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STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION


COUNTY OF BRUNSWICK 17 CVS 2243

TOWN OF LELAND, NORTH CAROLINA, )


and H2GO BRUNSWICK REGIONAL )
WATER & SEWER, )
Plaintiffs, )
vs. )
TOWN OF BELVILLE, NORTH CAROLINA, )
Defendant. )
____________________________________)
TOWN OF LELAND, NORTH CAROLINA, )
Plaintiff and Cross- )
Claim Plaintiff )
vs. ) ORDER
TOWN OF BELVILLE, NORTH CAROLINA, )
Defendant, )
and )
H2GO BRUNSWICK REGIONAL )
WATER AND SEWER, )
Cross-claim )
Defendant. )
_________________________________ )
INTERLOCAL RISK FINANCING FUND OF )
NORTH CAROLINA, )
Intervenor. )
____________________________________)

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This cause of action was filed by the Town of Leland on December 1, 2017

against H2GO Brunswick Regional Water & Sewer (hereinafter H2GO) and the Town

of Belville. The parties, by order of the court were realigned to make H2GO a

plaintiff. Cross motions for summary judgment by the parties, along with

accompanying briefs and exhibits, were filed and came on to be heard before the

undersigned on February 28, 2019. All parties were present and represented by

counsel at the time of the hearing of the motions. All exhibits, not hereinafter

excluded by this order, were received and admitted in evidence at the summary

judgment motion hearing.

The court finds, pursuant to Rule 56(c) of the North Carolina Rules of Civil

Procedure, that there are no genuine issues as to the following material facts:

1. The towns of Leland and Belville are incorporated local governments in Brunswick

County, N.C.

2. H2GO Brunswick Regional Water and Sewer (“H2GO”) is a sanitary district, organized

and existing pursuant to Chapter 130A of the North Carolina General Statutes. The

original district was formed pursuant to Article 12 of Chapter 130 for the purpose of

providing treated water to the citizens living in the district. On March 1, 1976 a

petition executed by 51% of the resident freeholders within the proposed district was

presented to the Brunswick County Board of Commissioners. The petition was

submitted to the North Carolina Department of Human Resources. A joint public

hearing was held with the representatives of the Department and the county Board

of Commissioners after the proper notices were published. Afterwards, the Board of

Commissioners adopted a resolution approving the creation of the district and,

through it, requested that the Commission of Health Services create the district. On

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May 8, 1976, the Commission duly created the Leland Sanitary District. The

organizational meeting of the district was held on July 13, 1976.

3. Prior to November 28, 2017, H2GO was properly permitted and provided sewage

collections, water distribution and wastewater treatment to approximately 10,300

residential and commercial customers who resided generally in the northeastern

section of Brunswick County. Residing within this district was 25,500 people. This

area serviced by H2GO included the entire Town of Belville, a majority of the Town

of Leland, part of the Town of Navassa and other unincorporated areas outside of

those towns. Of the approximate 26 square miles in the district, the percentage

geographical makeup consists of 44.3% from the Town of Leland, 11.5% from the

Town of Navassa, 7.4% from the Town of Belville and the remaining 36.7% from

unincorporated areas of that part of Brunswick County.

4. In November of 2017, H2GO had 29 full-time employees requiring an annual payroll

in excess of over $1.54 million.

5. At the end of H2GO’s fiscal year in June of 2017, it had overall assets of over $65

million with liabilities of $8.4 million. It was receiving annual revenue of over $10.6

million (down about $.5 million from the 2016 fiscal year) with total annual expenses

of $7.9 million.

6. Prior to November 28, 2017, H2GO owned and operated a public sanitary sewer

collection system consisting of approximately 157 miles of gravity and pressure

sewers, a 400,000 gallon-per-day wastewater treatment plant, a 684,970 gallon-per-

day allocation from the Brunswick County Northeast Wastewater Treatment Plant,

and in partnership with a wastewater transmission system, a collection system

together with manholes, lift stations, force mains, valves, air release valves, service

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traps, service laterals, clean-outs, tracts of land, easements, rights-of-way, and other

related facilities.

7. Prior to November 28, 2017, H2GO owned and operated a public water distribution

system consisting of approximately 184 miles of distribution water mains, a 500,000

gallon ground storage tank and boost pump station, a one million gallon elevated

water storage tank, together with fire hydrants, valves, service line, customer

meters, tracts of land, easements, rights-of-way, and other related facilities.

8. On November 28, 2017, H2GO had in capital improvement funds, debt service

reserve funds, operating reserves, and customer deposits totaling approximately

$16.6 million.

9. On November 28, 2017, H2GO had debt associated with the sewer system of

approximately $6 million.

10. Currently and for many years previously, H2GO purchased its finished water from

Brunswick County Public Utilities. Its sources are a six million gallon per day

treatment plant which received its water from a freshwater well field and a 24 million

gallon per day Northwest water treatment plant, which is supplied raw water from

the Cape Fear River by the Lower Cape Fear Water and Sewer Authority.

11. H2GO adopted a bond order in July of 2012 authorizing the issuance of water and

sewer system revenue bonds to provide additional funds to finance the water and

sewer systems. This order authorized an initial bond in aggregate principal amount

not to exceed $6,855,000. The issuance of this order was approved by the North

Carolina Local Government Commission.

12. H2GO, pursuant to N.C. Gen. Stat. § 130A-50, is governed by a board of five

commissioners who are elected by the voters residing within the district. The total

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number of registered voters eligible to vote in the H2GO Brunswick Regional Water

and Sewer commissioners’ election is 17,805. Of that number 11,244 reside in

Leland, N.C. and 1,331 reside in Belville.

13. Going into the November 7, 2017 elections, the five elected commissioners were

William Browning, Carl Antos, Ron Jenkins, Jeff Gerken and Trudy Trombley. The

terms of Gerkin and Trombley had not expired. The remaining three seats faced

election. Jenkins and Antos sought re-election, but Browning chose not to run for re-

election. The voters elected William Beer and Rodney McCoy and re-elected Jenkins

to fill those three commissioner seats.

14. Prior to the election, Browning, Jenkins and Antos had voted to construct at a cost

of $34 million a reverse osmosis plant which consisted of a water treatment plant, a

new well field network, raw water transmission lines and a reverse osmosis

concentrate discharge line to the Brunswick River. This partially constructed reverse

osmosis plant would draw water from a 600 foot deep water aquifer for treatment

and containment removal and produce clean and sustainable potable water.

15. The construction of the reverse osmosis plant was one of the issues discussed and

debated by the candidates running for election to H2GO’s Board of Commissioners.

16. The present majority of H2GO Board of Commissioners consisting of Gerkin,

Trombley and Beer now do not favor the construction of the reverse osmosis plant.

17. Shortly after the election, H2GO commissioner Ron Jenkins met with H2GO executive

director Robert Walker to inquire if “there was any way we could transfer the assets

…from H2GO to Belville.” Walker promised Jenkins he would look into it. Town of

Belville attorney James Eldridge later advised Walker of the contents of N.C Gen.

Stat. § 160A-274(b). That statute is contained in Article 12 “Sale and Disposition of

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Property” of Chapter 160A and provides that “[a]ny governmental unit may, upon

such terms and conditions as it deems wise, with or without consideration, exchange

with, lease, lease from, sell to or purchase from any governmental unit any interest

in real or personal property.”

18. Several months before December 1, 2017, there were discussions between Belville

Mayor Mike Allen and town attorney, James Eldridge, related to the issues of H2GO’s

merger with Belville or the dissolution of H2GO. Preliminarily, Eldridge determined

that (1) a merger could not take place; (2) a dissolution could not take place where

Belville could take over H2GO’s assets; and (3) H2GO could not self-dissolve and

have Belville take over the assets.

19. On the day after the 2017 election, November 8, 2017, town attorney Eldridge in a

“private and confidential” email to executive director Walker asked when H2GO would

hold its organizational meeting and posed this hypothetical question to him: “In the

event some or all of its assets were “sold” to a governmental unit, do you agree that

under [N.C.G.S.] 130A-55(6), H2GO (in its continued existence) is authorized to

contract with that [governmental] unit to operate and manage its water/ sewer

services?” He also asked Walker if that governmental unit would be able to sustain

the operations of the sanitary district on the revenues raised from its water and sewer

services after it paid the operating and management costs without additional funding

from that government unit. Walker responded that the organizational meeting for the

new board was December 19, 2017 and any transfer of assets had to take place by

its next scheduled meeting on November 28, 2017. He also responded that H2GO

transferred $1.4 million to reserves during the last fiscal year. Walker indicated of

his “excite[ment] over this strategy.”

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20. On November 12, 2017, in an email from Walker to Eldridge, Walker indicated that

he had spoken with Joe Breault, a Belville town commissioner, Mayor Allen and three

of the H2GO board members (Browning, Antos, and Jenkins), and “it appear[ed that]

all three are on the same page to transfer H2GO property (real, personal, cash, and

other assets, etc.) to Belville.” He inquired: “Should we meet to strategize as time

is of the essence?” Walker characterized the transfer as “the nuclear option” and

realized that it was a “tall order,” but was ready to assist in this effort. In response,

Eldridge recognized the “extraordinary compressed timeframe within which to

prepare for, produce the instruments needed and close the transfer of assets

transaction.” He admitted that some of this work he could not “readily do or am not

competent to provide” such as setting up all of the revenue, costs and accounting

items.

21. A series of emails were exchanged between Walker and Eldridge over the next

twenty days, mostly marked “private and confidential,” that set out the proposed

details of a transfer of all assets from H2GO to the town of Belville pursuant to the

authority provided in N.C Gen. Stat. § 160A-274(b).

22. Many of these emails were copied to Mayor Allen and Belville town commissioner

Joseph Breault. Walker advised Eldridge that the board needed to get this transfer

done by the board’s next meeting on November 28, 2017.

23. Eldridge, in a November 27, 2017 email to Walker, expressed concerns by the

board members whether the board was “stepping beyond their authority” in its

transfer and conveyance of assets to Belville. Eldridge explained that those

concerns were why they were relying on N.C Gen. Stat. § 160A-274(b). Prior to

the November 28, 2017 meeting, executive director Walker only disclosed the

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planned transfer to Sanitary District Finance Officer Scott Hook, Sanitary District

Clerk Teresa Long, the PIO officer Tyler Wittkofsky, public relations officer Mike

McGill, and lead project engineer and designer for the reverse osmosis plant,

Charles Davis of the Wooden Company. All were told about the plans for the

transfer, but they were expected to keep this information confidential and not

reveal it to the public.

24. On the morning before the last board meeting on November 28, 2017, before the

new members were sworn in, Eldridge was unsure whether to include the “usual

‘Approved as to Form’ signature line for the attorneys on the agreements” because

he was concerned that the attorney for the Sanitary District, Steve Coble, may “not

sign until he has reviewed the doc[ument]s which impede the closing.” No one,

however, could find any statute, ordinance, or charter language that required that

approval language. It was decided not to include that signature line for H2GO

attorney Coble. Excluding that signature line would allow the documents to be

considered by the Board without Coble ever reviewing them.

25. With the continued assistance of Walker over a several week period, Eldridge

prepared the drafts of the transaction documents in time for the November 28, 2017

commissioners meeting. The thirty–eight warranty deeds conveying all of H2GO’s

real estate holdings to the town of Belville were prepared by an outside law firm.

Walker met with Clement Goodson, Belville’s outside certified public accountant, who

“was surprised to hear of a transaction of this scope.” They discussed the H2GO’s

checking and savings accounts and its property. Goodson had previously told Mayor

Allen that, after reviewing H2GO’s June 30, 2016 audit, he concluded that H2GO

could continue to pay their bills and operate the systems without additional Belville

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funding. H2GO had an auditor, but he was not asked about the planned conveyand

nor did he participate in the transaction or its discussions. There was no discussion

with H2GO’s bond attorney prior to the Board’s meeting.

26. Eldridge, through the last week before the November 28, 2017 H2GO commissioners’

meeting, prepared the documents attached as Exhibit 1, “Agreement to Convey

Water and Sewer Systems,” Exhibit 2, “Assignment and Bill of Sale”, Exhibit 2A

“Special Warranty Deed” (prepared by attorneys Price & Williams), Exhibit 3

“Agreement for the Operation and Maintenance of Water and Sewer Systems,” Exhibit

4, “Resolution of the Brunswick Regional Water and Sewer H2GO,” and Exhibit 5,

“Resolution by the Town of Belville Accepting Agreements With and Conveyances

From Brunswick Regional Water & Sewer H2GO.”

