Beroth Oil Co. v. N.C. Dep't of Transp.

• Decision Date: 15 May 2012
• Docket Number: No. COA11–1012.,COA11–1012.
• Citation: 725 S.E.2d 651
• Court: North Carolina Court of Appeals
• Parties: BEROTH OIL COMPANY, Paula and Kenneth Smith, Barbara Clapp, Pamela Moore Crockett, W.R. Moore, N & G Properties, Inc. and Elton V. Koonce, Plaintiffs, v. NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Defendant.

725 S.E.2d 651

BEROTH OIL COMPANY, Paula and Kenneth Smith, Barbara Clapp, Pamela Moore Crockett, W.R. Moore, N & G Properties, Inc. and Elton V. Koonce, Plaintiffs,

v.NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Defendant.

No. COA11–1012.

Court of Appeals of North Carolina.

May 15, 2012.

Appeal by Plaintiffs from order entered 20 May 2011 by Judge Lindsay R. Davis, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 8 February 2012.

Hendrick Bryant Nerhood & Otis, LLP, Winston–Salem, by Matthew H. Bryant, T. Paul Hendrick, Timothy Nerhood, and Kenneth C. Otis III, for Plaintiff-appellants.

Attorney General Roy Cooper, by Assistant Attorney General Dahr Joseph Tanoury, for Defendant-appellee.

HUNTER, JR., ROBERT N., Judge.

Beroth Oil Company, Barbara Clapp, Pamela Moore Crockett, W.R. Moore, N & G Properties, Inc., Elton V. Koonce, and Paula and Kenneth Smith (collectively, “Plaintiffs”) appeal from the trial court's 20 May 2011 order denying Plaintiffs' motion for class certification pursuant to Rule 23 of the North Carolina Rules of Civil Procedure. For the following reasons, we affirm.

I. Factual & Procedural Background

Plaintiffs are owners of real property located in Forsyth County in an area, hereinafter referred to as “the Northern Beltway,” designated by the North Carolina General Assembly for highway construction. SeeN.C. Gen.Stat. § 136–175 et seq. (2011). The proposed development consists of a 34–mile highway that loops around the northern part of Winston–Salem. The project (“the Northern Beltway Project”) contemplates development of two sections: a section extending from U.S. 158 to U.S. 52 in western Forsyth County (“the Western Loop”), and a section extending from U.S. 52 to U.S. 311 in eastern Forsyth County (“the Eastern Loop”).¹ Plaintiffs own property in both sections of the proposed development area.

On 6 October 1997, acting pursuant to powers vested in it under § 136–44.50 et seq. of our General Statutes (hereinafter referred to as “the Map Act”), Defendant North Carolina Department of Transportation (“NCDOT”) filed a transportation official corridor map for State project R–2247 with the Forsyth County Register of Deeds. Project R–2247 entails construction of the Western Loop section of the Northern Beltway Project and extends across approximately 579 parcels of land in western Forsyth County. The corridor map was

prepared for the purpose of setting forth the location of portions of the proposed Western Loop. Any property included within the Roadway Corridor shown on the Official Map is subject to restrictions on the issuance of building permits and subdivision approvals, and may be eligible for a special tax valuation.

NCDOT subsequently filed corridor maps on 26 November 2008 in furtherance of State projects U–2579 and U–2579A, which contemplate development of the Eastern Loop section of the Northern Beltway Project. State projects U–2579 and U–2579A span across between 1,808 and 1,929 parcels located in the eastern portion of Forsyth County.²

Along with each of these corridor maps, NCDOT filed a list of landowners who, based upon Forsyth County tax records, owned real property within the protected corridor and would therefore be affected by these maps of reservation.

When a corridor map is filed, the Map Act imposes certain statutory restrictions on landowners within the corridor. N.C. Gen.Stat. § 136–44.51 (2011). These include restrictions on the development of the affected property:

(a) After a transportation corridor official map is filed with the register of deeds, no building permit shall be issued for any building or structure or part thereof located within the transportation corridor, nor shall approval of a subdivision ... be granted with respect to property within the transportation corridor.

N.C. Gen.Stat. § 136–44.51(a) (2011).

The Map Act provides for three forms of administrative relief in order to alleviate the potentially negative impact of these restrictions. First, the Map Act authorizes NCDOT to acquire individual parcels within the protected corridor where the acquisition is determined “to be in the best public interest to protect the transportation corridor from development or when the transportation corridor official map creates an undue hardship on the affected property owner.” N.C. Gen.Stat. § 136–44.53(a) (2011). To qualify for this relief, hereinafter referred to as the “Hardship Program,” the affected property owner must file a written request that:

(1) Supports the hardship acquisition by providing justification, on the basis of health, safety or financial reasons, that remaining in the property poses an undue hardship compared to others; and

(2) Documents an inability to sell the property because of the impending project, at fair market value, within a time period that is typical for properties not impacted by the impending project.

