Land developers brought action against town for declaratory judgment to secure interest on impact fees that town charged pursuant to ordinance, which town reimbursed with a letter indicating that refund, without interest, was consideration for waiver of claims under ordinance. The Superior Court denied town’s motion to dismiss, granted developers’ motion for judgment on the pleadings, and awarded developers interest. Town appealed.
The Court of Appeals of North Carolina held that:
- Ordinance was invalid;
- Town was required to pay interest; and
- Accord and satisfaction of claims under ordinance did not bar interest sought under state statute.
Town ordinance requiring land developers to pay impact fees as a condition precedent for development approval used to fund police force, fire departments, and parks was invalid, despite contention that ordinance was merely a subdivision control ordinance. Ordinances requiring developers to pay fee for adequate public facilities were invalid absent specific authority from General Assembly, ordinance’s stated purpose was to ensure that public facilities supporting new residential development met or exceeded standards, and statute governing subdivision control ordinances did not authorize municipalities to charge fees as a condition precedent to subdivision approval.
Fact that town had voluntarily returned to developers the principal amount of illegally exacted impact fee did not bar developers from recovering interest on the returned fee pursuant to statute, even though fee was not the subject of an underlying judgment entered against town. Statute unambiguously required payment of interest on illegally exacted fee, statute did not prevent a claim for interest when a town returned the principal amount, and statute did not bar a claim for interest that arose from a separate civil action.
Doctrine of accord and satisfaction did not bar land developers from seeking interest on fee illegally exacted pursuant to invalid town ordinance, even though town returned fee principal with letter containing mutual release of obligations and liabilities under ordinance, developers initialed letter, and developers cashed the check, where letter contained no reference to a waiver of any obligations or liabilities regarding interest payments allowed under state statute.