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KERRY WATTS, Plaintiff, v. NORTH CAROLINA DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, Defendant
Filed: 20 March 2007
1. Appeal and Error_preservation of issue_public duty doctrine_argued in motion,
addressed by Industrial Commission_assignment of error
An issue concerning the public duty doctrine was preserved for appeal where defendant
argued in its motion to dismiss that the doctrine barred plaintiff's claim (although it did not
further argue the motion at the hearing), the Industrial Commission concluded that plaintiff had a
duty of care in assessing plaintiff's lot for a septic system, and defendant assigned as error the
Commission's failure to apply the doctrine.
2. Immunity_public duty doctrine_revocation of septic permit_pleading, evidence,
The special duty exception to the public duty doctrine applied where defendant, through
its agent the Health Department, made a promise to plaintiff by issuing an improvement permit
based upon its finding that soil conditions would support a three-bedroom house on property
plaintiff wanted to purchase, plaintiff relied on the permit in purchasing the property, defendant
revoked the permit after the purchase, and plaintiff was caused to incur additional expense to use
the lot as he had planned.
3. Negligence_admission_supported by finding without assignment of error
A conclusion by the Industrial Commission that defendant had admitted to negligent
conduct was supported by a finding to the same effect, to which defendant did not assign error.
The finding was binding.
4. Damages_revocation of septic permit_future interest rate damages_uncertain
Appellant did not assign error to the Industrial Commission's Tort Claims award of
damages for increased land purchase and construction costs following a revoked septic permit,
and review was limited to future interest rate damages. Those damages were uncertain,
speculative, and too remote to be recoverable.
5. Tort Claims Act_attorney fee award_not supported by statutes
The Industrial Commission erred by awarding attorney fees in a Tort Claims case where
none of the statutes cited by the Commission supported its award.
Judge TYSON concurring in part and dissenting in part.
Appeal by defendant from decision and order entered 8 August
2005 by the North Carolina Industrial Commission. Heard in the
Court of Appeals 13 November 2006.
James, McElroy & Diehl, P.A., by John R. Buric, for plaintiff-
Roy Cooper, Attorney General, by Dahr Joseph Tanoury,
Assistant Attorney General, for defendant-appellant.
MARTIN, Chief Judge.
Defendant North Carolina Department of Environment and Natural
Resources (NCDENR) appeals from a decision and order of the North
Carolina Industrial Commission awarding $267,733 in damages to
plaintiff arising from NCDENR's negligent issuance of an
improvement permit for land purchased by the plaintiff.
Plaintiff entered into a contract to purchase an undeveloped
lake-front lot in Montgomery County. A condition of the contract
was that the land perk for a three-bedroom residence, meaning
that the soil was suitable to support an on-site wastewater system.
On 30 July 1999, after inspecting the site, David Ezzell
(Ezzell), an agent of the Montgomery County Health Department
(Health Department) and NCDENR, issued an improvement permit
authorizing construction of a three-bedroom home on the lot. In
reliance on the improvement permit, plaintiff purchased the lot for
$118,000 and subsequently added a boat dock at a cost of
In 2002 plaintiff began to pursue his plans to develop the
lot. Plaintiff met with a mortgage loan broker about financing the
development, seeking an interest-only construction loan that would
convert to a thirty-year mortgage upon completion of the
construction. Although plaintiff did not apply for a loan at thattime, the broker testified that when they met in 2002 plaintiff
qualified for the financing at a rate of approximately 5.44%
interest for the thirty-year, fixed-rate mortgage.
As plaintiff prepared the site and the construction plans, he
decided that he could better use the lot if the proposed driveway
were switched from the left side to the right side of the lot. In
order to get approval for this change, plaintiff was required to
apply for a new permit. The perk test performed for the new permit
revealed that the soil would not perk for the new construction
plan, nor would it perk for the original construction plan;
therefore, the Health Department notified plaintiff that the permit
issued in July 1999 was being revoked. Plaintiff requested that
the soil be retested. The retest confirmed the result that the
soil was unsuitable for a ground absorption sewage system.
Plaintiff was notified of three ways in which the situation could
be remedied: (1) he could purchase another adjoining parcel of
property with suitable or provisionally suitable soil on which to
place the ground absorption sewage treatment and disposal system,
and plaintiff could install a system capable of pumping the
effluent to the adjoining parcel; (2) he could obtain an easement
to another parcel of property with suitable or provisionally
suitable soil on which to place the ground absorption sewage
treatment and disposal system and install a system capable of
pumping the effluent to the adjoining parcel; or (3) he could
install a septic system incorporating both pretreatment (sand or
peat filter) and a subsurface drip irrigation under the soil andsite conditions of the lot, although the septic system would have
to be designed and installed by a professional engineer or
individuals authorized in writing by the pretreatment and drip
irrigation manufacturers. Plaintiff elected to purchase an
adjoining parcel for $70,000. Although plaintiff's contact
throughout this process was with the Health Department, the parties
stipulated that the agency of the defendant in question in this
case is the Montgomery County Health Department of Montgomery
County, North Carolina, and . . . how it operates, it is an agent
of the State of North Carolina; i.e., the North Carolina Department
of Enviroment[al] and Natural Resources.
