On November 21, 2017 the North Carolina Court of Appeals ruled against the NCDOT in one of its appeals related to the Beroth Oil Co. & Kirby related Map Act Corridor Cases involving inverse condemnation in North Carolina.
The underlying trial court order in Forsyth County from October of 2016 was appealed. The appellate opinion was written by Judge Berger of the N.C. Court of Appeals. All quotes are from Judge Berger’s opinion, of which Judge Zachary concurred.
“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.” (Opinion P. 4)
The property owners arguments prevailed at the trial court level and now at the appellate level.
The initial question for the Court was to determine if this was a viable interlocutory appeal or not. Interlocutory is when the appeal is done before a final judgment has been awarded.
NCDOT’s grounds for appeal also included sovereign immunity. Sovereign Immunity is a doctrine that protects the government from being sued with limited exceptions.
Regarding the DOT’s sovereign immunity claim, the Court stated:
“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 distraction.” (p. 5)
The Court continued: “There 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.” citing Veazey v. Durham (p.6)
Regarding the State taking power, the Court continues: “When the State takes private property for a public use, it must pay just compensation.” (p.6).
Back to DOT’s sovereign immunity arguments, the Court dismisses this in its reasoning as follows:
“[S]overeign immunity must be juxtaposed with the contrary sovereignty of the individual, whose natural rights preceded government and were enumerated in the federal Bill of Rights and our own State Constitution’s Declaration of Rights. Our Supreme Court held that “[t]he doctrine of sovereign immunity cannot stand as a barrier to North Carolina citizens who seek to remedy violations of their rights guaranteed by the Declaration of Rights.” Citing Corum v. University of North Carolina (p.19)
“Every expropriation of a citizen’s fruits of his or her labor by the government is a taking, whether through taxation or by the power of eminent domain. However, of all rights enumerated in our constitutions, only the taking of an individual’s property rights by the sovereign for public use requires remuneration. This right “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Citing U.S. Supreme Court decision in Armstrong v. United States. (p20)
The Court continues with a review of NC General Statutes about the state’s eminent domain powers:
“Our General Assembly has expressly granted NCDOT the power of eminent domain. N.C. Gen. Stat. § 136-18 and -19 (2015).” (p.21)
“The right to compensation for property taken under the power of eminent domain does not rest solely upon statute because property owners have a constitutional right to just compensation for takings.” Citing Ferrell v. Dept. of Transportation (p.22)
“[T]he State has implicitly waived sovereign immunity to the extent of the rights afforded in Chapter 136 of our General Statutes. Id.
The next crux of the DOT’s arguments, which attempts to undo the Kirby appellate rulings, unfold as such:
“However, NCDOT disputes that the plaintiffs have a right to just compensation, and has consistently and strenuously argued that the trial court erred in applying Section 111 of Chapter 136 to the cases in which no taking has been admitted” (p22)
Now the Court gets to the part where the DOT had a history of fulsomely answering each allegation of the complaint. After the Kirby v. NC Dep’t of Transp. ruling by the NC Supreme Court, the DOT attorneys changed tacts. The DOT made general denials as “Paragraphs 1-61 are denied”. The trial court applied the doctrine of legal estoppel and the doctrine of judicial estoppel to deem the DOT had taken properties based on its prior method of answering and the Kirby decisions.
The Court of Appeals upheld the trial court and reasoned (enjoy these quotes):
“[O]ur Supreme Court has held that a party “cannot swap horses in midstream,” citing Roberts v. Grogan (p.24)
The party “should not be permitted to “blow hot and cold in the same breath,” citing Kannan v. Assad (p24).
And that the DOT “needs to face “the lesson, taught every day in the school of experience, that he cannot safely ‘run with the hare and hunt with the hound,’ ” citing Rand v. Gillette (p.24).
