Any stock brokerage website will tell you that “past performance is not indicative of future results.” The same is true in the context of land use permitting, such that what a municipality “had done” cannot ripen a claim to prevent against what a municipality “might do.”

In Fleischhauer v. Town of Topsail Beach, No. COA17-915 (March 6, 2018), the North Carolina Court of Appeals held that the plaintiffs’ declaratory judgment and injunctive relief claims were unripe because there had not yet been any final decision as to what development the Town would permit on the oceanfront lots neighboring plaintiffs’ “soundside” land. More particularly, the fact that the Town had previously permitted development does not mean it is certain to permit development again such that the Court can “precipitously” address the question.

The Facts

The plaintiffs own “soundside” land separated from the ocean by undeveloped oceanfront lots. The North Carolina Coastal Area Management Act (“CAMA”) requires coastal property owners to obtain development permits from the Division of Coastal Management before developing oceanfront land, after which those owners are required to obtain necessary zoning and building permits to develop the oceanfront land. In the Town, the local permitting process includes compliance with the Flood Damage Prevention Ordinance (the “FDPO”) requiring “[t]here shall be no alteration of dunes which would increase potential flood damage.” The Town has also opted into the National Flood Insurance Program, which requires the Town to adopt minimum regulations to reduce the risk of flooding and which allows for reduced insurance premiums for landowners in the Town.

In December 2016, the Town repealed its Dune Protection Ordinance, which provided protections for dunes that were added to the FDPO that plaintiffs allege generally prevented the development of the oceanfront lots. In light of the repeal of the Dune Ordinance, the plaintiffs filed suit against the Town claiming that the repeal of the Dune Protection Ordinance would result in development on the oceanfront lots and thereby create an increased potential for flood damage on their properties. The lawsuit sought a declaratory judgment that any excavation or manmade alterations of the dunes on the oceanfront lots would violate local ordinances, the town’s land use plan, and federal law. Importantly, at the time of the filing of the suit, and as far as we know today, the Town has not received any applications for zoning or building permits as to the oceanfront lots.

The Trial Court

The trial court issued a temporary restraining order prohibiting the Town from issuing any building permits or otherwise allowing alteration of the dunes. However, the trial court subsequently dismissed the plaintiffs’ complaint on the basis that the plaintiffs’ claims were unripe and failed to establish standing.

The Court of Appeals

The Court affirmed the trial court’s dismissal of the claims on ripeness grounds, explaining:

[P]laintiffs have not shown that the defendant made a final determination as to what development of the land, if any, will be permitted by the town. Plaintiffs have not even shown that the oceanfront lot owners have submitted applications for zoning or building permits to the defendant to request such a determination. Additionally, there is no evidence that FEMA has notified the defendant, or any flood insurance policyholder within Topsail Beach, that, with regard to NFIP, probationary status is impending or that policyholders’ insurance premiums may increase. In essence, plaintiffs ask us to rule that they may challenge the permissible uses of adjacent oceanfront lots based on a speculative possibility that development will proceed in the future. We decline to do so, as, until defendant makes a final decision about what uses of the oceanfront lots will be permitted, any challenge related to the use thereof will not be ripe for adjudication.

The Court also disagreed with the property owners’ argument that “because [the Town] permitted the construction of a beach house in 2014, before the decision to repeal the Dune Protection Ordinance, it is clear that [the Town] will approve similar development”. Rather, the Court held fast, “It would be precipitous to presume Topsail Beach has made a final decision as to the permissible development of the oceanfront lots because defendant previously authorized a building permit for the oceanfront property.”

Even past performance cannot ripen what is nothing more than a future result.