City of Greensboro v. Pearce

EAGLES, Judge.

Plaintiff first argues that the trial court’s findings of fact do not support its conclusion of law that plaintiff has inversely condemned defendants’ entire tract. We agree and vacate the trial court’s order and remand for additional findings.

The United States Constitution provides, inter alia, that “private property [shall not] be taken for public use, without just compensation.” U.S. Const, amend. V. The North Carolina Constitution provides the same fundamental protection against private property being taken for public use without just compensation. Finch v. City of Durham, 325 N.C. 352, 362-63, 384 S.E.2d 8, 14 (1989). It is a well settled constitutional principle that actual physical occupation or even touching is not required to support a finding that a taking has occurred. Adams Outdoor Advertising v. N.C. Dept. of Transportation, 112 N.C. App. 120, 122, 434 S.E.2d 666, 667 (1993). It is only necessary that there be “a substantial interference with the elemental rights growing out of the ownership of the property.” Id. (quoting Long v. City of Charlotte, 306 N.C. 187, 198-99, 293 S.E.2d 101, 109 (1982)).

Here, the trial court made no findings of fact or conclusions of law as to whether plaintiff’s actions in taking part of defendants’ tract constitute a “substantial interference” with defendants’ elemental property rights in the entire property affected. Many of the trial-court’s findings concern the impact on defendants’ property of the previous zoning changes and of plaintiff’s decision to eliminate on-street parking in front of defendants’ property. Any injury caused by either of these acts by plaintiff, however, is not compensable here because defendants have not challenged those actions of the plaintiff. Accordingly, we remand for the trial court to make findings of fact as to whether plaintiff’s eminent domain action “substantially interfered” with defendants’ elemental rights in their entire tract and thereby diminished the value of defendants’ entire tract.

If the trial court finds that the value of defendants’ entire tract has been diminished, a certain calculation difficulty remains because plaintiffs other actions may still affect the calculation of any diminution in the value of defendants’ property caused by plaintiff’s eminent domain action. We first recognize that, in determining the amount of the diminution in value that is compensable, the zoning on the property may be removed from the analysis because the zoning is not challenged and because the current zoning was in effect prior to the inception of the street widening project. Accordingly, we treat the zoning here as an attribute of the property and we must analyze the effect of plaintiff’s other actions in light of the zoning on the property.

Any diminution in the value of defendants’ property here is caused by the combined effect of the plaintiff’s eminent domain action and the elimination of on-street parking. Because the elimination of on-street parking occurred at virtually the same time as plaintiff’s institution of its eminent domain action, the elimination of on-street parking may not be analyzed as an attribute of the property. In determining the amount of compensation due defendants, a distinction must be made between any diminution caused by plaintiff’s eminent domain action and any diminution caused by the elimination of on-street parking. Any diminution caused by the elimination of on-street parking is not compensable here both because it has not been challenged and because elimination of on-street parking has been held to be a valid noncompensable exercise of the government’s police power unless shown to be “arbitrary, unreasonable or unjustly discriminatory.” Thompson v. Reidsville, 203 N.C. 502, 504, 166 S.E. 389, 391 (1932). Damages resulting from the proper exercise of the police power by reasonable means are not compensable as a taking. Responsible Citizens v. City of Asheville, 308 N.C. 255, 261, 302 S.E.2d 204, 208 (1983).

In its final analysis, the finder of fact must first determine pursuant to G.S. 40A-64, the fair market value of defendants’ property under its current zoning before plaintiff instituted its condemnation action and eliminated on-street parking. The finder of fact must then determine the fair market value of defendants’ property after the taking by plaintiff and the elimination of on-street parking. The difference between the fair market value before and the fair market value after the eminent domain action and the loss of on-street parking is, of course, the total diminution in the value of defendants’ property. Finally, having determined the total diminution, the finder of fact must determine how much of that total diminution is compensable because it is attributable to plaintiffs exercise of its eminent domain power. Always in applying this formula; the goal is to ensure that the landowner receives fair and just compensation to the fullest extent that the law allows.

We note here that the trial court previously determined that defendants’ property had been deprived of all value. To support a similar determination on remand, findings of fact must be made that defendants were deprived of all practical uses of their property. Weeks v. North Carolina Dep’t of Nat. Resources & Comm. Dev., 97 N.C. App. 215, 225-26, 388 S.E.2d 228, 234-35, disc. review denied, 326 N.C. 601, 393 S.E.2d 890 (1990).

Plaintiff next argues that the trial court lacked the authority to order payment of compensation for the entire tract after the Greensboro City Council determined, in its legislative authority, that a partial taking was appropriate. We disagree because defendants have alleged that plaintiffs action in eminent domain to take a portion of defendants’ tract effected an inverse condemnation of defendants’ entire tract. “Inverse condemnation” is often defined as “a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency.” Charlotte v. Spratt, 263 N.C. 656, 662-63, 140 S.E.2d 341, 346 (1965) (quoting City of Jacksonville v. Schumann, 167 So.2d 95, 98 (Fla. Dist. Ct. App. 1964)). “ ‘Inverse condemnation is a device which forces a governmental body to exercise its power of condemnation, even though it may have no desire to do so.’ ” Hoyle v. City of Charlotte, 276 N.C. 292, 302, 172 S.E.2d 1, 8 (1970) (quoting Bohannon, Airport Easements, 54 Va. L. Rev. 355, 373 (1968)). Accordingly, we conclude that, where inverse condemnation is properly alleged, the trial court undeniably has the authority to order payment of compensation beyond that proposed by the complaint in eminent domain.

Finally, plaintiff argues here that defendants failed to properly raise their inverse condemnation claim. We disagree. Plaintiff takes issue because defendants asserted their claim for inverse condemnation in their answer rather than in a counterclaim, which is the better practice. We recognize, however, that “principles of judicial economy dictate that the owners of the taken land may allege a further taking by inverse condemnation in the ongoing proceedings.” Department of Transportation v. Bragg, 308 N.C. 367, 371 n.1, 302 S.E.2d 227, 230 n.1 (1983). We also recognize that the fact that the pleading was labelled “Answer” does not preclude its being treated as a counterclaim as well as an answer. McCarley v. McCarley, 289 N.C. 109, 114, 221 S.E.2d 490, 494 (1976). We do so here.

Reversed and remanded.

Judge LEWIS concurs. Judge JOHN concurs in the result only.