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Beroth Oil Co. v. North Carolina Department of Transportation
Court of Appeals of North Carolina
November 21, 2017
BEROTH OIL COMPANY; SMITH, PAULA AND KENNETH; CLAPP, BARBARA; CROCKETT, PAMELA MOORE; ESTATE OF WR MOORE; N&G PROPERTIES, INC.; KOONCE, ELTON V.; REPUBLIC PROPERTIES; KIRBY, EUGENE AND MARTHA; HARRIS TRIAD HOMES, INC.; HENDRIX, MICHAEL; ENGELKEMIER, DARREN; HUTAGALUNG, IAN; MAEDL, SYLVIA; STEPT, STEPHEN; NELSON, JAMES AND PHYLISS; SHUGART ENTERPRISES, LLC; STUMP, FRANKLIN AND MINNIE; JADE ASSOCIATES, LLC.; CLAYTON, ALMA C.; PEGRAM, ELAINE SMITH; TRIDENT PROPERTIES, LLC; MCALLISTER, JUDITH T.; MARSHALL, ANDREW WILLIAM (JOINTLY HELD FAM. PROPERTY); SEIDELMANN, JOHN H. AND ROSEMARY; POPE, JAMES AND WANDA; PATEE, RONNIE AND VESTA; MCFADDEN, KENNETH AND PAMELA; MANN, RONALD CARSON; HIATT, EARL B. AND CRISSMAN; LITTLE, LOREN A. AND MARGARET; LEWIS, HENRY AND REBECCA; LAWSON, KATHRYN L.; KINNEY, LOIS K.; FULK, MICHAEL DAVID; EUDY, KRONE EDWARD; DILLON, CHARLES RAY AND JUDY; BULLINS, BILLIE JOE AND CAROLYN; CW MYERS TRADING POST, INC.; BRABHAM, VERDELL & MARLA; DIEHL, SCOTT C.; HIATT, EVERETT AND TERESA; LASLEY, KATHRYN M.; OMEGA SEAFOOD (GUS AND MARIA HODGES); PEAK, GARY W.; SHROPSHIRE, JOHN AND BESSIE; SMITH, CHESTER MONROE AND BETTY; THORE, BRENDA SUE, SDARAH THORE HAMMOND, JAMES THORE; TURPIN, JAMES AND SISTER, MARJORIE HUTCHENS; HOWELL, MARK AND MELISSA; WATKINS, JAMES AND DELORES; LEWIS, JERRY B. AND DENNIS; CANIPE, CONSTANCE FLYNT MULLINEX AND DONALD F. WEISNER; WEISNER, JOHNNY AND HAZEL (JOINTLY HELD FAM PROPERTY); ALLAN, AND WIFE, JOAN; BOOSE, THELMA; MYERS, DALE AND MARY; CONTE, JUDITH A.; CLINE, JEFFERY AND DANA; PFAFFTOWN BAPTIST; PROVIDENCE MORAVIAN; GREER, HONEY CHRISTINE COLLINS AND JEFFEREY; TERRONEZ, INOCENTE AND SONIA DOMIQUEZ; FOLK, JOHN AND MARGARET; HOUCK, SCOTT; BLANCHARD, PAUL; BERRIER, DON M. AND LINDA; BLACKFORD, KEN A.; WEEKS, SHAWN D.; ALEXANDER, JOHN H. AND WIFE KAREN L.; BAILEY, ROBERT CHRISTOPHER AND KAREN K.; BARRY, HILDA S.; BUCHANAN, JOHN A. JR. AND WIFE CAROL JONES; CALDWELL, MELVIN AND SHERIE; CAMERON, CARMIE J. AND WAYNE R.; CENTRAL TRIAD CHURCH - LEROY KELLY; CHURCH, CHRISTOPHER D. AND SHELLEY J.; CONRAD-WHITT, GLADY B. AND LORETTA C. WHITT ET AL.; CONRAD, HAROLD GRAY; DARRAH, ELIZABETH S. AND JASON D.; DAVENPORT, LEONARD C. AND ELSIE