A-S-P Associates v. City of Raleigh

Associates’ appeal to the Court of Appeals assigned error to the grant of summary judgment in favor of defendant City. Summary judgment may, when appropriate, be rendered against the party moving for such judgment. Blades v. City of Raleigh, 280 N.C. 531, 187 S.E. 2d 35 (1972); Bland v. Bland, 21 N.C. App. 192, 203 S.E. 2d 639 (1974). Summary judgment in favor of the non-movant is appropriate when the evidence presented demonstrates that no material issues of fact are in dispute, and the non-movant is entitled to entry of judgment as a matter of law.

Associates argue in their brief that their motion for summary judgment was limited to their claims of constitutional invalidity of the Oakwood Ordinance. They argue that it was, therefore, error for the superior court to grant summary judgment in favor of defendant City on all claims raised in Associates’ complaint.

It is apparent from the record, however, that both plaintiff and defendant were afforded adequate opportunity to and did submit evidentiary materials on all aspects of the case. The evidentiary materials submitted show, furthermore, that both Associates’ constitutional and their statutory challenges to the validity of the Oakwood Ordinance raise only questions of law. Summary judgment for the non-moving party should be granted only when the moving party has been given adequate opportunity to show in opposition that there is a genuine issue of fact to be resolved. 10 Wright & Miller, Federal Practice and Procedure, § 2720, p. 471 (1973). Associates were afforded that opportunity in this instance and the entry of summary judgment in favor of defendant City on all claims was proper.

The Court of Appeals found that material issues of fact existed with respect to two claims in Associates’ complaint. *213 Associates’ contention that substantial questions of fact existed with respect to other claims was not considered. Because we reverse the decision of the Court of Appeals on the two issues considered determinative by it, we must consider all issues raised.

Associates’ first contentions are that the Oakwood Ordinance deprives them of their property without due process of law in contravention of the Fourteenth Amendment to the United States Constitution, and that it deprives them of their property otherwise than by the law of the land in contravention of Article I, Section 19, of the North Carolina Constitution. The terms “law of the land” and “due process of law” are synonymous. Horton v. Gulledge, 277 N.C. 353, 177 S.E. 2d 885 (1970); State v. Ballance, 229 N.C. 764, 51 S.E. 2d 731 (1949).

Associates’ claim is premised on a line of cases in which this Court has indicated that a statute or ordinance based purely on aesthetic considerations, without any real or substantial relation to the public health, safety or morals, or the general welfare, deprives individuals of due process of law. State v. Vestal, 281 N.C. 517, 189 S.E. 2d 152 (1972); Little Pep Delmonico Restaurant, Inc. v. Charlotte, 252 N.C. 324, 113 S.E. 2d 422 (1960); State v. Brown, 250 N.C. 54, 108 S.E. 2d 74 (1959); In Re O’Neal, 243 N.C. 714, 92 S.E. 2d 189 (1956); State v. Staples, 157 N.C. 637, 73 S.E. 112 (1911); Barger v. Smith, 156 N.C. 323, 72 S.E. 376 (1911); State v. Whitlock, 149 N.C. 542 (1908). Associates contend that the Oakwood Ordinance falls within the scope of such impermissible exercise of the police power because it focuses entirely on the exterior appearance of structures within the Historic District. Associates further contend that even if the Ordinance is a valid exercise of the police power insofar as it is applied to historic structures, it is invalid when applied to new construction on property such as Associates’ vacant lot.

The police power is inherent in the sovereignty of the State. Winston-Salem v. Southern R.R. Co., 248 N.C. 637, 105 S.E. 2d 37 (1958). It is as extensive as may be required for the protection of the public health, safety, morals and general welfare. State v. Hales, 256 N.C. 27, 122 S.E. 2d 768 (1961); State v. Warren, 252 N.C. 690, 114 S.E. 2d 660 (1960). The police power may be delegated by the State to its municipalities whenever deemed *214 necessary by the Legislature. Raleigh v. Norfolk Southern R.R. Co., 275 N.C. 454, 168 S.E. 2d 389 (1969).

