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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
DURHAM LAND OWNERS ASSOCIATION, an unincorporated Association,
ANDERSON HOMES, INC., CIMARRON CAPITAL, INC., d/b/a CIMARRON
HOMES, THE DRESS COMPANY d/b/a THE DRESS HOMES COMPANY, M/I HOMES
OF RALEIGH, LLC, OLDE SOUTH HOMES, INC., RANDALL H. STEWART, ST.
LAWRENCE HOMES, INC., SUN RIVER BUILDERS, INC., THOMAS HUGH
MULLEN, 3-D BUILDERS, INC., VANCE CRABTREE BUILDERS, LLC,
WESTFIELD HOMES OF THE CAROLINAS, LLC., Plaintiffs, v. COUNTY OF
Filed: 06 June 2006
1. Schools and Education--school impact fee_absence of enabling legislation
The statute allowing a county board of commissioners to fix fees charged by county
officers and employees for performing services or dutites permitted or required by law, N.C.G.S.
§ 153A-102, did not authorize a county to levy a school impact fee upon developers,
homebuilders and new homeowners, because: (1) the language of N.C.G.S. § 153A-102 intimates
a fee more in line with a fixed cost to a recipient for an over-the-counter type service provided
by a county officer or employee who is performing that service, processing, or transaction
pursuant to law; (2) while fee may be susceptible to multiple interpretations, several other
aspects of the statute are unambiguous and guide the decision that it does not include a school
impact fee when the duty of providing adequate school facilities is a duty of the county itself and
not a duty of the county's officers and employees; (3) giving meaningful effect to the textual
limitations on the power to charge fees yields a determination that the services covered are more
routine document-oriented tasks that require the assistance of a person within county
government; (4) nothing about the statute's context or language suggest it was intended to be
used as the county suggests; and (5) the statute is in an article which addresses county
2. Schools and Education--school impact fee_absence of enabling legislation
Statutes pertaining to the general police powers of counties and authorizing counties to
adopt zoning ordinances, N.C.G.S. §§ 153A-121 and 153A-340, did not provide enabling
legislation for a county to impose school impact fees.
3. Schools and Education--school impact fee--common law
The common law did not provide authority for a county to impose school impact fees
because counties cannot act, in particular generate revenue from the public, without some form
of statutory authority.
4. Schools and Education; Immunity--school impact fee_sovereign
An action by plaintiff deveopers and homebuilders against a county for a declaratory
judgment that a school impact fee is unlawful and for a refund of collected fees was not barred by
sovereign immunity, and the trial court properly ordered that the unlawfully collected fees be
refunded. However, the trial court erred by ordering that the county pay interest on the refunded
Appeal by defendant from orders entered 03 June 2004 and 25
January 2005 by Judges Donald W. Stephens and Orlando F. Hudson,
Jr., respectively, in Durham County Superior Court. Heard in the
Court of Appeals 7 February 2006.
Stam, Fordham & Danchi, P.A., by Henry C. Fordham, Jr., for
Durham County Attorney S. C. Kitchen for defendant-appellant.
Tharrington Smith, L.L.P., by Michael Crowell and
Kathleen P. Tanner, and the North Carolina Schools Boards
Association by Allison B. Schafer, for Amicus Curiae
North Carolina Schools Boards Association.
Camden County Attorney Herbert T. Mullen, Jr. for Amicus
Curiae Camden County.
Currituck County Attorney Katherine McKenzie for Amicus
Curiae Currituck County.
Pasquotank County Attorney Michael Cox for Amicus Curiae
Plaintiffs, all developers and home builders, sued Durham
County (the County) alleging that the County's school impact fee
was imposed without proper enabling legislation from the General
Assembly, and therefore illegal. The trial court agreed, ordered
summary judgment in favor of plaintiffs, and mandated that the
County refund plaintiffs their payments with interest. The County
appealed to this Court arguing that: it possessed the necessary
enabling legislation; the trial court erred in awarding plaintiffs
summary judgment, repayment of the fees, and interest; and thatplaintiffs should not have been allowed to maintain a class action
against the County. We affirm in part and reverse in part.
