City of Charlotte, Corp. v. Univ. Fin. Props., LLC

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-473
Filed: 5 April 2016
Mecklenburg County, No. 13-CVS-8602
THE CITY OF CHARLOTTE, a municipal corporation, Plaintiff,
v.
UNIVERSITY FINANCIAL PROPERTIES, LLC, a North Carolina limited liability
company f/k/a University Bank Properties Limited Partnership, a North Carolina
limited partnership, et al., Defendants.
Appeal by plaintiff from orders entered 17 December 2014 by Judge John W.
Bowers in Mecklenburg County Superior Court. Heard in the Court of Appeals 4
November 2015.
Parker Poe Adams & Bernstein, LLP, by Jonathan E. Hall, Benjamin R.
Sullivan, and Nicolas E. Tosco, for plaintiff-appellant.
Johnston, Allison & Hord, P.A., by Martin L. White, R. Susanne Todd, and
David V. Brennan, for defendant-appellee.
DAVIS, Judge.
This appeal arises from the condemnation by the City of Charlotte (“the City”)
of a portion of property owned by University Financial Properties, LLC (“University
Financial”) in connection with the expansion of the City’s light rail system. The
primary issued raised by the City on appeal concerns the trial court’s determination
that the construction of an elevated bridge (“the Bridge”) in connection with the light
CITY OF CHARLOTTE V. UNIV. FIN. PROPS., LLC
Opinion of the Court
rail extension project “is part of the taking of University Financial’s property in this
action.” After careful review, we reverse and remand for further proceedings.
Factual Background
University Financial owns property located at the intersection of North Tryon
Street and W.T. Harris Boulevard in Charlotte, North Carolina. University Financial
leases the property to Bank of America, which operates a retail banking services
branch from this location.
On 30 April 2013, the City filed a complaint and declaration of taking in
Mecklenburg County Superior Court to acquire by condemnation a portion of
University Financial’s property “in connection with the LYNX Blueline Extension,
Northeast Corridor Lightrail Project.” University Financial’s tract of property
comprises 75,079 total square feet, and the City’s declaration of taking identified
5,135 square feet of the tract that would be taken in fee simple. The declaration of
taking also set forth various easements the City would be acquiring with respect to
University Financial’s property. The property taken in fee simple was acquired in
order to widen the travel lanes of North Tryon Street and accommodate vehicular
traffic because the infrastructure for the new light rail line — specifically, the light
rail track and the Bridge — will be located in the middle of the existing roadway so
as to enable the light rail to travel down the center of North Tryon Street. University
Financial filed its answer on 9 April 2014, seeking the trial court’s determination of
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just compensation for the property taken and the diminution in value of the
remaining tract as a result of the taking.
On 24 October 2014, the City filed a motion for the determination of all issues
other than damages pursuant to N.C. Gen. Stat. § 136-108. In its motion, the City
contended that University Financial was not entitled to compensation for any loss of
visibility to its property resulting from the construction of the Bridge because the
Bridge was not being built on the condemned property. Consequently, the City
requested a hearing under § 136-108 so that the trial court could “determine whether
any impact from construction of the bridge within the existing public right-of-way is
part of the taking in this action and is therefore compensable.”
On 19 November 2014, the City filed a motion for partial summary judgment
“on the question of whether an elevated bridge that the City plans to build at the
intersection of North Tryon Street and W.T. Harris Boulevard is part of the taking in
this case and is an element of the just compensation owed to University Financial.”
University Financial filed several exhibits with its response to the City’s partial
summary judgment motion, and the City moved to strike these documents, alleging
that they were inadmissible on various grounds.
The trial court held a hearing on the City’s motions on 1 December 2014. In
three orders entered 17 December 2014, the trial court (1) determined that the
construction of the Bridge “is part of the taking of University Financial’s property in
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this action” and that University Financial is entitled to present evidence of “any and
all damages resulting from the impact of the construction of the [light rail], including
construction of the Bridge, on its remaining property”; (2) denied the City’s motion
for partial summary judgment; and (3) denied its motion to strike. The City gave
timely notice of appeal.