H.; DAVIS, SHERRY L.; DECKER, DONNA BALLARD; DILLON, TONY LEE AND TONI P.; DORN, FRANK R.; FABRIZIO, JEFFREY P.; FRANCIS, LINDA DENISE; FULP, JARVIS R. AND GLORIA F.; GIRARD, FRANK J. AND WIFE CAROL; GRIFFIN, THOMAS J. AND NANCY C.; HAMMAKER, DOUGLAS E. AND MELICENT S.; HAMMOCK, HELEN MANOS AND MARGARET HAMMOCK HOERNER; HAYWORTH, SIBYL F.; HEMRIC, DANNY W. AND BEVERLY M.; HENNIS, TAMRA; HOBAN, JANET AND CRAIG; HOLMES, SCOTT P. AND PAMELA A. HILL-HOLMES; HUBBARD REALTY OF W-S INC.; IRON CITY INVESTMENTS, LLC - SCOTT SCEARCE; JONES ESTATE ET AL.; KEITH, MARK A. AND CATHY E.; KISER, JEFFREY AND ELIZABETH; LEE/MCDOWELL, LATRICE NICOLE; LOWRY, HARRY R. AND SANDRA P; LUTHERAN HOME W/S PROPERTY; MAIN, JEFFREY C. AND AMBER D.; MARTIN, TERRY W. AND JO ANN H.; MILLER, CARL JR. AND CURTIS CARPENTER; MITCHELL, CHRISTOPHER R.; MOORE, HILDA BROWN, WIDOW; MORAVIAN CHURCH SOUTHERN PROVINCE; NASH, RICHARD AND MEL - CROWDER, RICK AND SARAH ET AL.; BOARD OF TRUSTEES OF OAK GROVE MORAVIAN CHURCH; REGIONAL REALTY, INC - KEITH D. NORMAN ET AL.; SHELTON, JC AND MAGALENE R.; SIMCIC, JOESPH J. AND REBECCA M.; SMITH, LINDA G.; SNELL, DAVID P.; STACK, WILLIAM C. AND DONYA J.; STAFFORD, VIOLET G.; STEPHENSON, GREGORY J. AND LE'ANNA H.; SUMNER, JOHN E., SR. AND ANN H.; SWAIM, DERRICK AND WIFE KRISTINA C.; TAFFER, LANDON AND EVON; TAFT, LAMAR S. AND CHARLES V.; THOMASON, PATTIE W. AND VELMA G PARNELL; VANHOY, DALE C.; VIOLETTE, MICHAEL E. AND DEBORAH W.; WHITE, LEE AND AREATHER; WRAY, MEGAN P AND ALAN MICHAEL; WESTFALL, ROBERT W. AND KELLI D.; BEHAN, AUSTIN C. AND MARY JEAN; BENTLEY, CHARLES J., SR. AND BRENDA G.; BETHANY BAPTIST CHURCH; COOK, SHIRLEY T. AND COOPER, JENNY C.; WILMOTH-DOUTHIT ET AL.; DASILVA, GEORGE; FLUITT, JOE AND PAMELA MARTIN; HANNA, HEATHER W. AND MARK J.; HUBBARD REALTY; KUHL, WILLIAM A. AND BRENDA S.; LB3 LLC - HILO ENTERPRISES, LLC; LINER, DALE S. AND PEGGY; LUPER, FERRELL M. AND JOYCE; GLASS, LAVONDA; MDC INVESTMENTS, LLC; SEIVERS, HARVEY W. AND BETTY C.; SMALLS, SAMPSON H. AND SHARON; SMITH, SAM & CHRIS; SWAISGOOD, THOMAS D.; THRUSH, GLENN E., JR.; TROTTER, HELEN L.; TUCKER, MARGARET; VANCE, LATANDRA T.; WESTMORELAND, CB HEIRS ET AL.; WHITE, DORIS T., WIDOW; HICKS, RONALD; SMITH, LINDA; SNOW, CRAIG; SEDGE GARDEN POOL; KEARNEY, CLYDE AND HUGH; BEANE, TABITHA; FLAKE, WILDON