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  "name": "WAYNE STREET MOBILE HOME PARK, LLC and all others similarly situated, Plaintiff-Appellant v. NORTH BRUNSWICK SANITARY DISTRICT, Defendant-Appellee",
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    "judges": [
      "Chief Judge MARTIN and Judge McCULLOUGH concur."
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    "parties": [
      "WAYNE STREET MOBILE HOME PARK, LLC and all others similarly situated, Plaintiff-Appellant v. NORTH BRUNSWICK SANITARY DISTRICT, Defendant-Appellee"
    ],
    "opinions": [
      {
        "text": "McGEE, Judge.\nWayne Street Mobile Home Park, LLC, (Plaintiff) is a North Carolina corporation operating a mobile home park located in Brunswick County, North Carolina. North Brunswick Sanitary District (Defendant), currently known as Brunswick Regional Water and Sewer District H2GO, is a sanitary district also operating in Brunswick County, and is in the business of treating and distributing water. Defendant\u2019s predecessor in interest was called Leland Sanitary District, created in 1976.\nPlaintiff has been one of Defendant\u2019s customers since approximately 2003 and has purchased water from Defendant since that time. Plaintiff has been late in paying its water bill on six different occasions and has paid late fees, totaling $25.6.08. The late fees charged were approximately ten percent of the total balance due for each bill.\nPlaintiff filed a complaint on 4 January 2010 alleging that, pursuant to North Carolina Utilities Commission (N.C.U.C.) Rule R12-9(d), Defendant could not charge a late payment in excess of one percent of the balance due. Plaintiff further alleged that Defendant was a \u201cpublic utility\u201d as defined by N.C. Gen. Stat. \u00a7 62-3(23)(a) and, under N.C. Gen. Stat. \u00a7 62-110.5, was not exempt from regulation by the North Carolina Utilities Commission (the Commission). In its complaint, Plaintiff requested \u201c[t]hat the [c]ourt determine that this action shall proceed as a class action[.]\u201d Plaintiff\u2019s complaint also alleged unfair and deceptive trade practices by Defendant, and sought an injunction enjoining Defendant from charging excessive late fees.\nPlaintiff\u2019s attorney stated in an affidavit that, prior to the filing of Plaintiff\u2019s complaint, he contacted William E. Grantmyre (Mr. Grantmyre), an attorney for the Public Staff of the Commission. Conversations and emails between Plaintiff\u2019s attorney and Mr. Grantmyre were documented in Mr. Grantmyre\u2019s affidavit and show that Plaintiff\u2019s attorney asked Mr. Grantmyre whether the Commission \u201cregulated sanitary districts, and specifically, the North Brunswick Sanitary District.\u201d Mr. Grantmyre informed Plaintiff\u2019s attorney that, \u201cto [his] knowledge the Commission did not regulate sanitary districts, but [he] was unable to explain to [Plaintiff\u2019s attorney] why the Commission did not regulate sanitary districts.\u201d Mr. Grantmyre and Plaintiff\u2019s attorney discussed the definition of and exceptions to the term \u201cpublic utility\u201d as set out in N.C. Gen. Stat. \u00a7 62-3(23)(a)(2) and N.C. Gen. Stat. \u00a7 62-3(23)(d). Mr. Grantmyre and Plaintiff\u2019s attorney also discussed that N.C. Gen. Stat. \u00a7 62-3(23)(d) did \u201cnot state a specific exception for sanitary districts[.]\u201d\nMr. Grantmyre also informed Plaintiff\u2019s attorney that \u201cexemptions to Commission regulation were frequently granted through Commission orders and decisions pursuant to N.C. Gen. Stat. \u00a7 62-110.5.\u201d Plaintiffs attorney asked Mr. Grantmyre if there were any records available to indicate an exemption to North Brunswick Sanitary District. Mr. Grantmyre provided Plaintiff\u2019s attorney with a copy of a \u201cNovember 22, 1988, Docket No. W-279, Sub 19 Commission Order[.]\u201d This order stated that \u201cLeland Sanitary District is an \u2018owner exempt from regulation.\u2019 \u201d Plaintiff\u2019s attorney was not satisfied with this order because the exemption language appeared in the factual recital portion of the order rather than in the decretal portion of the order. Plaintiff\u2019s attorney asked Mr. Grantmyre for an original order exempting the Leland Sanitary District from regulation. Mr. Grantmyre was unable to find such an order.