27. In preparing the documents, Eldridge did not consult with the attorney for H2GO or

bond counsel. Commissioners Browning and Jenkins had instructed executive

director Walker not to discuss the transaction with attorney Coble. No other

attorneys were consulted or retained.

28. Previously, on November 20, 2017 at 6:30 p.m. the town of Belville had its regular

meeting of its Board of Commissioners. Its written agenda did not include any

mention of a transfer of assets and liabilities from H2GO to the Town of Belville. Its

only closed session during the meeting was held in order to consult with the town

attorney regarding “litigation with Urban Smart Growth and Michael White.” There

were no reports offered from the town attorney, mayor, mayor pro tem or the

commissioners under “Other Items and Reports.” This meeting was recessed until 8

a.m. on November 29, 2017. No reason for the recess was offered at the meeting or

recorded in the minutes.

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29. Sometime during November 28, 2017, the North Carolina Local Government

Commission (“LGC”) learned of the proposed transfer of its assets and liabilities by

H2GO to the Town of Belville. That commission became concerned that the

transaction would include the transfer of H2GO’s bond indebtedness. Sharon

Edmundson, Director of the Fiscal Management Section of the Finance Division of the

commission, sent an email at 4:43 p.m. on that date to Executive Director Walker,

Mayor Allen, town attorney Eldridge and to the Belville town administrator. Copies

of the email were sent to North Carolina State Treasurer Dale R. Folwell and other

state treasurer officials. It stated:

SLGFD staff has learned that the elected officials for H2GO plan to vote
tonight on transferring the assets and related debt of the District to the
Town of Belville. The debt is secured by system revenues. We cannot
confirm that the bond counsel for H2GO has been consulted on this plan.

We cannot recommend strong enough that H2GO consult with its bond
counsel before taking any action involving its debt or the assets that
generate the revenue that supports that debt. Actions such as those you
are considering may cause the debt to go into default status, which is
surely not your intent. In addition, any transfer of debt will require the
approval of the Local Government Commission before such a transfer
can occur (emphasis added).

We also recommend that the Town of Belville take the time to consider
the full responsibilities of taking on a water and sewer system, including
not only the costs and expertise needed to operate the system but the
costs and long term commitment to adequately maintaining and
eventually replace such a system.

We are happy to discuss these issues with you at your convenience.

30. In spite of the Edmundson email, the duly noticed H2GO board of commissioners

meeting scheduled for 6:00 p.m. on November 28, 2017 went forward as planned.

No contact with the LGC or bond counsel was made by Eldridge, Walker, Allen, or the

town administrator. One unsuccessful attempt was made by Finance Director Hook

to make contact by phone.

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31. All of the commissioners attended that meeting. The prepared agenda did not have

anything listed under new business. The meeting was called to order by Chairman

Browning at 6:00 p.m. The minutes maintained by the clerk indicate that Commission

Antos requested that discussion on H2GO “Operations” be added to New Business.

The consent agenda with that modification was approved unanimously.

32. After the meeting progressed to New Business, the minutes recorded that

Commissioner Antos, after hearing public comments on addressing the issue of the

quality of the water, “set forth” a resolution to sell, convey, transfer and assign all

H2GO real and personal property to the Town of Belville. Afterwards he distributed

for the first time copies of the recently prepared resolution and supporting documents

to the other commissioners. The minutes indicate that Antos stated that he had

“found out about this” two days before Thanksgiving which would have been

November 23, 2017. He further stated that “he believed that Belville had initiated

this” and “[I]n order to save the RO Plant I’m doing something that I never imagined

that I would do by selling H2GO to another municipality, but if that’s what we have

to do then that’s what we have to do.” In response to questioning, Antos stated that

the documents had been written for days. Commissioner Gerkin, Commissioner

Trombley, and H2GO’s attorney Steve Coble had not seen or reviewed the documents

prior to the meeting. Executive Director Walker stated that he had seen the four

documents during the last two days and that he was operating according to the

consensus reached by Commissioners Browning, Antos and Jenkins. Walker

explained that there were three documents, the Conveyance Agreement, Bill of Sale,

and an Operations Inter-local Agreement. He also advised that the conveyance

agreement was subject to the conditions contained in the conveyance agreement

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being met and subject to the “LGC approving the transfer of the SunTrust Bond”

which in his opinion was transferrable. Prior to the vote on the resolution, the LGC

email of that afternoon was read to the board by Commissioner Gerken. The motion

to approve the resolution (Exhibit 4) passed by a vote of 3 (Browing, Antos, and

Jenkins) to 2 (Trombley and Gerken). The meeting adjourned at 6:53 p.m. less than

one hour after it convened.

33. Immediately after the meeting Chairman Browning executed the agreement (Exhibit

1) which was delivered to the Town of Belville that evening or early the next morning.

34. The Town of Belville Board of Commissioners, at 8:00 a.m. on the next day,

November 29, 2017, reconvened its November 20, 2017 meeting. No reason had

been publicly given for recessing that November 20, 2017 meeting. Belville later

admitted that the meeting was recessed until November 29, 2017 “in the event that

any matter should arise from the November 28, 2017 meeting of H2GO’s Board of

Commissioners that would require immediate consideration by Belville’s Board.” After

a closed session was held to consult with the town attorney, the meeting reconvened

on the public record. With a unanimous vote, the resolution “Accepting Agreements

With and Conveyances From Brunswick Regional Water and Sewer (H2GO)” (Exhibit

5) was adopted. The “Resolution Authorizing Certain Capital Outlay Projects and

Expenditures From Water and Sewer Operating Funds” was also unanimously adopted

along with the designation of various financial banks as official depositories.

35. The recitals to both the “Agreement to Convey Water and Sewer Systems” (Exhibit

1) executed by H2GO and to the “Resolution by the Town of Belville Accepting

Agreements with and Conveyances From Brunswick Regional Water & Sewer H2GO”

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(Exhibit 5) contain identical sections which set out the reasons for these transactions.

Those identical sections are:

 GenX, and other unregulated contaminants, potentially harmful to humans,

have been detected in water drawn from the River.

 The county is unable to filter GenX and other chemical contaminants out of the

water before selling it to the District.

 A reverse osmosis (“RO”) water treatment system, sourced from deep-well,

confined aquifers will provide contaminant free finished water for customers

within the District, thus immediately removing the served population of 25,000

from the contaminated and vulnerable River Source.

 In compliance with its statutory mandate to promote and preserve public

health and welfare, and as an inherent element of its long term Water System

plans, the District has been proactively planning and working to construct and

operate a new 4.0 MG per day RO water treatment plant, and has invested

over $6 million and awarded construction contracts exceeding another $8

million in that project to date.

 The RO water treatment plant will be located on real property owned by the

District within the Town’s corporate limits.

 The District’s efforts to complete the RO water treatment plant have been

unjustifiably impeded, and recent events indicate the project may be

effectively terminated by rescinding the RO-related contracts thereby wasting

the $14 million the District has already invested towards safe, clean,

contaminant-free water supplies.

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35. The H2GO Commissioners described in their recitals the “recent events,”

referenced to above, to be (1) legislative consideration of House Bill 587, having a

local effect in Brunswick County, that would have required the District to undertake

an additional, redundant, and superfluous economic impact study for the RDO water

treatment plant; (2) the County and the Town of Leland adopting resolutions

requesting that the District delay the RO project until after the November 2017

election; and (3) the results of that election which will leave the District’s divided

governing board with a majority strongly opposed to the RO water treatment plant.

36. The Town of Belville commissioners described in their recitals that those “recent

events” included: (1) Commissioner Trombley openly questioning the need for the

District and stating that construction of the RO water treatment plant will likely be

stopped; (2) Commissioner Jeff Gerken stating that he knows a majority of the

board, when newly-elected Commissioner Beer is seated in December, and “he plans

to vote to kill the project;” and (3) Newly elected William Beer, who campaigned on

a platform to “stop further construction on the RO plant,” stated that he was working

closely with Trombley and Gerken and will seek to “abolish all activities and contracts

related to the reverse osmosis plant.”

37. The “recent events” described in the Town’s recitals, contained in ¶36 above,

were also included in H2GO’s recitals.

38. Additionally both the H2GO and Town of Belville commissioners recited that

based on those recent events, “it is reasonable to consider the risk to public health

and local economic development posed by the new board terminating the RO

construction project and seeking to dissolve the District.”

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39. Both commissions also found and concluded that (a) “public health, safety, and

welfare will be improved by the construction of the RO water treatment plant which

will provide the only contaminant-free and sustainable source of water for northern

Brunswick County;” (b) “the projected $34 Million Dollar project cost for the RO water

treatment plant and the preservation of the District’s 29 employment positions with

an annual payroll of $1,540,000 will improve and promote economic development

within the Town and in northern Brunswick County;” and (c) by entering into this

agreement “whereby the District conveys the Water and Sewer Systems to the Town”

and by agreement the District “operates, maintains, and manages those public

enterprises on behalf of the Town” will “effectively accomplish the public health and

economic development goals” described in the recitals.

40. The resolution passed by the H2GO Board of Commissioners provided the

authority to Chairman William H. Browning to execute the “Agreement to Convey

Water and Sewer Systems,” (Exhibit 4) which was prepared by attorney Eldridge. It

provided that:

At Closing, the district shall convey to the Town, free and clear of liens
and encumbrances, the Water and Sewer Systems by delivering
Warranty Deeds for the District’s real property and an assignment and
Bill of Sale for the District’s personal property including, inter alia, the
Systems’ infrastructure, facilities, structures, vehicles, equipment,
supplies, funds, permits, contracts, easements, other property rights,
liabilities, debt obligations, and all other materials and things associated
with or required for the ownership, operation, and maintenance of the
Water and Sewer Systems. Section 1.01 Conveyance by the District.

41. Article 2 of that agreement required that the District at closing deliver to the

Town of Belville a fully executed

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…Agreement, Warranty Deeds, an Assignment and Bill of Sale …in
satisfactory form, conveying to the Town, free and clear of liens and
other encumbrances, title to the District’s Water and Sewer Systems
including, but not limited to, the District’s real property and personal
property including, without limitation, easements, other property rights,
water and wastewater treatment infrastructure, collection line, lateral
lines, pump stations, facilities, structures, vehicles, equipment,
supplies, account and customer information, funds, liabilities, debt
obligations, and all other material and things associated with or required
for the operation and maintenance of the District’s Water and Systems.
Section 2.01 A.1. Closing.

Article 2 of the agreement also required the Town to deliver to the District an

executed agreement and operating agreement. Section 2.01 B.

42. Article 3 required confirmation by the District that all of its representations and

warranties are “true and correct” and that it has

complied with all of the obligations, covenants, and conditions required


to be performed by this Agreement including providing the Town with
satisfactory evidence that any third-party approvals have been obtained
relative to assigning and/or transferring the permits, contracts,
liabilities, and debt obligations, including the 2012 SunTrust Revenue
Bond (the “SunTrust Bond”), required to consummate the transactions
contemplated by this Agreement. Section 3.01 B. Conditions to
Agreement: Performance of Obligations.
The District also had to expressly agree that “[P]rior to the expiration of the

term under the parties’ contemporaneous Operating Agreement, the District shall

obtain the approval of the North Carolina Local Government Commission to transfer

the SunTrust Bond to the Town. Section 3.01 C. Further, the District had to expressly

agree that “no litigation, proceedings, lawsuits, or investigations shall have been

commenced with respect to the District, the Water and Sewer Systems, any permits,

contracts, property interests, rights and obligations associated therewith nor …have

sought to enjoin or prevent the Closing or alter any material performance under this

Agreement.” Section 3.01 D. Conditions to Agreement: No Litigation.

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43. The Agreement allowed the Town to totally rescind the agreement if the District

failed to satisfy any one of the conditions set out in section 3.01. Section 3.02.

Consequence of Failing to Satisfy Conditions.

44. The Agreement contained cross indemnification clauses that required the parties
to:
reimburse, indemnify and hold harmless the other …from and against
all claims, causes of action, judgments, awards, demands, losses,
settlement payments, deficiencies, liabilities, cost and expenses,
including …reasonable attorney fees and court costs suffered,
sustained, incurred, or required to be paid by the other party …which
result from, relate to, or arise out …[of]
(1) Any untruth, inaccuracy, or breach of any representation, warranty
or statement of the District contained in this Agreement or in any other
agreement, instrument or writing furnished by the [Town] [District] ...,
(2) Any breach of or the failure to fulfill or perform any obligation or
covenant of the [Town] [District] contained in this Agreement.
(3) The ownership, operation and/or use of the District’s Water and
Sewer Systems …” Section 5.01 A. and B. Indemnification.
45. In response to concerns about personal liability by H2GO Commissioner Antos,

on the day before the Commission meeting, Eldridge modified the indemnity language

contained in Section 7.01 of the Agreement. Liability of Officers, Employees and

Agents. That modified section provided that:

No elected or appointed member, officer, employee, or agent of either


party shall be subject to any personal liability or accountability by reason
of having voted to approve or having executed this Agreement or any
other documents related to the transactions contemplated hereby. Such
officials, officers, employees or agents shall be deemed to have executed
any such documents in their official capacities only and not in their
individual capacities. Section 7.01 Liability of Officers, Employees and
Agents.