C., JR.; ADAMS, WEBB, THOMAS; GORDON, HELEN; PEARSON, BEVERLY; BIAS, TERESA; BOYLES, DANTE; CLARK, JON; FLETCHER, JOSEPH; EMBLER, DEBBIE; GURSTEIN, SCOTT; HOBBS, STEVEN; THORE, BOBBY; CHARLES, DEBORAH T.; FORTNEY, WALTER; NODINE, DENNIS AND ELIZABETH; MESSICK, BILL (J.G. MESSICK & SON, INC.); MONROE, ELDER RONALD; WARD, PEGGY; PERKINS, JERRIE; SHOUSE, CHRISTINE R. KAUTZ AND PAUL KAUTZ; PEEPLES, WADE AND MARY LOU; CUNNINGHAM, JOHN AND GAYLE; CHAPMAN, LEE AND PEGGY - CHAPMAN FAMILY TRUST; WILLARD, DANIEL; CREWS, RACHEL; ROGERS, DARRELL AND AMBER; HEMMINGWAY, REESHEMAH; HOLT, LINDA; ALDRIDGE, MARTHA; HOOPER, MARY; WESTMORELAND, JACK; BOLIN, AMBER; BREWER JR., BOBBY; BRIGGS, JOHN; BURCHETTE, GLENN & TAMMY; HILL, EUGENE - ESH RENTAL; HAWKS, HOWARD; SPEAR, JOYCE & KIMBERLY; STOLTZ, WILLIAM; STIMPSON, ROBERT; STEWART, ASHLEY; RODDY, TERRY; NELSON, STEPHEN AND THERESA; MCKINNEY, MATTHEW AND TANGELA; FLINCHUM, MARLENE; Plaintiffs,
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Defendant. and BELL, KENNETH E.; BARLEY, JO ELLEN AND MARY B. WATSON; SUMMERS, MICHAEL AND BRENDA; GRUNDMAN, ROBERT E. AND LINDA L.; PICKARD, MARK J. AND LINDA J.; FELTS FAMILY LIMITED PARTNERSHIP; Plaintiffs,
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Defendant.
in the Court of Appeals 17 May 2017.
by defendant from order entered 3 October 2016 by Judge John
O. Craig III in Forsyth County Nos. 10-CVS-6926; 11-CVS-2998,
7119, 7120, 8170-8174, 8338; 12-CVS-4851, 4853-4859,
4861-4870, 4873-4876, 4916, 5953-5961, 5963, 6321, 6322,
6652, 7721, 8189; 13-CVS-1645, 4506, 6794, 7129;
14-CVS-4803-4806, 4808, 4809, 5702, 5703, 6311; 15-CVS-0301,
0610, 2471-2532, 3208-3231, 4011-4016, 4655-4657, 5447, 5448,
6744, 7770-7772, 7783, 7784; 16-CVS-0274-0276, 0812-0814,
1290, 1292, 1293, 2670-2688, 3083; Superior Court and
Guilford County Nos. 14-CVS-10615; 15-CVS-4276-4278, 4799,
6926; Superior Court.
Hendrick Bryant Nerhood Sanders & Otis, LLP, by Matthew
H. Bryant, T. Paul Hendrick, Timothy Nerhood, W. Kirk
Sanders, and Kenneth C. Otis III, for plaintiffs-appellees.
Attorney General Joshua H. Stein, by Special Deputy Attorney
General James M. Stanley, Jr.; Teague Campbell Dennis &
Gorham, LLP, by Matthew W. Skidmore and Jacob H. Wellman; and
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
LLP, by Steven M. Sartorio and William H. Moss, for the North
Carolina Department of Transportation, defendant-appellant.