On 2 July 2003, plaintiff filed an action under the North
Carolina Tort Claims Act, N.C.G.S. §§ 143-291 et seq., against
Ezzell, the Health Department, and NCDENR alleging that defendants
had negligently inspected and issued an improvement permit for his
lot. Defendants moved to dismiss on jurisdictional grounds and for
failure to state a claim upon which relief could be granted.
Plaintiff's complaint was heard by the North Carolina Industrial
Commission on 15 November 2004. The Deputy Commissioner dismissed
the claim against Mr. Ezzell, as he was not a proper party before
the Industrial Commission. As to the defendants Health Department
and NCDENR, the Deputy Commissioner ordered them jointly and
severally liable for $267,733 in compensatory damages to plaintiff,
$18,611.07 in attorney fees, and $13,034 in costs and expenses. Of
the $267,733 compensatory damages, $174,745.54 represent damages
arising from future interest payments. NCDENR appealed thedecision of the Deputy Commissioner to the full Industrial
Commission. The full Commission agreed with the findings and
conclusions of the Deputy Commissioner and affirmed the awards of
compensatory damages, attorney fees, and costs and expenses.
NCDENR appealed the full Commission's decision and order to this
NCDENR raises five issues on appeal.
I. Public Duty Doctrine
 First, NCDENR argues that the Industrial Commission erred
in failing to find and conclude that plaintiff's claim is barred by
the public duty doctrine. We first address whether this issue has
been preserved for appellate review. NCDENR moved to dismiss
plaintiff's claim pursuant to Rule 12(b)(1) (lack of subject matter
jurisdiction), 12(b)(2) (lack of personal jurisdiction), and
12(b)(6) (failure to state a claim upon which relief can be
granted), arguing that the public duty doctrine barred plaintiff's
claim. N.C.R. Civ. Pro. 12(b). Although NCDENR did not further
argue the motion at the hearing, the Commission concluded that
[t]he North Carolina Industrial Commission has jurisdiction over
Plaintiff and Defendants [NCDENR] and The Montgomery County Health
Department, and [NCDENR] and The Montgomery County Health
Department owed plaintiff a duty of care in making a proper
assessment of Lot 871 before issuing Improvement Permit No. 99291,
authorizing the construction of a three-bedroom residence on the
lot. NCDENR has assigned as error the Commission's conclusionthat it owed a duty of care to plaintiff for the Commission's
failure to apply the public duty doctrine. Thus, NCDENR has
preserved this issue for appeal. On appeal, [t]he Commission's
conclusions of law are reviewed de novo. McRae v. Toastmaster,
Inc., 358 N.C. 488, 496, 597 S.E.2d 695, 701 (2004).
 The issue before us is whether the public duty doctrine
applies to bar plaintiff's claim against NCDENR for negligent
inspection of soil conditions, where NCDENR issued an improvement
permit for a lot, plaintiff relied on the permit to purchase the
lot, and the permit was subsequently revoked, resulting in damage
to plaintiff. We first recognize:
The public duty doctrine is a separate rule of
common law negligence that may limit tort
liability, even when the State has waived
sovereign immunity. The rule provides that
when a governmental entity owes a duty to the
general public, particularly a statutory duty,
individual plaintiffs may not enforce the duty
Myers v. McGrady, 360 N.C. 460, 465-66, 628 S.E.2d 761, 766 (2006).
Our Supreme Court has held that the legislature intended the
public duty doctrine to apply to claims against the State under the
Tort Claims Act. Stone v. N.C. Dep't of Labor, 347 N.C. 473, 482,
495 S.E.2d 711, 716 (1998). The Supreme Court has also extended
the public duty doctrine to state agencies required by statute to
conduct inspections for the public's general protection. Lovelace
v. City of Shelby, 351 N.C. 458, 461, 526 S.E.2d 652, 654 (2000);
see also Hunt v. N.C. Dep't of Labor, 348 N.C. 192, 202, 499 S.E.2d
747, 753 (1998); Stone, 347 N.C. at 483, 495 S.E.2d at 717. In the
present case, the Health Department, an agent of NCDENR, is a stateagency required to inspect site for suitability of wastewater
treatment systems before issuing improvement permits by N.C.G.S. §
130A-336, and therefore may avail itself of the protection afforded
by the public duty doctrine.
