Brenco v. Sourth Carolina Department of Transportation, No. 3926 (NC 1/24/2005)

Decision Date24 January 2005
Docket NumberNo. 3926,3926
CourtNorth Carolina Supreme Court
PartiesBrenco, A General Partnership, Appellant, v. South Carolina Department of Transportation, Respondent.

Appeal From Horry County J. Stanton Cross, Jr., Master In Equity.

Howell V. Bellamy, Jr. and Douglas M. Zayicek, both of Myrtle Beach, for Appellant.

John B. McCutcheon, Jr., Mary Ruth M. Baxter, and Arrigo P. Carotti, all of Conway, for Respondent.

STILWELL, J.

Brenco brought this action against the South Carolina Department of Transportation (SCDOT), seeking deed rescission and claiming inverse condemnation. The trial court refused to rescind the deed and found Brenco failed to prove damages related to the inverse condemnation. We affirm in part, reverse in part, and remand.

BACKGROUND

Brenco owns property located along Highway 501 in Horry County. The property was formerly the site of a Brendle's store, which closed in 1997. In 1998, SCDOT purchased 6,689 square feet of Brenco's parking lot in order to build a frontage road. The negotiations and deed referenced aspects of SCDOT's August 18, 1993 road plans for development of the frontage road including the creation of "controlled access facilities" as needed.

After initially alerting them of the project, SCDOT's appraiser, Clyde Ratchford, met with Brenco representatives at the property and provided them with a plan sheet. Although Ratchford admitted the plans could be confusing, the plan sheet showed the property's direct access to Highway 501 would be eliminated and, after construction, access would be to the frontage road. The plan sheet provided to Brenco also was narrow in scope and did not show the plans related to the nearby intersection of George Bishop Parkway and Highway 501, an original alternate means of accessing Brenco's property from the highway. According to Ratchford, the plans indicated the grade of the road, and thus the property's visibility from the highway, would remain unchanged.

The appraisal valued the property taken at $34,700. A diagram attached as an exhibit to the appraisal showed only the property and the portion being taken for the frontage road. It did have an indication of the existing access point, which originally led to Highway 501, but did not specifically show any proposed change. However, language in the appraisal information indicated access would be to the frontage road. Brenco accepted the appraisal and agreed to sell the 6,689 square feet for $34,700.

The final project was completed pursuant to updated 2000 plans instead of the 1993 plans. Rather than being left at grade, Highway 501 was elevated, rendering Brenco's property less visible from the highway.

Brenco then brought this action to rescind the deed on the ground of negligent misrepresentation or unilateral or mutual mistake. Additionally, Brenco sought damages for inverse condemnation.

At trial, Brenco representatives maintained they knew nothing of their loss of access directly onto Highway 501. They asserted they were led to believe they would retain access across the frontage road. However, at least one representative admitted no one asked about access to and from Highway 501 onto the property. Additionally, Brenco questioned whether SCDOT knew about the change in grade or the possibility of such a change and failed to alert Brenco during the 1998 negotiations.

Ratchford indicated he never told Brenco representatives they would retain access to Highway 501. He maintained he showed them the portion of the plan sheet covering their property, which showed the elimination of direct access and provided access to their property only onto the frontage road. In addition, SCDOT offered testimony that although grade studies were being conducted, they learned the project would require elevating the road only after concluding the Brenco transaction.

Brenco offered testimony of two experts regarding the condition and value of the property. Engineer Steve Powell testified the highest and best use for the property was dramatically and negatively impacted as a result of the change in grade of the road and the elimination of direct access. Appraiser Jim Jayroe testified the property would no longer be usable for retail space, but would instead be classified as light industrial. He testified the negative change in value of the property from before the original taking (the 1998 deed) until after the completion of the project was approximately $1.5 million. However, when asked for a figure of the monetary damage between the 1993 plans and the 2000 plans, he responded: "I don't know."

A second appraiser for SCDOT, Woodrow Willard, testified there was no change in the property's value after Brenco deeded the frontage. He testified any change in grade of the road—the only change he found subsequent to the signing of the deed—was offset by improved access to the property through the use of the frontage road.

In its first order, the trial court refused to rescind the deed, citing Brenco's failure to prove any of its alleged grounds. As to mistake, the court concluded although Brenco representatives may have had an incorrect impression of what access the property would have to Highway 501 after the conveyance, the documents they received from SCDOT established the property would no longer enjoy direct access to the highway. The court also found SCDOT was not then aware the highway's grade would change and thus there was no basis to rescind the deed for negligent misrepresentation.

The court did not dispose of the inverse condemnation action in its first order. Instead, the court sent a letter to counsel indicating it was struggling with the issue of damages and requested a conference on the issue. At the conference, the court considered taking additional testimony regarding damages, and counsel for both parties agreed the court could reopen the record to receive additional testimony. Brenco later moved to reopen the case to offer additional evidence of damages. In a memorandum in support of the motion, Brenco's counsel noted the trial court mentioned during the damages conference that it wanted to hear specific testimony as to the changes between the August 18, 1993 plans and the 2000 implemented plans.

The court later issued an order in which it concluded Brenco failed to establish any damages necessary to prove an inverse condemnation as a result of the deviation from the 1993 to the 2000 plans. The court found Brenco's evidence of monetary damages related solely to the inverse condemnation deficient. Consequently, the court found the only evidence on damages resulting from the change in grade was from SCDOT's appraiser who opined that any damage resulting therefrom was offset by improved access. The court also declined to reopen the case for additional testimony on the issue. Brenco filed motions for reconsideration of both of the court's orders, which were denied after hearings.

DISCUSSION
I. Deed Rescission

Brenco argues the trial court erred in refusing to rescind the deed. We disagree.

An action to set aside a deed is a matter in equity. See Bullard v. Crawley, 294 S.C. 276, 278, 363 S.E.2d 897, 898 (1987). On appeal in an equity action, we may find facts in accordance with our own view of the evidence, but are not required to disregard the trial court's findings. Pinckney v. Warren, 344 S.C. 382, 387, 544 S.E.2d 620, 623 (2001). Moreover, our scope of review does not relieve the appellant of its burden to demonstrate the court's findings were in error. Id. at 387-88, 544 S.E.2d at 623.

A. Mistake

We find no basis for rescinding the deed on the ground of unilateral or mutual mistake.

To rescind an instrument on the ground of mistake, the evidence must be clear and convincing. Truck South, Inc. v. Patel, 339 S.C. 40, 49, 528 S.E.2d 424, 429 (2000). To rescind an instrument on the ground of unilateral mistake, the mistake must be accompanied (1) by proof it was induced by fraud, deceit, misrepresentation, concealment, or imposition of the opposing party and without negligence on the part of the party seeking rescission, or (2) by very strong and extraordinary circumstances which would make it a great wrong to enforce the agreement. Id.

A contract may be rescinded on the ground of mutual mistake where the parties have made a common mistake of fact causing each to do what neither intended. Young v. Cooler, 347 S.C. 362, 366, 555 S.E.2d 410, 412-13 (Ct. App. 2001).

At trial, Brenco maintained two primary grounds for mistake: (1) the loss of direct access to Highway 501 from the property and (2) the change in the grade of the road. They asserted they were led to believe they would retain access across the frontage road directly onto Highway 501. However, at least one representative admitted no one asked about access to and from Highway 501 onto the property. The deed, which references the 1993 plans, specifies the consideration paid to Brenco was for the "6,689 square feet of land, and all improvements thereon, if any, including rights of access as may be needed for controlled access facilities." (Emphasis added.) Although they argue...

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