North Carolina Department of Transportation
("NCDOT") appeals an October 3, 2016 order (the
"Order") that addressed three issues in an inverse
condemnation action filed by two hundred and eleven
plaintiffs in both Forsyth and Guilford Counties against
NCDOT seeking just compensation for the regulatory taking
effectuated by NCDOT's recordation of a transportation
corridor map pursuant to N.C. Gen. Stat. § 136-44.50 to
.54 (the "Map Act"). In some instances, the
plaintiff's property rights were taken almost two decades
ago. The appealed order granted nine plaintiffs' summary
judgment motion as directed by our Supreme Court and this
Court, partially granted the remaining plaintiffs' motion
for judgment on the pleadings, and set forth the rules and
procedures by which the trial court would adjudicate the
remaining issues of the individual cases.
establish grounds for immediate review of the interlocutory
order, NCDOT asserts two substantial rights that it alleges
would not be fully and adequately protected by appellate
review after final judgment. First, NCDOT argues that
decisions involving title and area taken in eminent domain
proceedings affect a substantial right and are appropriate
for immediate review. While this is a substantial right, and
may justify interlocutory review, it is a right of one who
holds an interest in property, not a right of the condemnor
if that condemnor holds no interest. NCDOT has not argued
that it holds any interest in the properties at issue in this
appeal. Therefore, this ground for interlocutory review must
NCDOT argues that decisions depriving the State of its right
to sovereign immunity affect a substantial right and require
immediate review. Again, this is generally a substantial
right and could certainly justify our interlocutory review,
except that the litigation has progressed well past the point
where sovereign immunity could be asserted, as it is a
jurisdictional bar to suit against the State. Furthermore,
sovereign immunity does not bar suit against the State when
the State has exercised its eminent domain power. Therefore,
in this instance, sovereign immunity provides no protection
for the State, and NCDOT's assertion of sovereign
immunity appears to be for no reason but either delay or
sovereign immunity has generally been held to be a
substantial right allowing interlocutory appeal, NCDOT
initially introduces its argument attempting to establish
grounds for appellate review as one of sovereign immunity.
Yet, the substance of its argument quickly shifts to a
separation of powers argument in which NCDOT asserts that the
judicial branch is barred from ordering the executive branch
to expend monies from the state treasury absent an
appropriation of the legislative branch. See N.C.
Const. art. V, § 7 ("No money shall be drawn from
the State treasury but in consequence of appropriations made
by law."). However, NCDOT cites no precedent whereby
this Constitutional restriction of power creates for it a
substantial right that could permit NCDOT interlocutory
is no more effective way to procrastinate the administration
of justice than that of bringing cases to an appellate court
piecemeal through the medium of successive appeals from
intermediate orders." Veazey v. Durham, 231
N.C. 357, 363, 57 S.E.2d 377, 382, reh'g denied,
232 N.C. 744, 59 S.E.2d 429 (1950). When the State takes
private property for a public use, it must pay just
compensation. Sovereign immunity will not relieve it of this
restriction on the use of its eminent domain power. Because
both grounds given by NCDOT to justify our interlocutory
review fail, we dismiss.
& Procedural Background
order NCDOT has herein appealed was entered October 3, 2016.
In the order, the trial court followed the instructions of
this Court, that reversed a prior order, and the Supreme
Court, that affirmed the opinion of this Court. Kirby v.
N.C. Dep't of Transp. (Kirby I), 239
N.C.App. 345, 769 S.E.2d 218, appeal dismissed,
disc. review allowed, ___ N.C. ___, 775 S.E.2d
829 (2015), aff'd, Kirby v. N.C. Dep't of
Transp. (Kirby II), 368 N.C. 847, 786 S.E.2d 919
(2016). Because only procedural aspects of this case have
changed since Kirby II, we adopt that opinion's
recitation of the pertinent facts:
In 1987 the General Assembly adopted the Roadway Corridor
Official Map Act (Map Act). Act of Aug. 7, 1987, ch. 747,
sec. 19, 1987 N.C. Sess. Laws 1520, 1538-43 (codified as
amended at N.C. G.S. §§ 136-44.50 to -44.54
(2015)); see also N.C. G.S. §§ 105-277.9
to -277.9A, 160A-458.4 (2015). Under the Map Act, once NCDOT
files a highway corridor map with the county register of
deeds, the Act imposes certain restrictions upon property
located within the corridor for an indefinite period of time.