The public duty doctrine, however, is subject to two
In Braswell this Court recognized two
exceptions to the public duty doctrine to
prevent inevitable inequities to certain
individuals. It explained that exceptions to
the doctrine exist: (1) where there is a
special relationship between the injured party
and the governmental entity; and (2) when the
governmental entity creates a special duty by
promising protection to an individual, the
protection is not forthcoming, and the
individual's reliance on the promise of
protection is causally related to the injury
suffered. These exceptions are narrowly
construed and applied.
Stone, 347 N.C. at 482-83, 495 S.E.2d at 717 (quoting Braswell v.
Braswell, 330 N.C. 363, 371, 410 S.E.2d 897, 902 (1991)) (citations
omitted). We must consider whether the facts of the present case
warrant the application of one of the exceptions to the public duty
The special duty exception requires (1) a promise of
protection made by the governmental entity, (2) the entity's
failure to protect, and (3) reliance by the individual on the
promise, causing damage to the individual. Id. at 482, 495 S.E.2d
at 717 (citing Braswell, 330 N.C. at 371, 410 S.E.2d at 902); see
also Cockerham-Ellerbee v. Town of Jonesville, 176 N.C. App. 372,
377, 626 S.E.2d 685, 689 (2006) (quoting Braswell, 330 N.C. at 371,
410 S.E.2d at 902). [T]he 'special duty' exception . . . is avery narrow one; it should be applied only when the promise,
reliance, and causation are manifestly present. Braswell, 330
N.C. at 372, 410 S.E.2d at 902.
As the dissent notes, the plaintiff bears the burden to allege
and prove an exception to the public duty doctrine. See
Guilford County, 355 N.C. 161, 170, 558 S.E.2d 490, 497 (2002).
However, the dissent contends that [t]he plaintiff neither
asserted nor proved nor did the Commission make any findings of
fact or conclusions of law to show either of the means to
establish a special duty/special relationship existed. This
contention is faulty for a number of reasons.
First, the plaintiff asserted the special duty exception by
presenting evidence that a special duty existed. Although
plaintiff did not plead a special duty in his complaint, after the
defense was pled, plaintiff's evidence with respect to the issue,
to which defendant did not object, was an implied amendment to
conform to the evidence. N.C.R. Civ. Pro. 15(b) (2005) (When
issues not raised by the pleadings are tried by the express or
implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings.)
[Rule 15(b)] allows issues to be raised by
liberal amendments to pleadings, and, in some
cases, by the evidence, the effect of the rule
being to allow amendment by implied consent to
change the legal theory of the cause of action
so long as the opposing party has not been
prejudiced in presenting his case, i.e., where
he had a fair opportunity to defend his case.
Taylor v. Gillespie, 66 N.C. App. 302, 305, 311 S.E.2d 362, 364
(1984) (emphasis omitted). In the present case, the plaintiff anddefendant stipulated to the facts supporting the issue of the
special duty exception, and plaintiff further offered exhibits in
support of the issue. Defendant cannot argue prejudice when it
voluntarily stipulated to the facts.
Second, the plaintiff met his burden of proof where the facts
supporting the exception were admitted by stipulation.
Third, the Commission made findings of fact and conclusions of
law to support the application of the special duty exception. The
Commission specifically found:
On July 27, 1999, plaintiff entered into
an Offer to Purchase and Contract for Lot No.
871, Hattaway Circle, located in Montgomery
County, North Carolina. One of the conditions
precedent to plaintiff purchasing Lot 871 was
that the lot perk for a three-bedroom
On July 30, 1999, after confirming that
the soils then present on Lot 871 were
suitable for a septic system, The Montgomery
County Health Department, Environmental Health
Section, issued Improvement Permit No. 99291,
authorizing the construction of a
three-bedroom residence on Lot 871.
In reliance upon the permit, plaintiff
purchased Lot 871 for a purchase price of
On September 5, 2002, John K. Fowlkes,
then acting Environmental Health Coordinator
for The Montgomery County Health Department,
notified Plaintiff that Lot 871 did not pass
the perk test.
These findings contain all of the elements of the special duty
exception. NCDENR, through its agent the Health Department, made
a promise to plaintiff by issuing the improvement permit warranting
that plaintiff could construct a three-bedroom home on the property
as described in the site plan. Plaintiff relied on the permit in
negotiating the purchase of the property. Finally, NCDENR, throughits agent the Health Department, revoked the permit after plaintiff
purchased the lot, prohibiting plaintiff from building on the lot
as the permit promised he would be able to do, and causing
plaintiff to incur additional expenses in order to use the lot as
he had planned.
Based on these findings of fact, the Commission concluded:
[NCDENR] and The Montgomery County Health
Department owed plaintiff a duty of care in
making a proper assessment of Lot 871 before
issuing Improvement Permit No. 99291 . . . .
The defendants failed in this duty of care
when they admittedly negligently issued Permit
No. 99291 upon discovering that the property
was unsuitable for a ground absorption sewage
system. Defendant's breach directly and
proximately caused plaintiff to incur damages
. . . .
