Tr. 11, 24).

2. Respondent is a State agency established pursuant to N.C. Gen. Stat. §§ 143B-275 et seq. and vested with the statutory authority to enforce the State’s environmental pollution laws, including laws enacted to protect the water quality of the State.

3. Petitioner acknowledged that he carried the burden of proof and accepted the burden of going forward. (Tr. 9).

4. Official Notice was taken of Mr. Bradley Bennett’s agency expertise in the stormwater rules and the stormwater program with which he worked for fourteen years. (Tr. 35). Official Notice was also taken of Ms. Linda Lewis’ expertise in implementing the stormwater rules and State stormwater permitting with which she worked for ten years. (Tr. 49).

5. The Respondent interprets the statutory section enacted at N.C. Gen. Stat. § 143-214.7 and entitled Stormwater Runoff Rules and Programs to, among other things, attempt to minimize the impacts of new development and redevelopment in various parts of the State. (Tr. 36).

6. The Respondent interprets the rule promulgated at N.C. Admin. Code tit. 15A, r. 2H.1005 (“Rule 2H.1005") as setting out a process to determine whether a project meets low density criteria. (Tr. 39). Low density means the project minimizes the amount of built-upon area to a certain level specified in the rules based on the receiving water’s classification. (Tr. 39). High density has a greater amount of built-upon area than low density, but requires structural stormwater controls to capture and treat the stormwater before the runoff leaves the site. (Tr. 39).

7. During the promulgation of Rule 2H.1005, Respondent received and addressed comments on whether single family residences on larger lots could be considered low density. (Tr. 40-41). In response to the comments, Respondent modified Rule 2H.1005 to allow a single family residence on a lot measuring at least a third of an acre or greater with a built-upon area of twenty five percent (25%) or less to qualify as low density. (Tr. 41). For lots less than a third of an acre, Respondent calculates built-upon area based on all impervious surfaces in the project including roads and parking areas. (Tr. 41-42, 44). For single family residences on lots greater than a third of an acre, Respondent calculates built-upon area based on impervious surface within the lot and excludes impervious surfaces such as roads and parking areas outside of the lot. (Ex. R-4, R-5, R-6, R-7, R-8; Tr. 42, 45).

8. Respondent seldom uses the calculation for single family residences on lots greater than a third of an acre because the cost of land in coastal areas restricts the availability of larger lot sizes or a project may include multiple types of development, not just single family residences. (Tr. 44). In the Wilmington region, Respondent observed a trend towards smaller lot sizes beginning in the mid-1990's because property in the area was becoming more expensive. (Tr. 51). Eventually, the lot size became a quarter of an acre or less. (Tr. 51).

9. Initially, approvals under Rule 2H.1005 were issued as certificates. (Tr. 42, 50). In 1999, the stormwater rules were modified to consolidate stormwater programs, clarify issues, create a permitting process, and establish permit fees. (Tr. 43). At that time, the Respondent began issuing permits for activities conducted pursuant to Rule 2H.1005. (Tr. 43, 50).

10. Respondent issued a certificate on June 30, 1988 reflecting a total project area of 56.83 acres. (Ex. R-9; Tr. 20, 57). At that time, Respondent calculated the built-upon area based on the total project area, not the lot area. (Tr. 58). Built-upon area within the project area included 1.87 acres of roads, .47 acres of recreation area and 11.47 acres of houses. (Tr. 58). Each lot was restricted to 4,900 square feet of built-upon area. (Tr. 58). This figure was included in the proposed covenants and deed restrictions for the Arboretum. (Tr. 58-59).

11. On August 30, 1993, Respondent attempted to conduct a compliance inspection, but could not locate the project. (Ex. R-10; Tr. 60). On September 3, 1993, Respondent sent a letter and its inspection report to the developer. (Ex. R-10; Tr. 60).

12. Respondent received a general vicinity map and a layout of the Arboretum subdivision. (Ex. R-11; Tr. 60-61).

13. Respondent conducted a compliance inspection on December 6, 1993, and sent a copy of the inspection report to the developer on January 13, 1994. (Ex. R-12). The inspection revealed that there were no swales along the roads and no recorded deed restrictions. (Ex. R-12; Tr. 62). In April 1996, Respondent sent by certified mail a request for a copy of the deed restrictions, but the request was returned unclaimed. (Ex. R-13; Tr. 63).