N.C. G.S. § 136-44.51. After a corridor map is filed,
"no building permit shall be issued for any building or
structure or part thereof located within the transportation
corridor, nor shall approval of a subdivision, as defined in
G.S. 153A-335 and G.S. 160A-376, be granted with respect to
property within the transportation corridor."
Id. § 136-44.51(a)[.] . . . Despite the
restrictions on improvement, development, and subdivision of
the affected property, or the tax benefits provided, NCDOT is
not obligated to build or complete the highway project.
. . . .
Plaintiffs are landowners whose properties are located within
either the Western or Eastern Loops of the Northern Beltway,
a highway project planned around Winston-Salem. Plaintiffs
allege that the project "has been planned since 1965,
and shown on planning maps since at least 1987 with the route
determined by the early 1990s."
On 6 October 1997, in accordance with the Map Act, NCDOT
recorded a highway transportation corridor map with the
Forsyth County Register of Deeds that plotted the Western
Loop of the Northern Beltway. Plaintiffs whose properties are
located within the Western Loop had all acquired their
properties before NCDOT recorded the pertinent corridor map.
On 26 November 2008, NCDOT recorded a second map that plotted
the Eastern Loop. Plaintiffs whose properties are located
within the Eastern Loop had also purchased their properties
before NCDOT recorded that corridor map, some as recently as
2006. The parties do not dispute that the Map Act imposed
restrictions on property development and division as soon as
NCDOT recorded the corridor maps.
The NCDOT has voluntarily purchased at least 454 properties
within the beltway through condemnation proceedings, and
since July 2010, has continued to purchase property located
in the Western and Eastern Loops. In June 2013, NCDOT
announced a public hearing regarding modification of the
Western Loop boundaries, noting that "[a] 'Protected
Corridor' has been identified that includes the areas of
the beltway that the Department expects to purchase to build
the proposed road." At the hearing an NCDOT official
advised that "no funding for the proposed Western
Section of the Northern Beltway had been included in the
current" budget through 2020 and that there was "no
schedule" establishing when construction would start.
From October 2011 to April 2012, following denial of their
motion for class certification, Beroth Oil Co. v. NCDOT
(Beroth II), 367 N.C. 333, 347, 757 S.E.2d 466, 477
(2014), aff'g in part and vacating in part Beroth Oil
Co. v. NCDOT (Beroth I), 220 N.C.App. 419, 725 S.E.2d
651 (2012), plaintiffs filed separate complaints against
NCDOT, asserting various, similar constitutional claims
related to takings without just compensation, including
inverse condemnation. On 31 July 2012, the Chief Justice
certified plaintiffs' cases as "exceptional"
under Rule 2.1 of the General Rules of Practice for the
Superior and District Courts, and the trial court
subsequently consolidated plaintiffs into the same group for
case management purposes.
The NCDOT timely answered, asserted various affirmative
defenses, including, inter alia, lack of standing,
and moved to dismiss plaintiffs' claims under Rules
12(b)(1), 12(b)(2), and 12(b)(6) of the North Carolina Rules
of Civil Procedure. On 8 January 2013, the trial court
entered an order denying NCDOT's motion to dismiss the
claim for inverse condemnation.
All parties moved for summary judgment. The trial court first
determined that plaintiffs failed to establish a taking,
reasoning that "a regulatory taking" by police
power only occurs when the legislation "deprive[s] the
property of all practical use, or of all
reasonable value" (citing and quoting Beroth I,
220 N.C.App. at 436-39, 725 S.E.2d at 661-63), and that the
"mere recording of project maps do[es] not constitute a
taking" (citing, inter alia, Browning v.
N.C. State Highway Comm'n, 263 N.C. 130, 135-36, 139
S.E.2d 227, 230-31 (1964)). Therefore, the trial court
concluded the inverse condemnation claim was "not yet
ripe" and granted summary judgment for NCDOT, dismissing
the claim without prejudice. Plaintiffs appealed the
dismissal and summary judgment orders to the Court of
Appeals, and NCDOT cross-appealed the same, arguing for
dismissal "with prejudice."
