An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NORTH CAROLINA COURT OF APPEALS
Filed: 6 September 2005
STATE of NORTH CAROLINA
ex. rel. UTILITIES COMMISSION,
Edwin C. Carlson (Complainant),
Conservancy Community, Inc. North Carolina
(Intervenor), Public Staff- Utilities Commission
North Carolina Utilities No. W-1202, Sub 0
Commission (Intervenor), and
Anne McDonough (Respondent),
COWEE MOUNTAIN IMPROVEMENT
ASSOCIATION, INC. (Intervenor),
Appeal by Cowee Mountain Improvement Association, Inc. from an
order entered 17 February 2004 by the North Carolina Utilities
Commission. Heard in the Court of Appeals 13 April 2005.
Public Staff Chief Counsel Antoinette R. Wike, for intervenor-
appellee North Carolina Utilities Commission.
Crisp, Page & Currin, L.L.P., by Robert F. Page, for
complainant-appellee Edwin C. Carlson and intervenor-appellee
Conservancy Community, Inc.
Anne McDonough, pro-se, respondent-appellee.
Coward, Hicks & Siler, P.A., by William H. Coward, for
intervenor-appellant Cowee Mountain Improvement Association,
In 1975, Mountain Acreage, Ltd., a limited partnership in
which respondent, Mrs. Anne McDonough, was a primary partner, began
development of a thirty-four lot subdivision named Cowee Mountainin Macon County, North Carolina. Although the recorded restrictive
covenants for the subdivision prohibited further subdivision
without the consent of the developers, the developers themselves,
through Mountain Acreage, Ltd., subdivided a lot in 1984, creating
a total of thirty-five separate lots. The Public Water Supply
Section (PWSS) of the North Carolina Department of Environment &
Natural Resources approved the water system originally installed by
the developer, with only one well, to serve thirty-five lots. At
the time of the hearing in this matter, all of the lots had been
sold and there were a total of twenty-two property owners in the
Cowee Mountain Subdivision. However, only seventeen of the lots
were connected to the water system.
Dr. Edwin C. Carlson purchased Lot 5 of Cowee Mountain
Subdivision in 1993. At that time, the restrictive covenants
prohibiting lot owners from subdividing their individual lots were
still in force. The restrictive covenants were allowed to expire
in 2000 and the property owners have been unable to reach agreement
on new restrictive covenants. After the restrictive covenants had
expired, Dr. Carlson lawfully subdivided his existing Lot 5 to
create Lot 5A. Dr. Carlson's request for water utility service to
be extended to Lot 5A was denied and, due to the denial, Dr.
Carlson filed his Complaint with the Commission.
Although Mrs. McDonough continues to own the water system, it
is, in effect, operated by the Cowee Mountain Improvement
Association, Inc. (CMIA). CMIA contracts with a local person in
the Highlands area to provide routine maintenance and repairservices. CMIA collects all of the annual homeowner assessments
from the lot owners and, from the proceeds of such assessments,
pays the operating expenses of the water system. The electric
account is in CMIA's name.
According to PWSS, there are now two wells located at the
Cowee Mountain water system which, together, produce a total of
forty-three gallons per minute. Service is currently being
provided to the seventeen connected lots by the first well. The
second well is not on-line and is kept in reserve. Since 1975,
when the subdivision came into being, only two lots have been
subdivided - the one which was subdivided by the original
developers in 1984 and the subdivision by Dr. Carlson of Lot 5 into
Lots 5 and 5A following the expiration of the restrictive covenants
On 5 August 2002, Dr. Carlson filed a letter of complaint with
the North Carolina Utilities Commission (Commission) regarding the
water system being operated in Cowee Mountain Subdivision, Macon
County, North Carolina. Dr. Carlson requested that the
owner/operator of the water system, Mrs. Anne McDonough, be
declared to be a public utility, and as such, be compelled to
provide water utility service to Dr. Carlson's subdivided Lot 5A in
the Cowee Mountain Subdivision. The Commission requested the
Public Staff investigate the matter and, on 16 October 2002, the
Public Staff submitted a written report of its findings. Dr.
Carlson responded to the Public Staff's report by letter to theCommission. The Commission received additional letters from other
property owners in the Cowee Mountain Subdivision.
Based upon this correspondence and the Public Staff's report,
the Commission issued an Order on 27 March 2003 requiring Mrs.
McDonough to appear and show cause why her water system should not
be declared a public utility. By further Order issued 1 April
2003, the Commission requested participation by the Public Staff at
the hearing. The matter came before a Commission Hearing Examiner
on 28 May 2003. At the hearing, CMIA and Cowee Ridge Consensus and
Conservancy Community, Inc. intervened as parties of record. The
intervention of the Public Staff was recognized pursuant to
Commission Rule. The matter was heard by Hearing Examiner Larry
Height, who subsequently resigned from employment at the
Commission. By Order entered 31 July 2003, the Commission assigned
Staff Attorney ToNola D. Brown-Bland to review the record and issue
a Recommended Order as the Hearing Examiner.