\nAfter the filing of Plaintiff\u2019s complaint, Defendant\u2019s attorney informed Plaintiff\u2019s attorney that sanitary districts were not regulated by the Commission and attempted to provide proof of this assertion. Prior to Defendant\u2019s filing a motion to dismiss and a motion seeking attorneys\u2019 fees and sanctions, Defendant\u2019s attorney also gave Plaintiff\u2019s attorney an opportunity to dismiss Plaintiff\u2019s claim.\nDefendant did file a motion to dismiss on 16 March 2010, pursuant to N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6). In its motion, Defendant alleged that Plaintiff had failed to state a claim on which relief could be granted because Defendant was \u201ca corporate and body politic of the State of North Carolina organized and existing pursuant to N.C.G.S. \u00a7 130A-47 etseq. and thus not regulated by the [] Commission.\u201d Pursuant to N.C. Gen. Stat. \u00a7 6-21.5 and \u00a7 75-16.1, Defendant also filed a motion for attorneys\u2019 fees and sanctions on 16 March 2010, for the same reasons stated in its motion to dismiss.\nThe trial court entered an order granting Defendant\u2019s motion to dismiss on 7 May 2010, agreeing with Defendant\u2019s reasoning and dismissing Plaintiff\u2019s complaint \u201csince all of Plaintiff\u2019s contentions hinge on whether or not sanitary districts are regulated by the Utilities Commission])]\u201d The trial court also entered an order on 7 May 2010, granting Defendant\u2019s motion for attorneys\u2019 fees, again stating that Defendant was not regulated by the Commission. The trial court\u2019s order granting Defendant\u2019s motion for attorneys\u2019 fees concluded that \u201cthere was a complete absence of a justiciable issue of either law or fact raised in [Plaintiff\u2019s] complaint],]\u201d and awarded Defendant $3,395.00 in attorneys\u2019 fees, plus interest and the costs of the action. Plaintiff appeals.\nDiscussion\nPlaintiff argues the trial court erred in granting Defendant\u2019s motion to dismiss and Defendant\u2019s motion for attorneys\u2019 fees. Plaintiff contends its complaint stated a claim upon which relief can be granted and that, because Defendant is a \u201cpublic utility\u201d as defined by N.C. Gen. Stat. \u00a7 62-3(23)a and is not excepted or exempted from regulation by the Commission, Plaintiff did raise a justiciable issue. We disagree.\nI. Motion to Dismiss\nPlaintiff argues the trial court erred in granting Defendant\u2019s motion to dismiss because Plaintiff\u2019s complaint \u201callege[d] that Defendant is a public utility, [and] is not exempt from regulation by the [Commission.]\u201d Plaintiff contends that sanitary districts such as Defendant are \u201cpublic utilities,\u201d as defined by N.C. Gen. Stat. \u00a7 62-3(23)(a) and therefore are subject to regulation by the Commission. Assuming Plaintiff\u2019s allegation is correct, Defendant would then be subject to the Commission\u2019s regulation of late charges pursuant to N.C. Admin. Code tit. 4, r. 11.R12-9 which requires that \u201c[n]o utility shall apply a late payment, interest, or finance charge to the balance in arrears at the rate of more than 1% per month.\u201d N.C. Admin. Code tit. 4, r. 11.R12-9 (June 2010). Plaintiff claims that Defendant is not subject to an exception from regulation pursuant to N.C. Gen. Stat. \u00a7 62-3(23)(d). We disagree.\nOur Court has held that the standard of review for an order granting a motion to dismiss pursuant to Rule 12(b)(6) is\nwhether the complaint states a claim for which relief can be granted under some legal theory when the complaint is liberally construed and all the allegations included therein are taken as true. On a motion to dismiss, the complaint\u2019s material factual allegations are taken as true. Dismissal is proper \u201cwhen one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiffs claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff\u2019s claim.\u201d On appeal of a 12(b)(6) motion to dismiss, this Court \u201cconducts a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court\u2019s ruling on the motion to dismiss was correct.\u201d\nBurgin v. Owen, 181 N.C. App. 511, 512, 640 S.E.2d 427, 428-29 (2007) (citations omitted). \u201cA complaint may be dismissed on motion if clearly without any merit; and this want of merit may consist in an absence of law to support a claim, or in the disclosure of some fact that will necessarily defeat the claim.\u201d O\u2019Neill v. Bank, 40 N.C. App. 227, 232, 252 S.E.2d 231, 235 (1979).