Fresenius Med. Care Holdings, Inc. v. Town of Lillington, 5:17-CV-00215-BR

• Decision Date: 20 September 2018
• Docket Number: NO. 5:17-CV-00215-BR,5:17-CV-00215-BR
• Citation: 339 F.Supp.3d 557
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: FRESENIUS MEDICAL CARE HOLDINGS, INC. d/b/a Fresenius Medical Care North America, Plaintiff, v. TOWN OF LILLINGTON, et al., Defendants.

339 F.Supp.3d 557

FRESENIUS MEDICAL CARE HOLDINGS, INC. d/b/a Fresenius Medical Care North America, Plaintiff,

v.TOWN OF LILLINGTON, et al., Defendants.

NO. 5:17-CV-00215-BR

United States District Court, E.D. North Carolina, Western Division.

Signed September 20, 2018

Reid C. Adams, Jr., Jonathan Reid Reich, Womble Bond Dickinson (US) LLP, Winston-Salem, NC, for Plaintiff.

Jeremy A. Kosin, Kenneth B. Rotenstreich, Mallory G. Horne, Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, Greensboro, NC, Michael Charles Gruman, Rodney E. Pettey, Yates, McLamb & Weyher, LLP, Raleigh, NC, for Defendants.

ORDER

W. Earl Britt, Senior U.S. District Judge

This matter is before the court on defendant Town of Lillington's (the "Town") motion to dismiss for lack of subject matter jurisdiction and failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (DE # 13.) Plaintiff filed a response in opposition to the Town's motion. (DE # 20.) The Town did not file a reply. This matter is ripe for disposition.

Plaintiff is a corporation that owns and operates a hemodialysis facility in Lillington, North Carolina. (DE # 1, at 2.) On 4 May 2017, plaintiff filed the instant action against the Town, No. 1 Chinese Restaurant (the "Restaurant"), and Restoration & Reconstruction, Inc. ("ServPro"). Plaintiff's claims arise from a series of events that began when a sewer line connected to its Lillington facility became clogged in June 2014 due to the "Restaurant's continued dumping of grease and kitchen waste in its kitchen drains." (Id. at 3.) According to plaintiff, the Town attempted to clear the sewer line by applying high pressure water. (Id. ) The application of the high pressure water caused raw sewage and kitchen grease to overflow into plaintiff's facility. (Id. ) In response, plaintiff hired ServPro to remedy the flood damage. (Id. ) Plaintiff alleges the facility suffered extensive damage, for which plaintiff has paid over $250,000 to remediate. (Id. at 3-4.)

With respect to the Town, plaintiff alleges claims of (1) negligence, (2) a denial of due process in violation of 42 U.S.C. § 1983, (3) a denial of just compensation for an unlawful taking in violation of 42 U.S.C. § 1983, (4) inverse condemnation, and (5) violations of the North Carolina Constitution under Corum v. University of North Carolina, 330 N.C. 761, 413 S.E.2d 276 (1992).¹ (Id. at 4-10.) The Town's motion seeks dismissal on the grounds that plaintiff's inverse condemnation and Corum claims fail to state a claim under Rule 12(b)(6) and that plaintiff's § 1983 claims are barred under Rule 12(b)(1) because they are unripe.

The court begins with the Town's Rule 12(b)(6) motion to dismiss plaintiff's inverse condemnation claim for failure to comply with the two-year statute of limitations contained in N.C. Gen. Stat. § 40A-51. Dismissal under Rule 12(b)(6) is appropriate "only when the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Darling v. Falls, 236 F.Supp.3d 914, 920 (M.D.N.C. 2017). A statute of limitations affirmative defense may be properly raised under Rule 12(b)(6) if "the time bar is apparent on the face of the complaint." Dean v. Pilgrim's Pride Corp., 395 F.3d 471, 474 (4th Cir. 2005) (citation omitted).

Section 40A-51 is North Carolina's statutory remedy for inverse condemnation. It allows the owner of property taken by an act or omission of a local government authority to initiate an action for compensation where the property was taken without the filing of a complaint containing a declaration of taking. N.C. Gen. Stat. § 40A-51(a). The action must be filed in North Carolina superior court and within two years of the taking (or the completion of the project involving the taking, whichever is later). Id.