Eldridge remarked to Walker in an email the afternoon of November 27, 2017

that the commissioners’ concern was “whether they are stepping beyond their

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authority.” Eldridge contended that sections 5.01 and 7.01 meant that Antos should

not be named individually in any filed lawsuit, but if he is “he should be indemnified

under [an H2GO insurance policy that covered past, current and future elected

officials for ‘operational practices’] and eventually off the hook anyway … and for a

multitude of legal reasons, it is reasonable to assume the lawsuit would eventually

be dismissed against him.” Eldridge’s position was relayed to Antos by Walker, and

he apparently became satisfied with the indemnity provision.

46. The final draft of the conveyance agreement was modified again by Eldridge after

the H2GO board of commissioners meeting recessed on November 28, 2017 to

address the North Carolina Local Government Commission’s warnings about the

SunTrust Bond issue. The final document contained the provision that LGC approval

of the bond transfer was a condition of the agreement. Section 3.01 stated that

“[T]his agreement is expressly conditioned upon and subject to the District satisfying

… the following express condition: … C. Prior to the expiration of the term under the

parties’ contemporaneous Operating Agreement, the District shall obtain the approval

of the North Carolina Local Government Commission to transfer the SunTrust Bond

to the Town. Section 3.01 C. Conditions to Agreement: Sun Trust Bond. Eldridge

confided in Walker, in a text message sent to him during the meeting, that he was

not “overly optimistic” that LGC would approve the transfer.

47. Pursuant to Section 1.01 of the Agreement to Convey Water and Sewer Systems,

Chairman Browning “in consideration of the sum of Ten Dollars and other valuable

consideration” executed on November 28, 2017 an assignment and bill of sale

(Exhibit “2”) to the Town of Belville of “certain personal property, contracts, permits,

funds, easements and property rights” described on Exhibit A, which was attached to

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the assignment and bill of sale, and shown on the Water System Map, Exhibit B, and

the Sewer System Map, Exhibit C. One hundred twenty-two items are listed in detail

on Exhibit 2, Attachment Exhibit A. These include easements, water and sewer

infrastructure, office and maintenance buildings, motor vehicles and equipment, real

property, engineering, consulting, and construction agreements, operating permits,

assessments, and cash totaling $16,596,282.55. It also listed as sold and transferred

the 2012 SunTrust Revenue Bond, Brunswick County Interlocal Debt, customer

accounts, pay plan receivables, customer deposits and unbilled receivables.

Generally, the Bill of Sale listed all of H2GO’s real and personal assets as well as all

of its debts.

48. Chairman Browning and Town of Belville mayor Mike Allen, also on November

28, 2017, executed an “Agreement for the Operation and Maintenance of Water and

Sewer Systems” (Exhibit 3) in which H2GO would operate the systems that had been

transferred to the Town of Belville. The primary provisions of this agreement are

that:

a. The operating agreement was to terminate on January 31, 2018. Section

4.01.A Term of Agreement.

b. The agreement could be terminated upon 30 day notice by either party.

Section 10.01 Termination.

c. The Town shall pay to the District a weekly base fee of $70,000 for the

district’s performance under this agreement. Section 5.01 Compensation. Listed in

section 5.02 are those performance items covered by this amount and in section 5.03

those that are not.

19
d. Article 6, Section 6.01 The Parties’ Obligations addresses the obligations

of the District. The district is generally required to (1) provide trained and competent

personnel; (2) provide regular inspections and maintenance of the infrastructure; (3)

maintain maintenance and daily operation records; (4) manage and operate the

systems with good business and operating practices and standards; (5) bill customers

and collect payments; and (6) perform the Town’s obligations under the contracts

and permits associated with the water and sewer systems.

e. Perform the Town’s obligations under the contracts and permits associated

with the water and sewer systems. Section 6.01.J.

e. The Town is the “governing authority” with regard to committing to provide

water and sewer services. Section 6.01.K.

f. The district is to provide notice in writing of any necessary capital

improvements. Section 6.01.P.

g. The district shall assist the Town with seeking financing approval from the

Local Government Commission for the construction of the reverse osmosis water

treatment plant. Section 6.01.Q.

h. The employees of the district are permitted to enter upon Town property

and operate Town vehicles and equipment. Section 6.01.S.

i. The “past, current, and future members of the governing board are not

licensed nor permitted to use any Town vehicles or equipment and are expressly not

licensed or permitted to enter upon any Town property associated with the Town’s

Water and Sewer Systems excepting the Town Hall public building.” Section 6.01.S.

20
j. The District shall perform the administrative and managerial duties required

for the operation of the public enterprise water and sewer systems. Section 6.01.U.

k. The District shall provide utility billing services for the Town’s systems and

will bill the system’s customers “based on the Town’s then current adopted rate

schedules.” Section 7.01 Billing.

l. The District shall collect the customers’ utility payments and capital recovery

fees in accordance with Town rates. All funds collected by the District shall be

forwarded to the Town along with written accounting of usage, billings, payments

received and the status of all accounts. Section 7.02 Collections.

m. The district shall “indemnify, defend and hold harmless” the Town, its

elected and appointed officials and its employees from any all costs, expense or

liabilities caused by the District’s default and breach of this Agreement. There was a

reciprocal indemnification obligation if the Town defaults on or breaches this

agreement. Section 8.01 Indemnification.

n. Default occurs when (1) the District fails to performs its obligations; (2) the

District materially breaches the agreement; and (3) the agreement is rescinded by

the District’s governing board prior to the expiration of its term. Section 11.01 Default

Defined.

o. Damages to the Town were liquidated “if the operation, maintenance, and

management of its Water and Sewer Systems is not performed” by the District. The

parties agreed that liquidated damages of $9,333.33 per day would be incurred by

the Town for “delays in performance only” beginning on the date on which the default

occurred and continuing each day until the Agreement expires. Section 11.02

21
Liquidated Damages Upon District’s Default. This remedy is in addition to any

“remedies available by other laws, regulations, warranty or guarantees, or by other

provisions of the Agreement.” Section 11.03 Cumulative Remedies.

49. On November 29, 2019 a North Carolina Special Warranty Deed (Exhibit 2A),

executed by Chairman William H. Browning, was recorded in the Brunswick County

Register. Through that deed, thirty-eight parcels of real property were conveyed

from Brunswick Regional Water & Sewer H2GO in fee simple to the Town of Belville.

These thirty-eight tracts comprised all of the real property owned by H2GO.

50. On December 1, 2017, Town of Leland, North Carolina and H2GO Brunswick

Regional Water & Sewer filed the original complaint in this action. On the same date

a temporary restraining order was entered by the Honorable Thomas H. Lock.

51. On December 28, 2017 Judge Lock, after a hearing, entered a preliminary

injunction. The First Amended Complaint for Declaratory and Injunctive Relief was

filed on April 5, 2018.

52. The court further finds that there is a legitimate public debate and concern in

the communities of northeastern Brunswick County over the quality of the water

distributed to the citizens through the H2GO system. Both the conveyance

agreement and the Belville resolution recited, and the defendant contends, that

GenX, and other unregulated contaminants, potentially harmful to humans, have

been detected in water drawn from the River. Executive Director Walker, however,

stated in his deposition that on November 27, 2017 at the time of the purported

conveyance and in January of 2019, to the best of his knowledge, that the water

provided by H2GO to its customers “met all state and federal water quality

22
standards.” These findings, conclusions of law, and orders by the court are not meant

to resolve those important issues. The court has found facts in an effort to determine

whether the acts and procedures followed by the H2GO Board of Commissioners and

the Town of Belville in November and December of 2017, in an attempt to address

these issues, complied with public policy and with the relevant North Carolina

statutory enactments and the decisions handed down by the appellate courts.

Based upon the foregoing, the court concludes as a matter of law:

Motion to Strike Affidavit of William H. McBride

The affidavit of attorney William H. McBride, was offered by Leland as expert

legal testimony which constituted legal arguments and conclusions regarding the

ultimate issues of law to be decided by the court. The motion of the Town of Belville

to strike the affidavit of William H. McBride is allowed.

I.

First Claim for Relief by Town of Leland and H2GO against the Town of

Belville:

For a Declaration that the Challenged Resolution, Putative Transfer and

Putative Agreements are Void Because They Impair H2GO as a Body Corporate

and Politic in Contravention of N.C. Gen. Stat. Chapter 130A, Article II, Part 2

Pursuant to N.C. Gen. Stat. §130A-55, a sanitary district board is a “body

politic and corporate.” That board can exercise those powers delineated in

subsections (1) through (25) of that statute. In this case H2GO Brunswick Regional

Water & Sewer is a sanitary district existing and operating pursuant to Chapter 130A

23
of the North Carolina General Statutes. Prior to end of November, 2017, H2GO

provided sewage collection, water distribution and wastewater treatment to

approximately 10,300 residential and commercial customers in an area of about 26

square miles, populated by over twenty five thousand people. The entire Town of

Belville, with its approximately one thousand customers and over thirteen hundred

voters eligible to vote in the commissioners’ election, is served by H2GO. A majority

of the Town of Leland, with its approximately five thousand customers and over

eleven thousand voters eligible to vote in the commissioners’ election is served by

H2GO. A total of 17,805 voters are eligible to vote in those elections. The Town of

Belville has three employees and an annual budget of about one million dollars.

The “Agreement to Convey Water and Sewer Systems,” executed by the H2GO

commission on November 28, 2017, was comprehensive. It transferred to the Town

of Belville the

Water and Sewer Systems, by delivering Warranty Deeds for the


District’s real property and an Assignment and Bill of Sale for the
District’s personal property including, inter alia, the Systems’
infrastructure, facilities, structures, vehicles, equipment, supplies,
funds, permits, contracts, easements, other property rights, liabilities,
and all other things associated with or required for the ownership,
operation, and maintenance of the Water and Sewer Systems.

This meant that the transfer to the Town of Belville was valued at over $16 million

dollars in cash and $40 million in assets. This wholesale transfer and assignments

eviscerated the ability, authority and power of the incoming H2GO Board of

Commissioners to independently operate and manage the water and sewer systems

at a level and quality necessary to fulfil its purpose mandated by N.C. Gen. Stat.

§130A-47 to “preserve and promote the public health and welfare” of its customers.

Although the “Agreement for the Operation and Maintenance of Water and Sewer

24
System,” executed also on November 28, 2017 by the parties, required the District

to “provide operational, maintenance, and management services for the Town’s

Water and Sewer System,” it was to expire on January 31, 2018 “unless earlier

terminated.”

On the date of the operation agreement’s expiration or its termination, the

elected commissioners would be left with no water or sewer system to operate, no

employees, staff and assets to exercise the powers granted to the board by N.C. Gen.

Stat. §130A-55 and other specific enactments. In essence, it ceased to be “a body

politic and corporate” created by statute. It would not be feasible or practical for the

H2GO board of commissioners, after the operating agreement expired, to create or

operate, or attempt to create or operate, parallel water and sewer systems that would

compete with the ones already in existence. If such attempts were made, it would

probably result in allegations by Belville that H2GO had violated and breached Section

4.04 and other sections of the conveyance agreement.

Article 2, Part 2 of chapter 130A, in addition to creating sanitary districts, also

describes an orderly and detailed means and procedures required to dissolve them.

N.C. Gen. Stat. §130A-72 “Dissolution of certain sanitary districts” requires

that:

1. 51% or more of the resident freeholders of a sanitary district, which has no

outstanding indebtedness, may petition the board of commissioners of the county to

dissolve the district.

2. Upon receipt of the petition, the county board of commissioners shall notify

the Department of Health and Human Services as well as any board of commissioners

in which a portion of the district lies of the receipt of the petition.

25
3. The county board of commissioners shall request that the Department hold

a joint public hearing with the county commissioners concerning the dissolution. The

secretary and the chairperson of the county board of commissioners shall identify the

place and time for a public hearing.

4. The county board of commissioners shall give notice of the hearing by

posting a notice at the courthouse door of the county or counties and by publication

in a local newspaper or newspapers at least once a week for four consecutive weeks.

