Department of Transp. v. Blue

• Citation: 556 S.E.2d 609,147 NC App. 596
• Decision Date: 18 December 2001
• Docket Number: No. COA00-995.,COA00-995.
• Parties: DEPARTMENT OF TRANSPORTATION, Plaintiff, v. Mack BLUE and Brenda Blue, Defendants. Department of Transportation, Plaintiff, v. Pierce B. Irby, et al., Defendants.
• Court: Court of Appeal of North Carolina (US)

556 S.E.2d 609

147 NC App. 596

DEPARTMENT OF TRANSPORTATION, Plaintiff, v. Mack BLUE and Brenda Blue, Defendants.

Department of Transportation, Plaintiff, v. Pierce B. Irby, et al., Defendants.

No. COA00-995.

Court of Appeals of North Carolina.

December 18, 2001.

Attorney General Roy Cooper, by Assistant Attorney Generals Fred Lamar and Lisa C. Glover, for the State.

Cunningham, Dedmond, Petersen & Smith, LLP, by F. Marsh Smith, Southern Pines, and Moser, Schmidly, Mason & Roose, LLP, by Stephen S. Schmidly, Asheboro, for defendants.

EAGLES, Chief Judge.

The North Carolina Department of Transportation ("NCDOT") and Mack Blue, Brenda Blue, and Pierce Irby (collectively, "defendants") each appeal from the trial court's orders denying NCDOT's motion to strike defendants' second defense, granting NCDOT's motion to dismiss defendants' counterclaims, granting defendants' motion to consolidate cases for purposes of discovery and G.S. § 136-108 hearing, denying defendants' motion to join necessary parties, allowing in part defendants' motion to modify the trial court's previous order, and allowing defendants' motion to certify this matter for immediate appeal pursuant to Rule 54. After a careful review of the record, briefs, and arguments of counsel, we affirm.

NCDOT has a program for improving transportation, which includes enlarging and constructing highways, known as the Transportation Improvement Program ("TIP"). See G.S. § 143B-350(f)(4). One TIP project, designated TIP R-210, was a transportation project intended to improve portions of United States Highway 1 from south of State Road 1853 near Lakeview, North Carolina, to State Road 1180 near Sanford, North Carolina. Planning for TIP R-210 began in 1989, and funding for the project was to be provided by the State. Throughout the planning process, NCDOT held public hearings and accepted public input on TIP R-210.

In 1991, NCDOT prepared and published a Draft Environmental Impact Statement ("DEIS") evaluating the environmental impact of various alternative routes for TIP R-210. Thereafter, on 22 April 1992, NCDOT issued a news release announcing its selection of the route designated "Alternative A" for TIP R-210. Then, on 1 December 1995, NCDOT prepared and published a Final Environmental Impact Statement ("FEIS"), as required by the North Carolina Environmental Policy Act ("NCEPA"), G.S. § 113A-1 et seq., approving the selection of "Alternative A." Ultimately, on 21 March 1996, the U.S. Federal Highway Administration ("FHWA") approved NCDOT's selection of "Alternative A" as the "environmentally preferred alternative" and issued a Record of Decision ("ROD") affirming its approval on that date.

Defendants each owned property located within the right-of-way of "Alternative A." After the selection of "Alternative A," NCDOT entered into negotiations with each defendant in an attempt to agree upon acceptable purchase prices for their parcels of land. After these negotiations failed, NCDOT filed separate condemnation actions against each defendant on 26 July 1999. On 26 October 1999, defendant Irby filed his answer and counterclaim, and thereafter, on 23 November 1999, defendants Mack and Brenda Blue filed their answers and counterclaims. In their answers and counterclaims, defendants alleged as a defense that NCDOT "engaged in arbitrary and capricious agency action and [ ] abused its agency discretion" ("defendants' second defense") and as a counterclaim that NCDOT violated NCEPA and the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq., by preparing an inadequate FEIS, inter alia.

Defendants filed a motion to consolidate these cases for purposes of discovery and hearings. Subsequently, NCDOT filed motions to dismiss defendants' counterclaims pursuant to Rules 12(b)(1), 12(b)(2), and 12(b)(6) and motions to strike defendants' second defense pursuant to Rule 12(f). Defendants then filed a motion to join as necessary parties NCDOT Secretary David McCoy and NCDOT Project Development and Environmental Analysis Branch Manager William D. Gilmore. A hearing was held on all pending motions during the 28 February 2000 Civil Session of Moore County Superior Court, the Honorable Catherine C. Eagles presiding. By order entered 10 March 2000, the trial court denied NCDOT's motion to strike defendants' second defense, granted NCDOT's motion to dismiss defendants' counterclaims for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), granted defendants' motion to consolidate cases for purposes of discovery and G.S. § 136-108 hearing, and denied defendants' motion to join necessary parties. In response to the order, defendants filed a motion to modify order, or in the alternative, to certify this matter for immediate appeal pursuant to Rule 54. After a hearing on this motion, Judge Eagles entered a second order on 30 May 2000 making a minor modification to her previous order and certifying this matter for immediate appeal. NCDOT and defendants appeal.