After many years of rejected petitions to the General Assembly
requesting enabling legislation to impose a school impact fee,
Durham County passed its Ordinance Adopting Impact Fee Procedures
for the Imposition . . . of School Impact Fees to be Imposed on New
Residential Construction (the ordinance). The ordinance is a
comprehensive piece of legislation covering all aspects of imposing
the fee, including exemptions, waivers, collection, and appeals.
It creates a local fund for the fees, an overall cap of fifty
percent of necessary facilities spending, and calls for a review
every three years. The ordinance's opening recital notes that the
County is authorized to impose the impact fee pursuant to G.S. §§
153A-102, 153A-121, 153A-340ff, Article IX, Sec. 2(2) of the North
Carolina Constitution, and the common law powers of the County[.]
The fee, which is either $2,000.00 or $1,155.00 depending on
whether the new home construction is single-family or multi-family
units, respectively, is assessed at the time a building permit
application is submitted. It must be paid prior to the home's
final inspection or issuance of a certificate of occupancy.
While Durham is the first county to pass an impact fee
ordinance without specific authority from the General Assembly,
each North Carolina county is facing an intensifying need for funds
associated with school construction. Education is a governmental
function so fundamental in this state that our constitution
contains a separate article entitled 'Education.' Rowan CountyBd. of Education v. U.S. Gypsum Co., 332 N.C. 1, 10, 418 S.E.2d
648, 655 (1992). And within that article, the General Assembly is
vested with the power to assign to units of local government such
responsibility for the financial support of the free public schools
as it may deem appropriate. N.C. Const. art. IX, § 2(2). Acting
on that authority, the General Assembly has stated: [i]t is the
policy of the State of North Carolina that the facilities
requirements for a public education system will be met by county
governments. N.C. Gen. Stat. § 115C-408(b) (2005). In an
endeavor to meet that policy requirement in the face of continued
local growth, the County passed the school impact fee ordinance
designed to generate the estimated hundreds of millions in
expanding capital expenditures necessary for school improvements
While a laudable goal, the County must have statutory
authority to pass the ordinance requiring the fee. Counties are
creatures of the General Assembly and have no inherent legislative
powers. . . . They are instrumentalities of state government and
possess only those powers the General Assembly has conferred upon
them. Craig v. County of Chatham, 356 N.C. 40, 44, 565 S.E.2d
172, 175 (2002) (citations omitted). The County contends that
despite lacking specific enabling legislation from the General
Assembly, it nevertheless has the authority to issue this type of
While plaintiffs disagree with that conclusion, there is no
dispute as to any genuine issues of material fact in this appeal. Accordingly then, our standard of review of the trial court's
conclusion in favor of plaintiffs is de novo. See Bellsouth
Telecomms., Inc. v. City of Laurinburg, 168 N.C. App. 75, 80, 606
S.E.2d 721, 724 (2005) (review of a trial court's summary judgment
order based solely on issues of law is de novo).
 First, the County argues that section 153A-102 authorizes
it to levy school impact fees against plaintiffs and new
homeowners. This statute does authorize the County, through its
board of commissioners, to set fees and commissions.
The board of commissioners may fix the fees
and commissions charged by county officers and
employees for performing services or duties
permitted or required by law. The board may
not, however, fix fees in the General Court of
Justice or modify the fees of the register of
deeds prescribed by G.S. 161-10 or the fees of
the board of elections prescribed by G.S. 163-
N.C. Gen. Stat. § 153A-102 (2005). The issue here is whether the
County's school impact fee is a contemplated fee authorized by
this legislation. In support of an affirmative response, the
County notes that any ordinance is presumed valid, see McNeill v.
Harnett County, 327 N.C. 552, 564-65, 398 S.E.2d 475, 482 (1990)
(quotations and citations omitted), and its enabling legislation is
to be read broadly, see N.C. Gen. Stat. § 153A-4 (2005).
