Status Update Map Act Cases – Inverse Condemnation
For decades, the North Carolina Department of Transportation (“the NCDOT”) has sought to save money in road construction by driving down property values and imposing harsh restrictions without any time limit on North Carolina property owners. This scheme imposed under the Map Act trampled on the property rights of owners just to save a buck if the NCDOT decided to build a highway over that property.
Finally, the tide turned against the NCDOT. Property owners challenged and won an eminent domain victory over North Carolina’s Map Act at the North Carolina Supreme Court. However, the NCDOT still resists the Supreme Court’s ruling.
This article discusses the ongoing statewide battle between property owners and the NCDOT. The NCDOT’s use of the Map Act has affected property owners in Forsyth, Wake, Cumberland, Cleveland, and Guilford Counties, but this inverse condemnation action has implications for property owners all over the state. This article offers an update on the efforts by Hendrick Bryant Nerhood Sanders & Otis in their fight for just compensation for North Carolina property owners.
KIRBY V. NCDOT AT THE SUPREME COURT (2016). North Carolina’s highest court ruled in a unanimous 7-0 decision “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.” (emphasis added). Hendrick Bryant Nerhood Sanders & Otis attorneys took the property owners’ case all the way to the N.C. Supreme Court and prevailed for you on these inverse condemnation cases.
The Supreme Court ordered the trial court to determine the value of the fundamental property rights the NCDOT took from the plaintiffs by recording the maps on their property. The Supreme Court ruled that the trial court would measure damages as the difference between the values of plaintiffs’ property before and after the NCDOT took their fundamental property rights.
In the Kirby case, the NCDOT recorded maps on plaintiffs’ property to prepare for the Winston-Salem Northern Beltway, a new stretch of highway that would encircle the northern portion of the city. These maps were recorded in the Register of Deeds. County tax maps also showed the path of the future highway with no timetable for construction
These maps came with severe restrictions on the plaintiffs’ property. The plaintiffs claimed that when the NCDOT placed restrictions on the plaintiffs’ property, the NCDOT took their property by eminent domain, and the Supreme Court agreed. This is called inverse condemnation, meaning the NCDOT took property without paying for it or declaring a taking.
The NCDOT’s restrictions prevented any property owner within the Map Act Corridor from obtaining a building permit or creating a subdivision. These restrictions had no expiration date, and no requirement that the NCDOT actually build the highway as planned. These restrictions were in place on some plaintiffs’ property since 1997, a span of twenty years.
The Map Act restrictions had a devastating impact on the plaintiffs’ ability to sell their property. Within the thirty-five mile path of the Northern Beltway, only five properties had been sold for fair market value since the maps had been filed. Within a quarter mile on either side of the Northern Beltway path, sixteen thousand properties sold for fair market value over that same time.
The NCDOT bought deeds to over five hundred pieces of property within the path of the Beltway, but continually stated that they did not know whether they would condemn the plaintiffs’ property. The Kirby plaintiffs brought a suit against the NCDOT so that the NCDOT would compensate them for what it had already taken by filing the maps.
As a result of the NCDOT’s actions, whole neighborhoods within the path of the Northern Beltway were bulldozed or fell into disrepair. This is called “condemnation blight.” Property values plummeted in these blighted neighborhoods, just as the NCDOT intended.
At trial, the NCDOT argued that it was acting under the State’s “police power,” the State’s ability to make laws for the health and safety of its citizens. This power includes land regulations such as zoning and courts do not often overturn State actions within the police power.
Saving money does not protect the health, safety, and welfare of the public under the police power. The Supreme Court ruled that the NCDOT acted outside of its police power, and instead had exercised its power of eminent domain by taking property for public use. The Court stated “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.”
The Court ruled that the recording of the Beltway maps plainly points to future condemnation by the NCDOT. Because the State exercised its eminent domain power here, the Supreme Court ordered that the trial courts determine the value of the property taken by the NCDOT for just compensation.
2.1 JUDGES. Special judges, called “2.1 Judges,” have been appointed in the five main Map Act counties in North Carolina to hear Map Act cases. 2.1 Judges are appointed in “exceptional cases” to oversee those cases from beginning to end. These judges are focused on the law and facts of these specific and numerous cases so that complex issues can be resolved consistently and efficiently.
Currently, 2.1 Judges have been appointed for Map Act cases in Forsyth, Guilford, Wake, Cumberland, and Cleveland Counties. Hendrick Bryant Nerhood Sanders & Otis has gone to each of these counties for hearings and setting the case scheduling orders to obtain just compensation for our clients.
FORSYTH COUNTY. In Forsyth County, the Map Act was used to plan the Winston-Salem Northern Beltway which would encircle the northern end of the city. These cases include the “Kirby 9” plaintiffs that were victorious in the N.C. Supreme Court.
The trial judge has ruled on our motion that, under Kirby, the NCDOT has indeed taken the plaintiffs’ property by filing maps on their properties and restricting their property rights. This applies for the plaintiffs who were part of the Kirby case, and those who have filed suit since then.
The trial judge has also entered a scheduling order which requires the NCDOT to:
(1) Make plats of plaintiffs’ properties, indicating where the properties are located within the Beltway if the NCDOT does not rely on the Map Act recorded maps. (2) Appraise plaintiffs’ properties; and (3) Make good faith deposits for the value of the property taken according to their appraisals.