The Supreme Court “has consistently held that “a party to a suit should not be allowed to change his position with respect to a material matter in the course of litigation.” Citing Roberts (p.24-25)
The reason to prevent DOT from changing tacts, applying the doctrine of judicial estoppel, the Court continues:
“By prohibiting a litigant from changing positions, “judicial estoppel seeks to protect courts, not litigants, from individuals who would play fast and loose with the judicial system,” citing Whitacre P’ship. (p.25)
The Court went on to analyze the three factors to enforce judicial estoppel. It concluded about the DOT’s differing ways of answering to avoid summary judgment and motions on the pleadings:
“Judicial acceptance of NCDOT’s latter inconsistent position does pose a threat to judicial integrity in that it could lead to inconsistent court determinations or the perception that either the first or the second court was misled.” (p.26)
“Finally, NCDOT is attempting to avoid payment of just compensation by asserting a technical argument that, because NCDOT has admitted no taking, it therefore will pay no just compensation. This inconsistent position gives NCDOT an unfair advantage in that it effectively ends Plaintiffs’ statutory right to pursue a cause of action seeking just compensation. This would most certainly impose an unfair detriment on the Plaintiffs in that their alleged damages suffered as a result of NCDOT’s actions would no longer be compensable. It is for these reasons that the trial court found NCDOT’s general denials as legally untenable, and deemed the facts establishing that each of the Plaintiffs’ properties were within the highway corridor maps’ boundaries admitted.” (p.26)
The Court concludes “sovereign immunity provides no bar to Plaintiffs’ suit against NCDOT” (p.27)
The NCDOT’s next argument for this interlocutory appeal was that the judicial branch cannot order the executive branch to do a certain act, particularly make deposits, based on the constitutional separation of powers in our tripartite system. The Court concludes “it is this statute that allows the Plaintiffs an avenue by which they can be compensated for the taking. Therefore, this argument must also fail and we dismiss this appeal.” (p.27)
The Court also addresses the NCDOT’s policy argument that it and the taxpayers would suffer irreparable harm. In response, The Court notes:
“While it is admirable to protect the public purse and spend it wisely, this argument is not helpful at this point in the litigation. This should have been a consideration before the highway corridor map was filed. The constitutional right to just compensation when the state takes an individual’s private property rights for public use will not be suspended on the mere fact that it may be expensive.” (p.28)
“While there will be a high monetary price, and conceivably a political price as well, once NCDOT pays just compensation for exercising its eminent domain power, perhaps this will force NCDOT to respect the rights of our individual citizens and not restrict their rights without the ability or willingness to pay.” (p29)
The majority opinion concludes:
“At this juncture, it is NCDOT that must follow the order of the trial court appealed herein and file plats or maps, without further delay, identifying interests and areas taken to comply with G.S. § 136-111 and with the clear mandates of this Court in Kirby I, and our Supreme Court in Kirby II.” (p29)
There was a dissenting opinion by Judge Dillon. The dissenting judge opined there was an interlocutory appeal. However, that same outcome was reached by both the majority and dissenting opinion as to the ultimate outcome and ruling:
“Now reaching the merits of NCDOT’s argument, I agree with the majority that the trial court got it right. Section 136-111 requires NCDOT to post a deposit and file maps/plats in an inverse condemnation action where NCDOT has admitted to a taking.” (p.5 dissent)
And “Accordingly, my vote is to affirm the order of the trial court.”
WHAT’S NEXT FOR PROPERTY OWNERS: Now the property owners cases are back in the hands of the trial courts, which will enforce its orders that the NCDOT 1) plat the inversely condemn properties, 2) appraise the value taken per the Kirby opinions, & 3) deposit funds for the amount of the takings. All disputes and valuations will go before the trial court and ultimately a jury.
The full opinion may be read here: https://appellate.nccourts.org/opinions/?c=2&pdf=35543
**Hendrick Bryant is the North Carolina law firm that brought the fight to the NCDOT on behalf of property owners in these inverse condemnation cases in North Carolina affected by the Map Act Corridors.**
Hendrick Bryant Nerhood Sanders & Otis, LLP
723 Coliseum Dr. Ste. 101
Winston-Salem, NC 27106