Determining whether the County's impact fees are supported by
the authority granted to it in N.C. Gen. Stat. § 153A-102 requires
us to ascertain the General Assembly's intent. In so doing, the
context of the Act and the spirit and reason of the law must beconsidered, for it is the intention of the Legislature, as
expressed in the statute, which controls. Mullen v. Louisburg,
225 N.C. 53, 58, 33 S.E.2d 484, 487 (1945); see also Carolina Power
& Light Co. v. City of Asheville, 358 N.C. 512, 518, 597 S.E.2d
717, 722 (2004) (The foremost task in statutory interpretation is
'to determine legislative intent while giving the language of the
statute its natural and ordinary meaning unless the context
requires otherwise.' (citations omitted)). And if the language of
a statute is clear and unambiguous when applying ordinary meaning
and grammar to its text, the legislative intent behind it is
readily apparent. See Smith Chapel Baptist Church v. City of
Durham, 350 N.C. 805, 811, 517 S.E.2d 874, 878 (1999). But if the
language is ambiguous, or susceptible to multiple interpretations,
judicial construction must be grounded in the statute's perceived
intent or purpose.
It is the universal rule that in seeking the
intent it is the duty of the Court, where the
language of a statute is susceptible of more
than one interpretation, to adopt the
construction and practical interpretation
which best expresses the intention of the
Legislature, . . . for 'the heart of a statute
is the intention of the lawmaking body.'
Mullen, 225 N.C. at 58, 33 S.E.2d at 487 (internal citations
Amid these general rules, this Court has expressed a specific
formulation of judicial construction when dealing with statutes in
chapters 153A and 160A of our General Statutes. Section 153A-4
does state that any legislative act affecting counties should be
broadly construed and grants of power shall be construed toinclude any powers that are reasonably expedient to the exercise of
the power. N.C. Gen. Stat. § 153A-4 (2005). And the clear
legislative policy and purpose in the broad construction is so
that the counties of this State . . . [can] have adequate
authority to exercise the powers, rights, duties, functions,
privileges, and immunities conferred upon them by law. Id. But,
in conjunction with our general rules of statutory construction,
only if there is an ambiguity in a statute found in chapter 153A
should section 153A-4 be part of the courts' interpretative
process. If, however, the statute is clear on its face, the plain
language of the statute controls and section 153A-4 remains idle.
Though not without nuances and distinguishing
factors, we find Homebuilders, Bowers, and
Smith Chapel to be consistent statements of
the law and in accord with N.C. Gen. Stat. §
160A-4. The narrow Dillon's Rule of statutory
construction used when interpreting municipal
powers has been replaced by N.C. Gen. Stat. §
160A-4's mandate that the language of Chapter
160A be construed in favor of extending powers
to a municipality where there is an ambiguity
in the authorizing language, or the powers
clearly authorized reasonably necessitate
additional and supplementary powers to
carry them into execution and effect[.] N.C.
Gen. Stat. § 160A-4 (emphasis added); see
Homebuilders Assn. of Charlotte, 336 N.C. at
45, 442 S.E.2d at 50. However, where the
plain meaning of the statute is without
ambiguity, it must be enforced as written.
Bowers, 339 N.C. at 419-20, 451 S.E.2d at 289;
see also Smith Chapel Baptist, 350 N.C. at
812, 517 S.E.2d at 879.
BellSouth, 168 N.C. App. at 82-83, 606 S.E.2d at 726.
Despite the County's argument that section 153A-102 supports
a broad grant of power to levy fees in compensation for virtually
any duty of the County, there is little case law or legislativeaction surrounding the statute. In fact, the County has not
offered any example of the fees it currently charges pursuant to
section 153A-102, save for these impact fees. Even so, we hold
that section 153A-102 fails to support the County's argument that
it is authorized to charge school impact fees. The language of
section 153A-102 intimates a fee in this context is more in line
with a fixed cost to a recipient for an over-the-counter type
service provided by a county officer or employee who is performing
that service, processing, or transaction pursuant to law. And,
while fee may indeed be susceptible to multiple interpretations,
several other aspects of the statute are unambiguous and guide our
decision that it does not include the fee here.