Several principles must be borne in mind when considering a due process challenge to governmental regulation of private property on grounds that it is an invalid exercise of the police power. First, is the object of the legislation within the scope of the police power? Second, considering all the surrounding circumstances and particular facts of the case is the means by which the governmental entity has chosen to regulate reasonable? G.I. Surplus Store v. Hunter, 257 N.C. 206, 125 S.E. 2d 764 (1962); State v. Brown, 250 N.C. 54, 108 S.E. 2d 74 (1959); Winston-Salem v. Southern R.R. Co., 248 N.C. 637, 105 S.E. 2d 37 (1958). This second inquiry is two-pronged: (1) Is the statute in its application reasonably necessary to promote the accomplishment of a public good and (2) is the interference with the owner’s right to use his property as he deems appropriate reasonable in degree?

Moreover, in reviewing acts of the Legislature this Court must not lose sight of the fact that “[s]ince the police power of the State has not been, and by its nature cannot be, placed within fixed definitive limits, it may be extended or restricted to meet changing conditions, economic as well as social.” Winston-Salem v. Southern R.R. Co., supra, at 642-43, 105 S.E. 2d at 41. Also, “[w]hen the most that can be said against [an ordinance] is that whether it was an unreasonable, arbitrary or unequal exercise of power is fairly debatable, the courts will not interfere. In such circumstances the settled rule seems to be that the court will not substitute its judgment for that of the legislative body charged with the primary duty and responsibility of determining whether its action is in the interest of the public health, safety, morals, or general welfare.” In Re Appeal of Parker, 214 N.C. 51, 197 S.E. 706 (1938). Euclid v. Ambler Realty, 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926).

Legislative exercise of the police power to regulate private property in the interest of historic preservation has met with increasing acceptance by the courts of other jurisdictions. E.g., Maher v. City of New Orleans, 516 F. 2d 1051 (5th Cir. 1975); Bohannan v. City of San Diego, 30 Cal. App. 3d 416, 106 Cal. Rptr. 333 (1973); Figarsky v. Historic District Comm., 171 Conn. 198, 368 A. 2d 163 (1976)} Rebman v. City of Springfield, 111 Ill. App. 2d 430, 250 N.E. 2d 282 (1969); City of New Orleans v. Levy, 223 *215 La. 14, 64 So. 2d 798 (1958); Opinion of the Justices, 333 Mass. 773, 128 N.E. 2d 557 (1955); Opinion of the Justices, 333 Mass. 783, 128 N.E. 2d 563 (1955); and City of Santa Fe v. Gamble-Skogmo, Inc., 73 N.M. 410, 389 P. 2d 13 (1964). See Comment, Historic Preservation Cases: A Collection, 12 Wake Forest L. Rev. 227 (1976). Historic district legislation similar to the provisions of G.S. §§ 160A-395 through 399 has now been enacted by at least thirty-nine states. Beckwith, Developments in the Law of Historic Preservation and a Reflection on Liberty, 12 Wake Forest L. Rev. 93, 95 n. 18 (1976); Wilson and Winkler, The Response of State Legislation to Historic Preservation, 36 Law and Contemp. Prob., 329 (1971). More than 500 cities and towns have passed local landmark or historic district ordinances. National Trust for Historic Preservation, Historic Preservation and the Law, Part IV, ch. 5, p. 3 (1978).

In Maher v. City of New Orleans, supra, plaintiff challenged an ordinance that regulates the preservation and maintenance of buildings in the historic Vieux Carre section of that City. In rejecting plaintiff’s contention that the architectural controls imposed by the ordinance were not within the parameters of police power regulation, the Court observed: “[pjroper state purposes may encompass not only the goal of abating undesirable conditions, but of fostering ends the community deems worthy . . . . Nor need the values advanced be solely economic or directed at health and safety in their narrowest senses. The police power inhering in the lawmaker is more generous, comprehending more subtle and ephemeral societal interests.” Id. at 1060.

