Condemnation Law Overview and Update R. Susanne Todd Johnston Allison Hord 1065 E. Morehead Street Charlotte, NC 28204

What is Condemnation?  Act or Process of taking property by Eminent Domain  Authority or Power of the Government to take Private Property for Public Use 2 What is Eminent Domain?

Where Does Eminent Domain Authority Come From?  Fifth Amendment of the US Constitution  NC Constitution 3

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5 5th Amendment to the U.S. Constitution: Nor shall private property be taken for public use without just compensation 14th Amendment to the U.S. Constitution Makes the Bill of Rights applicable to the States US Constitution

6 No personal shall be deprived of his life, liberty or property but by the law of the land.  NC General Statutes  Chapter 40A  Chapter 136 NC Constitution “Law of the Land Clause”

7  Fifth Amendment of the US Constitution  No private property shall be taken for a public use without payment of just compensation  Can only take for a public purpose  Have to pay Just Compensation Limits of Eminent Domain Authority

 Private Condemnors:  Utility Companies like Duke Energy and Piedmont Natural Gas  Railroads  Power lines  Gas lines 8 Who has the Power to Condemn?

 Public Condemnors: Cities, Towns, Counties  Jails  Fire Stations  Airports  Water and Sewer Treatment Plants  Storm Drainage  Parks  Roads 9 Who has the Power to Condemn?

 Other Public Condemnors: School Board, Housing Authority, Water Authority  Schools  Economic Development / Affordable Housing  Water Lines  Sewer Lines 10 Who has the Power to Condemn?

 N.C. Department of Transportation  Road Rights of Way  Sidewalks  Traffic Signals 11 Who has the Power to Condemn?

N.C. Gen. Stat. § 40A-2 et. seq. (“Slow Take”) N.C. Gen. Stat. § 136-103 et. seq. (“Quick Take”) 12 North Carolina Statutes Provide Two Condemnation Processes

 N.C. DOT  NC Gen. Stat. § 136-103 et. seq.  Everyone Else  NC Gen. Stat. § 40A Some municipalities have Local Legislation that gives them authority to use the § 136 condemnation process to take property for various other public uses.  City of Charlotte - Chapter 7, Article V, § 7.81 allows City to use quick take for a variety of public uses 13 Condemnation Process

A "taking" has been defined as:  the taking of something, whether it is the actual physical property or interference with the right of ownership, use or enjoyment. Kirby v. N.C. DOT, 368 N.C. 847, 786 S.E.2d 919 (2016)  Types of takings: Regulatory or Physical 14 What is a Taking?

 A regulation that deprives the owner of all economically beneficial use of this property. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 112 S. Ct. 2886 (1992). 15 Regulatory Takings

Determining if property has been “taken” depends on whether or not the property is being subjected to the government’s police power or its power of eminent domain.  In the exercise of police power, the owner is denied the unrestricted use or enjoyment of his property through regulations.  This exercise is not compensable UNLESS the regulation goes too far and, deprives the owner of all economically beneficial use of the property. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 112 S. Ct. 2886 (1992)  The Court will examine (1) the character of the governmental action, (2) its economic impact, and (3) its interference with reasonable investment- backed expectations to determine if a taking has occurred Id. at 1071 16 Police Power vs. Eminent Domain Power

Can be a permanent physical invasion or a temporary, intermittent invasion. Permanent Invasions: Temporary, intermittent invasion: Lea Co. v. N.C. Bd. of Transp., 308 N.C. 603, 304 S.E.2d 164 (1983) See also: Wilkie v. City of Boiling Spring Lakes, 370 N.C. 540, 809 S.E.2d 853 (2018) 17 Physical Takings

Just Compensation (Damages) §136  Complete: Where the entire tract is taken the measure of damages is the fair market value of the property at the time of taking. N.C. Gen. Stat. §136-112(1)  Permanent Partial taking : Damages are the difference between the FMV of the ENTIRE parcel before the taking and the FMV of the REMAINDER after the taking with consideration being given to any special or general benefits resulting from the utilization of the part taken for highway purposes. N.C. Gen. Stat. §136-112(1); Chappell v. N.C. DOT, 374 N.C. 273, 841 S.E.2d 513 (2020) 18 What is Your Taking Worth?