If all matters pertaining to the dissolution cannot be concluded at the hearing, it can

be continued to a later date and time.

5. If after the hearing has concluded, the Commission of Public Health and the

county board(s) of commissioners “deem it advisable to comply with the request of

the petition,” the Commission shall adopt a resolution to dissolve the sanitary district.

6. After the resolution to dissolve the sanitary has been adopted, the local

sanitary district is authorized to convey all assets, including cash, to any government

unit or public utility company operating under the authority of a certificate of public

convenience and necessity granted by the North Carolina Utilities Commission in

return for the assumption of the obligation to provide water and sewage services to

area served by the district.

None of these provisions were followed or attempted in the H2GO to Belville

transaction which brought about the same results as a dissolution, a conveyance of

all assets and cash in return for assumption of the obligation to provide water and

sewage services.

The legislature in N.C. Gen. Stat. §130A-73 required similar procedures when

the boundaries of a sanitary district are entirely located within or coterminous with

26
the corporate limits of a city or town. Also as a condition precedent to the dissolution

under this provision, the sanitary district had to be “without indebtedness.” N.C.

Gen. Stat. §130A-73.1 addresses another distinct situation where there has been an

annexation of the area within the district by a city or town. It also requires petitioning

the board of county commissioners, notifications to the Department of Health and

Human Services and governing body of the city or town and adoption. If the county

commissioners, the governing body of the city or town, and the Commission of Public

Health deem it advisable to comply with the petition request, the Commission shall

adopt a resolution of dissolution.

Mergers of sanitary districts and a city or town also results in terminating the

district as a political subdivision. To accomplish this, N.C. Gen. Stat. §130A-80

requires that in the case of a merging of a district contained within a city or town,

where the district and the city or town do not have coterminous boundaries, the

governing boards have to petition the board of commissioners requesting an election

by the voters within the sanitary district and city or town. A majority of the votes

cast in the district and a majority of the votes cast in the city or town is necessary

for the merger.

The procedure to allow the merging of a sanitary district with a coterminous

city or town is defined in N.C. Gen. Stat. §130A-80.1. It requires that an election be

held with all of the voters of the district or the city or town being eligible to vote. A

majority of all the votes cast would be necessary for the merger. An election would

also be required by N.C. Gen. Stat. §130A-80.2 for a merger of a sanitary district

with a non-coterminous city or town.

27
Under N.C. Gen. Stat. §130A-81(1), a dissolution of a sanitary district can

occur through a referendum when the General Assembly incorporates a municipality,

which includes within its boundaries a sanitary district or is coterminous with a

sanitary district. An alternative to N.C. Gen. Stat. §130A-81(1) is provided in

subsection 1a. In counties having a population in excess of 275,000 the county board

of commissioners may dissolve a sanitary district by a referendum on the question of

dissolution and assumption by the county of any outstanding district indebtedness.

Pursuant to N.C. Gen. Stat. §130A-82, a county board of commissioners may dissolve

a district which has no outstanding indebtedness when members of the district vote

in favor of dissolution. A plan for continued operation of services and functions must

be adopted by the county commissioners before the dissolution can become effective.

Also, N.C. Gen. Stat. §130A-85 provides for dissolution of a sanitary district when

there are 500 or less resident freeholders living within the district, it has no

outstanding bonded indebtedness, and the county board of commissioners adopts a

plan for continued operations and agrees to assume any other legal district

indebtedness.

As is evident from the above enactments, the General Assembly has adopted

a complete, orderly and detailed procedures whereby a sanitary district can be

dissolved, merged or incorporated with another government entity. Based upon the

above, it is clear that the General Assembly concluded that in order for a sanitary

district to be dissolved, merged or incorporated into another governmental body,

these statutory procedures and prerequisites have to be adhered to.

The Agreement by H2GO to Convey Water and Sewer Systems was drafted

and executed to avoid all of these safeguards and requirements and to avoid any

28
reconsideration of the reverse osmosis decision by the newly elected board. The

language of the recitals in both the Agreement and Belville’s Resolution Accepting the

Agreement clearly supports that conclusion.

Belville contends that the H2GO sanitary district still exists and remains an

independent body politic and corporate. It further contends that the district remains

functional as long as the operating agreement is in effect, but the agreement in

Section 4.01 provides that it “shall expire on January 31, 2018 unless earlier

terminated.” Although an extension is possible, this language indicates that it was

the intention of the town to terminate the operation agreement as soon as practically

possible. After the operation agreement expires or is terminated, the district’s board

of commissioners will not have a water or sewer system to operate, no employees,

no customers, no assets, no permits, no infrastructure, and no income. It would

exist in name only but could not function as a sanitary district or exercise the powers

granted to a sanitary district in N.C. Gen. Stat. §130A-55 and its subsections which

provides that “[A] sanitary district shall be a body politic and corporate” and “may

exercise all of the powers granted to sanitary districts by this Article.”

Generally, the statute grants the district the power (1) to acquire, construct,

maintain and operate sewage collection, treatment and disposal systems and water

supply systems as well as water purification or treatment plants; (3) to levy taxes on

property in order to carry out the powers and duties conferred and to pay the principal

and interest on bonds and notes of the district; (4) to acquire either by purchase,

condemnation or otherwise and hold real and personal property, easements, rights-

of way and water rights; (5) employ engineers, counsel and other necessary persons;

(6) to negotiate and enter into agreements with owners of other existing sewer

29
systems and water supplies; (7) to adopt rules necessary for the proper functioning

of the district; (8a and 8b) to contract with any person to supply raw water or filtered

water and sewer service; (8c) to contract with any person for the treatment of the

district’s sewage in a disposal or treatment plant owned by that person; (9) after

adoption of a plan required under G.S. 130A-60 to alter or modify the plan if approved

by the Department which must determine that the alteration or modification does not

constitute a material deviation from the objective of the plan and is in the public

health interest of the district; (11) to collect and dispose of garbage, waste and other

refuse by contract or otherwise; (14) to have privileges and immunities granted to

other governmental units in exercise of its governmental functions; (15) to use the

income of the district and, if necessary, to levy and collect taxes upon all taxable

property in the district to pay the costs of collecting and disposing of garbage, waste

and other refuse; (16) to adopt rules for the promotion and protection of the public

health and to possess the listed powers to do so; (17) to establish zoning units on

property not controlled by other jurisdictions for the purpose of promoting and

protecting the public health; (18) to acquire by contract any distribution system

located outside of the district when the water for the distribution system is supplied

by the district; (20) to dispose of real or personal property belonging to the district

according to the procedures prescribed in Article 12 of Chapter 160A; (22) to make

special assessments against benefitted property within the district for the purpose of

constructing, reconstructing, extending the water systems or sanitary collection,

treatment and sewage disposal systems; and (25) to negotiate and enter into

agreements with other municipal corporations or sanitary districts for the purpose of

implementing an economic development plan.

30
N.C. Gen. Stat. §130A-64 also gives the sanitary board the power to “apply

service charges and rates upon the exact benefits derived” in order to maintain and

operate the work of the district and pay the principal and interest on any outstanding

bonds. It is also authorized to modify and adjust those rates.

According to the conveyance agreement, once the operation agreement

expires or is terminated by the Town, by design, all of these powers would be

surrendered to the Town of Belville Board of Commissioners to be exercised as the

members of that board saw fit. By doing so, the newly elected H2GO board of

commissioners would be without the ability to govern meaningfully as mandated by

Chapter 130A.

The operation and maintenance agreement, recites that “the Town owns and

is responsible” for a public water distribution system and a public sanitary sewer

collection system. An obligation of the town set out in Section 6.02 of this agreement

required it to “[c]ontinue to properly manage and fund the Water and Sewer

operations through necessary rate adjustments.”

Town attorney Eldridge, the author of the resolutions and agreements,

correctly and completely understood the practical and legal ramifications and intent

of the “Agreement to Convey Water and Sewer Systems”, “Assignment and Bill of

Sale” and the “Agreement for the Operation and Maintenance of Water and Sewer

Systems.” He concluded in his deposition testimony that after the transfer, the H2GO

board would not have much business to conduct. It would not have any infrastructure,

customers or property, and the former employees of H2GO would become employees

of the Town of Belville. In fact, Section 6.02 of the operation and maintenance

agreement further provided that “all past, current, and future members of the

31
District’s governing board are not licensed nor permitted to use any Town vehicles or

equipment and are expressly not licensed or permitted to enter upon any Town

property associated with the Town’s Water and Sewer Systems excepting the Town

Hall public building.” This provision clearly demonstrates the intent of the Town and

the former majority of the District Board of Commissions to dismantle the sanitary

district as a body politic and corporate and completely remove all significant power

from the new District Board of Commissioners in contravention of N.C. Gen. Stat.

Chapter 130A, Article II, Part 2.

Based upon the above, the summary judgment motion of the Town of Leland

and H2GO Brunswick Regional Water & Sewer as to the first cause of action is

Granted. The summary judgment motion of the defendant Belville is Denied.

II.

Second Claim for Relief by Town of Leland and H2GO against the Town of Belville:

For a Declaration that the Challenged Resolution, Putative Transfer and Putative

Agreements are Void Because It Involves an Improper Transfer of Government

Functions.

The leading case of Plant Food Company v. City of Charlotte, 214 N.C. 518,

519-520, 199 S.E. 712, 713-714 (1938) addresses this issue. Its rule is that:

[W]here governmental discretionary powers are involved, a board


can make no contract which would bind its successors in office with
respect to the exercise of the discretion. Amongst the powers generally
conceded to be accompanied by such governmental discretion, and
which cannot be suspended or controlled by contract, are usually classed
the legislative powers of the governing body--the power to make
ordinances and decide upon public questions of a purely governmental
character (and under this head must be classed most of the strictly
governmental discretionary powers, since the body acts as a whole and
usually by ordinance or resolution); the power to lay out and maintain

32
streets, to build bridges and viaducts over which they lead, preserve
civil order; to regulate rates (where power to do so is given in the
charter); to levy taxes, make assessments, and the like. These are
mentioned simply by way of illustration and only roughly indicate the
quality of the power we are discussing. "A public function is one which
is exercised by virtue of certain attributes of sovereignty delegated to a
city for the health and protection of its inhabitants, or the public."
[citation omitted].

Where governmental powers of this kind are not involved or


disadvantageously affected, the right to make contract, otherwise
unobjectionable to the law, is one of the most important incidents of
municipal government. [citation omitted.] In the administration of its
proprietary affairs, the commissioners or councilmen of the town may
make reasonable contracts binding upon their successors running
through a term of years.

A local government may enter into a contract that is binding on itself “unless

the contract purports to bind the government on a matter on which public policy

requires that the government retain discretion as to whether and how to act.” David

Lawrence, Contracts that Bind the Discretion of Governing Boards, POPULAR

GOVERNMENT, Summer, 1990, p. 39. Professor Lawrence suggests that the categories

of discretionary powers basically involve the exercise of either the government’s

police power or the government’s taxing and spending powers. On the other hand,

local government can enter into a contract that binds future boards if it involves

proprietary activity such as ordinary commercial transactions. “The true test is

whether the contract itself deprives a governing body, or its successor, of a discretion

which public policy demands should be left unimpaired.” Plant Food, 214 N.C. at 520,

199 S.E. at 714.

The court admitted that “the line between powers classified as governmental

and those classified as proprietary is none too sharply drawn, and is subject to a

change of front as society advances and conceptions of the functions of government

are modified under its insistent demands.” Id. 214 N.C. at 520, 199 S.E. at 715.

33
In N.C. Gen. Stat. §130A-47, the State of North Carolina declared as its public

policy that the Commission for Public Health may create sanitary districts without

regard for county, township or municipal lines “for the purpose of preserving and

promoting the public health and welfare.” In order to accomplish that purpose it

granted a sanitary district the powers contained in N.C. Gen. Stat. §130A-55.

A governmental function is “an activity that is ‘discretionary, political,

legislative, or public in nature and performed for the public good in behalf of the State

rather than for itself.’" "When a municipality is acting 'in behalf of the State' in

promoting or protecting the health, safety, security, or general welfare of its citizens,

it is an agency of the sovereign. When it engages in a public enterprise essentially

for the benefit of the compact community, it is acting within its proprietary powers."

Britt v. City of Wilmington, 236 N.C. 446, 450, 73 S.E.2d 289, 293 (1952) (citing

Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42 (1942)). The courts have

established that the construction of a sewerage system is a governmental function.

McCombs v. City of Asheboro, 6 N.C. App. 234, 235, 170 S.E.2d 169, 170 (1969).