On 14 November 2003, Hearing Examiner Brown-Bland entered a
Recommended Order entitled Recommended Order Requiring Application
for Franchise or Transfer of System. On 1 December 2003, Dr.
Carlson filed exceptions to the Recommended Order and requested
that the Commission schedule an oral argument to consider his
exceptions. By Order issued 10 December 2003, the Commission found
good cause to schedule the matter for oral argument on Dr.
Carlson's exceptions and oral arguments took place before the Full
Commission on 20 January 2004. On 17 February 2004, the Commission
issued its Final Order Requiring Application For Franchise OrTransfer Of System And Service To Lot 5A (Final Order) which is
the subject of the present appeal. CMIA filed its Notice of Appeal
on 19 April 2004.
The dispositive issue on appeal is whether CMIA has standing
to bring this appeal. Standing refers to whether a party has a
sufficient stake in an otherwise justiciable controversy such that
he or she may properly seek adjudication of the matter. American
Woodland Indus., Inc. v. Tolson, 155 N.C. App. 624, 626, 574
S.E.2d 55, 57 (2002). A party seeking standing has the burden of
proving three necessary elements:
(1) injury in fact -- an invasion of a
legally protected interest that is (a)
concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical; (2)
the injury is fairly traceable to the
challenged action of the [appellee]; and (3)
it is likely, as opposed to merely
speculative, that the injury will be redressed
by a favorable decision.
Neuse River Found., Inc. v. Smithfield Foods, Inc., 155 N.C. App.
110, 114, 574 S.E.2d 48, 52 (2002) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61, 119 L. Ed. 2d 351, 364 (1992)),
review denied, 356 N.C. 675, 577 S.E.2d 628 (2003).
Furthermore, this Court has previously addressed the standing
requirements necessary to appeal a decision by a North Carolina
In order to have standing to appeal, a party
must not only file notice of appeal within 30
days, but must also be aggrieved. Although
the phrase 'aggrieved party' has no technical
meaning and depends on the circumstances
involved, the Administrative Procedure Actprovides guidance as to the intent of the
General Assembly in its definition of 'person
aggrieved' as any person or group of persons
of common interest directly or indirectly
affected substantially in his or its person,
property, or employment by an administrative
decision. In addition, . . . the North
Carolina Supreme Court defined an aggrieved
person as one adversely affected in respect of
legal rights, or suffering from an
infringement or denial of legal rights.
State ex rel. Utils. Comm'n v. Buck Island, Inc., 162 N.C. App.
568, 573-74, 592 S.E.2d 244, 248 (2004) (internal citations and
quotations omitted). A 'party aggrieved' is one whose rights have
been directly and injuriously affected by the judgment entered . .
. . Where a party is not aggrieved, his appeal will be dismissed.
Hoisington v. ZT-Winston-Salem Assocs., 133 N.C. App. 485, 496, 516
S.E.2d 176, 184 (1999) (citations omitted).
CMIA asserts the following in an attempt to show it has
standing as an aggrieved party:
Appellant is Cowee Mountain Improvement
Association, Inc., (CMIA) which is a voluntary
. . . homeowners' association initially formed
to manage the subject water system (even
though it continues to be owned by Respondent,
Anne McDonough) and to manage other common
elements such as the roads. By and with the
consent of the members of the Association, it
has also come to be the voice of the
individual owners in this litigation. . . .
. . .
The long-range impact of the decision is
that it will open a wide door that will
encourage other owners to re-subdivide their
lots, creating the potential for some 140 lots
in a subdivision that consisted of only 35
lots until the creation of Lot 5A. In
essence, the Commission has said that
unlimited re-subdivision will be subsidized byan ever-expanding water system, indefinitely
until the aquifer is exhausted. . . .
. . .
. . . Suffice it to say that the legal
rights of CMIA, as representative of all of
the property owners save Dr. Carlson, and the
properties of these owners, have been
adversely affected by the Order and therefore
Appellant is an aggrieved party.
. . .
. . . We must assume for our purposes
here that the rules now being applied to
benefit Appellee Dr. Carlson will be applied
the same way for all future applicants.
In the present case, CMIA has no legally protected interest,
or injury in fact, and therefore lacks standing to bring this
action. While CMIA claims to be representing all of the property
owners save Dr. Carlson the record contains two letters from
property owners (Charles T. Wolf, a member of the Board of
Directors of CMIA, and Mark S. Murrah, an independent owner not
represented by any homeowners' association) supporting Dr. Carlson.
Specifically, the only interest asserted by CMIA was its desire to
purchase the Cowee Mountain water system and operate it as a non-
regulated community water association. There was an executory
agreement between Mrs. McDonough and CMIA to sell the system but,
as of the time of the Commission's Order, that agreement was on
hold. The record does not reflect CMIA has yet purchased the water
system. In the Commission's Final Order, there were no orders as
to CMIA or any of its members. All of the mandates required that
certain actions be taken by Mrs. McDonough or Dr. Carlson, but not
by CMIA. If CMIA does ultimately purchase the system from Mrs.McDonough, it is still free to petition the Commission for an
exemption from regulation as a public utility.
Judges McGEE and STEELMAN concur.
Report per Rule 30(e).
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