The United States Supreme Court has also recognized the expansive scope of the states’ police power. In Berman v. Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27 (1954) it was observed, albeit in the context of an exercise of power of eminent domain, that “the concept of the public welfare is broad and inclusive. (Citation omitted.) The values it represents are spiritual as well as physical, aesthetic as well as monetary.” In the recent case of Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed. 2d 631 (1978), applying the concept of the public welfare found in Berman, the Court upheld comprehensive governmental regulation of private property designed to preserve historic buildings in the City of New York.

*216 In State v. Vestal, 281 N.C. 517, 189 S.E. 2d 152 (1972), we took note of the growing body of authority in other jurisdictions recognizing that the police power may be broad enough to include reasonable regulation of property for aesthetic reasons alone. Although we are not now prepared to endorse such a broad concept of the scope of the police power, we find no difficulty in holding that the police power encompasses the right to control the exterior appearance of private property when the object of such control is the perservation of the State’s legacy of historically significant structures. “While most aesthetic ordinances are concerned with good taste and beauty ... a historic district zoning ordinance ... is not primarily concerned with whether the subject of regulation is beautiful or tasteful, but rather with preserving it as it is, representative of what it was, for such educational, cultural, or economic values as it may have. Cases dealing with purely aesthetic regulations are distinguishable from those dealing with preservation of a historical area or a historical style of architecture.” A. Rathkopf The Law of Zoning and Planning, § 15.01, p. 15-4, (4th ed. 1975).

The preservation of historically significant residential and commercial districts protects and promotes the general welfare in distinct yet intricately related ways. It provides a visual, educational medium by which an understanding of our country’s historic and cultural heritage may be imparted to present and future generations. That understanding provides in turn a unique and valuable perspective on the social, cultural, and economic mores of past generations of Americans, which remain operative to varying degrees today. N. Williams, American Planning Law, Land Use and the Police Power, § 71A.02, p. 88 (Cum. Supp. 1978). Historic preservation moreover serves as a stimulus to protection and promotion of the general welfare in related, more tangible respects. It can stimulate revitalization of deteroriating residential and commercial districts in urban areas, thus contributing to their economic and social stability. Figarsky v. Historic District Comm., 171 Conn. 198, 208, 368 A. 2d 163, 167 (1976); R. Montague & T. Wrenn, Planning for Preservation, pp. 11-17 (America’s Society of Planning Officials 1969). It tends to foster architectural creativity by preserving physical examples of outstanding architectural techniques of the past. N. Williams, supra, at § 71A.02. It also has the potential, documented in *217 numerous instances, e.g., in the Vieux Carre section of New Orleans, of generating substantial tourism revenues. City of New Orleans v. Levy, 223 La. 14, 64 So. 2d 798 (1953); R. Montague & T. Wrenn, supra; Schroder, The Preservation of Historical Areas, 62 Ky. L. J. 940 (1974). Although it is also recognized that historic preservation legislation, particularly historic district ordinances, may adversely affect the welfare of certain segments of society and infringe on individual liberty, Beckwith, Developments in the Law of Historic Preservation and A Reflection on Liberty, 12 Wake Forest L. Rev. 93 (1976); Newsom, Blacks, and Historic Preservation, 36 Law & Contemp. Probs. 423 (1971), the wisdom of such legislation is “fairly debatable,” precluding substitution of our judgment for that of the General Assembly.

