Charlotte, NC – Parker Poe Adams & Bernstein LLP is pleased to announce the North Carolina Supreme Court recently ruled in favor of the Town of Midland in a case, Town of Midland v. Harrell, with an important clarification of law for municipalities across the state. The court ruled the town, by following its development ordinance, had satisfied procedural requirements of state law to bring a civil suit against a developer over its failure to repair certain streets in a subdivision.
The exact nature of those procedural requirements has been an open question since the Court of Appeals' Nance ruling in 2019. Two schools of thought arose from the Nance opinion, which played out in the Town of Midland case. The developer in Midland's case claimed the Nance ruling required all municipalities to secure pre-authorization from their governing board before bringing suit in the municipality’s name and, given that Midland did not have that pre-authorization, that the town lacked standing to sue. The town contended, and the Supreme Court agreed, that all Nance held was that a municipality had to follow its own specific ordinances to bring suit in an enforcement action.
Writing for a unanimous Supreme Court, Justice Trey Allen said the court was neither bound by the Nance ruling nor does it "read that decision to hold that a municipality’s elected governing board must always act by resolution to authorize a lawsuit." Emphasizing that state law allows the board to act "by ordinance or resolution," the justices determined that the Midland Development Ordinance allowed the town to file suit without first obtaining town council's authorization.
After addressing those procedural requirements, the Supreme Court affirmed a prior decision holding the developer was responsible for maintaining the streets in question.
The ruling includes two takeaways for North Carolina municipalities:
1. The Nance ruling did not create a blanket rule requiring their elected boards to authorize lawsuits.
2. They should consult their specific ordinances to determine if the ordinances grant permission to litigate without a resolution.
Parker Poe partners Anthony Fox and Daniel Peterson, as well as associate Jasmine Little, represented the Town of Midland before the Supreme Court.
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