The power to establish rates for water and sewer is a governmental function and not

a proprietary one. Candler v. Asheville, 247 N.C. 398, 407, 101 S.E.2d 470, 477

(1958).

A "proprietary" function, on the other hand, is one that is "commercial or

chiefly for the private advantage of the compact community." Estate of Williams v.

Pasquotank Cty. Parks & Rec. Dep't, 366 N.C. 195, 199, 732 S.E.2d 137, 141 (2012).

In the case where a governing board “enters a contract which restricts it in the

performance of its governmental function or in the exercise of its legislative authority,

34
such a contract is ultra vires and is of no legal effect. Raintree Corp. v. Charlotte, 49

N.C. App. 391, 396, 271 S.E.2d 524, 527 (1980) citing, Bessemer Improvement Co.

v. City of Greensboro, 247 N.C. 549, 101 S.E. 2d 336 (1958).

Thus, actions are void or invalid from the beginning if it is beyond the power of local

government to enter into a contract (emphasis added). However, “in the

administration of its proprietary affairs [local governing boards] may make

reasonable contracts binding upon their successors running through a term of years.”

Plant Food, 214 N.C. at 520, 199 S.E. at 715.

The Sanitary District on November 28, 2017 conveyed to Belville

[T]he Water and Sewer Systems by delivering Warranty Deeds for the
District’s real property and an Assignment and Bill of Sale for the
District’s personal property including, inter alia, the Systems’
infrastructure, facilities, structures, vehicles, equipment, supplies,
funds, permits, contracts, easements, other property rights, liabilities,
debt obligations, and all other materials and things associated with or
required for the ownership, operation, and maintenance of the Water
and Sewer Systems.
Section 1.01 Agreement to Convey Water and Sewer Systems.
The “Agreement for the Operation and Maintenance of Water and Sewer”

included Belville’s obligation under Section 6.02 B to “[C]ontinue to properly manage

and fund the Water and Sewer Systems’ operations through rate adjustments.”

(emphasis added). Clearly, by this conveyance, the Town of Belville would acquire

the ability to oversee and manage the systems and set the rates for present and

future services under the systems. After the expiration of the operation agreement,

or if it is terminated by the Town, the operation of these systems by the Town would

require making key policymaking decisions that are governmental functions in

addition to other proprietary functions. The setting of rates, and the levying of taxes

35
and special assessments are some of the specific governmental functions listed in

Plant Food which had been conveyed to the Town of Belville.

In order to manage and operate the water and sewage systems, the Town of

Belville, once the operating agreement expired, would solely and permanently have

to exercise those powers contained in N.C. Gen. Stat. §130A-55, many of which are

governmental or legislative functions and designated for the governing authority of

sanitary districts. Those powers that are or may be legislative or governmental

include the authority (1) to acquire, construct, maintain and operate sewage

collection, treatment and disposal systems and water supply systems as well as water

purification or treatment plants; (3) to levy taxes on property in order to carry out

the powers and duties conferred and to pay the principal and interest on bonds and

notes of the district; (4) to acquire either by purchase, condemnation or otherwise

and hold real and personal property, easements, rights-of way and water rights; (5)

employ engineers, counsel and other necessary persons; (6) to negotiate and enter

into agreements with owners of other existing sewer systems and water supplies; (7)

to adopt rules necessary for the proper functioning of the district; (8a and 8b) to

contract with any person to supply raw water or filtered water and sewer service;

(8c) to contract with any person for the treatment of the district’s sewage in a

disposal or treatment plant owned by that person; (9) after adoption of a plan

required under G.S. 130A-60, to alter or modify the plan if approved by the

Department which must determine that the alteration or modification does not

constitute a material deviation from the objective of the plan and is in the public

health interest of the district; (11) to collect and dispose of garbage, waste and other

refuse by contract or otherwise; (14) to have privileges and immunities granted to

36
other governmental units in exercise of its governmental functions; (15) to use the

income of the district and, if necessary, to levy and collect taxes upon all taxable

property in the district to pay the costs of collecting and disposing of garbage, waste

and other refuse; (16) to adopt rules for the promotion and protection of the public

health [it would be problematic for the Town of Belville to exercise and enforce the

powers delineated in subsections (a) through (f) on any person who resided outside

of its town’s limits]; (17) to establish zoning units on property not controlled by other

jurisdictions for the purpose of promoting and protecting the public health; (18) to

acquire by contract any distribution system located outside of the district when the

water for the distribution system is supplied by the district; (20) to dispose of real or

personal property belonging to the district according to the procedures prescribed in

Article 12 of Chapter 160A; (22) to make special assessments against benefitted

property within the district for the purpose of constructing, reconstructing, extending

the water systems or sanitary collection, treatment and sewage disposal systems;

and (25) to negotiate and enter into agreements with other municipal corporations

or sanitary districts for the purpose and implementing an economic development

plan.

Based upon the foregoing, the court concludes that the cumulative effect of

the resolutions, transfer and operating agreements was to enter into an agreement

which eliminates the district’s governmental discretionary power and binds the

commission’s successors permanently. This is contrary to public policy and an

unlawful transfer of governmental functions by the H2GO Board of Commissioners to

the Town of Belville.

37
Based upon the above, the summary judgment motion of the Town of Leland

and H2GO Brunswick Regional Water & Sewer as to the second cause of action is

Granted. The summary judgment motion of the defendant Belville is Denied.

III.

Third Claim for Relief by Town of Leland and H2GO against the Town of Belville:

For a Declaration that the Challenged Resolution, Transfer and Agreements are Void

Because They are Oppressive, the Result of Manifest Abuse of Discretion, in Wanton

Disregard of the Public Good, and Contrary to N.C. Gen. Stat. §130A-55 and N.C.

Gen. Stat. §160A, Article 12.

The case of Reese v. Mecklenburg Cty., 204 N.C. App. 410, 422-23, 694 S.E.2d

453, 462 (2010) provides the standard and guidance as to when governmental action

can be set aside by a court.

North Carolina law recognizes a strong presumption that


governmental bodies act in good faith. Painter v. Wake County Board of
Education, 288 N.C. 165, 178, 217 S.E.2d 650, 658 (1975). "The courts
may not interfere with the exercise of the discretionary powers of local
administrative boards for the public welfare 'unless their action is so
clearly unreasonable as to amount to an oppressive and manifest abuse
of their discretion.'" Mullen v. Town of Louisburg, 225 N.C. 53, 60, 33
S.E.2d 484, 489 (1945). A "manifest abuse of discretion" must be "so
clearly unreasonable as to amount to an oppress[ion]," James v. Nash
Cty. General Hospital, 1 N.C. App. 33, 34-35, 159 S.E.2d 252, 253
(1968) (quoting Mullen, 225 N.C. at 60, 33 S.E.2d at 489 (1945)); or
amount to action "in wanton disregard of the public good." Barbour v.
Carteret County, 255 N.C. 177, 181, 120 S.E.2d 448, 451 (1961). If a
party contends that public officials have failed to act in good faith, then
that party has the burden of overcoming the presumption by competent
and substantial evidence. Painter, 288 N.C. at 178, 217 S.E.2d at 658.

With little public disclosure or discussion, and the exclusion of the minority

members from any prior notice or knowledge of the proposed board action, after a

meeting that lasted less than one hour, the H2GO Board of Commissioners

38
transferred to the Town of Belville over $40 million in property and $16 million in

deposits. The effect of these actions are discussed previously in more detail, but it

took away the power and authority of the next H2GO board to maintain and operate

sewage collection, treatment and disposal systems and to maintain and operate the

water supply systems, water purification and treatment for all of the people in the

sanitary district.

Belville relies on N.C. Gen. Stat. §160A-274 “Sale, lease, exchange and joint

use of governmental property” to authorize and validate the transfer. Subsection (b)

provides that: “Any governmental unit [includes a sanitary district] may upon such

terms and conditions as it deems wise, with or without consideration, exchange with,

lease to, lease from, sell to, or purchase from any other governmental unit any

interest in real or personal properly.” A review of the cases decided under the

authority granted by this statute does not give much guidance to the issue of the

propriety of a conveyance of this magnitude.

Except for Barbour, the courts in the above cases did not interfere with the

actions of the municipal corporation. In each case the courts found that the decisions

were reasonable and were made in good faith. None of the cases, however, rose to

the level of H2GO’s transfer of all of its functions, assets, real and personal property,

revenue, infrastructure, contracts, permits and customers so that the sanitary district

could not function or exercise its statutory powers thereafter.

In Barbour, the trial court’s dismissal of an action brought by county taxpayers

to prevent the county’s purchase of a real estate lot to order to construct a hospital

was reversed. The Supreme Court found that the allegations in the complaint were

sufficient to allege that the county commissioners, in total disregard of their duty to

39
the public, intended to “squander” public funds. The plaintiffs alleged that the

property, due its size, location, character of the soil and other factors, was not

suitable for the purpose intended and was not worth half of the amount offered to be

paid by the county. The plaintiffs also contended that prior to the decision to

purchase, there was no appraisal of the value of the property and the action was for

some unknown reason “done in a spirit of haste.” The court concluded that the

actions of the commission were “arbitrary, capricious, and without regard to what

[was] a proper price.” The court went on to declare that the conduct of the

commission did not “comport with the duty which public officials owe those they

represent. It manifests bad faith, not bona fide action.”

Fifty years later in Reese, the Court of Appeals rejected the taxpayer’s claim

because, unlike the facts in Barbour, the county had the property appraised prior to

purchase and acted in compliance with established guidelines for obtaining approval

of the necessary financing by the Local Government Commission and that, even

though the purchase price was too high by 4% and up to 27%, the Board acted within

its discretion and judgment in the development and location of public parks and

recreational facilities. The court approved the findings of the trial court contained in

its order granting judgment on the pleadings in favor of county with respect to this

claim for relief. The court found that, "[a]s a matter of law, and standing alone, a

27% differential in price in relation to another isolated transaction is not so excessive

as to demonstrate the manifest abuse of discretion necessary to set aside a decision

of a governmental body." The trial court further found that "the Complaint is devoid

of any allegation of corruption or self-dealing, payments to an insider or someone

40
associated with the Board, or any other allegation that the price differential was the

result of corruption or a manifest disregard of the Board's public duty."

In this case, like the pleadings in Reese, there is no allegation nor is there any

evidence of corruption, self-dealing, payments to an insider or someone associated

with the Board or any other action precipitated by corruption. A good faith dispute

has arisen as to how best to provide safe water to the citizens of the sanitary district.

These transactions have produced or will produce these results: (1) the H2GO

board of commissioners will lose all ability to exercise its statutory authority under

N.C. Gen. Stat. §130A-55; (2) all real property and personal property owned by

H2GO including its infrastructure, facilities, structures, vehicles, equipment, supplies,

and funds, used to operate the water and sewer system, with a total value in excess

of $57 million would be conveyed by the district to the Town of Belville; (3) included

in that conveyance is approximately $16.5 million in capital improvement funds, debt

service reserve funds, operating reserves, and customer deposits; (4) H2GO’s debt

associated with the sewer system of approximately $6 million would be transferred

to the Town of Belville; (5) a public water distribution system and a public sanitary

sewer collection system that served a population in excess of 25,000, with over

10,000 customer accounts, would be conveyed to the Town of Belville; (6) the Town

of Belville would have the authority to charge those customers who did not live in

Belville higher rates; (7) 29 H2GO employees would be terminated and the Town of

Belville would be required to employ most, if not all of them, so they could operate

the system; (8) major portions of the Town of Leland and those who reside in the

unincorporated areas would be dependent on the Board of Commissioners of the

Town of Belville for their economic planning and expansion requirements; (9) the

41
elected H2GO Board of Commissioners have been locked out of their district office

and meeting place except when entry is permitted by Town of Belville officials; (10)

the Town of Belville, in order to manage and operate the systems, would have to

exercise all of the power and authority set out in N.C. Gen. Stat. §130A-55 for

sanitary districts, including the sole authority to set rates and fees for utility

customers; and (11) of the approximately 17,800 registered voters in the district,

16,500 (approximately 11,200 of those voters reside in Leland) would be voting for

sanitary district commissioners who no longer had the authority or ability to manage

and operate their water distribution and public sanitary collection systems. That

authority would fall into the exclusive hands of the town commissioners for the Town

of Belville. Those living outside of that town cannot vote for those commissioners.