At the outset, we note that these appeals are interlocutory in nature. "An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy." Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). Here, the trial court's orders did not dispose of the entire case; instead, the orders left pending NCDOT's condemnation actions against defendants. As further action by the trial court is pending to settle and determine the entire controversy, the trial court's orders are interlocutory.

"Generally, there is no right of immediate appeal from an interlocutory order." Abe v. Westview Capital, 130 N.C.App. 332, 334, 502 S.E.2d 879, 881 (1998). However, appeals from interlocutory orders raising issues of sovereign immunity affect a substantial right sufficient to warrant immediate appellate review. See Price v. Davis, 132 N.C.App. 556, 558-59, 512 S.E.2d 783, 785 (1999)

. Here, NCDOT asserts that the defense of sovereign immunity bars defendants' second defense and counterclaims. Accordingly, this appeal warrants immediate appellate review.

At the heart of both NCDOT's appeal and defendants' cross-appeal is the propriety of the trial court's treatment of defendants' second defense and defendants' counterclaims. First, we address the trial court's denial of NCDOT's motion to strike defendants' second defense pursuant to Rule 12(f). Next, we address the trial court's grant of NCDOT's motion to dismiss defendants' counterclaims for lack of subject matter jurisdiction pursuant to Rule 12(b)(1).

As to the trial court's denial of NCDOT's motion to strike defendants' second defense, NCDOT argues that the trial court erred in denying the motion based on the doctrine of sovereign immunity. After careful review of this issue, we affirm the trial court.

Under Rule 12(f), the trial court "may order stricken from any pleading any insufficient defense or any redundant, irrelevant, immaterial, impertinent, or scandalous matter." G.S. § 1A-1, Rule 12(f). A motion under Rule 12(f) is a device to test the legal sufficiency of an affirmative defense. See Trust Co. v. Akelaitis, 25 N.C.App. 522, 525, 214 S.E.2d 281, 284 (1975)

. "If there is any question as to whether an issue may arise, the motion [under Rule 12(f) ] should be denied." Shellhorn v. Brad Ragan, Inc., 38 N.C.App. 310, 316, 248 S.E.2d 103, 108 (1978).

Defendants' second defense alleges that NCDOT engaged in arbitrary and capricious conduct and abused its agency discretion. In condemnation proceedings, "[e]ach owner is entitled to defend upon the ground his property does not qualify for the purpose intended, or that its selection was the result of arbitrary or capricious conduct on the part of the taking agency." Redevelopment Commission v. Hagins, 258 N.C. 220, 225, 128 S.E.2d 391, 395 (1962).

Nevertheless, NCDOT asserts the defense of sovereign immunity. "Sovereign immunity is a theory or defense established to protect a sovereign or state as well as its officials and agents from suit in certain instances." Vest v. Easley, ___, ___ N.C.App. ___, ___, 549 S.E.2d 568, 572 (2001). Under the doctrine of sovereign immunity, "[t]he State of North Carolina is immune from suit unless and until it expressly consents to be sued." State v. Taylor, 322 N.C. 433, 435, 368 S.E.2d 601, 602 (1988).

Here, NCDOT acquired title to defendants' land pursuant to G.S. § 136-19. Section 136-19 "empowers [NCDOT] to acquire title to land that it deems necessary for the construction or maintenance of road." Ferrell v. Dept. of Transportation, 334 N.C. 650, 655, 435 S.E.2d 309, 313 (1993). "In enacting this statutory scheme, the legislature has implicitly waived [NCDOT's] sovereign immunity to the extent of the rights afforded in [G.S.] § 136-19[ ]." Id. Consequently, NCDOT may not avail itself of this defense here.

Additionally, we note that defendants further alleged as part of their second defense that NCDOT's conduct in condemning their land was arbitrary and capricious based in part on NCDOT's alleged violations of NCEPA and NEPA. Significantly, TIP R-210 is a state project. The project was to be constructed with North Carolina Highway Trust Funds, and, as defendants alleged, NCDOT "shifted funds so that [TIP R-210] will be built without federal funds."

"The requirements of NEPA are inapplicable to the state. NEPA has no application to a project unless [ ] the action is federal." Buda v. Saxbe, 406 F.Supp. 399, 402 (E.D.Tenn.1974) (citations omitted). Moreover, "NEPA ... by its express language operates only upon federal agencies, and imposes no duties on the States or on municipalities, except to the extent that a non-federal entity is found to be acting in partnership with the federal government." Town of North Hempstead v. Village of North Hills, 482 F.Supp. 900, 903 (E.D.N.Y. 1979) (citations omitted); see also Ely v....