Foremost, the duty of providing adequate school facilities is
a duty of the County itself, not a duty of the County's officers
and employees. The plain language of the statute limits the board
of commissioners' power to fix only those fees charged by county
officers and employees for performing services or duties permitted
or required by law. N.C. Gen. Stat. § 153A-102 (2005). Although
their is not found between performing and services, the
statute's design and language imply it. Unlike processing a
permit, reviewing an application, or maintaining records, the
County's officers or employees are not actually going out and
building schools. In other words, section 153A-102 is not a broad
based, revenue generating provision designed to offset the cost of
any service the County provides, but only those services that itsofficers or employees provide pursuant to their position within
The statute's second sentence discussing limitations on the
power to fix fees substantially favors this interpretation as well.
The County may not fix the fees in the General Court of Justice or
modify the fees of the register of deeds prescribed by G.S. 161-10
or the fees of the board of elections prescribed by G.S. 163-107.
N.C. Gen. Stat. § 153A-102 (2005). The fees found in N.C. Gen.
Stat. § 161-10 (2005) are those associated with doing business in
the register of deeds office_interacting with the personnel. The
highest listed fee is $50.00 for issuance and processing of a
marriage license. The fees located in N.C. Gen. Stat. § 163-107
are filing fees for elected office; the current fee is set at 1% of
the annual salary of the office sought. See N.C. Gen. Stat. § 163-
107 (2005). The court system also has fees set for filing,
docketing, processing, and maintaining a multitude of documents and
records. Interpreting the County's ability to set school impact
fees_designed to offset the cost of building school facilities
throughout the county_under this statute would leave the clear
legislative limitations on this power rather perfunctory or
arbitrary. Instead, giving meaningful effect to the textual
limitations on the power to charge fees yields a determination that
the services covered are more routine, document-oriented tasks,
that require the assistance of a person within county government.
Also, the statute is located in Article 5 of Chapter 153A,
which addresses county administration. Section 153A-102's originis a 1953 act by the General Assembly entitled AN ACT TO AUTHORIZE
THE COUNTY COMMISSIONERS OF EACH COUNTY IN THIS STATE TO FIX THE
SALARIES OR OTHER COMPENSATION OF ALL ELECTIVE AND APPOINTIVE
COUNTY OFFICIALS AND EMPLOYEES DRAWING COMPENSATION FROM SAID
COUNTIES. 1953 N.C. Sess. Laws ch. 1227, §§ 1-3. Later, in 1969,
the General Assembly modified the Board's ability to fix salaries,
fees, and number of employees. See 1969 N.C. Sess. Laws ch. 358,
§ 1. Although the statute's section has been renumbered, its
language has not been altered since 1973. See 1973 N.C. Sess. Laws
ch. 822, § 1. Nothing about the statute's context or language
suggest it was intended to be used as the County suggests here.
Indeed, Articles 7 and 9, addressing taxation and special
assessments, contain powers more in line with what the County
maintains this section provides it with.
In sum, we do not agree with the County that its
constitutional and legislative duty_as opposed to the duties of its
officers and employees_to provide facilities for public schools is
the type of service or duty contemplated by section 153A-102 for
which a fee can be charged.
 The County argues that several other statutes provide
enabling legislation for the school impact fees including N.C. Gen.
Stat. §§ 153A-121 and 153A-340. We disagree.