The right to vote on equal terms is a fundamental right. Dunn v. Blumstein,

405 U.S. 330, 31 L.Ed.2d 274 (1972); Texfi Industries v. City of Fayetteville, 301

N.C. 1, 269 S.E.2d 142 (1980). Those people living outside of Belville have been

deprived of this fundamental right. The court must use strict scrutiny in determining

whether the equal protection of the laws was denied those individuals in this case.

The Town of Belville has not demonstrated that the differentiation between the

classification of voters (those living in Belville as opposed to those living outside) is

necessary to promote a compelling governmental interest in operating the systems.

Northampton Cty. Drainage Dist. No. One v. Bailey, 326 N.C. 742, 746-47, 392

S.E.2d 352, 356 (1990).

Neither side has produced a case where N.C. Gen. Stat. §160A-274(b) has

been relied upon to approve or disapprove such a comprehensive transfer of assets

that would result in such a dynamic change in the governance of a public entity such

42
as a sanitary district. None of the cases cited or relied upon by the parties dealt with

the sheer enormity of this transaction and its effect on the general public in this

district.

Through the detailed statutory authority allowing dissolution of sanitary

districts (N.C. Gen. Stat. §130A-72, N.C. Gen. Stat. §130A-73, N.C. Gen. Stat. §130-

73.1, and N.C. Gen. Stat. §82), merger of districts and municipalities (N.C. Gen. Stat.

§130A-80, N.C. Gen. Stat. §130A-80.1, N.C. Gen. Stat. §130A-80.2, N.C. Gen. Stat.

§130A-80.3, and N.C. Gen. Stat. §130A-80.3) and incorporation of a municipality

with dissolution of the district (N.C. Gen. Stat. §130-81), it appears that the

legislature did not intend that N.C. Gen. Stat. §160A-274 be the means or the vehicle

to accomplish what the outgoing H2GO board of commissioners and the Town of

Belville attempted. When a court has to consider these statutes that are in pari

materia, it has to give effect, if possible to all these provisions without destroying the

meaning of these enactments. Also, “[p]arts of the same statute dealing with the

same subject matter must be considered and interpreted as a whole.” State ex rel.

Comm'r of Ins. v. N.C. Auto. Rate Admin. Office, 294 N.C. 60, 66, 241 S.E.2d 324,

328 (1978).

It is a well-established principle of statutory construction that:

Where there is one statute dealing with a subject in general and


comprehensive terms, and another dealing with a part of the same
subject in a more minute and definite way, the two should be read
together and harmonized, if possible, with a view to giving effect to a
consistent legislative policy; but, to the extent of any necessary
repugnancy between them, the special statute, or the one dealing with
the common subject matter in a minute way, will prevail over the
general statute, according to the authorities on the question, unless it
appears that the legislature intended to make the general act
controlling; and this is true a fortiori when the special act is later in point
of time, although the rule is applicable without regard to the respective

43
dates of passage. Nat'l Food Stores v. N.C. Bd. of Alcoholic Control, 268
N.C. 624, 628-29, 151 S.E.2d 582, 586 (1966).

Also, courts will “normally adopt an interpretation which will avoid absurd or

bizarre consequences, the presumption being that the legislature acted in accordance

with reason and common sense," State ex rel. Comm'r of Ins. v. North Carolina Auto.

Rate Admin. Office, 294 N.C. 60, 68, 241 S.E.2d 324, 329 (1978), and "with full

knowledge of prior and existing law," State v. Benton, 276 N.C. 641, 658, 174 S.E.2d

793, 804 (1970). Rhyne v. K-Mart Corp., 358 N.C. 160, 189, 594 S.E.2d 1, 20

(2004).

N.C. Gen. Stat. §160A-321, contained in Article 16 of that chapter, specifically

addresses the “Sale, lease, or discontinuance of city-owned enterprise” by a city. It

authorizes a city to “sell …any enterprise that it may own upon any terms and

conditions that the council may deem best.” However, that statute does not authorize

a sanitary district to sell a public enterprise. The “sanitary district” inclusion language

of N.C. Gen. Stat. §130A-55(20) does not apply to this Article. It is fair to conclude

that the General Assembly intended to provide to a city the specific authority to sell

or convey an entire public enterprise but not to a sanitary district.

The court concludes that the detailed statutory provisions of dissolution,

merger and incorporation control in this situation where the final result is the transfer

to the Town of Belville of all of the sanitary district’s real and personal property,

including “the Systems’ infrastructure, facilities, structures, vehicles, equipment,

supplies, funds, permits, contracts, easements, other property rights, liabilities, debt

obligations and all other materials and things associated with …the ownership,

operation, and maintenance” of said systems. N.C. Gen. Stat. §160A-274 grants a

44
governmental unit the authority to sell to another governmental unit “any interest in

real or personal property” but not the wholesale transfer of the governmental unit in

its entirety.

Professor David M. Lawrence suggested in Local Government Property

Transactions in North Carolina, § 502 “Limitations on Disposition,” 2nd Edition, 2000,

that the courts have ruled that local governments cannot dispose of property held in

governmental use, and that general authority to convey only applied to property held

in the government’s private capacity. He cites as authority the case of City of

Southport v. Stanly, 125 N.C. 464, 467, 34 S.E. 641, 642 (1899) in which the court

concluded that the town could not convey in a long term lease property designated

for the use of the town. It reasoned that to allow such a conveyance,

[I]t would be in the power of the governing authorities of a town


or city to practically annul its charter--a thing which certainly could not
be done except by the General Assembly, through a bill enacted for that
purpose. If the Commissioners or Aldermen could, sell one public square
or park, or building used for government purposes, why, they could
logically sell every building owned by the town, and every public square,
and by that means destroy the means of properly governing the
municipality, and also greatly impair the value of all real estate within
the city or town limits. It is true such action on the part of the
Commissioners might not be probable, but it could be done--it is
possible that it could be done--under the construction which the
defendant put upon the Code section. The reasonable construction of
the statute must be that the town or city authorities can sell any
personal property, or sell or lease any real estate which belongs to the
town or city as the surplus of the original acreage ceded for the town or
city site, or such land as may have been subsequently acquired or
purchased; but in no case can the power be extended to the sale or
lease of any real estate which, by the terms of the act of incorporation,
is to be held in trust for the use of the town, or any real estate with or
without the buildings on it which is devoted to the purposes of
government, including town or city hall, market houses, houses used for
fire departments or for water supply, or for public squares or parks
(emphasis added).

45
Of the court’s conclusion in Stanly that “if a city could sell every parcel and

thereby effectively abolish itself,” Professor Lawrence stated that it would certainly

be a “slippery slope”, but in such a case the city would be protected by the abuse of

discretion standard. Absent “further judicial decision,” Lawrence advised that

municipalities should consider that strict limitation regarding the sale of

governmental property still in force.

The court has already raised the profound effect of the transfer of the systems

and its governance on the ability of those who reside outside of Belville but within

the sanitary district. They would be limited to voting for members of the sanitary

district commission that does not have the authority or ability to address their

concerns or consider requests for service or expansion of services. They would be

forced to plead their needs and requests to the Town of Belville officials who are

elected solely by Belville residents. It is not difficult to see the conflicts that could

arise when competing interests for service and development of services, between

those who live in Belville and those who do not, come before the Belville commission.

In exchange for all that Belville will receive, the town has few obligations under

the conveyance agreement. The obligations of the District are detailed and

comprehensive. Section 4.02 of the agreement defines the town’s “representations

and warranties.” They consist of only an acknowledgment (1) that the town is a

municipal corporation “with the power and authority to enter into and perform its

obligations under this Agreement and all other documents …” (2) that the documents

and instruments have been duly authorized and executed and are valid and binding

instruments; and (3) that compliance with the terms of the agreement does not

46
“conflict with or constitute a breach or violation of, or a default under any agreements

to which the town is a party, any applicable, rule or regulation of any governmental

unit or agency thereon.” Section 7.09 recites that “this agreement is the “complete,

entire and final agreement of the parties with respect to the subject matter hereof.”

The operation and maintenance agreement for the water and sewer systems

sets out in detail in section 6.01 the obligations of the district. It sets out the few

obligations of the town in section 6.02 along with the same general representations

of the town contained in the conveyance agreement. Under section 6.02 the town is

obligated to (1) reimburse the district on a timely basis; (2) continue to properly

manage and fund the Water and Sewer Systems’ operations through necessary rate

adjustments; (3) consider the recommendations made by district personnel

regarding any problems with the system; (4) pursue enforcement/ remedial actions

against those who actions result in or reasonably likely to result in issues and

problems with the systems operations; and (5) be responsible for regulatory

enforcement. Even these rather general nondescript obligations were to expire on

January 31, 2018 or sooner if terminated by one or both parties. Other than to

“continue to properly manage and fund the systems’ operations,” the town does not

obligate itself in writing under the conveyance or operations agreement to accept the

regular responsibilities and standards of service imposed by N.C. Gen. Stat. §130A-

47 and owed to the people of the district that the sanitary district commission was

bound by and has complied with.

N.C. Gen. Stat. §160A-86 requires that governing boards of cities and sanitary

districts adopt policies containing a code of ethics to guide their actions in the

47
performance of their official duties. Although the court was not presented the codes

for either board, it is apparent that the affairs and procedures followed in the H2GO

governing board by the majority members of that outgoing H2GO board of

commissioners and in the Belville Board of Commissioners by members of that board

were not conducted in an “open and public manner.” N.C. Gen. Stat. §160A-87(5).

Although the court specifically does not find from what it has heard or has been

presented to it, that there are any open meetings violations, the court reluctantly

comes to the conclusion that the affairs of the governing boards were not conducted

in an open and public manner due to:

(1) exchanges of emails between the Belville town attorney Eldridge and H2GO

Executive Director Walker marked “private and confidential” and communications

that were transacted during the course of the November 28, 2018 H2GO board of

commissioners meeting;

(2) the exclusion of H2GO attorney Coble from the ability to see, review or

sign the conveyance documents before their consideration by the board;

(3) the decision by Executive Director Walker and commissioners Browning,

Jenkins and Antos to keep from commissioners Trombley and Gerken any mention of

the plans to sell or transfer H2GO assets;

(4) arranging for a compact time frame of less than 24 hours starting with the

rapid passing by the sanitary district board of the resolution of, the agreement to

convey the water and sewer systems, and the assignment and bill of sale on the

evening of November 28, 2017, the execution of the acceptance agreement

48
resolution by the Town of Belville Board of Commissioners during the 8 a.m. meeting

on the morning of November 29, 2017, and the execution and filing of the assignment

and bill of sale in the Register of Deeds office at 11:34 a.m. on November 29, 2019

and the execution and filing of the special warranty deed in the office of the Register

of Deeds office at 12:39 p.m. on November 29, 2019 for the purpose of avoiding a

restraining order and other court intervention;

(5) the failure to include notice of the consideration of these actions on the

H2GO board agenda on November 28, 2017 and the later addition of an agenda item

described innocuously as “H2GO operations” by Commissioner Antos who would later

vote for the transfer;

(6) the failure to contact, consult beforehand, and seek prior approval from

the Local Government Commission or bond counsel for H2GO of the proposed transfer

of the assets and debt to Belville;

(7) the failure of Executive Director Walker or any commissioner with

knowledge of the proposed transfer to disclose to the other commissioners the receipt

of the email hours before the board meeting from Sharon Edmundson, Director of

the Fiscal Management Section of the Finance Division of the North Carolina Local

Government Commission which recommended that before action is taken that H2GO

consult with its bond counsel and consider the possible ramifications if it did not;

(8) the failure to disclose to the public any mention of the conveyance or the

reasoning or justification for the reconvening of the Town of Belville Board of

49
Commissioners meeting of November 20, 2017 although the commissioners had

known that any action by H2GO had to be immediately considered by them.

Further, N.C. Gen. Stat. §160A-312 authorizes cities and towns to acquire,

own and operate public enterprises in order to provide services to the city and its

citizens. Water services and wastewater collection are identified as permitted public

enterprises under N.C. Gen. Stat. §160A-311(2) and (3). However, the General

Assembly limited and qualified the ability of the city to operate a public enterprise

outside its corporate limits only “within reasonable limitations.”

Reasonableness can be found when the area to be serviced has a geographical

proximity to the city’s boundaries. See, Lumbee River Elec. Membership Corp. v. City

of Fayetteville, 309 N.C. 726, 738-39, 309 S.E.2d 209, 217 (1983) (reasonable to

extend electric service to a subdivision whose entrance was across the street from

an area serviced by the city even though it was outside the city limits).