This conclusion comprises all of the elements of the special duty
exception except the reliance element. The conclusion also
indicates that the duty was owed to plaintiff individually rather
than solely to the general public. It is this conclusion of law
that defendant assigned as error for failure to apply the public
duty doctrine. The Commission's conclusions of law are reviewed
de novo. McRae, 358 N.C. at 496, 597 S.E.2d at 701. Although
the Commission failed to specifically conclude that the special
duty exception to the public duty doctrine applied, its conclusion
was adequately supported by the facts; therefore, it is affirmed.
II. Admission of Negligence
 Next, NCDENR argues that the Industrial Commission's
conclusion that NCDENR admitted to negligent conduct is not
supported by the findings of fact or competent evidence. In itsfinding of fact 9, the Commission found [p]rior to the trial of
this matter, defendants admitted that they were negligent in
issuing Permit No. 99291. Since NCDENR did not assign error to
this finding of fact, it is binding upon us. N.C.R. App. P. 10(a)
(scope of review is limited to the consideration of the assignments
of error set out in the record on appeal); Johnson v. Herbie's
Place, 157 N.C. App. 168, 180, 579 S.E.2d 110, 118 (2003). Finding
of fact 9 adequately supports the Commission's conclusion that
NCDENR admitted negligence.
III. Interest Rate Damages
 NCDENR also assigned error to the future interest rate
damages awarded by the Commission, arguing that they were not
reasonably foreseeable, were speculative, remote, and not
reasonably certain, and were awarded according to an improper
measure of damages. The Commission based its award on a finding of
fact that as a result of defendants' negligence and the resulting
delay in construction, plaintiff will incur an increased interest
rate of at least 1.5% over the term of its loan. The cost of this
1.5% increase in interest is $174,745.54. NCDENR argues that this
finding is not supported by the competent evidence, and that it
does not support the Commission's conclusion of law that
[d]efendants' breach directly and proximately caused plaintiff to
incur damages in the amount of $267,733.00.
Assuming, arguendo, the Commission's finding of fact is
supported by competent evidence, the finding does not support the
Commission's conclusion that plaintiff is entitled to recover$174,745.54 in future interest damages. It is true that a
tortfeasor is responsible for all damages directly caused by his
misconduct, and for all indirect or consequential damages which are
the natural and probable effect of the wrong, under the facts as
they exist at the time the same is committed and which can be
ascertained with a reasonable degree of certainty. Binder v.
General Motors Acceptance Corp., 222 N.C. 512, 514, 23 S.E.2d 894,
895 (1943) (quoting Conrad v. Shuford, 174 N.C. 719, 721, 94 S.E.
424, 425 (1917)). However, [d]amages which are uncertain and
speculative . . . are too remote to be recoverable. Johnson v.
Atlantic Coast Line R.R. Co., 184 N.C. 101, 105, 113 S.E. 606, 608
(1922). The future interest damages included in the Commission's
award are uncertain, speculative, and too remote to be recoverable.
The figure for future interest damages was calculated based on
financial data about projected interest rates, the anticipated
number of years over which the loan would accrue interest, and the
type of loan (fixed, as opposed to variable). The numbers further
depend on plaintiff completing construction of the home on time and
according to schedule. In sum total, these factors make the figure
of $174,745.54 uncertain and speculative. Our Supreme Court has
held that such damages are not recoverable, id.; thus, we hold that
the Commission erred in including the amount of $174,745.54 in the
With regard to the proper measure of damages, NCDENR argues
that the Commission should have used the diminution of value of the
property to calculate the damages. However, NCDENR did not assignerror to the Commission's award of damages for the cost of
purchasing the adjoining lot and constructing a suitable septic
system on the lot and the increased construction costs. Thus, our
review is limited to the award of future interest rate damages.
N.C.R. App. P. 10(a) ([T]he scope of review on appeal is confined
to a consideration of those assignments of error set out in the
record on appeal.) Because we reverse the Commission's award of
future interest rate damages on the grounds that they are
speculative, we need not address the measure of damages used.
In addition to the speculative nature of the damages, the
award is also error because it fails to discount the future
interest rate damages to present value. It is well established
that damages for losses which may occur in the future, such as the
future interest rate payments in this case, must be reduced to the
present worth of such losses, and it is error not to do so. Faison
v. Cribb, 241 N.C. 303, 303, 85 S.E.2d 139, 140 (1954); Daughtry v.
Cline, 224 N.C. 381, 384, 30 S.E.2d 322, 324 (1944); Lamont v.
Highsmith Hospital, 206 N.C. 111, 112-13, 173 S.E. 46, 46-47
IV. Award of Costs and Attorney Fees
 NCDENR also assigns error to the award of costs and
attorney fees to the plaintiff, arguing these amounts are not
recoverable under the Tort Claims Act.