Section 153A-121 establishes that counties have general police
powers and, pursuant to that power, may by ordinance, define,
regulate, prohibit, or abate acts, omissions, or conditionsdetrimental to the health, safety, or welfare of its citizens and
the peace and dignity of the county[.] N.C. Gen. Stat. § 153A-
121(a) (2005). And section 153A-340 authorizes the County to
adopt zoning and development regulation ordinances for the
purpose of promoting health, safety, morals, or the general
welfare[.] N.C. Gen. Stat. § 153A-340(a) (2005). Pursuant to
section 153A-341, the County's aforementioned ordinances shall be
made in accordance with a comprehensive plan and designed . . . to
facilitate the adequate provision of transportation, water,
sewerage, schools, parks, and other public requirements. N.C.
Gen. Stat. § 153A-341 (2003).
Relying in part on Homebuilders Assn. of Charlotte v. City of
Charlotte, 336 N.C. 37, 442 S.E.2d 45 (1994), which interprets
mirrored county regulatory provisions in city government, the
County argues it has the ability to charge the school impact fee
as an additional and supplementary power that is reasonably
necessary or expedient to carry a regulatory program into execution
and effect. Id. at 45, 442 S.E.2d at 50. In Homebuilders, the
plaintiffs filed suit to keep the City of Charlotte from
instituting user fees for certain government services, all of
which were related to using public facilities or the local
government's regulatory function. Id. at 39-40, 442 S.E.2d at 47-
48. The Supreme Court held that applying section 160A-4's broad
construction to the regulatory and police powers of cities
supported a determination that Charlotte's user fee schedule was
reasonably necessary or expedient to the execution of the City'spower to regulate the activities for which the services are
provided. Id. at 45, 442 S.E.2d at 50. Since counties have
almost identical police and regulatory powers, as well as a
legislative mandate according to section 153A-4 to have any powers
reasonably expedient to the exercise of the power, the County
argues Homebuilders recognizes its authority to charge the fee.
While perhaps not stating it explicitly, we do not believe the
Supreme Court intended to allow a city or county's zoning power to
authorize it to charge a fee for providing its actual governmental
services to the public. Instead, the Court recognized that cities,
unlike counties, did not have a specific fee statute (like
section 153A-102) and charging fees for document reviews and
approvals was expedient to the cities' given power to control
zoning and development. The user fees listed in Homebuilders are
all for permit reviews and application-processing type services.
See Homebuilders, 336 N.C. at 40-41, 442 S.E.2d at 48 (listing, for
example: commercial permit review, floodplain analysis, and final
plat review). We do not read Homebuilders to allow counties to
charge a fee for, again, its own services such as school
The County argues that Home Builders and Contractors Assoc. Of
Palm Beach County v. Board of County Commissioners of Palm Beach
County, 446 So. 2d 140 (Fla. Ct. App. 1983) is persuasive authority
for its position. There, the appellate court determined that the
county's road impact fee was a regulation, not a tax, and was
supported by the broad regulatory powers given to Florida counties. The appropriate framework for determining
whether an impact fee is a regulation or a tax
is one of public policy in which a number of
factors should be weighed. The home rule
powers granted local governments in Florida,
the legislative mandate that local governments
must plan comprehensively for future growth,
and the additional broad powers given them to
make those plans work effectively, indicate
that properly limited impact fees for
educational or recreational purposes should be
construed as regulations. Characterization as
a regulation is particularly appropriate where
an impact fee is used to complement other land
use measures such as in lieu fees or
dedications. If an impact fee is
characterized as a regulation, its validity
should then be determined by reference to the
dual rational nexi police power standard.
Id. at 145 (quoting Julian C. Juergensmeyer & Robert M. Blake,
Impact Fees: An Answer to Local Governments' Capital Funding
Dilemma, 9 Fla. St. U. L. Rev. 415, 440-41 (1981)). Although the
Florida appellate court found impact fees a permissible regulation
within the power of its counties, we do not find this logic
persuasive. That far reaching determination is more appropriate
for legislative drafting than this Court's judicial construction.
Accordingly then, we can find no authority to support a
determination that pursuant to the County's zoning and general
police powers that it has the necessary statutory authority to
impose a school impact fee.
 Although plaintiffs bring forth several other claims
regarding the County's lack of statutory authority to impose an
impact fee, we do not need to address them here. But since theCounty contends that this state's common law provides the authority
to impose the school impact fee, we will address that.
