City of Charlotte v. Combs, COA11–107.

• Decision Date: 04 October 2011
• Docket Number: No. COA11–107.,COA11–107.
• Citation: 719 S.E.2d 59
• Court: North Carolina Court of Appeals
• Parties: The CITY OF CHARLOTTE, a Municipal Corporation, Plaintiff, v. Anthony R. COMBS, Karen C. Combs, Park Meridian Bank, Beneficiary, Bryan F. Kennedy, III, Trustee, and any other party of interest, Defendants.

719 S.E.2d 59

The CITY OF CHARLOTTE, a Municipal Corporation, Plaintiff,

v.Anthony R. COMBS, Karen C. Combs, Park Meridian Bank, Beneficiary, Bryan F. Kennedy, III, Trustee, and any other party of interest, Defendants.

No. COA11–107.

Court of Appeals of North Carolina.

Oct. 4, 2011.

Appeal by defendants from judgment entered 26 January 2010 by Judge Beverly T. Beal in Mecklenburg County Superior Court. Heard in the Court of Appeals 17 August 2011.

Office of the City Attorney, by Gretchen R. Nelli, for plaintiff-appellee.

The Odom Law Firm, PLLC, Charlotte, by Thomas L. Odom, Jr., and David W. Murray, for defendants-appellants.

HUNTER, ROBERT C., Judge.

Defendants Anthony R. Combs and Karen C. Combs appeal from the trial court's judgment entered on the jury's verdict that the Combs were entitled to $5,073.00 as “just compensation” for the taking of their property by plaintiff City of Charlotte for a temporary construction easement from 31 May 2007 through 13 August 2009. We agree with the Combs' main argument that the trial court erred in permitting the City's expert to give his opinion as to the value of the taking because his opinion lacked a sufficiently reliable method of proof. Consequently, we remand for a new trial.

Facts

Since May 1999, the Combs have owned the Biberstein House in Charlotte, North Carolina. The historic property, located at 1600 Elizabeth Avenue near Presbyterian Hospital, consists of .2997 acres as well as the 4,167–square–foot house, which has been converted into an office building. The property has only one entrance, a driveway leading from Elizabeth Avenue to a secured parking lot in the rear of the property with approximately 15 parking spaces.

On 31 May 2007, the City filed a “Complaint, Declaration of Taking and Notice of Deposit and Service of Plat,” notifying the Combs that the City intended to take a “temporary construction easement” (“TCE”) over their property in connection with the Elizabeth Avenue Business Corridor Project. The TCE consisted of a narrow strip—approximately five feet by 66 feet (totaling 330 square feet) along the front of the Combs' property abutting Elizabeth Avenue. At the time it filed the complaint, the City planned to acquire the TCE over the Combs' property for one year and deposited $2,300.00 with the clerk of superior court as an estimate of compensation for the taking.

Almost a year later, on 30 May 2008, the Combs filed an answer in which they alleged that the taking was unconstitutional and that just compensation for the taking was “greatly in excess” of the $2,300.00 deposited by the City. On 8 June 2009, as the construction project was still ongoing, the City amended its complaint and deposited an additional $2,075.00 with the court clerk, bringing the total amount deposited to $4,375.00.

The City completed the construction project on 13 August 2009, at which time the property subject to the TCE reverted back to the Combs.¹ On 18 November 2009, the Combs moved to amend their answer to allege with more specificity the damages resulting from the TCE. The trial court granted the motion to amend on 7 December 2009.

A jury trial was conducted on 7–11 and 14 December 2009, with the sole issue being: “What amount of just compensation are Anthony and Karen Combs entitled to recover for the taking of their property by the City for temporary construction easement from May 31, 2007, to August 13, 2009[?]” Damon Bidencope, an appraiser, testified as an expert on behalf of the Combs. Believing that the TCE had a “material impact” on the entirety of the Combs' property, not just the 330 square feet subject to the TCE, Mr. Bidencope explained that he tried to “quantify” this impact in his “analysis.” As a result, Mr. Bidencope testified that the fair market rental value should be based on the entire 4,167 square feet of the property's “net rentable area” rather than just the 330 square feet encompassed by the TCE. He estimated the value of lost rental income for the Combs' property by multiplying the difference between the market rental value of the net rentable area of the property before the TCE and the market rental value of the net rentable area of the property during the taking times the number of months the property was affected by the TCE and discounting for present value. Based on this formula, Mr. Bidencope testified that, in his opinion, the “fair market value of the use by the City of the construction easement on the Combs' property and the effect on the remainder of the property outside of the construction easement” totaled approximately $103,000.00.²