Just Compensation (Damages) §40A  Complete: Where the entire tract is taken the measure of damages is the fair market value of the property at the time of taking. N.C. Gen. Stat. § 40A-64.  Permanent Partial taking: Damages are the “greater of” either (1) difference between the FMV of the ENTIRE parcel before the taking and the FMV of the REMAINDER after the taking or (2) the fair market value of the property taken. N.C. Gen. Stat. § 40A-64.  Temporary taking: the measure of damages for a temporary taking is the rental value of the land actually occupied by the condemnor. DOT v. Jay Butmataji, LLC, 260 N.C. App. 516, 520, 818 S.E.2d 171, 175 (2018) 19 What is Your Taking Worth?

 Loss of reasonable access to public road  Loss of rental income  Loss of property rights  Loss of improvements on the property i.e. fences, landscaping, buildings, ponds, etc.  Damage to remaining property  Temporary use of property  Loss of personal property DOT v. Adams Outdoor Advert. of Charlotte Ltd. P'ship, 370 N.C. 101 (2017)  Loss of visibility City of Charlotte v. Univ. Fin. Props., Ltd. Liab. Co., 260 N.C. App. 135 (2018)  Circuity of Travel (medians)  Loss of business profits DOT v. Adams Outdoor Advert. of Charlotte Ltd. P'ship, 370 N.C. 101, 110 (2017)  Re-routing of traffic is not compensable where reasonable access to a public road is provided DOT v. Riddle, 253 N.C. App. 20 (2017) 20 Compensable vs. Non-Compensable Damages

21 Sunset Beach

Converting Private Property to Public Use without filing a condemnation action or making payment of just compensation  Property owner can bring an “inverse condemnation” action within two years of completion of project  Forces Condemnor to recognize the taking and pay just compensation  Award of attorneys’ fees  Can bring claim in State of Federal Court  Knick v. Twp. of Scott, 139 S. Ct. 2162 (2019) A landowner was not required to pursue an inverse condemnation action against a township in state court before bringing a 42 U.S.C.S §1983 action alleging violation of the Fifth Amendment Takings Clause because government violated the Takings Clause when it took property without compensation, and a Fifth Amendment claim could be brought under §1983 at that time. 22 Inverse Condemnation

23 Map Act Plotting or Planning does not, in itself, amount to a taking. Adams Outdoor Advertising v. NC Dept. of Transp., 112 N.C. App 120, 434 S.E.2d 666 (1993) Recording of Maps with the Register of Deeds showing Highway Corridor Running Across Properties

 Right to Possess  Right to Sell  Right to Develop  Right to Exclude Others 24 Property Rights

25 Map Act Cases  Beroth Oil Co. v. N.C. DOT, 220 N.C. App. 419, 725 S.E.2d 651 (2012). Property owners tried to get class certification to address the issues in one matter, the court denied that which led to several individual cases filed by property owners claiming that NC DOT had in essence taken their land through eminent domain without paying just compensation. Many of these cases were heard at the trial level and went up and down on appeal for different reasons.  Kirby v. N.C. DOT, 368 N.C. 847 (2016). A group of Forsyth County property owners sued the NCDOT alleging that NCDOT’s filing of the transportation corridor map, an area in which their property lay, amounted to a taking of their property through eminent domain for which they were owed just compensation. The NC Supreme Court ruled that the limitations imposed on property owners by the Map Act and filing of the transportation corridor maps, i.e. inability to further develop, suppressed land value, limitations on disposing of the property and the indefinite nature of those limitations amounted to a taking of the property for which the state was required to pay.  Chappell v. N.C. DOT, 374 N.C. 273, 841 S.E.2d 513 (2020)  DOT v. Stimpson, 258 N.C. App. 382, 813 S.E.2d 634 (2018)

26 Condemnation Cases Are Different!  Chapter 136  Title Vests When Case Filed, Deposit Made, Memorandum of Action Recorded  Answer due: 12 months after service  Chapter 40A  Depends on Condemnor and Use  Answer due: 120 days after service

27 Withdraw Deposit  Deposit is Government’s “Estimate of” Just Compensation  Property owner can withdraw deposit  Contest Amount Paid by Filing Answer

28 Defendant Property Owner is Treated as Plaintiff  Has Claim for Additional Compensation  Bears Burden of Proof  Goes First at Trial  Can File Voluntary Dismissal City of Charlotte v. Univ. Fin. Props., Ltd. Liab. Co., 260 N.C. App. 135 (2018)

29 Don’t Settle Too Soon Don’t Get Taken  Project always looks good on paper  Everything looks good in black and white  Investigation reveals reality  NC DOT v. Laxmi Hotels of Spring Lake, Inc., 259 N.C. App. 610 (2018)

30 Thank You