We consider NCDENR's argument first as to costs. Our statutes
state [t]he Industrial Commission is authorized . . . to tax the
costs against the loser in the same manner as costs are taxed bythe superior court in civil actions, N.C. Gen. Stat. § 143-291.1
(2005), and in civil actions costs may be allowed or not, in the
discretion of the court, unless otherwise provided by law. N.C.
Gen. Stat. § 6-20 (2005). When read together, these statutes give
the Commission discretion to tax costs against the losing party.
Where the court has taxed costs in a discretionary manner its
decision is not reviewable. Dixon, Odom & Co. v. Sledge, 59 N.C.
App. 280, 286, 296 S.E.2d 512, 516 (1982) (citing Hoskins v.
Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963)). Because the
Commission's authority to tax costs is discretionary, its award is
not reviewable by this Court, absent a showing of manifest abuse of
discretion. However, its conclusions of law are reviewable de
novo. McRae, 358 N.C. at 496, 597 S.E.2d at 701.
The Commission cited several statutes supporting its award of
attorney fees, including N.C.G.S. §§ 1A-1 Rule 11, 6-21.5, 7A-
305(d)(3), 143-291, and 143-291.1. None of these statutes support
the Commission's award in the present case.
The Commission first cited N.C.G.S. § 1A-1 Rule 11 in support
of its award. Rule 11 allows a court to award attorney fees as an
appropriate sanction against an attorney who violates the rule. To
comply with Rule 11, an attorney who submits a signed pleading,
motion, or other paper to the court must ensure:
[T]o the best of his knowledge, information,
and belief formed after reasonable inquiry
[the document] is well grounded in fact and is
warranted by existing law or a good faith
argument for the extension, modification, or
reversal of existing law, and that it is not
interposed for any improper purpose, such asto harass or to cause unnecessary delay or
needless increase in the cost of litigation.
By citing Rule 11 as support for an award of attorney fees, the
Commission implies that the award is imposed as a sanction against
NCDENR for violation of the rule. We note that the imposition of
[Rule 11] sanctions is reviewable de novo, but the choice of
sanction is reviewable under an abuse of discretion standard.
Crutchfield v. Crutchfield, 132 N.C. App. 193, 195, 511 S.E.2d 31,
Reviewing the imposition of the sanction de novo, we find no
facts to support it. The Commission made only one finding that
contains any of the elements of a Rule 11 sanction, as follows:
Defendants' position on damages cannot be
supported by the evidence of record.
Defendants have raised defenses that cannot be
supported in law, contending that plaintiff
would have been obligated to purchase a second
lot even if defendants had not been negligent,
or that plaintiff should be compelled to
accept the untested system outlined herein.
Defendants' contention that either fact
lowered plaintiff's damage claim to
approximately $8,000.00 was belied by their
Although the Commission cited the lack of facts and law to support
the amount of damages for which NCDENR advocated, the amount of
$8,000 did not appear in any pleading, motion, or other paper filed
with the Commission, but was rather an argument made by defense
counsel at the hearing. As such, defendants' position is not the
proper subject of a Rule 11 sanction. Finding no other grounds for
Rule 11 sanctions, we hold that the Commission erred to the extentit relied on Rule 11 to support its award of attorney fees to
The Commission next relied on N.C.G.S. § 6-21.5 to support its
award of attorney fees. Section 6-21.5 states [i]n any civil
action . . . the court, upon motion of the prevailing party, may
award a reasonable attorney's fee to the prevailing party if the
court finds that there was a complete absence of a justiciable
issue of either law or fact raised by the losing party in any
pleading. The Commission made no findings to support a conclusion
that NCDENR presented no justiciable issue. Thus, § 6-21.5 is
inapplicable in the present case and does not support the
Commission's award of attorney fees.
The Commission also cited N.C.G.S. § 7A-305(d)(3) as authority
for its award of attorney fees. This statute authorizes the court
in civil actions to assess or recover [c]ounsel fees, as provided
by law. The statute does not specifically grant the courts the
authority to award attorney fees, but only recognizes that such
authority may be conferred by other statutes. Having found no
other statute which is applicable to the present case that grants
the courts the authority to award attorney fees, we conclude that
§ 7A-305(d)(3) does not grant such authority to the courts and, by
extension, the Commission.
Finally, the Commission cited N.C.G.S. §§ 143-291 and 143-
291.1 support an award of attorney fees. When read by themselves,
neither section grants the Commission the authority to award
attorney fees. However, when read together with § 6-21.1, thisCourt has held the Industrial Commission has jurisdiction and
authority to award attorney's fees in a Tort Claims Act case.
Karp v. Univ. of North Carolina, 88 N.C. App. 282, 284, 362 S.E.2d
825, 826 (1987), aff'd per curiam, 323 N.C. 473, 373 S.E.2d 430
(1988). Section 6-21.1 provides where the judgment for recovery
of damages is ten thousand dollars ($10,000) or less, the presiding
judge may, in his discretion, allow a reasonable attorney fee . .