The County argues that when there is a constitutional mandate
to provide an adequate education combined with the constitutional
guarantee to use revenues to fund these constitutional mandates,
the common law provides the authority to raise funds to meet the
constitutional requirements imposed on counties. We cannot agree.
Considering that counties cannot act, in particular generate
revenue from the public, without some form of statutory authority,
the County's common law argument is plagued with shortcomings.
 Since we have determined there is no authority for the
County to collect its school impact fee, we must now determine
whether the trial court's remedy of a refund plus interest is
appropriate. The County argues several theories in support of the
contention that it is not required to refund the fees.
First, the County argues that since N.C. Gen. Stat. § 1A-1,
Rule 23 (2005) (allowing class actions), does not mention the state
or counties specifically, and because counties enjoy sovereign
immunity unless waived by statute, then all class actions against
the state or its counties are barred by sovereign immunity.
Although perhaps accurately stated in its parts, we do not agree
with the legal sum of those parts: that the absence of state or
counties in Rule 23 means that neither can be sued in a class
action. Indeed, the County can cite us no North Carolina case
holding as such. In fact, although not precisely addressed, ourappellate courts have allowed class action declaratory judgment
suits that seek injunctive and payment relief against the State.
See Faulkenbury v. Teachers' and State Employees' Ret. Sys., 345
N.C. 683, 696-99, 483 S.E.2d 422, 430-32 (1997) (class action case
against the State in which the Court dismissed a sovereign immunity
challenge to a part of the suit, but affirmed the award in favor of
class action plaintiffs); Faulkenbury v. Teachers' & State
Employees' Retirement System, 108 N.C. App. 357, 376, 424 S.E.2d
420, 430 (1993) (The North Carolina Supreme Court has emphasized
that class actions are appropriate and should be permitted when
they can 'serve useful purposes' such as preventing a multiplicity
of suits or inconsistent results.). Furthermore, when determining
whether sovereign immunity bars a suit, the manner in which the
case is brought, whether by class action or individually, is not
necessarily as important as the actual claims and violations
alleged. See Peverall v. County of Alamance, 154 N.C. App. 426,
429-30, 573 S.E.2d 517, 519 (2002) (allowing a class action against
a county on some claims, but barring other specific claims due to
sovereign immunity), disc. review denied, 356 N.C. 676, 577 S.E.2d
Second, and in step with that determination, the County argues
that plaintiffs' declaratory judgment action and action for a
refund are barred by sovereign immunity. We disagree. In a
comparable case to ours, the North Carolina Supreme Court awarded
the plaintiffs a refund of fees paid pursuant to a city ordinanceenacted without proper enabling legislation. See Smith Chapel
Baptist Church, 350 N.C. at 819, 517 S.E.2d at 883.
In the instant case, because we have already
held that the City's SWU ordinance and the
fees charged thereunder are invalid as a
matter of law, we further hold that plaintiffs
are entitled to a full refund of the illegally
collected fees from the City, plus interest on
those fees to the date of judgment.
Id. In so doing, the Court likened the action to the common law
doctrine of an action for money had and received. Id. at 818,
517 S.E.2d at 882-83. Although any sovereign immunity defense to
this type of action was tacitly rejected by our Supreme Court, we
are further persuaded by Charlotte-Mecklenburg Hospital Auth. v.
N.C. Industrial Comm., 336 N.C. 200, 443 S.E.2d 716 (1994), in
which the Court rejected the defense of sovereign immunity to a
declaratory judgment action alleging that the Industrial Commission
created a regulation beyond its statutory authority. In so doing,
the Court minimized the distinction in these actions between naming
defendants as public officers enforcing an allegedly invalid
regulation, an action not cloaked in sovereign immunity, and
directly naming the body that passed the regulation or ordinance,
an action that was long considered shielded.