14. On July 26, 1994, the Caswell Partnership, which was the original developer, negotiated an agreement with the Arboretum Community Association for transfer of the property which included a release of any and all claims and demands upon the developer. (Tr. 20-21).

15. Petitioner complained to Respondent about the Arboretum subdivision in 1999, specifically describing road hazard and flooding problems. (Ex. R-14; Tr. 64-66). Respondent replied to Petitioner by describing the low density development and explaining that Respondent’s review did not address traffic safety or flooding issues. (Ex. R-15; Tr. 66-67).

16. Respondent conducted another compliance inspection on April 14, 1999. (Ex. R-16; Tr. 68). The inspection revealed the following: a service road was constructed without approval; a road section was altered without approval; several traffic islands were created without approval; the layout of the subdivision differed from the existing approval; cul-de-sacs were altered, deleted or added without approval; a road was lengthened without approval; a parking lot was added without approval; and there were no recorded deed restrictions which were required by the existing approval. (Ex. R-16; Tr. 68-69).

17. Petitioner complained again about the Arboretum subdivision in a letter dated December 29, 2000. (Ex. R-17; Tr. 70). Some of Petitioner’s concerns related to the built upon area exceeding the amount allowed by Respondent’s 1998 certificate. (Ex. R-17; Tr. 70).

18. On June 29, 2001, based upon Petitioner’s complaints and information, Respondent contacted the Arboretum Community Association (“Association”) to discuss the problems revealed by inspections and to request that the Association apply for a permit. (Ex. R-18; Tr. 71).

19. By letter dated July 13, 2001, the Association requested the appropriate forms to apply for a permit and discussed some of the problems revealed by the inspections. (Ex. R-19; Tr. 72). By letter dated August 9, 2001, the Association again contacted Respondent, stating that it believed that the Association had not exceeded the twenty-five percent built-upon area requirement. (Ex. R-20; Tr. 73).

20. On August 28, 2001, Respondent replied to the Association by enclosing an application, a supplement form, a copy of the stormwater rules with a checklist; and a description of the project’s past calculations of allowable built-upon area. (Ex. R-21; Tr. 74).

21. On September 12, 2001, the Association submitted to Respondent information relating to the restrictive covenants, the site development plan, and an application fee. (Ex. R-22; Tr. 75). The following day, Respondent sent the Association a letter reminding them of the additional information still needed to complete the permit modification application. (Ex. R-23; Tr. 76).

22. On September 28, 2001, the Association submitted to Respondent a Stormwater Management Permit Application Form listing the total project area as 56.83 acres and the proposed impervious surface area as 14.146 acres, which equated to 24.85 percent built-upon area. (Ex. R-24; Tr. 77). Each lot was restricted to 4,900 square feet per lot, which was recorded in deed restrictions and protective covenants. (Ex. R-24; Tr. 77).

23. On December 18, 2001, Respondent requested additional information including copies of plans, scale of plans, verification of calculations, dimensions of tennis courts and parking lot, details of cul-de-sacs, and width of eyebrow pavement. (Ex. R-25; Tr. 81-82). In part, this supplemental request for information was based upon the discovery of an error in the original certificate’s calculations of built-upon area. (Tr. 82). With the error corrected and addition of the new built-upon areas, Respondent calculated that each lot could only contain a maximum of 4,262 square feet of built-upon area. (Tr. 84). This calculation was made based on total project area, not just lot area.

24. On April 29, 2002, Respondent again requested additional information on the following items: recalculations of impervious surface areas, the Association’s potential ability to resolve compliance by changing built-upon area restrictions for remaining lots, and the existence of the service road. In addition, the letter addressed the Division’s enforcement discretion for the past calculation error. (Ex. R-26; Tr. 83-85).

25. Respondent’s recalculations for the permit showed that the built-upon area per lot did not exceed the twenty-five percent (25%) allowed for single family residences on lots greater than a third of an acre. (Ex. R-27; Tr. 86). Each lot would be allowed to contain approximately 4,870 square feet of built-upon area. (Ex. R-27; Tr. 86, 90). The difference between this calculation and the earlier calculation was due to the recognition that the lots were greater than a third of an acre and entitled to a “lot-only” calculation, rather than an “entire project” calculation. (Tr. 87).