Here, plaintiff does not argue that § 40A-51's limitations period has not expired and rightly so. Plaintiff alleges a physical taking occurred in June 2014 and lasted one day. (Compl., DE # 1, at 3, 7-9.) However, it did not file the complaint until 4 May 2017, well after the expiration of the limitations period. Nonetheless, in its response to the Town's motion, plaintiff maintains that § 40A-51's statute of limitations does not apply because its inverse condemnation claim is brought directly under the Fifth and Fourteenth Amendments to the United States Constitution and under the North Carolina Constitution's "law of the land" clause, Article I, Section 19. (See DE # 20, at 4-6.) The Town makes no argument regarding whether § 40A-51 is plaintiff's exclusive state remedy for inverse condemnation nor regarding the applicable statute of limitations to the extent plaintiff alleges a direct action under the United States or North Carolina Constitution. Accordingly, the court does not resolve these issues and presumes plaintiff's inverse condemnation claim is properly asserted under the United States and North Carolina Constitutions and not barred by any statute of limitations applicable to those theories.²

Alternatively, the Town argues that plaintiff's inverse condemnation claim under the North Carolina Constitution should be dismissed under Rule 12(b)(6) because the damages plaintiff alleges are consequential and incidental. Under North Carolina law,

[a]n action in inverse condemnation must show (1) a taking (2) of private property (3) for a public use or purpose. Advertising Co. v. City of Charlotte , 50 N.C.App. 150, 153-54, 272 S.E.2d 920, 922 (1980). Although an actual occupation of the land, dispossession of the landowner, or physical touching of the land is not necessary, a taking of private property requires "a substantial interference with elemental rights growing out of the ownership of the property." Long v. City of Charlotte , 306 N.C. 187, 198-99, 293 S.E.2d 101, 109 (1982). A plaintiff must show an actual interference with or disturbance of property rights resulting in injuries which are not merely consequential or incidental. Id. at 199, 293 S.E.2d at 109.

While Black's Law Dictionary does not define the word consequential , it does define the term consequential damages , and from this definition, we may determine what the Supreme Court meant when it wrote of "injuries which are not merely consequential." Consequential damages means "[s]uch damage, loss or injury as does not flow directly and immediately from the act of the party, but only from some of the consequences or results of such act." Black's Law Dictionary 390 (6th ed. 1990). Black's Law Dictionary defines incidental as "[d]epending upon or appertaining to something else as primary; something necessary, appertaining to, or depending upon another which is termed the principal; something incidental to the main purpose." Black's Law Dictionary 762.

Adams Outdoor Advert. of Charlotte v. N.C. Dep't of Transp., 112 N.C.App. 120, 434 S.E.2d 666, 667-68 (1993) (most alterations in original).

The Town relies on two cases to support its argument. One case that the Town cites is Long, quoted above. There, the North Carolina Supreme Court considered whether the plaintiffs could recover in trespass and nuisance—in addition to inverse condemnation—for flights occurring directly over their property. 293 S.E.2d at 104. The court stressed the importance of the requirement in "takings" cases that the plaintiff show "a substantial interference with the use and enjoyment of the land, not merely incidental damage," id. at 110, and recognized that "not every act or happening injurious to the landowner, his property, or his use thereof is compensable," id. at 109. Noting that the plaintiffs alleged the subject runway had made their property " ‘almost useless,’ ‘greatly diminished in value,’ and ‘almost unsellable and almost unliveable,’ " the court concluded that the plaintiffs' sole remedy was inverse condemnation, and the trial court was therefore correct in dismissing their trespass and nuisance claims. Id. at 111.

In the other case on which the Town relies, Adams, the North Carolina Court of Appeals examined whether the trial court properly dismissed the plaintiff's complaint for inverse condemnation based on the alleged taking of its billboards. The plaintiff alleged that the North Carolina Department of Transportation ("DOT") planted trees and vegetation on the state right-of-way adjacent to the plaintiff's billboards and that the vegetation obscured the billboards, rendering them "economically useless." 434 S.E.2d at 667. The appellate court determined that DOT's "planting of trees as part of its beautification project was [its] primary act, of which the obscuring of plaintiff's billboards was only a consequential or incidental result." Id. at 668. For that reason, along with others, the court held that the obstruction of the billboards did not amount to a taking and thus affirmed the trial court's dismissal of the complaint. Id. at 668-69.

The Town argues that plaintiff has failed to plead more than consequential or incidental damage because, like in Adams, "the Town's objective here was one of town maintenance, which consequentially resulted in an alleged de minimus intrusion into the Plaintiff's rights to their [sic] property." (Mem., DE # 14, at 7.) The court disagrees. Adams concerned DOT's purported interference with the "right" of the plaintiff's property to be seen, which the court declined to recognize as a basis for taking. This case, however, concerns a more direct interference with plaintiff's property. As noted above, plaintiff has alleged that the Town's application of high pressure water caused sewage and kitchen grease to overflow into plaintiff's property. It further alleges that the Town's actions have caused its property a loss in value exceeding $250,000. (Compl., DE # 1, at 10.) With these allegations, the court concludes that plaintiff sufficiently alleges more than consequential or incidental injury and thus states a claim for inverse condemnation. See Peach v. City of High Point, 199 N.C.App....