Property owners will have six months after they receive the appraisals and deposits from the NCDOT to accept or reject them. If the plaintiffs do not accept the NCDOT’s valuation, they may still withdraw the deposits made by the NCDOT, and proceed to mediation to try to negotiate a settlement. If the owner and the NCDOT cannot reach an agreement at mediation, then they will go to trial on the issue of damages.
Once the NCDOT files a plat, makes a deposit, delivers the appraisal and the owner rejects the appraisal, either party may ask for a “108 hearing.” This hearing may be requested if the parties disagree over title to the land, the interest or area taken, or proper parties.
If the NCDOT does not sufficiently value plaintiffs’ property, then we will do everything we can to make sure that the plaintiffs’ get just compensation, including going to trial on the issue of damages.
The NCDOT has appealed these orders, including the orders affecting the Kirby 9 plaintiffs. This is discussed below.
WAKE COUNTY. In Wake County, the Map Act has been used to plan the I-540 Outer Loop around Raleigh. We have argued Map Act Cases in Raleigh. On January 13, 2017, we re-argued the issue of a taking under Kirby and Jamestown Pender (discussed below).
That issue, along with the schedule of Wake County Map Act Cases are currently under deliberation by the trial court.
CUMBERLAND COUNTY. In Cumberland County, the Map Act has been used to plan the Fayetteville Outer Loop. The trial court has entered an order that is similar to the one entered by Forsyth County court. The Fayetteville order states that the NCDOT did take the plaintiffs’ property and sets a schedule for just compensation. The NCDOT has appealed this order.
CLEVELAND COUNTY. In Cleveland County, the Map Act has been used to plan the US 74 Shelby Bypass. We have ongoing hearings before the Cleveland County trial court to obtain just compensation for property owners in Cleveland County.
GUILFORD COUNTY. In Guilford County, the Map Act was used to plan the Greensboro Urban Loop which would ease congestion on I-40 around Greensboro. The Guilford Map Act cases are subject to the same orders from Judge Craig as the Forsyth Map Act cases. The NCDOT has appealed the Guilford County order too.
JAMESTOWN PENDER, L.P v. NCDOT. In November 2016, the Court of Appeals decided a Map Act case from Pender County, Jamestown Pender L.P. v. NCDOT, 792 S.E.2d 187 (N.C. Ct. App. 2016). This case is a companion case to Kirby. In Pender County, the Map Act had been used to plan the US 17 Hampstead Bypass.
The facts of Jamestown Pender were very similar to the Kirby facts. The only significant difference was that the NCDOT used another organization, the Wilmington Urban Area Metropolitan Planning Organization (“WMPO”) to file maps and restrictions on plaintiffs’ property. Nevertheless, the Court of Appeals found that the plaintiffs’ land had been taken by the filing of the Map Act maps by WMPO.
The Court of Appeals ruled that even though the NCDOT did not file the map itself, the NCDOT need not be the one to file the map to constitute a taking. More importantly, however, the Court of Appeals made clear that the holding of Kirby applies to more than just the Winston-Salem Northern Beltway; it applies all over the North Carolina.
NCDOT APPEAL AND SUPERSEDEAS. Instead of complying with the holdings of Kirby and Jamestown Pender, which both clearly state that a taking has occurred by the filing of the Map Act maps, the NCDOT has continued to fight and appeal.
The NCDOT is currently appealing trial court’s orders in the Guilford and Forsyth County cases. The NCDOT has moved for a writ of supersedeas so that it does not have to make appraisals and deposits while Judge Craig’s order is on appeal as an emergency measure. The NCDOT seeks to delay just compensation as long as possible.
Despite the language from Kirby stating, “NCDOT effectuated a taking of fundamental property rights,” (emphasis added) the NCDOT continues to deny that a taking ever occurred as a result of the Map Act. The NCDOT is ignoring the plain instruction of the North Carolina Supreme Court.
Additionally, the NCDOT has once again raised the defense of sovereign immunity. The property owners contend the NCDOT abandoned this argument in the Kirby appeal by not arguing this defense at the Supreme Court. Sovereign immunity is a common law doctrine that states a citizen cannot sue the government unless the government allows them to do so. It arises from English common law where “the King can do no wrong.”
Plaintiffs contend that sovereign immunity fails because North Carolina has enacted statutes for the state to pay inverse condemnation claims in N.C. Gen. Stat. § 136-111. This trumps the NCDOT’s sovereign immunity defense.
N.C. Gen. Stat. § 136-111 waives sovereign immunity of the North Carolina by giving landowners a statutory remedy to seek just compensation for property taken by eminent domain. When a statute provides a legal remedy for an individual against the government, sovereign immunity is waived. The Fifth and Fourteenth Amendments to the United States Constitution also provide that just compensation must be provided when the state exercises its power of eminent domain.
These arguments, both old and new, are frivolous, baseless, and solely for the purpose of delaying just compensation to property owners. We continue to fight the NCDOT’s arguments and appeals on behalf of property owners across North Carolina. Although the NCDOT wants to delay payment to the landowners as long as possible, we are doing everything we can to get to a trial on the issue of damages and obtain just compensation for North Carolina property owners.
If you have questions about your inverse condemnation case, CALL the eminent domain attorneys at Hendrick Bryant Nerhood Sanders & Otis at (336) 723-7200.
Inverse Condemnation Map of Northern Beltway in Winston-Salem
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