The Court of Appeals reversed the dismissal of
plaintiffs' inverse condemnation claim. Kirby
[I]. The Court of Appeals concluded that, unlike
regulations under the police power, which the State deploys
to protect the public from injury, "the Map Act is a
cost-controlling mechanism, " id. at , 769
S.E.2d at 232, that employs the power of eminent domain,
allowing NCDOT "to foreshadow which properties will
eventually be taken for roadway projects and in turn,
decrease the future price the State must pay to obtain those
affected parcels, " id. at , 769 S.E.2d at
232 (quoting Beroth II, 367 N.C. at 349, 757 S.E.2d
at 478 (Newby, J., dissenting in part and concurring in
part)). The Court of Appeals determined that the Map Act
imposed restrictions on "Plaintiffs' ability to
freely improve, develop, and dispose of their own property,
" id. at , 769 S.E.2d at 235, that
"never expire, " id. at , 769 S.E.2d
at 234 (quoting Beroth II, 367 N.C. at 349, 757
S.E.2d at 478), and that, as a result, the Map Act
effectuated a taking of their "elemental [property]
rights, " id. at , 769 S.E.2d at 234.
Therefore, the Court of Appeals concluded that
plaintiffs' inverse condemnation claim was ripe and
remanded the matter for a "discrete fact-specific
inquiry, " id. at , 769 S.E.2d at 235
(quoting and discussing Beroth II, 367 N.C. at 343,
757 S.E.2d at 474 (majority opinion)), to determine "the
amount of compensation due, " id. at , 769
S.E.2d at 236.
Kirby II, 368 N.C. at 848-52, 786 S.E.2d at 921-23
Supreme Court granted NCDOT's petition for discretionary
review, and affirmed this Court's opinion in Kirby
I. Specifically, the Supreme Court held, inter
alia: "The language of the Map Act plainly points
to future condemnation of land in the development of corridor
highway projects, thus requiring NCDOT to invoke eminent
domain." Id. at 854, 786 S.E.2d at 925.
"The Map Act's indefinite restraint on fundamental
property rights is squarely outside the scope of the police
power." Id. at 855, 786 S.E.2d at 925.
"Justifying the exercise of governmental power in this
way would allow the State to hinder property rights
indefinitely for a project that may never be built."
Id. "The societal benefits envisioned by the
Map Act are not designed primarily to prevent injury or
protect the health, safety, and welfare of the public.
Furthermore, the provisions of the Map Act that allow
landowners relief from the statutory scheme are inadequate to
safeguard their constitutionally protected property
Supreme Court concluded by stating that:
Through inverse condemnation the owner may recover to the
extent of the diminution in his property's value as
measured by the difference in the fair market value of the
property immediately before and immediately after the taking.
Obviously, not every act or happening injurious to the
landowner, his property, or his use thereof is compensable.
Thus, to pursue a successful inverse condemnation claim, a
plaintiff must demonstrate not only a substantial
interference with certain property rights but also that the
interference caused a decrease in the fair market value of
his land as a whole.
By recording the corridor maps at issue here, which
restricted plaintiffs' rights to improve, develop, and
subdivide their property for an indefinite period of time,
NCDOT effectuated a taking of fundamental property rights. On
remand, the trier of fact must determine the value of the
loss of these fundamental rights by calculating the value of
the land before the corridor map was recorded and the value
of the land afterward, taking into account all pertinent
factors, including the restriction on each plaintiff's
fundamental rights, as well as any effect of the reduced
ad valorem taxes. Accordingly, the trial court
improperly dismissed plaintiffs' inverse condemnation
Id. at 855-56, 786 S.E.2d at 925-26 (citations and
internal quotation marks omitted).
the case was remanded, the trial court entered the order
herein appealed on October 3, 2016, which had followed the
instructions given by both Appellate Courts. That order
granted Plaintiffs' motion for partial judgment on the
pleadings pursuant to Rule 12(c) of the North Carolina Rules
of Civil Procedure, finding a taking of Plaintiffs'
fundamental property rights had occurred by inverse
condemnation; granted Plaintiffs' partial summary
judgment finding a taking; and established the rules and
procedures by which NCDOT would file plats, appraise