i iesad Masand 0 IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION FILE #: 19-CVS-4028, P ror DAVID SCHROEDER and, NEW! #4 PEGGY SCHROEDER, Plaintif v. ‘ORDER FOR SUMMARY JUDGMENT N.C. Gen. Stat. § 1A-1, RULE 56 CITY OF WILMINGTON, and CITY OF WILMINGTON BOARD OF ADJUSTMENT, Defendants ‘THIS MATTER came before the undersigned Superior Court Judge in and for the County of "New Hanover on the 14° day of September 2020 on Defendants’ Motion for Summary Judgment ‘pursuant to Rule 56 ofthe North Carolina Rules of Civil Procedure. Plaintiff was represented by Air Bargil ofthe Institute of Justice in Aeington, Virginia. Defendant was represented by Robert Hagemann with te office of Poyner Spruill, LLC ofthe Wake County Bar. The Court ‘having reviewed the memoranda submitted by the parties and having heard the arguments of| ‘counsel finds that there is no genuine issue of material fact and the Plaintfls are entitled to {judgment as a matter of law. The ruling ofthe court is based on the following conclusions of law’ 1. N.C. Gen, Stat. 160~424(c) reads in relevant pat as follows: Inno event may a city do any ofthe following: @) adopt or enforee any ordinance that ‘would require any owner or manager of rental property to obtain any permit or permission from the city to lease or rent residential real property oto register rental property with the city, except for those individual rental units that have either more than {our verified violation ina rolling 12-month period or two or more verified violations in rolling 30-day period, or upon the property being identified within the top ten percent (10%) of properties with crime or disorder problems as set forth ina local ordinance; N.C. Gen, Stat §160A-424(¢) 2018) 2. N.C. Gen, Stat § 160A-424(¢) didnot limit its application tothe article or section under ‘which it appeared 3. 2019N. Sess. Law 111 (2019 SE 355) repealed article 19 of Chapter 160A and replaced G.S. 1804-424(¢) with te foloing: eee CLERK OF SUPERIOR COURT NEW HANOVER COUNTY by; Lindsay © Tau Dap Ce of Supa CutInno event may a local government do any ofthe following: () adopt or enforce any ‘ordinance that would require any owner or manager of rental property to obtain any permit or permission under Article 11 or Article 12 of this Chapter from the local government to lease or ret residential real property o to register rental property withthe local government, except for those individual properties that have more than four verified violations in a rolling 12 month period or two or more verified violations ina rolling 30, day period, or upon the property being identified within the tp ten percent (10%) of properties with crime or disorder problems as set forth ina local ordinance. 2019 S.L 111, § 24 (codified as N.C, Gen, Stat. § 160D-1207%6)) 4, Pursuant to 2020 N.C, Sess, Law 25 (2019 SB 720), Part If of SL. 2019-111, which includes the above quoted revision, was made effective when 2020 N.C. Sess. Law 25 became law which was on June 19, 2020, ‘The legislation included a provision that “Part Il of S.L. 2019-111 clarifies and restates the ‘intent of law existing on the effective date ofthis act and applies to ordinances adopted before, on, and after that date. Valid local government development regulations that are in effect at the time ofthe effective date of Part Il of S.L.2019-111 remain in effect but local ‘governments shall amend those regulations to conform to the provisions of Pat Il of S.L. 2019-111 on or before July 1, 2021. Part I of S.L. 2019-111 applies to local government development regulation decisions made on or aftr the earlier of: (1) The effective date of the ‘amendments to local development rezulations made to conform tothe provisions of Part I of SL. 2019-111 oF @) July 1, 2021." 6. The language used is clear and unambiguous even with the amendments made in 2019 S.L. 111. No local government may adopt or enforce any ordinance that would require any owner or manager of rental property to register rental property with the local government. 7. The amendments made to G'S. 1608-424 in 2019 S.L. 111 limit the peohibition on permits, ‘and permissions to Articles 11 and 12 of that chapter but no such limiting language was made applicable to the prohibition on the registration requirement. 8, Given that the language ofthe statute is clear and unambiguous, determination of legislative intent is unnecessary and improper. 9. Wilmington City Code § 18-331 was adopted February 5, 2019, That ordinance requires property owners of whole-house lodging units to register each establishment annually with the City, Wilmington City Code § 18-331(4). 10. The ordinance also imposes a separation requirement of four hundred (400) fet from any other residenially-zoned whole-house lodging establishment or properly permitted bed and breakfast lodging, Wilmington City Code § 18-331(b)11, For the inital registration proces, the ordinance mandated use of a lottery method based on ‘the cap and separation requirements to determine which properties would be permitted t0 ‘continue to operate as whole-house lodging. Wilmington City Code § 18-331(4d}8). 12. For properties being used as whole-house lodging at the time of the adoption of the ordinance ‘that ate not permitted to continue operation duc to the cap and separation requirements, a one ‘year amortization period is provided for but after that one year, the use of the property as ‘whole-house lodging must be terminated. Wilmington City Code § 18-331(q). 13, The provisions of Wilmington City Code § 18-331 are preempted by N.C. Gen. Stat. § 160A- 424(e) and N.C. Gen, Stat. § 160D-1207(e) and are therefore invalid IT IS THEREFORE ORDERED, ADIUDGED AND DECREED that summary judgment is hereby granted in favor ofthe Plaintiff. Wilmington City Code § 18-331 is declared void and unenforceable. ITIS FURTHER ORDERED that there is no just reason to delay appeal ofthis order in that it affect a substantial right of the defendants and to the extent this Court i authorized to do so pursuant to Rule 54(b) of the North Carolina Rules of Civil Procedure, this order is certified for immediate appellate review. This the _\S_ day of September, 2020, BLE, LL Kent Harrell ‘Superior Court Judge PresidingCERTIFI “ATE OF SERVICE 1 the undersigned do hereby certify thatthe attached and forgoing order was served on the following parties by depositing the same in a postage paid envelope in an official depository of the United States Postal Service addressed as follows: W. Gray Smith ‘Adam Griffin Mason and Mason, Institute for Justice Counsel for Plaintiff Counsel for Painiff 514 Princess Street ‘901 North Glebe Road, Suite 900 Wilmington, NC 28401 Adlington, VA 22203 Robert Hagemann Meredith Everhart Poyner Spruill, LLP City of Wilmington Counsel for Defendant Counsel for Defendant 301 Fayetteville Steet, Suite 1900 PO Box 1810 Raleigh, N.C. 27601 Wilmington, NC 28402-1810 This the_15_day of September, 2020, : Valerie Jordan Legal Assistant to JudgéR, Kent Harrell