That term “within reasonable limitations” does not refer solely to the territorial

extent of the city’s venture but “embraces all facts and circumstances which affect

the reasonableness of the venture.” Quality Water Supply, Inc. v. City of Wilmington,

97 N.C. App. 400, 406-07, 388 S.E.2d 608, 612 (1990). In Quality Water, the court

found that the extension of a water line beyond the city limits to be reasonable

because the land to be serviced by the water line lies adjacent to areas which have

been studied by the City for annexation. In addition, the water line extension, which

would be paid for by a third party, could service those newly annexed areas.

50
The Town of Belville has about 2,000 residents, 1,300 registered voters and

approximately 1,000 of the 10,000 metered customers of H2GO. The town is

governed by a mayor and a five member board of commissioners. It has three

employees and an annual budget of about one million dollars. Its geographical

configuration comprises about two square miles. It did independently have water and

sewer services. The area that the Town of Belville attempted to acquire to provide

water and sewer services to was approximately twenty-four square miles. That area

included parts of the Town of Leland, 11.5 square miles of which is within the sanitary

district, with its 5,000 sanitary district’s metered customers. It also included the

Town of Navassa, a town of a population of about 1,800 residents.

The maps, attached as exhibits 6-12, were provided by Leland town planner

Benjamin Andrea. They demonstrate the areas that encompass the H2GO sanitary

district and the municipalities of Leland, Belville and Navassa.

To service these customers, Belville is relying on a smooth transition of H2GO’s

$10 million operating budget and the 29 H2GO employees to its employment.

Without them or without a seamless transition of those employees or any disruption

in the transition, the customers of H2GO could face interruption and problems with

their service. Presently, the three Belville employees are untrained and unqualified

to undertake this additional workload.

This acquisition by the Town of Belville will result, according to an email inquiry

by Eldridge, in revenue that exceeded the expenses required to operate and maintain

the system. This profit would run counter to the ruling in Domestic Elec. Serv., Inc.

v. Rocky Mount, 285 N.C. 135, 144, 203 S.E.2d 838, 844 (1974) in which the court

51
concluded that “the primary function of a municipal corporation is to provide local

government within its limits and authorized services to its inhabitants, not to engage

in business enterprises for profit outside its corporate limits.” In addition, N.C. Gen.

Stat. §130A-47 provided specifically that “no municipal corporation or any part of the

territory in a municipal corporation shall be included in a sanitary district except at

the request of the governing board of the municipal corporation.” That was not done

nor is it likely to occur.

After considering all of the facts and circumstance, the court concludes that

under N.C. Gen. Stat. §160A-312(a), it was unreasonable for Belville to acquire and

operate these water and sewer public enterprises outside its corporate limits. Such

an acquisition would be in violation of Article 16 of Section 160A of the General

Statutes, and beyond its statutory authority.

Less than two hours before the November 28, 2017 meeting of the H2GO’s

Board of Commissioners, the director of the Fiscal Management Section of the Finance

Division of the North Carolina Local Government Commission sent an email to H2GO

Executive Director Walker, Belville Mayor Allen and Belville town attorney Eldridge.

In it, Director Sharon Edmundson strongly recommended that, before transferring

the assets and related debt of the district to Belville, that H2GO consult with its bond

counsel before taking any action because any action on the debt or the assets that

generate the revenue to pay the debt could cause the debt to go into “default status.”

She also advised that any transfer of the debt would require the approval of the LGC

before such a transfer can occur. She also recommended that the Town “take the

time to consider the full responsibilities of taking on a water and sewer system[s],

52
“including not only the costs and expertise needed to operate the system[s] but the

costs and long term commitment to adequately maintain and eventually replace such

a system.” She invited the town and H2GO officials to contact her at any time. By

statute, LGC is charged with reviewing and supervising all of the significant financial

affairs of local governments which would include this transaction.

Within two hours after the receipt of the LGC email, the H2GO commission

voted to convey the water and sewer systems and its assets, property rights,

liabilities, and debt obligations. No attempts were made by the Belville or H2GO

officials, as suggested, to contact LGC to inquire about their contractual and statutory

obligations regarding the revenue bonds. Belville attorney Eldridge, instead of

contacting LGC officials, modified the language of the agreement to require the

District, prior to the expiration of the operating agreement, to obtain the approval of

LGC to transfer the SunTrust Bond to the town. No further inquiry was made after

receipt of the LGC email regarding the financial health of the town and the issue of a

long term commitment and possible replacement of the systems. Modifications to the

instruments were made during and after the commissioners’ meeting. Executive

Director Walker believed that the district’s bond was transferrable. He also believed

that Scott Hook, who knew previously about the proposed conveyance, made one

unsuccessful attempt to contact the bondholder once by phone. The vote was not

delayed.

Conclusion

The court finds that there was competent and substantial evidence to support

the legal conclusion that the commissioners of both governing boards of H2GO and

53
Belville, acting in concert, failed to act in good faith, and their actions were so clearly

unreasonable as to amount to an oppressive and manifest abuse of their discretion.

Based upon the above, the summary judgment motion of the Town of Leland

and H2GO Brunswick Regional Water & Sewer as to the third cause of action is

Granted. The summary judgment motion of the defendant Belville is Denied.

IV.
Fourth Claim for Relief by Leland and H2GO against Belville:
For a Declaration that the Challenged Resolution, Putative Transfer, and Putative
Agreements Are Void Because They Involve an Illegal Debt Transfer that is
Unauthorized by North Carolina Law and Contrary to H2GO’s Bond Order

Fifth Claim for Relief by Leland and H2GO against Belville:


For a Declaration that the Challenged Resolution, Putative Transfer, and Putative
Agreements Are Void Because They Involve an Illegal Debt Transfer In Violation of
H2GO’s Bond

Sixth Claim for Relief by Leland and H2GO against Belville:


For a Declaration that the Challenged Resolution, Putative Transfer, and Putative
Agreements Are Void Because They Involve an Illegal Debt Transfer In Violation of
N.C. Gen. Stat. Chapter 159, Article 5

The Seventh Claim for Relief by Leland and H2GO against Belville was

previously dismissed by court order entered on August 20, 2018.

The plaintiffs contend that H2GO, in Section 1.01 of the Agreement to Convey

Water and Sewer System, agreed to convey at closing to the Town of Belville those

systems free and clear of liens and encumbrances. In support of that conclusion, the

plaintiffs cite the following sections and language in both the agreement and

assignment and bill of sale. In Section 2.01(A)(1) of the agreement, the district was

required to deliver fully executed documents to Belville at closing that conveyed its

54
funds, liabilities and debt obligations. In Section 3.01 the agreement was conditioned

on the expressed requirement that the district provide the town “with satisfactory

evidence that any third-party approvals have been obtained relative to assigning

and/or transferring the permits, contracts, liabilities, and debt obligations, including

the 2012 SunTrust Revenue Bond ...”

In the Assignment and Bill of Sale executed by H2GO, chairman William H.

Browning, H2GO bargained, sold and assigned to the town, in addition to all of the

real and personal property and other listed items, the 2012 SunTrust Revenue Bond

which was listed as item 117. Also, counsel for Belville in correspondence with Judge

Lock on December 20, 2017, in reference to the preliminary injunction order,

asserted that the bonds were among the assets and liabilities conveyed to Belville.

Many of the preliminary injunction provisions are premised on that assertion in that

Belville would “retain title to and ownership of the real and personal property of the

water and sewer system and its liabilities.” Also, Belville was ordered to make the

payments on the bond promptly after presented with the invoices by H2GO.

Section 2.05 of the Bond Order prohibited the transfer of the SunTrust Revenue

Bond “to any person other than a bank, an insurance company or a similar financial

institution” by the Bond Register without prior approval from the Local Government

Commission. No prior approval of the transfer to Belville was sought or received from

the Commission by H2GO or Belville.

The plaintiffs argue that by the language of these instruments, the transfer of

the SunTrust Revenue Bond and the revenue to meet the district’s obligations was

achieved in violation of the Bond Order.

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Defendant Belville, however, contends that H2GO‘s bond was not transferred,

because the consummation of the conveyance was conditioned on LGC approval of

the conveyance. In support of this contention, Belville argues that Section 3.01 of

the conveyance agreement provides that the agreement is “expressly conditioned

upon and subject to the District satisfying, or the Town’s waiving in writing, the

following express condition[]” contained in subsection “C” captioned, “The SunTrust

Bond”. This section required that “[p]rior to the expiration of the term under the

parties’ contemporaneous Operating Agreement, the District shall obtain the approval

of the North Carolina Local Government Commission to transfer the SunTrust Bond

to the town.” Belville contends that this specific provision clearly demonstrates the

intention of the parties that H2GO’s obligations under the Bond would not be

transferred to the Town of Belville until LGC approval was obtained.

If the bond indebtedness and obligation has not been transferred, as the

defendant contends, then the transfer of the district’s real property, personal

property, “the systems’ infrastructure, facilities, structures, vehicles, equipment,

supplies, funds, permits, contracts, easements” and “all other materials and things

associated with or required for the ownership, operation, and maintenance of the

Water and Sewer Systems” would violate section 7.09 of the Bond Order executed

by H2GO on July 10, 2012. That section states: “[t]he District covenants that it will

not sell, lease or otherwise dispose of the System or any part thereof except as

expressly permitted by this Section or as agreed to by 100% of the Holders.” There

is no evidence the Holders have granted any permission.

It would also violate N.C. Gen. Stat. §159-92(a) which requires that “[a]ll

revenue bonds issued under this Article shall be equally and ratably secured by a

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pledge, charge, and lien upon revenues provided for in the bond order … in

accordance with the provisions of this Article and of the bond order.” This statute

creates an automatic lien on all revenues provided for in the bond order. Section 5.03

Pledge of Net Revenues of the bond order reiterates that statutory mandate. It

provides that the “District pledges the Net Revenues to secure the payment of the

principal of, redemption premium, if any, and interest on the bonds. The Revenues,

as received by the District, shall immediately be subject to the lien of this pledge

without any physical delivery thereof or further act and the lien of this pledge shall

have priority over any or all other obligations and liabilities of the District …” Section

7.10 Creation of Liens requires that the district will not create any charge or lien on

the net revenues that rank equally with or prior to the charge or lien on the net

revenues. Under the terms of the conveyance, the district transferred the systems

free and clear of all liens. As a result, this would mean that the holders of the bonds

have lost their lien on the net revenues which would be received by Belville.

The sections of the agreement to convey and assignment and bill of sale cited

by both parties seem to contradict each other on the issue of whether the SunTrust

bond was conveyed. Statements by executive director Walker in his deposition

regarding the transfer are also confusing.

In addition, the Local Government Commission, in spite of actual notice of

these conveyances, has not acted, ordered a hearing on the issue, declared the bond

in default, intervened in this lawsuit, nor has it revealed its position regarding

approval of the transfer. If the transfer of the SunTrust Bond does not receive

approval by the commission, the town, pursuant to section 3.02 of the agreement,

can “rescind this Agreement and convey back to the district, by warranty deeds and

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an assignment and bill of sale, …the Water and Sewer systems including, without

limitation” all of those materials and things described in Article 1.

By granting summary judgment for the plaintiffs in the first three issues and

thereby nullifying the transfer and conveyances by H2GO to Belville, LGC will not

have to consider a request of the Town for approval unless it chooses to. SunTrust

also has not declared the bond to be in default or sought a declaration from LGC that

the bond was in default. The preliminary injunction required that the payments

continue while this suit progressed. Although LGC and SunTrust are not under the

restrictions of the preliminary injunction, neither has acted or intervened.

The court is not in a position to determine what this non-action by the LGC and

SunTrust means or how this affects the parties’ contentions regarding the bond.

The Bond Order, which authorized the issuance of the water and sewer revenue

bonds of H2GO, was a contract between the district and the holders of the bonds.

The agreements therein are “to be performed by or on behalf of the District shall be

for the equal benefit, protection and security of the Holders of any and all of the

Bonds so issued or to issued …” Under Section 1.02 Definitions, a Bondholder means

“any person who shall be the registered owner of such Bond or Bonds.” The

customers who receive or could receive services from the water and sewer systems

and the towns within the district are not parties to this contract.

Section 11.06 Parties Interested Herein of the bond order also provides that:

Except as herein otherwise expressly provided, nothing in this


Bond Order expressed or implied is intended or shall be construed to
confer on any person, firm or corporation other than the District, the
Bond Registrar and the Holders of the Bonds issued under and secured
by this Bond Order any right, remedy or claim, legal or equitable, under

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or by reason of this Bond Order or any provision hereof, this Bond Order
and all its provisions being intended to be and being for the sole and
exclusive benefit of the parties hereto and the Holders from time to time
of the Bonds issued hereunder.
Under this section Leland did not acquire any rights nor secured any claims or

causes of action under the Bond Order. The only parties to this contract that could

be involved in any default with respect to the Bond debt are H2GO and the

bondholders. In addition, no conduct of Belville could bring about a default.

