NC Supreme Court Rejects $39 Million Civil Claim against Currituck County

The Supreme Court of North Carolina ruled in Currituck County’s favor as it agreed with a lower court’s decision to reject a default judgment against the county in the case of Swan Beach LLC v. Currituck County.  With this ruling, Currituck County will not pay $39 million in civil damages that a Superior Court judge had awarded to Swan Beach LLC in 2016.

In today’s decision, filed on May 11, 2018, the Supreme Court of North Carolina agreed with a ruling made by the North Carolina Court of Appeals on Oct. 3, 2017 to set aside entry of default and vacate a default judgment in the amount of $39,000,804 against Currituck County.  The entry of default and default judgment had been delivered in Currituck County Superior Court by Judge Milton Fitch on April 25, 2016.

“The county is pleased with the Supreme Court’s decision, which we believed would be the result,” said Dan Scanlon, Currituck County Manager.  “The county looks forward to proceeding with the trial court’s determination of the plaintiff’s claims, which are without merit.”

The $39 million judgment could have had a potentially devastating impact upon the county’s property tax rate.  To pay off that high a sum, the county would have been forced to significantly raise the current tax rate of $0.48 to nearly double, according to county staff.  The amount of county services offered to citizens by the county could also have been negatively affected.

In a complaint filed in July 2012, Swan Beach LLC claims that that it has a vested right to commercially develop its property in the four-wheel drive area of Currituck County; that Currituck County has violated its rights by allowing others in the four-wheel drive area of the county to commercially use their property; and wrongly denied it permits for commercial development in the four-wheel drive area of the county because Swan Beach LLC representatives are of Jewish faith and did not reside in North Carolina.  Swan Beach LLC applied for the rezoning of its property in 2008 and 2011.

Currituck County has maintained that it does not discriminate against anyone for any reason, and that the property rights of Swan Beach LLC have not been violated because commercial development in the four-wheel drive area of the county has never been allowed by county ordinance.

The case will now return to Currituck County Superior Court for determination of the merits of the plaintiff’s complaint regarding development in the off-road area.  As the case returns to court, updates will be provided as information becomes available.