There is no difference in principle between an
attempt to enforce an invalid regulation and
the initial adoption or enactment of such a
regulation; both are in excess of the
authority granted the agency under the statute
and invade or threaten to invade personal or
property rights of a citizen in disregard of
the law. We therefore hold that the doctrine
of sovereign immunity does not authorize the
dismissal of plaintiff hospitals' complaint
alleging that defendant Commission and itsmembers, in excess of their statutory
authority, adopted an invalid regulation.
Id. at 208, 443 S.E.2d at 721.
Third, the County argues that if it is subject to a
declaratory judgment action and an action for a refund of the fees,
then it should not be required to pay interest on the refunded
fees. We agree with this contention. For more than sixty years
our Supreme Court has held that post-judgment interest may not be
awarded against the State unless the State has manifested its
willingness to pay interest by an Act of the General Assembly or by
a lawful contract to do so. Yancey v. Highway Commission, 222
N.C. 106, 109, 22 S.E.2d 256, 259 (1942). That rule has been
applied in numerous cases of this Court as well. See, e.g., McGee
v. N.C. Dep't of Revenue, 135 N.C. App. 319, 520 S.E.2d 84 (1999);
Faulkenbury v. Teachers' and State Employees' Ret. Sys., 132 N.C.
App. 137, 510 S.E.2d 675, disc. review denied, 350 N.C. 379, 536
S.E.2d 620 (1999); Myers v. Dept. of Crime Control, 67 N.C. App.
553, 313 S.E.2d 276 (1984). Despite the County's unauthorized
actions here, there is no statutory authority for the award of
interest in this circumstance, nor is there evidence of a contract.
Thus, the trial court erred as a matter of law in ordering the
County to award plaintiffs interest on the money collected and to
be refunded. See Shavitz v. City of High Point, 177 N.C. App. ___,
___, ___ S.E.2d ___, ___ (16 May 2006) (No. COA05-571) (in an
action for a refund of fines, post-judgment interest could not be
awarded against a city). Plaintiffs cite to Smith Chapel for authority that the
County's refund is subject to an award of interest. Plaintiffs are
correct in that the Supreme Court in Smith Chapel did award a full
refund of the illegally collected fees from the City, plus interest
on those fees to the date of judgment. Smith Chapel Baptist
Church, 350 N.C. at 819, 517 S.E.2d at 883 (emphasis added). Yet,
there is nothing to suggest that in doing so the Supreme Court was
changing an otherwise long standing rule that the State_and
vicariously its political subdivisions_does not pay interest under
N.C. Gen. Stat. § 24-5 on judgments against it. In fact, although
not stated, the Supreme Court in Smith Chapel was dealing with a
city's fixed fee for providing storm water removal, a public
enterprise. [O]ur courts have clearly stated that in setting rates
for public enterprise services, municipalities act in a proprietary
role. Pulliam v. City of Greensboro, 103 N.C. App. 748, 753, 407
S.E.2d 567, 569-70, disc. review denied, 330 N.C. 197, 412 S.E.2d
59 (1991). And when a municipality is engaged in a proprietary
function, it operates without governmental immunity. See id. at
751, 407 S.E.2d at 568 (quoting McCombs v. City of Asheboro, 6 N.C.
App. 234, 238, 170 S.E.2d 169, 172 (1969)). That is not the case
here concerning a county's imposition of a school construction fee
without appropriate authority.
In conclusion, after reviewing the authority and reasoning on
each side, we have determined that the trial court did not err in
deciding that the County's school impact fee was unlawful, void,and without legal effect. It also did not err in ordering that a
refund of the collected and separately maintained school impact
fees is an appropriate remedy for the County's actions. We have
determined, however, that the trial court did err in awarding
interest on those refunded fees.
We have further reviewed the County's remaining assignments of
error briefed and found them to be without merit. Accordingly, we
affirm the trial court's order of summary judgment in favor of
plaintiffs in all respects save for the award of interest, which we
Affirmed in part, reversed in part.
Judges McCULLOUGH and LEVINSON concur.
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