26. On June 4, 2002, Respondent forwarded the recalculation information to the Association. (Ex. R-28; Tr. 87-88).

27. On June 13, 2002, the Association submitted an application to modify the stormwater permit which showed a project area of 56.83 acres and no more than 4,871 square feet of impervious surface on any one lot. (Ex. R-29; Tr. 21, 89-90).

28. On July 22, 2002, Respondent issued a modified permit reflecting the project area as 56.83 acres and restricting each lot to 4,871 square feet of built-upon area per lot. (Ex. P-6, R-30; Tr. 22, 23, 91-92). In Ms. Lewis’ opinion, the permit was issued consistent with other permits issued for projects containing single family residences on lots over a third of an acre in size. (Tr. 92). On January 13, 2003, the restrictive covenants of the Arboretum were changed from 4,900 square feet to 4,871 square feet of impervious surface area per lot. (Tr. 21-22).

29. Petitioner offered evidence disputing the number of acres within the Arboretum Subdivision by presenting a plat that calculated the acreage at 55.33 acres based on plats recorded at the Brunswick County Courthouse. (Ex. P-1 through P-5; Tr. 22-23). Because the calculation plat did not reflect an actual survey, the plat was entered as demonstrative evidence. (Tr. 30, 32). The remaining plats did not have a certification as an official record, so they also were received as demonstrative evidence. (Tr. 30-31, 32).

30. Petitioner also offered evidence disputing the number of acres owned by the Arboretum Community Association by presenting a newsletter with a highlighted portion indicating taxes had not been paid by the Caswell Partnership. (Ex. P-7; Tr. 24). He also presented tax records showing the taxpayer as The Caswell Partnership from 1990 through 1995. From that time until 1998, various other entities were listed as the taxpayer. Beginning in 1998, Caswell Beach Plantation, Inc. was listed as the taxpayer. The same records list the Current Property Owner as “Caswell Beach Plantation Inc, % Arboretum Comm Assn Inc.” (Ex. P-8; Tr. 25). Since the tax records did not contain a certification as an official record, the records were received as demonstrative evidence. (Tr. 31, 32).

31. Petitioner also offered the Articles of Incorporation of Caswell Beach Plantation, Inc. and the Re-Stated By-Laws of Caswell Beach Plantation, Inc. as evidence that the Arboretum is a member of the Caswell Beach Plantation, but not the owners of the property. (Ex. P-9 and P-10; Tr. 26).

32. Petitioner also offered a Quit-Claim Deed from The Caswell Partnership to Caswell Beach Plantation, Inc. as further evidence that the Arboretum Community Association is not the owner of the property. (Ex. P-11; Tr. 26-27). However, the mailing address for Caswell Beach Plantation is “c/o the Arboretum Community Association, Inc.” (Ex. P-11). Because the Quit-Claim Deed is an unofficial copy, it was entered as demonstrative evidence. (Tr. 31, 32).

33. Petitioner also offered a copy of the Board of Directors’ April 8, 1996 meeting, which was taken as demonstrative evidence due to the lack of an official signature or seal and the highlighted text throughout the document. (Ex. P-12; Tr. 31, 32).

34. Petitioner offered a set of documents relating to the service road which were taken as demonstrative evidence due to the lack of official certification, the presence of highlighting and the presence of handwritten comments. (Ex. P-13; Tr. 31-32). In the September 8, 1999 letter from the Town of Caswell Beach to Petitioner, the Town indicated that the Arboretum Community Association would be obtaining permits and would be responsible for any violations of the Respondent’s regulations. (Ex. P-13; Tr. 28).

35. Even if the project acreage were reduced to Petitioner’s contended amount, Rule 2H.1005 still allowed Respondent to calculate the built-upon area using lot size rather than project size because each of the lots measured over a third of an acre. (Tr. 92-94).

BASED UPON the foregoing Findings of Fact and upon the preponderance or greater weight of the evidence in the whole record, the undersigned makes the following:

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has jurisdiction to hear this case pursuant to N.C. Gen. Stat. § 150B-23 as a dispute over an agency action, specifically the issuing of a “license” which is defined by N.C. Gen. Stat. § 150B-2(3) to include a permit.

2. The Petitioner is a "person aggrieved" as defined by N.C. Gen. Stat. § 150B-2(6), because the permit allows built-upon area within the subdivision where Petitioner resides and may directly or indirectly affect substantially his person or property. Respondent is an “agency” as defined by N.C. Gen. Stat. § 150B-2(1a) because it is a subdivision of a department within the executive branch of State government.