\nIn the present case, the trial court stated in its order granting Defendant\u2019s motion to dismiss that, \u201cafter reviewing the pleadings and receiving arguments of counsel,\u201d the trial court determined that Defendant was \u201cnot regulated by the [Commission].\u201d In its arguments, Defendant relies heavily on Paper Co. v. Sanitary District, 232 N.C. 421, 61 S.E.2d 378 (1950), to assert that sanitary districts are not public utilities regulated by the Commission.\nIn Paper Co., the plaintiff sought an injunction against a sanitary district to prevent it from ceasing to supply water to the plaintiff because of the demands of a prior contract with a third party. Id. In determining the validity of the contract between the sanitary district and the third party, our Supreme Court observed that sanitary districts are \u201cgwasi-municipal corporation^], . . . which [are] not under the control or supervision of the North Carolina Utilities Commission as to services or rates.\u201d Id. at 428, 61 S.E.2d at 383. Paper Co. does not define a \u201cgwasi-municipal corporation,\u201d but our Supreme Court has held that quasi-municipal corporations are entities that governments use to \u201cperform ancillary functions in government more easily and perfectly ... because of their character, special personnel, skill and care.\u201d Airport Authority v. Johnson, 226 N.C, 1, 9, 36 S.E.2d 803, 809 (1946).\nPlaintiff argues that Paper Co. is not controlling in the present case because Paper Co. was decided based upon the language of a statute that has now been repealed and superseded. As currently defined by N.C. Gen. Stat. \u00a7 62-3, a \u201cpublic utility\u201d is\na person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating in this State equipment or facilities for:\n2. Diverting, developing, pumping, impounding, distributing or furnishing water to or for the public for compensation[.]\nN.C. Gen. Stat. \u00a7 62-3(23)(a)(2) (2009). This statute further lists a number of exceptions including that \u201c[tjhe term \u2018public utility,\u2019 except as otherwise expressly provided in this Chapter, shall not include a municipality])]\u201d N.C.G.S. \u00a7 62-3(23)(d). \u201c \u2018Municipality\u2019 means any incorporated community, whether designated in its charter as a city, town, or village.\u201d N.C.G.S. \u00a7 62-3(19).\nIn 1950, when Paper Co. was decided, N.C. Gen. Stat. \u00a7 62-65, entitled \u201cDefinitions,\u201d made no mention of an exception for municipalities. Instead, the 1950 version of N.C. Gen. Stat. \u00a7 62-30 listed the supervisory powers of the Commission and stated that the\nUtilities Commission shall have general supervision over rates charged and the service given, as follows, to wit:\n(3) By electric light, power, water, and gas companies, pipe lines originating in North Carolina for the transportation of petroleum products, and corporations, other than such as are municipally owned or conducted[.]\nN.C. Gen. Stat. \u00a7 62-30 (1950) (emphasis added). The current version of the statute, N.C. Gen. Stat. \u00a7 62-32, is entitled: \u201cSupervisory powers; rates and service\u201d and does not include the same language. It merely states that: \u201cUnder the rules herein prescribed and subject to the limitations hereinafter set forth, the Commission shall have general supervision over the rates charged and service rendered by all public utilities in this State.\u201d N.C. Gen. Stat. \u00a7 62-32 (2009). The language now defining and excepting \u201cpublic utilities\u201d is included in the current N.C.G.S. \u00a7 62-3(23).\nPlaintiff contends that, while Paper Co. stated that sanitary districts are \u201cgwasi-municipal corporation^], . . . which [are] not under the control or supervision of the North Carolina Utilities Commission as to services or rates,\u201d Paper Co. is no longer binding. Paper Co., 232 N.C. at 428, 61 S.E.2d at 383. Plaintiff argues that the determination in Paper Co. is based on the language \u201cmunicipally owned or conducted,\u201d which has been removed from the current statutes and replaced with the word \u201cmunicipality.\u201d N.C.G.S. \u00a7 62-30(3); compare N.C.G.S. \u00a7 62-3(23)(d). Therefore, Plaintiff argues that Paper Co. is no longer controlling given the current statutes, and that sanitary districts are no longer excepted from Commission regulation.