Although the object of particular legislation may well be within the scope of the police power, the legislation may yet deprive individuals of due process of law if the means chosen to implement the legislative objective are unreasonable. Euclid v. Ambler Realty, supra; Maher v. City of New Orleans, supra. Such is not the case here, however. Comprehensive regulation of the “construction, reconstruction, alteration, restoration, or moving of buildings, structures, appurtenant fixtures, or outdoor advertising signs in the historic district which would be incongruous with the historic aspects of the district” is the only feasible manner in which the historic aspects of an entire district can be maintained. Associates’ contention that the provisions in the Oakwood Ordinance requiring issuance of a certificate of appropriateness for new construction is unreasonable, particularly when applied to Associates’ plans to construct an office building on its now vacant lot, is without merit. It is widely recognized that preservation of the historic aspects of a district requires more than simply the preservation of those buildings of historical and architectural significance within the district. In rejecting a similar challenge, the District Court in Maher v. City of New Orleans, 371 F. Supp. 653, 663 (E.D. La. 1974) observed: “just as important is the preservation and protection of the setting or scene in which [structures of architectural and historical significance] are situated.” See City of New Orleans v. Permagent, supra; Wiedl, Historic District Ordinances, 8 Conn. L. Rev. 209, 215-17 (1976). This “tout ensemble” doctrine, as it is now often termed, is an integral and reasonable part of effective historic district preservation.

*218 Most important, however, is the fact that Associates and other property owners similarly situated are not prohibited by the Oakwood Ordinance from erecting new structures. They are only required to construct them in a manner that will not result in a structure incongruous with the historic aspects of the Historic District. Property owners within the Historic District may, by virtue of this requirement, be unable to develop their property for its most profitable use or at the cost they would prefer. But the mere fact that an ordinance results in the depreciation of the value of an individual’s property or restricts to a certain degree the right to develop it as he deems appropriate is not sufficient reason to render the ordinance invalid. Zopfi v. City of Wilmington, 273 N.C. 430, 160 S.E. 2d 325 (1968); Helms v. Charlotte, 255 N.C. 647, 122 S.E. 2d 817 (1961). The test of reasonableness necessarily involves a balancing of the diminution in value of an individual’s property and the corresponding gain to the public. Sax, Takings and the Police Power, 74 Yale L. J. 36 (1964).

Associates next contend that the superior court erred as a matter of law in ruling that the Oakwood Ordinance does not delegate legislative power to the Historic District Commission. Legislative power is vested exclusively in the General Assembly by Article II, Section 1, of the North Carolina Constitution. From this provision and from Article I, Section 6, derives the principle that the General Assembly may not delegate its power to any other department or body. Motsinger v. Perryman, 218 N.C. 15, 9 S.E. 2d 511 (1940); Coastal Highway v. Turnpike Authority, 237 N.C. 52, 74 S.E. 2d 310 (1953). This principle, however, is not absolute.

“Since legislation must often be adapted to complex conditions involving numerous details with which the Legislature cannot deal directly, the constitutional inhibition against delegating legislative authority does not deny to the Legislature the necessary flexability of enabling it to lay down policies and establish standards, while leaving to designated governmental agencies and administrative boards the determination of facts to which the policy as declared by the Legislature shall apply. (Citation omitted.) Without this power, the Legislature would often be placed in the awkward situation of possessing a power over a given subject without being able to exercise it.” Coastal Highway v. Turnpike Authority, supra, at 60, 74 S.E. 2d at 316.

*219 Associates contend that adequate standards have not been established in this instance.

Analysis of the statutes authorizing the establishment of historic districts by cities and counties and the Oakwood Ordinance itself is necessary to resolution of this issue. G.S. § 160A-395 authorizes any municipal governing body to designate one or more historic districts as a part of its general zoning ordinance. Municipal governing bodies (which term includes governing boards of counties as well) are thereby delegated the legislative power to determine whether or not to designate a historic district or districts. This delegation of power is not challenged by Associates. Delegation to municipal corporations of the States’ police power to legislate concerning local problems such as zoning is permissible by long standing exception to the general rule of non-delegation of legislative power. In Re Markham, 259 N.C. 566, 131 S.E. 2d 329 (1963); Jackson v. Board of Adjustment, 275 N.C. 155, 166 S.E. 2d 78 (1969).

