Top NC court wrestles with two Map Act cases
The North Carolina Supreme Court heard two Map Act cases Tuesday pitting property owners against the state Department of Transportation. DOT has warned that the cases could lead to payments “multiple times higher” than the state has faced in previous Map Act disputes. Plaintiffs have accused the department of “confusing” and “misleading” state courts.
The 1987 Map Act allowed DOT to restrict development on private property covered by maps for designated highway corridors. Some properties faced restrictions for more than two decades. The General Assembly repealed the act after the state Supreme Court declared it unconstitutional in a 2016 case known as Kirby.
DOT has resolved “hundreds of cases … to the tune of hundreds of millions of dollars under this court’s guidance,” said lawyer Howard Rhodes, who represented DOT during two hours of oral arguments.
Now plaintiffs are asking the state’s highest court to change the way Map Act damages should be calculated, Rhodes warned. DOT would be forced to pay more than previous court rulings have required, he said.
A property owner affected by the Map Act “is entitled to be made whole once,” Rhodes argued. Map Act. “So when DOT pays just compensation for the ability to restrict the three rights for an unlimited period of time — the rights to improve, develop, and subdivide — when DOT pays compensation for the taking of those rights, it doesn’t pay for them again when it subsequently condemns the property for the project.”
DOT is attempting to use Map Act restrictions that went away in 2016 to undercut the price it must pay when it requires targeted property after that date, lawyer Stephanie Autry argued.
“What the department wants to do is use the fiction that the Map Act restrictions continue — even though they were rescinded — not just so that they can devalue Ms. Mata’s property, which was taken in the direct [condemnation] action four years after the map restrictions were rescinded, but also any other property that it might need to take in the future that was ever subject to the Map Act.”
Plaintiff Elizabeth Mata owns a 100-acre tract in Holly Springs that is likely to face condemnation again, Autry argued. “They will be able to use this fiction that the remaining land is still damaged by permanent Map Act restrictions to pay her less than they would pay her neighbor who never had a Map Act claim.”
Much of the debate in both cases involves the legal designation of Map Act restrictions as “indefinite” or “temporary.” DOT supports the “indefinite” option, while the plaintiffs urge the Supreme Court to treat the restrictions as “temporary.”
“Your argument just doesn’t make any sense to me,” Dietz said to Rhodes. “Why does a buyer on the market today care about those restrictions which ended up being just a fiction to whoever owned the property before? You’re going to value it based on what you can do with the property when you take title to it, and those restrictions to it don’t exist.”
Dietz suggested that the cases could end up creating “windfalls” for affected property owners.
“What I’m concerned about is that we are going to make really bad law about temporary takings in this case,” Dietz noted.
“There’s now been two trial court judges and, I guess, five Court of Appeals judges who have all looked at this and disagree about a lot of things, but, from what I can see, every single one of them agree[s] that it has to be temporary,” Dietz said. “It can’t be an indefinite taking like the one we saw in Kirby before the repeal. They’re all just completely wrong about that?”
“They are completely wrong about that,” Rhodes responded. “No. 1, they are departing from this court’s express determination about the nature of a Map Act taking.”
Chief Justice Paul Newby that the court in Kirby “stated several times” that the Map Act restrictions were indefinite and not temporary.
Plaintiffs in both cases filed court document in July accusing DOT of “confusing” and “misleading” state courts in their disputes. DOT’s arguments have helped delay compensation owed to property owners, according to the court filing
Mata and the Mata Family LLC attempted to distinguish their Wake County court battle from a Cumberland County dispute involving plaintiff William Sanders.
One state Court of Appeals panel addressed the Mata case and a related Wake County suit filed by the Wonder Day Limited Partnership. A different appellate panel heard the Sanders case.
“Other than the fact these actions are inverse condemnations arising under the Map Act, the issues raised by Mata and Wonder Day on one hand and Sanders on the other are quite different,” Mata’s lawyers wrote. A separate brief in the Sanders case offered similar arguments.
Mata’s lawyers distinguished between inverse condemnation under the Map Act and DOT’s direct condemnation when the department takes land for a highway project.
“Sanders is one of only six cases filed statewide to recover damages for a Map Act taking after the direct taking for the same property had been resolved by settlement or trial,” according to the court brief. “Mata and Wonder Day, on the other hand, are garden variety Map Act cases, where the property owners filed their Map Act suits before DOT filed a separate direct condemnation to take their property.”