\nHowever, a closer reading of Paper Co. reveals that the Supreme Court makes no mention of the language \u201cmunicipally owned or conducted\u201d in its determination; nor does it assert that sanitary districts are \u201cmunicipalities.\u201d Instead, the Supreme Court explicitly stated in Paper Co. that sanitary districts are \u201cgwasi-municipal corporation[s],. . . which [are] not under the control or supervision of the North Carolina Utilities Commission as to services or rates.\u201d Paper Co., 232 N.C. at 428, 61 S.E.2d at 383.\nOur Supreme Court has held that \u201c[t]he cardinal rule of statutory construction is that legislative intent controls. In seeking to ascertain this intent, courts should consider the language of the statute, the spirit of the Act and what the statute seeks to accomplish.\u201d Derebery v. Pitt County Fire Marshall, 318 N.C. 192, 196, 347 S.E.2d 814, 817 (1986). When the exception in the statutes was changed from \u201cmunicipally owned or conducted\u201d to read only \u201cmunicipality,\u201d the exception was not altered so as to invalidate Paper Co. because the changed phrasing was not the dispositive language on which the decision in Paper Co. was based. Plaintiff has failed to show that the modification in the wording of the statute invalidates the Paper Co. decision. Contrary to Plaintiffs assertion, we hold that the change in statutory language was not intended to include \u201cquasi-municipal corporations\u201d or sanitary districts within the Commission\u2019s supervisory purview. Applying the factors for determining legislative intent outlined in Derebery to the case before us, there is no suggestion that the General Assembly intended to change the meaning of the statute to exclude sanitary districts. Therefore, Paper Co. continues to be valid and binding and sanitary districts are \u201cnot under the control or supervision of the North Carolina Utilities Commission as to services or rates.\u201d Paper Co., 232 N.C. at 428, 61 S.E.2d at 383. Thus, the trial court properly granted Defendant\u2019s motion to dismiss in that Plaintiff failed to present a claim upon which relief could be granted because \u201cthe complaint on its face reveals that no law supports the plaintiff\u2019s claim.\u201d Burgin, 181 N.C. App. at 512, 640 S.E.2d at 428-29.\nII. Attorneys\u2019 Fees\nPlaintiff next argues that the trial court erred in awarding attorneys\u2019 fees pursuant to N.C. Gen. Stat. \u00a7 6-21.5, because Plaintiff\u2019s complaint \u201craised justiciable issues of law and fact].]\u201d We disagree.\nN.C. Gen. Stat. \u00a7 6-21.5 (2009) states that\n[i]n any civil action, special proceeding, or estate or trust pro-' ceeding, the court, upon motion of the prevailing party, may award a reasonable attorney\u2019s 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 filing of a general denial or the granting of any preliminary motion, such as ... a motion to dismiss pursuant to G.S. 1A-1, Rule 12(b)(6) ... is not in itself a sufficient reason for the court to award attorney\u2019s fees, but may be evidence to support the court\u2019s decision to make such an award.\nIn reviewing an order granting a motion for attorneys\u2019 fees pursuant to N.C.G.S. \u00a7 6-21.5, \u201c[t]he presence or absence of justiciable issues in pleadings is ... a question of law that this Court reviews de novo.\" Free Spirit Aviation v. Rutherford Airport, - N.C. App. -, -, 696 S.E.2d 559, 563 (2010) (citation omitted). \u201cThe decision to award or deny attorney\u2019s fees under Section 6-21.5 is a matter left to the sound discretion of the trial court.\u201d Persis Nova Constr., Inc. v. Edwards, 195 N.C. App. 55, 67, 671 S.E.2d 23, 30 (2009). Therefore, we review the trial court\u2019s order granting attorneys\u2019 fees for abuse of discretion. Id. at 65, 671 S.E.2d at 29.\n\u201c \u2018A justiciable issue has been defined as an issue that is \u201creal and present as opposed to imagined or fanciful.\u201d \u2019 \u201d Sunamerica Financial Corp. v. Bonham, 328 N.C. 254, 257, 400 S.E.2d 435, 437 (1991) (citations omitted). \u201cIn order to find complete absence of a justiciable issue it must conclusively appear that such issues are absent even giving the pleadings the indulgent treatment they receive on motions for summary judgment or to dismiss.\u201d K & K Development Corp. v. Columbia Banking Fed. Savings & Loan, 96 N.C. App. 474, 479, 386 S.E.2d 226, 229 (1989) (citation omitted).