The delegation of legislative power to municipal governing bodies is not in this instance, however, an unlimited delegation. G.S. § 160A-396 provides that before a city or county may designate one or more historic districts it must establish a historic district commission. 2 G.S. § 160A-396 further limits the delegation of power by specifying that, “a majority of the members of such a commission shall have demonstrated special interest, experience, or education in history or architecture . . . .” G.S. § 160A-397 imposes another limitation by specifying the method by which a historic district ordinance adopted by a city or county is to be enforced:

“From and after the designation of a historic district, no exterior portion of any building or other structure (including stone walls, fences, light fixtures, steps and pavement, or other appurtenant features) nor above-ground utility structure nor any type of outdoor advertising sign shall be erected, altered, restored, or moved within such district until after an application for a certificate of appropriateness as to exterior architectural features has been submitted to and approved by the historic district commission.”

*220 G.S. § 160A-397 then establishes the standard by which a historic district commission is to be bound in its administration of a historic district by approving or disapproving applications for Certificates of Appropriateness:

“The commission shall not consider interior arrangement and shall take no action under this section except for the purpose of preventing the construction, reconstruction, alteration, restoration, or moving of buildings, structures, appurtenant fixtures, or outdoor advertising signs in the historic district which would he incongruous with the historic aspects of the district. ” (Emphasis added.)

The statutory authorization of historic district ordinances is, therefore, a mixture of delegated legislative and administrative power. A municipal governing body has unlimited discretion to determine whether or not to establish a historic district or districts. Once it chooses to do so, however, its discretion insofar as the method and the standard by which a historic district ordinance is to be administered is, by contrast, extremely limited. A historic district ordinance is to be administered by a historic district commission, the composition of which is specified by the General Assembly, in accordance with the standard of “incongruity” set directly by the General Assembly in G.S. § 160A-397.

The Oakwood Ordinance itself reflects this statutory mixture of delegated legislative and administrative powers. The Ordinance first establishes the Historic District and its boundaries. Section 24-57.4 of the Code of the City of Raleigh establishes the Raleigh Historic District Commission to enforce the Ordinance; 3 Section 24-57.1 authorizes the Historic District Commission to require applications for a Certificate of Appropriateness for any proposed activities within the Historic District which are covered by the specific provisions of G.S. § 160A-397, quoted supra; Section 24-57.3 adopts the standard set forth in G.S. § 160A-397 of preventing those activities specified in G.S. § 160A-397 “which would be incongruous with the historic aspects of the district” as the limitation on the discretion conferred on the Historic District Commission.

Section 24-57.3 further provides that an appeal may be taken to Raleigh’s Board of Adjustment from the Historic District Com *221 mission’s decision on an application for a Certificate of Appropriateness. Appeal to the Superior Court of Wake County from a decision of the Board of Adjustment is also provided for.

Section 24-57.5 incorporates by reference “architectural guidelines and design standards,” which are set forth in a January 1975 report prepared by Raleigh’s Planning Department entitled A Proposal for the Designation of Oakwood as an Historic District. 4 The Historic District Commission is directed to apply the incorporated guidelines and standards in its consideration of applications for Certificates of Appropriateness.

. It is on these “architectural guidelines and design standards” that Associates mistakenly focus their contention that power to administer the Oakwood Ordinance has been delegated to the Historic District Commission without adequate standards. Associates contend the architectural guidelines and design standards “vest the Commission with the untrammeled authority to compel individual property owners in the Historic District to comply with whatever arbitrary or subjective views the members of the Commission might have as to how property in the district should be maintained or developed.”

From the foregoing analysis of the enabling statutes and the Oakwood Ordinance itself, however, it is manifestly clear that it is not the guidelines and standards incorporated into the Oakwood Ordinance which must meet the legal test of sufficiency, but rather it is the standard set forth in G.S. § 160A-397 and in the Ordinance itself, which limits the discretion of the Historic District Commission to preventing only those of certain specified activities, “which would be incongruous with the historic aspects of the district.” Although we cannot ignore in our consideration the guidelines and standards incorporated into the Oakwood Ordinance, if the general standard of “incongruity” is legally sufficient to withstand a delegation challenge, the incorporated *222 guidelines and standards, which give varying degrees of specificity to that general standard, are sufficient a fortiori.