Analysis
I. Appellate Jurisdiction
All three of the trial court’s orders that the City seeks to appeal are
interlocutory orders. It is well established that interlocutory orders, which are made
during the pendency of an action, are generally not immediately appealable. Duval
v. OM Hospitality, LLC, 186 N.C. App. 390, 392, 651 S.E.2d 261, 263 (2007). If,
however, the order implicates a substantial right that will be lost absent our review
prior to the entry of a final judgment, an immediate appeal is permissible. See Veazey
v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) (“An appeal does not
lie . . . from an interlocutory order of the Superior Court, unless such order affects
some substantial right claimed by the appellant and will work an injury to him if not
corrected before an appeal from the final judgment.”).
In condemnation proceedings, our appellate courts have identified certain
“vital preliminary issues,” such as the trial court’s determination of the title or area
taken, which affect a substantial right and are subject to immediate appeal. N.C.
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Dep’t of Transp. v. Stagecoach Village, 360 N.C. 46, 48, 619 S.E.2d 495, 496 (2005)
(citation and quotation marks omitted); see Dep’t of Transp. v. Airlie Park, Inc., 156
N.C. App. 63, 66, 576 S.E.2d 341, 343 (“Because defendant’s present appeal
specifically contests the trial court’s determination of the area affected by the taking,
which is a ‘vital preliminary issue,’ such appeal is properly before this Court.”), appeal
dismissed, 357 N.C. 504, 587 S.E.2d 417 (2003). In its order pursuant to N.C. Gen.
Stat. § 136-108, the trial court concluded that the City’s construction of the Bridge
was “part of the taking in this action.” Because this ruling concerns the area
encompassed by the taking, we have jurisdiction over the City’s appeal with regard
to the trial court’s determination of this issue.1
II. Damages Due to Loss of Visibility
In ruling on the issue of “whether any impact from construction of the bridge
within the existing public right of way is part of the taking [in] this action and
therefore compensable,” the trial court concluded, in pertinent part, as follows: (1)
“The construction of the BLE Project2, including the construction of the Bridge, is
part of the taking of University Financial’s property in this action”; (2) “Any and all
1 For the reasons explained herein, our ruling on the trial court’s § 136-108 issue is dispositive
of this entire appeal and grants the City the relief it sought in its motion for partial summary
judgment. Moreover, our decision renders moot the City’s appeal of the trial court’s denial of its motion
to strike.
2The term “BLE Project” is an abbreviation of the project’s full title, which is the LYNX Blue
Line Extension Northeast Corridor Light Rail Project.
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impact to University Financial’s remaining property caused by the construction of the
BLE Project, including construction of the Bridge, is compensable”; and (3) “Loss of
visibility of University Financial’s remaining property resulting from the Bridge is a
factor that may be considered by a finder of fact in determining the fair market value
of University Financial’s remaining property.”
Based on the above-quoted conclusions of law, the trial court ordered that
University Financial be permitted to present evidence of “any and all damages
resulting from the impact of the construction of the BLE Project, including
construction of the Bridge, on its remaining property[.]” The City contends that the
trial court’s ruling is contrary to North Carolina law, and we agree.
When the State, an agency, or a municipality exercises its power of eminent
domain to take private property for a public purpose, it must provide just
compensation to the property owner for the taking. Dare Cty. Bd. of Educ. v. Sakaria,
118 N.C. App. 609, 614, 456 S.E.2d 842, 845 (1995), aff’d per curiam, 342 N.C. 648,
466 S.E.2d 717 (1996), cert. denied, 519 U.S. 976, 136 L.Ed.2d 325 (1997). When only
a portion of the property is taken, “the owners of the land are entitled to receive the
difference between the fair market value of the entire tract immediately before the
taking and the fair market value of the remaining property after the taking, less any
general and special benefits.” Dep’t of Transp. v. Bragg, 308 N.C. 367, 369-70, 302
S.E.2d 227, 229 (1983); see also N.C. Gen. Stat. § 136-112(1) (2015). “In determining
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the fair market value of the remaining land the owner is entitled to damage which is
a consequence of the taking of a portion thereof, that is, for the injuries accruing to
the residue from the taking, which includes damage resulting from the condemnor’s
use of the appropriated portion.” Bd. of Transp. v. Brown, 34 N.C. App. 266, 268, 237
S.E.2d 854, 855 (1977), aff’d per curiam, 296 N.C. 250, 249 S.E.2d 803 (1978). The
fair market value of the remaining land after the taking “contemplates the project in
its completed state and any damage to the remainder due to the use[ ] to which the
part appropriated may, or probably will, be put.” Bragg, 308 N.C. at 370, 302 S.E.2d
at 229 (citation, quotation marks, and emphasis omitted).