“The Mata and Wonder Day inverse condemnations are just like the thousands of other Map Act cases DOT has resolved,” Mata’s lawyers argued. “The Mata and Wonder Day direct condemnations, which are still pending, are also just like the tens of thousands of direct condemnation cases DOT has resolved. The Mata and Wonder Day cases are extremely important to their respective property owners but are otherwise unexceptional.”
“DOT has argued that Sanders, Mata, and Wonder Day are similar to each other and different from all other inverse and direct condemnations for the purpose of confusing the courts, misleading the courts about the impact of court decisions, manufacturing grounds for discretionary review and delaying compensation to these owners,” the court filing continued.
Discretionary review refers to the process the state Supreme Court used to agree to hear the two Map Act cases.
“DOT’s misleading arguments about the trial courts’ rulings induced the Court of Appeals panels to misunderstand the trial courts,” Mata’s lawyers wrote. “DOT tried to create the appearance of a conflict between decisions of the Court of Appeals. DOT claimed the interplay between Mata (and its companion case, Wonder Day) and Sanders would have the effect of reopening thousands of Map Act cases and costing hundreds of millions of dollars.”
Mata’s lawyers warned of “DOT’s machinations” and the “confusion caused by DOT’s engineering.”
A key issue in the Mata and Sanders cases involves the interplay between DOT’s Map Act payment and the payment for land the department eventually takes for a highway project.
“DOT claims in the Mata (and Wonder Day) inverse condemnations that it is entitled to a credit in the Mata and Wonder Day direct condemnations for the amount it is ultimately determined to owe Mata (and Wonder Day) for the inverse claims under the Map Act,” Mata’s lawyers wrote. “DOT bas[e]s this claim on its theory that the Map Act restrictions are permanent, despite the fact they were actually rescinded. DOT’s theory is that these permanent restrictions allow it to treat the Mata (and Wonder Day) property, in the direct actions, as though it is still restricted and undevelopable.”
“The trial court and Court of Appeals in Mata (and Wonder Day) ruled against DOT on this issue of whether DOT can treat the Mata property as still restricted by the Map Act restrictions despite the fact that the restrictions were rescinded,” the brief added.
The appellate rulings in Mata and Sanders only appear to create a conflict for the state Supreme Court to resolve, Mata’s lawyers argued.
“DOT has done its best to create the appearance of conflicting rulings on these two valuation issues, but they are actually all in accord,” according to the brief. “All affirm the basic measure of damages applicable to the Map Act claims in Mata (and Wonder Day) and Sanders is the difference in the value of the property ‘immediately before and immediately after’ the taking.”
Mata plaintiffs filed a Map Act lawsuit in 2019, the year before DOT filed suit to condemn property for Interstate 540.
The state Supreme Court issued orders in March agreeing to hear the two Map Act cases.
DOT had urged Supreme Court justices in August 2024 to take the Mata case. The department warned that a lower court ruling in the case could “create confusion” in future Map Act lawsuits.
In a split 2-1 decision in July 2024, the state Court of Appeals ordered a trial judge to revisit the amount of money DOT must pay to resolve two Map Act disputes in Wake County.
While that could mean less money for plaintiffs than the trial court originally ordered, appellate judges rejected DOT’s argument that Map Act restrictions should be treated as “indefinite” rather than “temporary.” The distinction could lead to significant differences in the amount DOT must pay to resolve outstanding Map Act cases.
DOT lawyers filed a petition citing three reasons for the Supreme Court to take the Mata case.
“First, the Mata opinion conflicts with decisions of the Supreme Court and imposes a different measure of damages for a Map Act taking than the one imposed by this Court in Kirby v. North Carolina Department of Transportation … and affirmed in Chappell v. North Carolina Department of Transportation,” previous Map Act rulings from 2016 and 2020. “Second, by imposing a different measure of damages, the Mata decision treats current and future landowners differently than hundreds of prior landowners who litigated or settled their Map Act claims under this Court’s guidance despite the fact these landowners suffered the same taking.”
“Third, the Mata decision imposes an unworkable measure of damages that will create confusion in future Map Act lawsuits,” DOT lawyers warned.
The petition also warned about a conflict between two Appeals Court decisions in similar Map Act disputes.
“The Mata decision also involves an identical legal issue to the Court of Appeals’ decision in W.T. Sanders v. North Carolina Department of Transportation, which is currently subject to a DOT petition for discretionary review to this Court filed on April 5, 2024,” DOT lawyers wrote. “The Mata decision, however, renders a contrary ruling on the crucial legal issue to the decision in Sanders, thus creating a split in the Court of Appeals’ approach to Map Act cases.”