. . N.C. Gen. Stat. § 6-21.1 (2005). The total damages awarded
in the present case were $267,733. Even excluding the future
interest damages of $174,754.54, the plaintiff's damages far exceed
the statutory maximum of $10,000, and so we find that the
Commission was not authorized under §§ 143-291 and 143-291.1 to
award attorney fees to plaintiff.
Because none of the statutes cited by the Commission support
its award of attorney fees to plaintiff, we hold the Commission
erred in awarding attorney fees.
V. Acceptance of Additional Evidence
NCDENR's final argument is that the Commission erred in
denying its motion, made after the conclusion of the hearing, for
the Commission to take additional evidence regarding present day
discounted value of the future interest rate damages. Because we
have reversed and remanded the award of future interest damages on
other grounds, we need not consider whether the Commission erred in
refusing the additional evidence.
Affirmed as to the Commission's denial of NCDENR's motion to
dismiss based on the public duty doctrine and its award of costs,reversed and remanded as to award of interest rate damages and
Affirmed in part; reversed and remanded in part.
Judge CALABRIA concurs.
Judge TYSON concurs in part and dissents in part by separate
TYSON, Judge, concurring in part, dissenting in part.
I concur with the majority's holding that NCDENR properly
preserved its assignment of error, that its appeal is properly
before us, and that the public duty doctrine applies to the facts
The majority's opinion also holds that plaintiff showed, and
the Commission found, a special relationship existed or a special
duty was owed by NCDENR to plaintiff.
Plaintiff bears the burden of proof to overcome the public
duty doctrine. Wood v. Guilford Cty., 355 N.C. 161, 170, 558
S.E.2d 490, 497 (2002). The majority's opinion correctly notes the
special duty/special relationship exceptions to the public duty
doctrine are narrow exceptions. Stone v. N.C. Dept. Of Labor,
347 N.C. 473, 482-83, 495 S.E.2d 711, 717, cert. denied, 525 U.S.
1016, 142 L. Ed. 2d 449 (1998) (These exceptions are narrowly
construed and applied.); Braswell v. Braswell, 330 N.C. 363, 372,
410 S.E.2d 897, 902 (1991) ([T]he 'special duty' exception to the
general rule . . . is a very narrow one; it should be applied only
when the promise, reliance, and causation are manifestlypresent.). Nothing in the record shows that plaintiff asserted or
proved, or that the Commission found, a special duty was owed or
special relationship existed between plaintiff and NCDENR.
NCDENR's motion to dismiss should have been granted. I vote
to reverse the Commission's opinion and award and remand for entry
of dismissal. I respectfully dissent.
On 27 July 1999, plaintiff entered into an Offer to Purchase
and Contract (the contract) with Donald L. McAvoy, Jr. (Seller)
for Lot 871 (Lot 871) in Montgomery County, North Carolina. The
contract was contingent upon the lot perking for 3 bedrooms. On
30 July 1999, Seller's agent Tommy Blake obtained an improvement
permit from the Montgomery County Health Department (Permit
99291). Permit 99291 approved the installation of an on-site
wastewater system and was subject to revocation if the site plans
or intended use change[d] from those shown above or on the
application. Permit 99291 authorized construction of the
wastewater system for five years from the date of issuance.
Nearly three years after purchasing Lot 871, plaintiff
modified his site plan and moved the driveway from the left-hand to
the right-hand portion of Lot 871. In June 2002, plaintiff
notified the Montgomery County Health Department of the proposed
change and was informed that he must reapply for an improvement
permit because of his changes.
On 3 June 2002, plaintiff applied for an improvement permit.
Montgomery County Health Department denied plaintiff's applicationdue to unsuitable soil topography, unsuitable soil characteristics,
and unsuitable soil depth. On 5 September 2002, Montgomery County
Environment Health Coordinator Jon Fowlkes also notified plaintiff
that the original Permit 99291 was revoked as of 21 August 2002
because the site was unsuitable for a ground absorption sewage
II. Standard of Review
The standard of review under the Tort Claims Act is well
settled. [W]hen considering an appeal from the Commission, our
Court is limited to two questions: (1) whether competent evidence
exists to support the Commission's findings of fact, and (2)
whether the Commission's findings of fact justify its conclusions
of law and decision. Simmons v. N.C. Dept. of Transportation, 128
N.C. App. 402, 405-06, 496 S.E.2d 790, 793 (1998). Mixed issue of
fact and law and conclusions of law are reviewable de novo on
appeal. Starco, Inc. v. AMG Bonding and Ins. Services, 124 N.C.
App. 332, 336, 477 S.E.2d 211, 215 (1996).