This rule of damages provides a landowner compensation
only for damages arising from a taking of property and
which flow directly from the use to which the land taken is
put. No compensation is awarded for damages which are
shared by neighboring property owners and the public and
which arise regardless of whether the landowner’s property
has been condemned.
Bd. of Transp. v. Bryant, 59 N.C. App. 256, 261-62, 296 S.E.2d 814, 817-18 (1982)
(emphasis added).
Here, the trial court concluded that the determination of the fair market value
of the remainder of University Financial’s property required consideration of the loss
of visibility to that property resulting from the Bridge’s construction. However, this
ruling ignores the fact that (1) University Financial’s loss of visibility argument is
akin to a property owner’s assertion of the right to compensation for a reduction in
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the flow of traffic past his property — an argument our appellate courts have
repeatedly rejected; and (2) the loss of visibility from the Bridge does not “flow directly
from the use to which the land taken is put,” id., given that the land taken from
University Financial is being utilized for road-widening purposes and not as the
location of the Bridge.
A property owner whose land abuts a public roadway — such as University
Financial here — has a right of reasonable access to that roadway that cannot be
taken without the payment of just compensation. See Wofford v. N.C. State Highway
Comm’n, 263 N.C. 677, 681, 140 S.E.2d 376, 380 (“The private right of the owner of
land abutting a street or highway is an easement appurtenant to the land, consisting
of the right of reasonable access to the particular street or highway which his property
abuts.”), cert. denied, 382 U.S. 822, 15 L.Ed.2d 67 (1965). However, so long as the
landowner can still access his property (a concern not at issue here), any
modifications to the roadway that may alter the flow of traffic are not takings. See
Barnes v. N.C. State Highway Comm’n, 257 N.C. 507, 516, 126 S.E.2d 732, 738-39
(1962) (“[Landowners] have no property right in the continuation or maintenance of
the flow of traffic past their property. They still have free and unhampered ingress
and egress to their property. . . . Re-routing and diversion of traffic are police power
regulations. Circuity of route, resulting from an exercise of the police power, is an
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incidental result of a lawful act. It is not the taking or damaging of a property right.”
(citation and quotation marks omitted)).
Because a landowner “has no constitutional right to have anyone pass by his
premises at all,” id. at 515, 126 S.E.2d at 738 (citation and quotation marks omitted),
the landowner is not owed compensation for any changes in traffic around his
property that result from the municipality’s actions. See Moses v. State Highway
Comm’n, 261 N.C. 316, 320, 134 S.E.2d 664, 667 (rejecting petitioners’ argument that
they were entitled to compensation based on replacement of their direct access to the
highway with service road access simply because less traffic passed by their property
and noting that “[i]f petitioners could collect because of such diminution in travel by
their property, so could every merchant in a town when the Highway Commission
constructed a by-pass to expedite the flow of traffic”), cert. denied, 379 U.S. 930, 13
L.Ed.2d 342 (1964); see also Wofford, 263 N.C. at 684, 140 S.E.2d at 382 (explaining
that “[t]he purchaser of a lot abutting a public street, whatever the origin of the street,
takes title subject to the authority of the city to control and limit its use, and to
abandon or close it under lawful procedure”).