23 C.F.R. § 710.503(c) (2011). Six of the eight Plaintiffs in the instant case have not applied for administrative relief under the Hardship Program. ³ Second, landowners may apply for a building permit or subdivision plat approval, in which case the Map Act's restrictions on development are lifted a maximum of three years after the application is submitted. N.C. Gen.Stat. § 136–44.51(b) (2011). Plaintiffs have not applied for building permits or subdivision plat approvals. Third, landowners may request a variance from the Map Act's restrictions. N.C. Gen.Stat. § 136–44.52 (2011). Variances are granted where “no reasonable return may be earned from the land” and the Map Act's restrictions “result in practical difficulties or unnecessary hardships.” Id. Plaintiffs have not applied for variances. In addition to these administrative remedies, the Map Act provides an 80 percent property tax reduction to qualifying landowners.⁴N.C. Gen.Stat. § 105–277.9 (2011).

NCDOT began acquiring properties in the Western Loop through its Hardship Program soon after recording the map of reservation for that section of the Northern Beltway Project. However, NCDOT's plans for property acquisition and development were postponed in 1999 when a coalition of citizens and owners of property within the corridor brought suit in the United States District Court for the Middle District of North Carolina and obtained an injunction prohibiting NCDOT from further acquisition and development of the Western Loop. See generally N.C. Alliance for Transp. Reform, Inc. v. United States DOT, 713 F.Supp.2d 491 (M.D.N.C.2010). The court lifted the injunctionin May 2010, id. at 527, and NCDOT has since resumed acquisition of properties in both the Western and Eastern Loop sections of the Northern Beltway through its Hardship Program. While it is unclear precisely how many parcels NCDOT has purchased within the Northern Beltway to date, NCDOT describes the number as “over 300” as of 21 March 2011.⁵

On 16 September 2010, Plaintiffs filed a complaint in Forsyth County Superior Court setting forth the following allegations regarding the Map Act and NCDOT's actions pursuant to the Map Act in furtherance of its plan to develop the Northern Beltway:

The inordinate 13 years ⁶ and counting delay by NCDOT in acquiring Plaintiffs' property in the Western Loop, the filing of the Western Loop and Eastern Loop maps with the Forsyth County Register of Deeds, the restrictions on property imposed by [the Map Act], the existence of the Hardship Program, the statements of the NCDOT to Plaintiffs and Other Property Owners regarding the use of their properties, the statements of NCDOT that acquisitions in the Northern Beltway will not commence for an undetermined number of years, the expressed intent of NCDOT to depress future property values and development in the Northern Beltway, the acquisition of dozens of parcels in the Northern Beltway by NCDOT, NCDOT's demolition of homes in the Northern Beltway, the condemnation blight caused by NCDOT, and NCDOT's continued acquisition of property in the Northern Beltway subsequent to May 2010, are unequivocal, fixed and irreversible indications that NCDOT intends to purchase the Plaintiffs' Properties and Other Property Owners' properties at some future undisclosed time.

Plaintiffs further alleged that these acts “have placed a cloud upon all real property in the Northern Beltway” and “have rendered the Plaintiffs' Properties and Other Property Owners' real properties in the Northern Beltway unmarketable at fair market value, economically undevelopable, and depressed property values and rents throughout the Northern Beltway.”

Based on the foregoing allegations, Plaintiffs' complaint set forth the following claims for relief against NCDOT: inverse condemnation pursuant to N.C. Gen.Stat. § 136–111 (2011) (“Claim 1”); a taking in violation of the Fifth Amendment to the United States Constitution pursuant to 42 U.S.C. § 1983 (“Claim 2”); a violation of Plaintiffs' rights under the equal protection clause of the Fourteenth Amendment to the United States Constitution pursuant to 42 U.S.C. § 1983 (“Claim 3”); a taking in violation of Article I, Section 19 (the “Law of the Land” clause) of the North Carolina Constitution (“Claim 4”); and declaratory relief pursuant to N.C. Gen.Stat. § 1–260 (2011) seeking “a declaration of taking and the date of the taking[,]” or, in the alternative, “a declaration that the Hardship Program, and [the Map Act] are unconstitutional and invalid exercises of legislative power as they affect a taking by the NCDOT without just compensation and are unequal in their application to property owners” (“Claim 5”). Plaintiffs alleged these claims individually and on behalf of members of the following proposed class: “Plaintiffs and all others similarly situated who own property in the Northern Beltway in Forsyth County and are subject to [the Map Act].” Plaintiffs further alleged the proposed class members share a “genuine personal interest” in the action because they each own property subject to the...