“This confusion is the result of the way the Mata and Sanders decisions both depart from this Court’s precedents,” department lawyers argued.
In Mata v. NC Department of Transportation and Wonder Day Partnership v. NC Department of Transportation, Wake County Superior Court Judge Bryan Collins sided with plaintiffs and against DOT in a dispute over payments the department owed property owners.
The size of the payment depends in part on whether the Map Act’s former restrictions on the use of property should be considered as “temporary” or “indefinite.” In the two Wake County cases, the Map Act blocked any development of affected property for 20 years.
Appellate judges agreed with portions of Collins’ ruling. “The trial court correctly found the duration of the temporary taking occurred between 6 August 1996 until 11 July 2016,” wrote Judge John Tyson. “The order of the trial court concluding the duration of the temporary taking is affirmed.”
“The Map Act was a temporary taking under the power of eminent domain,” Tyson added. “The proper measure of the damages to be proven by Plaintiff is the diminution in value on the date of the filing of the highway corridor on 6 August 1996 until 11 July 2016, ‘taking into account all pertinent factors’ to include the reduction in assessed ad valorem taxes Plaintiffs benefitted from during the period of the relevant temporary taking. The order of the trial court is reversed on the measure of damages Plaintiff must prove.”
Judge Jeff Carpenter joined Tyson’s majority opinion. Judge Hunter Murphy signed on to much of the opinion but dissented on calculation of damages. Murphy endorsed the trial court’s conclusion. “I would hold that the rental value of the property was the proper measure of damages, as our precedent requires in the case of a temporary taking,” he wrote.
The Mata and Wonder Day cases prompted an hour of oral arguments in May 2024 at the state’s second-highest court.
Plaintiffs argued that the state Department of Transportation seeks a Map Act “discount.” The discount would reduce the amount of money DOT pays when it takes a property once targeted by the now-repealed state law.
The department responded that the plaintiffs would force taxpayers to pay sums “many multiples higher” than awards offered in hundreds of other Map Act cases settled since the state Supreme Court killed Map Act corridors in 2016.
“What the DOT is doing is trying to get a condemnation discount,” Autry argued. She responded to arguments from the DOT’s lawyer. “What is hard for me to listen to him say is that they deserve a discount or a credit for money that they haven’t paid — money that they owed 28 years ago.”
Autry accused DOT of relying on a legal “fiction” that the Map Act’s restrictions remained in place when it targeted property after the law went off the books. “They would be paying you based on a price as though you could not develop your property although, in fact, the restrictions had been rescinded in 2016.”
“That’s what I was a little bit worried that I was hearing from the state,” Murphy responded.
“I’m worried that I’m hearing it as well,” Autry replied.
Rhodes, representing DOT, argued that the state Supreme Court already has settled the issue of how Map Act property owners should be compensated. He accused plaintiffs in the two Wake County cases of trying to deviate from existing Map Act law in pursuit of much larger payments.
“They want the benefit of a different measure of damages, one that is different in kind than has been applied in over 700 Map Act cases that have gone before the courts and either been litigated or settled,” Rhodes said.
“They are seeking compensation many multiples higher than has been paid to all prior Map Act claimants under the Supreme Court’s guidance,” he added. “This is not a matter of the department seeking a discount. This is a matter of paying fair compensation under the guidance of the Supreme Court and paying that compensation to all citizens who have been subject to this taking on the same terms.”
Tyson highlighted the significance of the Map Act’s repeal. “Your case … hinges on the fact that the repeal of the … Map Act statute is what determined the fact that the Map Act restriction was temporary,” Tyson said to Autry.
“Absolutely. I’m not running from that. That’s the facts,” Autry responded.
The two cases involve Wake County properties targeted in a 1996 corridor map for Interstate 540. In both cases, Collins issued rulings in June 2023 that favored property owners over the DOT. The department appealed those rulings.
Property owners and the state agency disagree over whether Map Act takings were temporary or indefinite. The difference could amount to major differences in how much the state must pay to acquire targeted properties.
“The trial court’s ruling that the recission of the corridor maps converted the taking from indefinite to temporary, if allowed to stand, will have a significant impact on all future litigation under the Map Act,” wrote lawyers representing DOT in an Appeals Court petition. “In so ruling, the trial court attempted to distinguish this case from our Supreme Court’s decision in Chappell v. NC Dept. of Transportation, which expressly held that a Map Act taking is of indefinite duration.”