We are unable to discern a meaningful distinction between (1) the assertion
that a landowner is entitled to compensation because its property has diminished in
value due to the reduction in traffic caused by a municipality’s actions; and (2)
University Financial’s contention here that it is entitled to compensation for the
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decreased value of its property based on the reduced visibility to passing traffic caused
by the City’s construction of the elevated light rail bridge.3 Consequently, we hold
that the loss in visibility of University Financial’s property to passing traffic is not
“part of the taking” and that the trial court’s order holding otherwise must be
reversed.
In arguing to the contrary, University Financial cites our decision in N.C. State
Highway Comm’n v. English, 20 N.C. App. 20, 200 S.E.2d 429 (1973). However, its
reliance on English is misplaced.
In English, the North Carolina Highway Commission condemned 1.38 acres of
the defendants’ 3.24-acre property in order to relocate a road and construct a
controlled-access facility to Interstate 40. Id. at 21, 200 S.E.2d at 430. During the
jury trial on just compensation, the defendants presented evidence that the loss of
visibility to their remaining land caused by a “fill” that had been constructed so that
the highway could pass over a road reduced the fair market value of their remaining
property. Id. at 24, 200 S.E.2d at 432. University Financial argues that English
“supports loss of visibility as a relevant factor affecting fair market value of a
3 While University Financial argues that the reduction in traffic flow cases are distinguishable
from the present case because they involve a governmental body’s exercise of its police power to
regulate traffic, it has not demonstrated that the City’s decision to widen an existing public roadway
and construct the Bridge over the W.T. Harris Boulevard intersection is not likewise a valid exercise
of police power. See generally Barnes, 257 N.C. at 516, 126 S.E.2d at 738-39 (“Re-routing and diversion
of traffic are police power regulations”); Haymore v. N.C. State Highway Comm’n, 14 N.C. App. 691,
695, 189 S.E.2d 611, 615 (regulations enacted “so as not to endanger travel upon the highway”
constitute valid “exercise of the general police power”), cert. denied, 281 N.C. 757, 191 S.E.2d 355(1972).
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remainder” and contends that English “sanctioned the use of loss of visibility evidence
as relevant to a determination of just compensation.”
However, neither party in English contested on appeal the admissibility of the
loss of visibility evidence. Instead, the issue before this Court concerned the trial
court’s instructions to the jury. We rejected the defendant landowners’ argument
that the trial court was required to instruct the jury that pursuant to N.C. Gen. Stat.
§ 136-89.52 “the Commission may acquire private or public property and property
rights for controlled-access facilities . . . including rights of access, air, view, and
light.” Id. at 23, 200 S.E.2d at 431. We concluded that such an instruction was
inapplicable because
[t]his sentence of the statute does not create a right of view
or sight distance in individual landowners to and from
their land. Nor does it suggest that an individual
landowner has a right of view or sight distance for which
compensation must be paid.
Id. Thus, English does not provide support for University Financial’s position in the
present case.
University Financial next argues that because there was an actual physical
taking of a portion of its land — namely, the 5,135 square foot tract abutting North
Tryon Street taken to expand the roadway — it is entitled to “receive compensation
for impacts to its remainder that might not be compensable had a physical taking not
occurred.” We are not persuaded.
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As this Court explained in Bryant, “the fact that a taking occurs does not make
all other damages automatically compensable.” Bryant, 59 N.C. App. at 262, 296
S.E.2d at 818. In Bryant, the Board of Transportation condemned a portion of the
defendants’ land in order to make improvements to Interstate 40. Id. at 257, 296
S.E.2d at 815. There was a trial on the issue of just compensation, and on appeal,
the defendants argued that the trial court had erred in failing to admit evidence that
“following condemnation of a portion of their property, there was unreasonable
interference with access to their remaining property during the resulting
construction . . . . as an element to be considered by the jury in determining the
difference between the fair market value of the property before and after the taking.”
Id. at 261, 296 S.E.2d at 817. We rejected this contention, explaining that
[d]amages for unreasonable interference with access to
defendants’ remaining property during construction on a
public road project do not arise from the taking of the right-
of-way or from the use to which the taken property is put.