\nUnder this deferential review of the pleadings, a plaintiff must either: (1) \u201creasonably have been aware, at the time the complaint was filed, that the pleading contained no justiciable issue;\u201d or (2) be found to have \u201cpersisted in litigating the case after the point where [Plaintiff] should reasonably have become aware that [the] pleading [Plaintiff] filed no longer contained a justiciable issue.\u201d\nCredigy Receivables, Inc. v. Whittington, \u2014 N.C. App. \u2014, \u2014, 689 S.E.2d 889, 895, disc. review denied, 364 N.C. 324, 700 S.E.2d 748 (2010) (citation omitted).\nPlaintiff argues that, because the trial court\u2019s order granting Defendant\u2019s motion to dismiss should be reversed, so should the award of attorneys\u2019 fees. As we have decided the trial court did not err in granting Defendant\u2019s motion to dismiss, Plaintiff\u2019s argument is without merit.\nPlaintiff also argues that the award of attorneys\u2019 fees should be reversed because Plaintiff\u2019s complaint \u201ccertainly raises justiciable issues of law and fact.\u201d In support of this argument, Plaintiff cites discussions between its attorney and Defendant\u2019s attorney concerning the existence of an order exempting Defendant from the Commission\u2019s supervisory powers. Plaintiff contends that \u201c [i]t is reasonable to assume if an Order and Decision exempting Defendant from regulation had been entered, either the [Commission] or Defendant would be able to locate it.\u201d Plaintiff further states that \u201cif Defendant has not obtained such an exemption, it has charged and collected unlawful late fees and is liable to Plaintiff as a matter of law.\u201d We disagree. Plaintiff\u2019s argument misses the mark because it is predicated on a determination that sanitary districts are subject to the Commission\u2019s supervisory powers \u2014 a determination that we have rejected. Because we have held that Defendant, as a sanitary district, is not a \u201cpublic utility\u201d for the purposes of Commission regulation, Plaintiff\u2019s argument is without merit. Paper Co. has not been overruled, nor have the intervening statutory changes invalidated it. Paper Co. is therefore still binding and controlling law on this issue, and this Court finds that Plaintiff did not present a justiciable issue. Therefore, in light of the absence of a justiciable issue, the trial court did not abuse its discretion in awarding Defendant attorneys\u2019 fees.\nAffirmed.\nChief Judge MARTIN and Judge McCULLOUGH concur.",
        "type": "majority",
        "author": "McGEE, Judge."
      }
    ],
    "attorneys": [
      "Robertson, Medlin & Bloss, PLLC, by John F. Bloss and Stephen E. Robertson, for Plaintiff-Appellant.",
      "Hogue Hill Jones Nash & Lynch, LLP, by Anna J. Averitt, for Defendant-Appellee."
    ],
    "corrections": "",
    "head_matter": "WAYNE STREET MOBILE HOME PARK, LLC and all others similarly situated, Plaintiff-Appellant v. NORTH BRUNSWICK SANITARY DISTRICT, Defendant-Appellee\nNo. COA10-1111\n(Filed 19 July 2011)\n1. Utilities\u2014 sanitary districts \u2014 collection of late fees\nThe trial court did not err by granting defendant\u2019s motion to dismiss a complaint challenging defendant\u2019s collection of late fees on the contention that sanitary districts are public utilities subject to the Utilities Commission\u2019s regulation of late charges. A 1950 case stated that sanitary districts are quasi-municipal corporations that are not under the control of the Utilities Commission as to services or rates, and a subsequent change in statutory language was not intended to include sanitary districts within the Commission\u2019s supervisory purview.\n2. Attorney Fees\u2014 challenge to late fees \u2014 utilities\nThe trial court did not err by awarding attorney fees pursuant to N.C.G.S. \u00a7 6-21.5 based on plaintiff not raising justiciable issues of law and fact. Plaintiff\u2019s argument was without merit because it was predicated on sanitary districts being subject to the Utilities Commission\u2019s supervisory powers, which they are not.\nAppeal by Plaintiff from orders entered 7 May 2010 by Judge Ola M. Lewis in Superior Court, Brunswick County. Heard in the Court of Appeals 21 February 2011.\nRobertson, Medlin & Bloss, PLLC, by John F. Bloss and Stephen E. Robertson, for Plaintiff-Appellant.\nHogue Hill Jones Nash & Lynch, LLP, by Anna J. Averitt, for Defendant-Appellee."
  },
  "file_name": "0554-01",
  "first_page_order": 564,
  "last_page_order": 572
}