Fitzhugh Stout, the appraiser who prepared several appraisal reports for the City regarding the Combs' property, was tendered as an expert real estate appraiser by the City. Prior to his testifying at trial, the Combs requested a voir dire, where Mr. Stout indicated, among other things, that he had not appraised the entire property before and after the TCE based on his experience that TCEs do not adversely affect the remainder of the property. At the conclusion of the voir dire, the trial court ruled, over the Combs' objection, that Mr. Stout would be allowed to give his expert opinion as to the value of the TCE. Mr. Stout then testified that he estimated the rental value of the TCE by multiplying the product of the “per square foot land value” and the area of the TCE times the annual rate of return on renting the property, and then multiplying that product by the number of years of the TCE. Mr. Stout's opinion was that the rental value of the TCE was $4,569.00, plus $220.00 for the removal of two shrubs and a 20–square–foot concrete slab, for a total valuation of $4,789.00.³

The jury awarded the Combs $5,073.00 as just compensation for the TCE. The trial court entered judgment on the jury's verdict on 26 January 2010. The Combs moved for a new trial on 5 February 2010 and, after conducting a hearing on the motion on 1 April 2010, the trial court entered on order on 25 May 2010 denying the Combs' motion. The Combs timely appealed to this Court from the trial court's judgment and subsequent order denying their motion for a new trial.

Temporary Takings

A “taking” is defined as “ ‘entering upon private property for more than a momentary period, and under warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him [or her] of all beneficial enjoyment thereof.’ ” Long v. City of Charlotte, 306 N.C. 187, 199, 293 S.E.2d 101, 109 (1982) (quoting Penn v. Coastal Corp., 231 N.C. 481, 484, 57 S.E.2d 817, 819 (1950)). A “ ‘temporary’ ” taking, which “den[ies] a landowner all use of his [or her] property” for a finite period, is “no[ ] different in kind from [a] permanent taking[ ],” and requires just compensation for “the use of the land during th [e] period” of the taking. First English Evangelical Lutheran Church of Glendale v. Los Angeles County, 482 U.S. 304, 318–19, 107 S.Ct. 2378, 2388, 96 L.Ed.2d 250, 266–67 (1987).

Generally, the measure of damages for a temporary taking is the “rental value of the land actually occupied” by the condemnor. Leigh v. Garysburg Mfg. Co., 132 N.C. 167, 170, 43 S.E. 632, 633 (1903); accord Kimball Laundry Co. v. United States, 338 U.S. 1, 7, 69 S.Ct. 1434, 1438, 93 L.Ed. 1765, 1773 (1949) (concluding that “the proper measure of compensation” for temporary taking “is the rental that probably could have been obtained”); United States v. Banisadr Bldg. Joint Venture, 65 F.3d 374, 378 (4th Cir.1995) (explaining that “when the Government takes property only for a period of years, ... it essentially takes a leasehold in the property[, and] [t]hus, the value of the taking is what rental the marketplace would have yielded for the property taken”); State v. Sun Oil Co., 160 N.J.Super. 513, 527, 390 A.2d 661, 668 (1978) (holding that “[w]here a temporary construction easement is taken[,]” the “rental value of the property taken is the normal measure of damages and is awarded for the period taken”); see 4 Nichols on Eminent Domain § 12E.01[4] (rev.3d ed.2006) [hereinafter Nichols ] (citing Leigh for proposition that, under North Carolina law, measure of damages for temporary taking is “fair market rental value for the period of time the property is taken”); 9 Nichols § G32.08[2][a] (“The most widely accepted measure of compensation for the taking of a temporary easement appears to be the rental value of the property taken.”).

Where, as here, the temporary taking is in the form of a temporary construction easement, our Supreme Court has held that, in addition to paying the “[f]air rental value of [the] easement area for [the] time used by [the] condemnor,” the condemnor is liable for “additional elements of damages flowing from the use of the temporary construction easement[ ],” which may include: (1) the “[c]ost of removal of [the] landowner's improvements from the construction easement that are paid by landowner”; (2) the “[c]ost of constructing [an] alternate entrance to [the] property”; (3) the “[c]hanges made in [the] area resulting from [the] use of [the] easement that affect [the] value of [the] area in [the] easement or [the] value of the remaining property of [the] landowner”; (4) the “[r]emoval of trees, crops, [or] improvements from [the] area in [the] easement by [the] condemnor”; and (5) the “[l]ength of time [the] easement [was] used by [the] condemnor.” Colonial Pipeline Co. v. Weaver, 310 N.C. 93, 107, 310 S.E.2d 338, 346 (1984); see also 26 Am.Jur.2d Eminent Domain § 283 (“Where land has been appropriated for a temporary use, the measure of compensation is the fair productive value of the property during the time in which it is held. More specifically, the rental value during the period of the taking, together with any damage sustained by the property, may be awarded as full compensation.”).

Admissibility of...