These damages are noncompensable because they are not
unique to defendants. They are shared by defendants in
common with the public at large, and the fact that a taking
occurs does not make all other damages automatically
compensable.
Id. at 262, 296 S.E.2d at 818. Thus, the fact that a physical taking has occurred is
not enough to render compensable injuries that are otherwise recognized as
noncompensable that do not arise from the condemnor’s use of the particular land
taken.
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As explained above, a landowner is entitled to compensation when a portion of
his land is acquired by condemnation both for the land taken and for “any damage to
the remainder due to the use[ ] to which the part appropriated may, or probably will,
be put.” Bragg, 308 N.C. at 370, 302 S.E.2d at 229.
A use of lands of another which causes annoyance,
inconvenience, or damage to the land of the defendant is
not compensable. If the defendant were to claim damage
from conduct of the condemnor, which conduct did not arise
out of use of the defendant’s land taken, such damage is
suffered by all in the neighborhood generally, and is not the
proper subject of compensation.
City of Kings Mountain v. Cline, 19 N.C. App. 9, 11, 198 S.E.2d 64, 66 (1973) (internal
citation omitted).
Our Supreme Court’s decision in Carolina Power & Light Co. v. Creasman, 262
N.C. 390, 137 S.E.2d 497 (1964), is instructive. Creasman involved the condemnation
of a small portion of the defendant landowners’ property for the construction of a new
steam plant. During the jury trial on just compensation, the defendant landowners
were permitted to offer evidence that “the construction, maintenance and operation
by petitioner of said steam plant, together with the dam, the lake, the railroad, etc.,
in a desirable rural residential community, seriously and adversely affected the fair
market value of property in the community.” Id. at 399, 137 S.E.2d at 504. Carolina
Power & Light Company appealed from the jury’s award of damages and sought a
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new trial on just compensation, arguing that this evidence had been improperly
admitted by the trial court. Id. at 403, 137 S.E.2d at 506.
Our Supreme Court agreed, explaining that while the defendant landowners
were entitled to “recover compensation both for the land actually taken and for the
permanent injuries to their remaining property caused by the severance and the use
to which the land taken may, or probably will, be put[,]” the evidence concerning the
damage to the value of the remainder of the property from the steam plant’s
construction and operation “occur[s] without reference to whether any portion of [the]
property is condemned. In short, [these damages] do not result from the taking of a
portion of [the] property.” Id. at 402, 137 S.E.2d at 506. The Court further held that
consequential damages to be awarded the owner for a
taking of a part of his lands are to be limited to the
damages sustained by him by reason of the taking of the
particular part and of the use to which such part is to be
put by the acquiring agency. No additional compensation
may be awarded to him by reason of proper public use of
other lands located in proximity to but not part of the lands
taken from the particular owner. The theory behind this
denial of recovery is undoubtedly that such owner may not
be considered as suffering legal damage over and above
that suffered by his neighbors whose lands were not taken.
Id. at 402-03, 137 S.E.2d at 506 (citation and quotation marks omitted).
The same is true here. The property taken from University Financial is being
used to widen North Tryon Street. The Bridge that will reduce the visibility of
University Financial’s remaining property to passing traffic is to be located over the
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existing roadway (not on the land taken from University Financial) and is likely to
similarly reduce the visibility of other neighboring lots on North Tryon Street. As
such, University Financial is not entitled to compensation from the City’s use of land
that is “not part of the lands taken from [University Financial]” and “may not be
considered as suffering legal damage over and above that suffered by [its] neighbors
whose lands were not taken.” Id. (citation and quotation marks omitted). Therefore,
for this reason as well, the trial court erred in ruling that University Financial is
entitled to present evidence concerning “all damages resulting from the impact of the
construction of the BLE Project, including construction of the Bridge, on its remaining
property” during the trial on just compensation.
Conclusion
For the reasons stated above, we reverse the trial court’s ruling that the
Bridge’s impact on University Financial’s remaining property is compensable and
remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
Judges STEPHENS and STROUD concur.
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