The 2020 Chappell case followed up on the Supreme Court’s initial ruling against the Map Act in the 2016 case Kirby v. NC DOT.
“Whether the negative easement taken by the Department was temporary or indefinite is important in this case and all other similar pending and subsequent Map Act cases,” DOT’s lawyers argued.
“Each and every one of the potentially hundreds of remaining Map Act lawsuits will require a determination of before and after value by appraisers for both the landowners and the Department,” the petition continued. “This Court’s guidance as to whether the taking was indefinite, as held by the Supreme Court in Kirby and Chappell, or temporary, as held by the trial court here, will be instrumental in allowing those appraisers to develop their opinions, and in allowing the parties to those lawsuits to evaluate their positions and potentially reach settlements.”
“This Court’s ruling on the duration of the Map Act taking will also have a significant effect on direct condemnation actions involving the same properties on which the Department effected Map Act takings,” DOT lawyers argued. “Should this Court adhere to the Supreme Court’s established precedent from Kirby and Chappell and hold that the taking was indefinite in nature, the reduced rights and value remaining after the Map Act taking will directly affect the value of the property prior to the Department’s ultimate condemnation of the same property for its highway project.”
If a Map Act taking is ruled to be temporary, rather than indefinite, then affected property owners could collect two large payments from DOT for the same land, the petition continued. One payment would address the impact of the Map Act. The other would address the actual taking of the property for highway construction.
“[S]hould this Court accept the invitation to deviate from established precedent and hold that the Map Act taking was temporary in duration and ended in 2016, landowners will presumably argue that the Map Act taking has no effect on the rights held and consequent value of their properties at the time the Department’s direct condemnation actions,” DOT lawyers wrote. “As a practical matter, this result would enable landowners to recover potentially large verdicts in Map Act claims premised on the rental value of their properties over decades of time, followed by a second full recovery for the direct condemnation of the property.”
“Such an outcome would be unjust and inconsistent with this Court’s holding … and the Supreme Court’s holding in Chappell, and this Court should not delay its involvement to uphold its and the Supreme Court’s precedents,” the petition continued.
Collins rejected DOT’s arguments in his rulings. “Invalidation or rescission of an offending statute converts an otherwise indefinite taking into a temporary one,” he wrote in the Wonder Day case. DOT filed paperwork in 2020 to take the Wonder Day property that had been included in the I-540 corridor map.
“The DOT’s arguments are entirely based on multiple ‘imaginary situations’ or fictions,” Collins wrote. “The first fiction is that the restrictions continue to be indefinite when we now know their duration. That fiction is necessary to articulate the next fiction, which is that the Property continues to be encumbered by the restrictions in 2020. If Wonder Day’s Property is valued as restricted by the Map act in 2020, although the restrictions had actually been removed in 2016 and Wonder Day was thereafter able to use or sell its Property as unrestricted, Wonder Day would receive a value based on an imaginary or fictional scenario.”
“The Supreme Court of North Carolina has recognized that, while reducing acquisition costs is a ‘laudable’ goal, the Map Act is not ‘a valid, regulatory exercise of the police power,’ but instead is a regulation that went too far and thus became a taking for which just compensation must be made under the power of eminent domain,” Collins added. “The DOT cannot use its project, including the map restrictions it placed on the Property to limit acquisition costs, to reduce the value of Wonder Day’s Property when it takes the Property through direct condemnation.”
“For purposes of determining just compensation for the taking of Wonder Day’s Property in 2020, the DOT cannot value the Property as restricted because the Property was not restricted in 2020, and the DOT cannot use the restrictions it imposed as part of its Project to depreciate the value of Wonder Day’s Property and thereby take its Property in 2020 at a discounted or restricted price,” the judge determined.
Collins admonished DOT not to treat a Map Act property owner in a different way than others whose properties were targeted for the highway. “Owners whose property was not within the map corridor but whose property was taken in fee in 2020 for the construction of I-540 will be paid the unrestricted value of their property in 2020. Wonder Day is likewise entitled to receive the unrestricted value of its Property in 2020 when the DOT took it in fee in 2020,” the judge wrote. “The burden the Map Act imposed on Wonder Day for more than 20 years is separate from, and over and above, the physical taking it suffered when the DOT took its Property in 2020.”
The John Locke Foundation, which oversees Carolina Journal, submitted friend-of-the-court briefs supporting property owners in the Kirby and Chappell cases.
“Top NC court wrestles with two Map Act cases” was originally published on www.carolinajournal.com.