In the recent case of Adams v. Dept. of N.E.R., 295 N.C. 683, 249 S.E. 2d 402 (1978) we observed with respect to the delegation of power to an administrative agency:

“When there is an obvious need for expertise in the achievement of legislative goals the General Assembly is not required to lay down a detailed agenda covering every conceivable problem which might arise in the implementation of the legislation. It is enough if general policies and standards have been articulated which are sufficient to provide direction to an administrative body possessing the expertise to adapt the legislative goals to varying circumstances.” Id. at 698, 249 S.E. 2d 411.

We also joined in Adams a growing trend of authority by recognizing that “the presence or absence of procedural safeguards is relevant to the broader question of whether a delegation of authority is accompanied by adequate guiding standards.” Id.

The general policy and standard of “incongruity,” adopted by both the General Assembly and the Raleigh City Council, in this instance is best denominated as “a contextual standard.” A contextual standard is one which derives its meaning from the objectively determinable, interrelated conditions and characteristics of the subject to which the standard is to be applied. See Turnbull, Aesthetic Zoning, 7 Wake Forest L. Rev. 230, 242 (1971). In this instance the standard of “incongruity” must derive its meaning, if any, from the total physical environment of the Historic District. That is to say, the conditions and characteristics of the Historic District’s physical environment must be sufficiently distinctive and identifiable to provide reasonable guidance to the Historic District Commission in applying the “incongruity” standard.

Although the neighborhood encompassed by the Historic District is to a considerable extent an architectural melange, that heterogeneity of architectural style is not such as to render the standard of “incongruity” meaningless. The predominant architectural style found in the area is Victorian, the characteristics of which are readily identifiable. City of Raleigh, Planning Department, A Proposal to Designate Oakwood as a Historic District, p. 1 (1975); N.C. Department of Cultural Resources, National *223 Register Nomination Form, Oakwood Historic District (1974). In his deposition, Raleigh’s Planning Director, A. C. Hall, Jr., testified:

“[T]he remaining part of Oakwood, yes, has been developed since that time, with varying types of architectures, filling in the holes, so to speak, in the neighborhood, but still this is in my opinion and my recollection, this is the only and the best example, and has a majority of worthwhile Victorian or Victorian Era structures in it, in the neighborhood that we have.”

The characteristics of other architectural styles of historical interest found in the Historic District are equally distinctive and objectively ascertainable. A Proposal to Designate Oakwood as a Historic District, supra, pp. 16-17. The architectural guidelines and design standards incorporated into the Oakwood Ordinance (described in note 4, supra) provide an analysis of the structural elements of the different styles and provide additional support for our conclusion that the contextual standard of “incongruity” is a sufficient limitation on the Historic District Commission’s discretion.

It will be remembered that G.S. § 160A-396 requires that a majority of the members of a historic district commission shall have demonstrated special interest, experience, or education in history or architecture. There is no evidence that Raleigh’s Historic District Commission is not so constituted. To achieve the ultimate purposes of historic district preservation, it is a practical necessity that a substantial degree of discretionary authority guided by policies and goals set by the legislature, be delegated to such an administrative body possessing the expertise to adapt the legislative policies and goals to varying, particular circumstances. Adams v. Dept. of N.E.R., supra. It is a matter of practical impossibility for a legislative body to deal with the host of details inherent in the complex nature of historic district preservation.

It is therefore sufficient that a general, yet meaningful, contextual standard has been set forth to limit the discretion of the Historic District Commission. Strikingly similar standards for administration of historic district ordinances have long been approved by courts of other jurisdictions. E.g., Maher v. City of New Orleans, 516 F. 2d 1051 (5th Cir. 1975); South of Second Associates v. Georgetown, (Colo.) 580 P. 2d 807 (1978); City of *224 New Orleans v. Permagent, 198 La. 852, 5 So. 2d 129 (1941); Town of Deering ex rel. Bittenbender v. Tibbetts, 105 N.H. 481, 202 A. 2d 232 (1964); City of Santa Fe v. Gamble-Skogmo, Inc., 73 N.M. 410,