Although a bond holder could claim that a default has taken place by the

transfer of the assets to Belville under Section 8.01 Events of Default, there is no

evidence that any holder has. One could claim that the transfer of the assets and

revenues can trigger a default under Section 8.01(c) in that it could result in the

district being “incapable of fulfilling its obligations” under the order. The court

cannot, however, assert the rights of any bondholder and declare a default under the

order or Chapter 159, Article 5 or ask or order the Local Government Commission to

do so.

Based upon the foregoing, the defendant Belville’s motions for summary

judgment as to the plaintiffs’ Fourth, Fifth and Sixth causes of action are Granted.

The plaintiffs motions for summary judgment as these same causes of action are

Denied and those causes of action are Dismissed.

Eighth Claim for Relief (For Preliminary and Permanent Injunctive Relief, Including

Mandatory Injunctive Relief)

(By Leland and H2GO against Belville)

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This is not a cause of action but a request for a remedy which is addressed

later in the order.

Ninth Claim for Relief (Undue Influence)

(By H2GO against Belville)

Plaintiff H2GO alleges that following the election it was subject to undue

influence from Belville by having its attorney, James Ethridge, (a) improperly

communicate with H2GO commissioners and employees to facilitate the transfer

described in the Agreement to Convey Water and Sewer Systems; (b) intentionally

exclude H2GO’s municipal counsel from reviewing, considering or offering advice

regarding the transfer; and (c) drafting the resolution and agreement.

Undue influence is defined as "a fraudulent influence over the mind and will of

another to the extent that the professed action is not freely done but is in truth the

act of the one who procures the result." In re Estate of Loftin and Loftin v. Loftin, 285

N.C. 717, 722, 208 S.E. 2d 670, 674-75 (1974). There are four general elements of

undue influence: (1) a person who is subject to influence; (2) an opportunity to exert

undue influence; (3) a disposition to exert undue influence; and (4) a result indicating

undue influence. Griffin v. Baucom, 74 N.C. App. 282, 286, 328 S.E.2d 38, 41

(1985).

Undue influence “must usually be proved by evidence of a combination of

surrounding facts, circumstances and inferences from which a jury could find that the

person's act was not the product of his own free and unconstrained will, but instead

was the result of an overpowering influence over him by another (emphasis added).”

H2GO would have to show that for the influence to be undue, "there must be

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something operating upon the mind of the person whose act is called in judgment, of

sufficient controlling effect to destroy free agency and to render the instrument [in

Carl Antos’ case, the vote; in Robert Walker’s case, the cooperation with Eldridge],

...not properly an expression of the wishes of the maker, but rather the expression

of the will of another. It is the substitution of the mind of the person exercising the

influence [Eldridge] for the mind of” Antos and Walker causing them to take an action

which each one would not have made. In re Will of Prince, 109 N.C. App. 58, 61,

425 S.E.2d 711, 713-14 (1993) (quoting In re Will of Kemp, 234 N.C. 495, 498, 67

S.E.2d 672, 674 (1951)).

The facts, circumstances and inferences from the evidence do not support

these contentions as a matter of law.

H2GO contends that the source of the undue influence was Belville. No case

supports the contention that an entity could be the subject of undue influence. Robert

Walker was an employee of H2GO and Carl Antos was only one of five of its elected

commissioners. No case has ruled that an entity had a “mind” that could be operated

upon or controlled.

The evidence shows that Walker, shortly after the election, was asked by an

H2GO commissioner Jenkins “if there was any way we could transfer the assets …from

H2GO to Belville.” Walker promised Jenkins he would look into it. Eldridge would

later in an email advise Walker of the purported authority contained within N.C. Gen.

Stat. §160A-274(b). Walker in a November 12, 2017 email to Eldridge stated that he

had spoken with Belville Mayor Allen, Belville town commissioner, Joe Breault and

H2GO commissioners, Browning, Antos, and Jenkins and advised that the three

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commissioners were “on the same page to transfer H2GO property (real, personal,

cash and other assets, etc.) to Belville. Should we meet to strategize as time is of

thee essence? I have questions in regard to existing construction contracts and

current liabilities.” This was over two weeks prior to the vote. The evidence clearly

shows that Walker was acting pursuant to the direction provided him by his

commissioners. He had no independent authority to effect any transfer outside of

the actions and votes of the commissioners. The vote to adopt the resolution to

convey the systems and to enter into the agreement to convey those systems was

the majority’s effort to ensure the continued construction of the RO plant and not due

to any undue influence from Belville or its attorney. The majority of the H2GO

commissioners and the governing authorities of Belville all shared the same goal and

worked behind the scenes together to attain it.

Just prior to the H2GO’s commissioners meeting, Walker advised Eldridge on

November 27, 2017 that Antos remained concerned about personal liability and

indemnification and asked Eldridge to, “if possible, include ‘current and past elected

officials’ in the mutual indemnity language.” Walker cited H2GO’s liability insurance

as additional coverage but asked that the indemnity language be added. As a result

of that request, modifications were made and Eldridge rendered an opinion to Walker

that Antos would not be individually named in a lawsuit, but if he was, he would be

indemnified under that policy and probably be dismissed from the lawsuit. This was

not legal advice to Antos but a general opinion as to the meaning and significance of

the modified language. No undue influence was exercised over Antos or any other

commissioner by Eldridge or Belville.

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The defendant Belville’s motion for summary judgment as to H2GO’s Ninth

claim for relief is Granted. H2GO’s motion for summary judgement is Denied, and

this claim is Dismissed.

Tenth Claim for Relief

(Breach of Fiduciary Duty, Constructive Fraud, and Constructive Trust)

(By H2GO against Belville)

H2GO contends that because Belville had its town attorney (1) give advice to

members of the outgoing majority of district commissioners and district employees;

(2) draft the challenged resolutions and agreements; (3) exclude the district’s

municipal counsel from discussions concerning the resolution and agreements to

transfer, it assumed a fiduciary duty to act in the best interest of H2GO concerning

the transaction.

“To establish constructive fraud, a plaintiff must show that “defendant (1) owes

plaintiff a fiduciary duty; (2) breached this fiduciary duty; and (3) sought to benefit

himself in the transaction.” Sullivan v. Mebane Packaging Grp., 158 N.C. App. 19, 32,

581 S.E.2d 452, 462, disc. review denied, 357 N.C. 511, 588 S.E.2d 473 (2003).

A fiduciary relationship can exist under a variety of circumstances, Stilwell v.

Walden, 70 N.C. App. 543, 546, 320 S.E.2d 329, 331 (1984), and it can extend to a

case in which a fiduciary relation exists in fact and in which there is confidence

reposed on one side and resulting domination and influence on the other. Abbitt v.

Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931). "Only when one party

figuratively holds all the cards—all the financial power, technical information, for

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example—have North Carolina courts found that the 'special circumstance' of a

fiduciary relationship has arisen." Broussard v. Meineke Disc. Muffler Shops, Inc., 155

F.3d 331, 348 (4th Cir. 1998). North Carolina courts generally find that parties who

interact at arms-length do not have a fiduciary relationship with each other, even if

they are mutually interdependent businesses. Tin Originals, Inc. v. Colonial Tin

Works, Inc., 98 N.C. App. 663, 666, 391 S.E.2d 831, 833 (1990).

The evidence does not show any special trust or fiduciary relationship between

the parties. This was an arms-length transaction in which Belville and the outgoing

majority of H2GO’s commission each sought and shared a common goal. There was

no discrepancy in bargaining power. The governing authority of Belville and the

outgoing majority concluded that this was the only way to assure that the RO project

would continue before the new majority took over the voting control of the district

commission. To have that goal achieved, it required the mutual approval by both the

town and district commissions of the written instruments prepared by the town

attorney with the explicit assistance and cooperation of the district employees within

the time remaining.

This was an arms-length transaction in which Belville, its governing officials or

its attorney did not exercise a domineering influence over H2GO, and no fiduciary

relationship was created by its actions.

The defendant Belville’s motion for summary judgment as to H2GO’s tenth

claim for relief is Granted. H2GO’s motion for summary judgment is Denied, and this

claim is Dismissed.

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The amended complaint’s Eleventh Cause of Action against Belville was

dismissed on August 20, 2018 by the court.

The amended complaint’s Twelfth Cause of Action against Belville and a cross

claim against H2GO, in which a violation of the open meetings law is asserted, was

stayed by an order of this court entered on January 3, 2019.

Counterclaims by Belville against H2GO and Leland

The Town of Belville in its first counterclaim asserts that it is entitled to a

declaratory judgment declaring that the actions of H2GO and its subsequent conduct

in the emergency meeting was unlawful, invalid and void. It raised the issues of (1)

whether commissioner-elect Beer was qualified to execute the duties of commissioner

at the December 4, 2017 meeting or afterwards; (2) whether the resolutions voted

on by the H2GO board members on December 4, 2017 and afterwards was lawful,

valid or binding; and (3) whether, prior to its organizational meeting on December

19, 2017, the H2GO board was duly sitting and authorized to conduct business on

December 4, 2017. The fourth issue was stayed from consideration by the order of

the court entered on January 3, 2019.

Commissioner Beer was properly sworn in because N.C. Gen. Stat. §130A-

50(e) Election and terms of office of sanitary district boards provides that “[t]he

elected members of the board shall take the office on the first Monday in December

following their election …” December 4, 2017 was the first Monday in December

following the election.

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Pursuant to N.C. Gen. Stat. §143-318.12(f) an emergency meeting was called

for December 4, 2017 to discuss the temporary restraining order, the resolutions and

agreements, legal representation and the appropriate direction to the staff. Initially,

at the meeting the newly elected commissioner, Bill Beer was sworn in. The other

newly elected commissioner did not get sworn in at that meeting. The board

approved a resolution declaring the previously approved and executed documents

“null and void” and declaring that “they could not be lawfully accepted by the Town

of Belville and declared them withdrawn.” The board also instructed the executive

director to take certain listed actions under threat of termination.

An emergency meeting may be called due to “generally unexpected

circumstances that require immediate consideration by the public body.” N.C. Gen.

Stat. §143-318.12(f). The court finds that the facts and circumstances facing the

board justified the emergency meeting at which it took necessary and appropriate

action.

The court concludes that: (1) Beer, after he was sworn in, was qualified to

execute the duties of commissioner at the December 4, 2017 meeting or afterwards;

(2) the resolutions voted on by the H2GO board members on December 4, 2017 and

afterwards were lawful, valid and binding; and (3) on December 4, 2017 the H2GO

board was duly sitting and authorized to conduct business.

The plaintiffs’ motion for summary judgment as to the defendant’s first

counterclaim is Granted and concludes that the defendant is not entitled to a

declaratory judgment declaring that the actions of H2GO and its subsequent conduct

were unlawful, invalid and void. As a result, the defendant’s first counterclaim is

Dismissed.

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The town contends in its second counterclaim that the agreements were valid

and binding contracts between H2GO and the town. It also contends that H2GO

breached the agreements by (1) failing to cooperate with Belville to effectuate the

intent and purpose of the agreements; (2) unilaterally passing unlawful resolutions

declaring the agreements unlawful, void and of no legal effect; and (3) failing to

indemnify the town with respect to all claims in this litigation, its attorney fees, costs

and expenses.

Based upon the rulings of the court granting the plaintiffs’ motions for

summary judgment as to the first, second and third causes of action, the plaintiffs’

motion for summary judgment as to the defendant’s second counterclaim is Granted

and the second counterclaim alleging breach of contract is Dismissed.

Based upon the foregoing findings of fact and the rulings on the various causes

of actions and counterclaims, the court orders and declares that:

1. The challenged Resolution of the Brunswick Regional Water and Sewer

H2GO, the Agreement to Convey Water and Sewer Systems, and the

Assignment and Bill of Sale and Special Warranty Deed are unlawful, void

and of no effect.

2. The preliminary injunction previously entered by the court shall remain in

full effect.

3. A permanent mandatory injunction shall be entered by the court consistent

with and in support of the rulings of the court which will order that the

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public records state that H2GO is the lawful owner of all assets and debts

described in the specialty warranty deed and the assignment and bill of

sale.

4. The court defers ruling on any request for attorney fees and litigation costs.

5. The previous order staying any consideration of open meetings law remains

in effect.

6. The court retains jurisdiction to entertain any further motions by the parties

regarding this order.

This the 22nd day of April, 2019.

______________________________
Superior Court Judge

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