3. All parties have been correctly designated and are properly before the Office of Administrative Hearings. The Office of Administrative Hearings has jurisdiction over the parties and the subject matter.

4. Petitioner bears the burden of proof in this contested case because he seeks to prove the existence of a claim, i.e., that the agency acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, or failed to act as required by law or rule. See Peace v. Empl. Sec. Com’n of N.C., 349 N.C. 315, 507 S.E.2d 272 (1998) (courts generally allocate the burden of proof in any dispute on the party attempting to show the existence of a claim or cause of action, even if that requires proof of negative allegations); Britthaven v. N.C. Dept. of Human Resources, 118 N.C. App. 379, 382, 455 S.E.2d 455, 461, rev. denied., 341 N.C. 418, 461 S.E.2d 754 (1995) (contested case petitioner usually bears the burden of proof on the issues).

5. It is presumed that Respondent discharged its duties in good faith and exercised its powers in accord with the spirit and purpose of the law. See Painter v. Wake County Bd. of Ed., 288 N.C. 165, 217 S.E.2d 650 (1975). Petitioner carries the burden to overcome the presumption by competent and substantial evidence. See Styers v. Phillips, 277 N.C. 460, 178 S.E.2d 583 (1971).

6. The agency’s interpretation of N.C. Gen. Stat. 143-214.7 as attempting to minimize the impacts of new development and redevelopment in various parts of the State receives deference because the agency’s interpretation was reasonable and based upon a permissible construction of the statute. See County of Durham v. N.C. Dept. of Env’t and Natural Resources, 131 N.C. App. 395, 396-397, 507 S.E.2d 310, 311 (1998), rev. denied, 350 N.C. 92, 528 S.E.2d 361 (1999) (citations omitted).

7. The agency’s interpretation of Rule 2H.1005 as providing two methods of calculating built-upon area and the agency’s interpretation of the 1999 amendments to the stormwater rules as requiring permits, receive due deference because the interpretations were not plainly erroneous or inconsistent with the regulation. See Simonel v. N.C. School of the Arts, 119 N.C. App. 772, 775, 460 S.E.2d 194, 196 (1995).

8. Respondent correctly required the Arboretum Community Association to obtain a permit to control its stormwater pursuant to N.C. Gen. Stat. § 143-214.7 and Rule 2H.1005.

9. Respondent correctly calculated built-upon area pursuant to Rule 2H.1005 and restricted each lot to 4,871 square feet of built-upon area by the terms of the permit.

10. Petitioner’s evidence failed to show any improper conduct by Respondent and therefore did not overcome the presumption set forth by law that the Respondent’s official action in issuing the permit was lawful and correct. Petitioner’s evidence also failed to show any agency error, any failure to follow proper procedure, any arbitrary or capricious action or any failure to act as required by law or rule in issuing the permit.

11. The preponderance of the evidence, giving due regard to the demonstrated knowledge and expertise of the agency with respect to facts and inferences within the specialized knowledge of the agency, supported the agency action of issuing the permit. N.C. Gen. Stat. § 150B-34. The evidence that the Respondent required the Association to submit details on previously unapproved built-upon area and recalculated the built-upon areas according to the appropriate regulation demonstrated that Respondent acted reasonably and in accordance with law, rule and procedure in order to remove an error discovered in an earlier approval process.

12. In issuing the Permit, Respondent did not act erroneously, used proper procedure, did not act arbitrarily or capriciously, and acted as required by law or rule.

BASED UPON the foregoing Findings of Fact and Conclusions of Law, the undersigned makes the following:

DECISION

The undersigned administrative law judge recommends that the Environmental Management Commission uphold the issuance of the stormwater permit for the Arboretum Subdivision.

NOTICE

Before making its FINAL DECISION, the agency making the final decision in this contested case, is required to give each party an opportunity to file exceptions to this DECISION and to present written arguments to those in the agency who will make the final decision. N.C. Gen. Stat. § 150B-36(a).

The agency is required by N.C. Gen. Stat. § 150B-36(b3) to serve a copy of the final decision on all parties and to furnish a copy to the parties’ attorneys of record and to the Office of Administrative Hearings. The agency that will make the final decision in this contested case is the Environmental Management Commission.

This the 5th day of September, 2003.

___________________________

Beryl E. Wade

Administrative Law Judge

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