III. Exceptions to Public Duty Doctrine
In all negligence actions, the plaintiff must allege and prove
the defendant owed the plaintiff a duty of care. Wood, 355 N.C. at
170, 558 S.E.2d at 497. To be actionable, the defendant must
specifically owe a duty to the injured plaintiff, and not to the
public generally. Id. at 166, 558 S.E.2d at 493-94. This burden
of proof remains on the plaintiff whether the defendant is a
governmental entity or a private person. Id. The public duty doctrine is a separate rule of common law
negligence that may limit tort liability, even when the State has
waived sovereign immunity. Myers v. McGrady, 360 N.C. 460, 465,
628 S.E.2d 761, 766 (2006). The public duty doctrine provides
that governmental entities and their agents owe duties only to the
general public, not to individuals, absent a 'special relationship'
or 'special duty' between the entity and the injured party.
Stone, 347 N.C. at 477-78, 495 S.E.2d at 714 (emphasis supplied).
The rule provides that when a governmental entity owes a duty
to the general public, particularly a statutory duty, individual
plaintiffs may not enforce the duty in tort. Myers, 360 N.C. at
465-66, 628 S.E.2d at 766 (emphasis supplied). The public duty
doctrine applies to state agencies required by statute to conduct
inspections for the public's general protection. Wood, 355 N.C.
at 167, 558 S.E.2d at 495.
The majority's opinion correctly notes that the public duty
doctrine is subject to two exceptions:
(1) where there is a special relationship
between the injured party and the governmental
entity; and (2) when the governmental entity
creates a special duty by promising protection
to an individual, the protection is not
forthcoming, and the individual's reliance on
the promise of protection is causally related
to the injury suffered. These exceptions are
narrowly construed and applied.
Stone, 347 N.C. at 482-83, 495 S.E.2d at 717 (emphasis supplied).
This Court recently held a special duty may be created in one
of three ways.
First, a special duty is created where the
municipality, through its police officers, . .. promise[s] protection to an individual, the
protection is not forthcoming, and the
individual's reliance on the promise of
protection is causally related to the injury
suffered. Second, a special duty may be
created by virtue of a special relationship,
such as that between a state's witness or
informant . . . [and] law enforcement
officers. We note that some confusion has
arisen in this area due to the fact that this
Court has previously referred to the special
relationship exception as being a separate
exception to the public duty doctrine, when,
in fact, it is actually a subset of the
special duty exception. A special
relationship is simply another way to show
that a special duty exists. Third, a special
duty may be created by statute; provided there
is an express statutory provision vesting
individual claimants with a private cause of
action for violations of the statute. Our
courts have generally held that a private
right of action only exists where the
legislature expressly provides for such in the
Cockerham-Ellerbee v. Town of Jonesville, 176 N.C. App. 372, 377,
626 S.E.2d 685, 689 (2006) (internal quotations and citations
omitted). The plaintiff neither asserted nor proved nor did the
Commission make any findings of fact or conclusions of law to show
either of these means to establish a special duty/special
relationship existed. No express statutory provision vested
plaintiff with a private right of action. Id. No special
relationship was shown between plaintiff and NCDENR. Id.
(internal quotation omitted).
[T]he 'special duty' exception to the general rule . . . is
a very narrow one; it should be applied only when the promise,
reliance, and causation are manifestly present. Braswell, 330
N.C. at 372, 410 S.E.2d at 902. In order to claim the specialduty/special relationship exception of the public duty doctrine,
the plaintiff must allege and prove: (1) a promise of protection
made by the governmental entity; (2) the entity's failure to
protect; and (3) reliance by the individual on the promise
resulting in damage to the individual. Stone, 347 N.C. at 482-83,
495 S.E.2d at 717.
A. Promise of Protection
Plaintiff failed to show NCDENR made any promise to him. See
Hunt v. N.C. Dept. of Labor, 348 N.C. 192, 199, 499 S.E.2d 747, 751
(1998) (If the plaintiff failed to allege an actual promise, then
the special duty exception cannot be a basis of liability.); cf.
Davis v. Messer, 119 N.C. App. 44, 56, 457 S.E.2d 902, 910 (Holding
the plaintiffs' allegations that the Town . . . promised it would
provide fire-fighting assistance and protection; [that] the
promised protection never arrived; and [that] plaintiffs relied
upon the promise to respond to the fire as their exclusive source
of aid, resulting in the complete destruction of their home,
stated a claim for relief under the special duty exception to the
public duty doctrine.), disc. rev. denied, 341 N.C. 647, 462 S.E.2d
The Commission's finding that Montgomery County Health
Department issued Permit 99291 does not create a promise to protect
plaintiff. The majority's opinion strains to impliedly excuse
plaintiff's failure to allege any promise and the Commission's
failure to address NCDENR's assertions of the public duty doctrine.
Nothing in the record shows NCDENR extended a promise of protectionto plaintiff when Permit 99291 was issued. Plaintiff failed to
prove, and the Commission failed to enter, findings of fact or
conclusions of law to establish the first element in the special
duty/special relationship exception to the public duty doctrine.
B. Failure to Protect
Plaintiff also failed to show NCDENR's issuance of Permit
99291 was NCDENR's failure to protect him. The Commission failed
to enter findings of fact that NCDENR failed to protect plaintiff
when it issued Permit 99291.
Even if NCDENR admitted Ezzell was negligent in issuing the
original permit, Ezzell's statutory duty to inspect was owed to the
public generally and not to any individual. The purpose of the
inspection and issuance of permits to install septic tank systems
is for the protection and benefit of public health, safety, and
welfare. N.C. Gen. Stat. § 130A-333 (2005); see Stone, 347 N.C. at
483, 495 S.E.2d at 717 (The public duty doctrine applied and duty
was for the benefit of the general public when the statute charged
the Commissioner of Labor with the duty to visit and inspect at
reasonable hours, as often as practicable, all of the factories,
mercantile establishments, mills, workshops, public eating places,
and commercial institutions in the State.); Hunt, 348 N.C. at 198,
499 S.E.2d at 751 (The public duty doctrine applied when the
Amusement Device Safety Act and the rules promulgated thereunder
are for the protection of the public from exposure to such unsafe
conditions and do not create a duty to a specific individual.). Plaintiff failed to show, and the Commission failed to enter,
findings of fact or conclusions of law that he established the
second element in the special duty/special relationship exception
to the public duty doctrine.
C. Nonreliance and Damages
Although the Commission entered finding of fact numbered 5
that plaintiff relied on Permit 99291 as a condition to his
purchase of the lot, the Commission failed to enter any finding of
fact or conclusion of law that plaintiff relied on utilizing Permit
99291. Plaintiff's conduct and inaction shows he never relied on
Permit 99291. Three years after purchasing the lot, plaintiff
changed his site plan and sought an entirely new permit. Plaintiff
failed to challenge or appeal the revocation of the original 1999
Permit 99291 and never sought to construct improvements in reliance
of that permit. Plaintiff could have, but failed to, assert
available administrative and judicial remedies.
Under N.C. Gen. Stat. § 150B-43 (2005):
[a]ny person who is aggrieved by the final
decision in a contested case, and who has
exhausted all administrative remedies made
available to him by statute or agency rule, is
entitled to judicial review of the decision
under this Article, unless adequate procedure
for judicial review is provided in another
statute, in which case the review shall be
under such other statute. Nothing in this
Chapter shall prevent any person from invoking
any judicial remedy available to him under the
law to test the validity of any administrative
action not made reviewable under this Article.
(Emphasis supplied). The North Carolina Administrative Code controls the issuance
of septic system improvement permits. N.C. Admin. Code tit. 15A,
18A.1937 (2006). The Code also states that [a]ppeals concerning
the interpretation and enforcement of the rules in this Section
shall be made in accordance with G.S. 150B and 10 NCAC 1B. N.C.
Admin. Code tit. 15A, 18A.1965 (2006).
Plaintiff's failures to construct improvements consistent
with the conditions of the original permit or to challenge the
County's revocation of the original 1999 permit shows he never
intended to rely on the original permit. Plaintiff voluntarily
changed the approved site plan three years after the original
permit 99291 was issued and did not appeal the County's denial of
his June 2002 application for a new improvement permit. These
actions show the absence of any reliance by plaintiff on Permit
Plaintiff has also failed to show, and the Commission failed
to enter, findings of fact plaintiff suffered damages from the
negligently issued Permit 99291. Competent evidence in the record
and a finding of fact shows NCDENR provided plaintiff with an
option to install a septic system within the confines of Lot 871.
Plaintiff did not exercise this option, but decided to purchase an
adjoining lot on which to install his septic system. Plaintiff
failed to show he suffered any damages resulting from the
negligently issued Permit 99291. The record shows that plaintiff
failed to prove, and the Commission failed to enter, any findings
of fact to support the third element of reliance or damages toprove the special duty/special relationship exception to the
public duty doctrine.
Defendant properly asserted plaintiff's claims were barred by
the public duty doctrine. The Commission failed to make any
findings of fact or conclusion of law that plaintiff alleged or
proved a special relationship existed or a special duty was owed
by NCDENR to plaintiff. Plaintiff, not NCDENR, carried the burden
of proof on this issue. Wood
, 355 N.C. at 170, 558 S.E.2d at 497.
Nothing before the Commission or this Court tends to show
NCDENR extended a promise to protect plaintiff, that NCDENR failed
to protect plaintiff, and that plaintiff relied and suffered
damages or did anything other than to inspect for the general
public's health and benefit. I vote to reverse the Commission's
opinion and award and remand to the Commission for dismissal of
plaintiff's claim. I respectfully dissent.
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