When I started with the Attorney General’s office representing the NCDOT (NC Department of Transportation) in eminent domain cases, I had nearly a decade of litigation experience, but it felt like a whole new world. Eminent domain cases proceed unlike any other kind of litigation, and attorneys are often confused by the process and unsure how to counsel their clients. Here, I offer three practical insights related to the early stages of an eminent domain taking, which might help attorneys encountering these issues for the first time.
#1: Get involved early and follow up.
The NCDOT is the most active condemning authority in the state, by far. However, for the past decade-plus it has been farming out to non-lawyer, third-party contractors the tasks of making initial contact with property owners and negotiating settlements. When these “right-of-way agents” first contact your client, it is important that your client be vigilant and follow up. This is because right-of-way agents are often incentivized to either settle with the property owner quickly or move the property off their desk by showing they made a “good faith” effort to negotiate. And where an agent can show they were unable to get a response from a property owner, this “good faith” standard can be met, and the agent can refer the case to the AG’s office for litigation. You will ensure your client does not miss a valuable opportunity to negotiate before litigation by getting involved early.
#2: Help your client identify all the ways the project may affect their property and share this with the condemning authority.
A November 2022 NC Court of Appeals opinion demonstrates that, in some instances, you might be able to negotiate a stronger settlement before a complaint is filed. In DOT v. Mt. Vills., LLC, the NCDOT enlisted an appraiser pre-litigation who agreed (at the request of the property owner’s legal counsel) to include an “extraordinary assumption” that an adjacent parking area was “for use by the subject owner under a prescriptive easement” (i.e. the NCDOT was initially willing to compensate the property owner for effects on adjacent property it didn’t own, but to which it claimed a right of use). The property owner did not reach a settlement with NCDOT, and a complaint was filed. The NC Department of Justice (NCDOJ) attorney assigned to the matter realized the NCDOT had sound arguments that no prescriptive easement existed and raised the issue in court. This resulted in the NCDOT receiving a verdict for less than the original appraised value.
This demonstrates the lesson: if you engage the condemning authority early in the process and provide reasonable arguments as to value, you may place your client in a stronger negotiating position than if you wait for a complaint to be filed.
#3: Advise your client about the “quick take” nature of public condemnation in NC.
There are two main statutes by which public condemnors take property in North Carolina: Chapter 136 and Chapter 40A. Chapter 136 is how the NCDOT and NCDOA condemn property. Chapter 40A is how local governments typically condemn property. With few exceptions, these statutes function as “quick take” laws—meaning title to the subject property vests in the condemning authority at the moment the condemnation action is filed. I can’t tell you the number of times property owners called the AG’s office, shocked that they lost legal possession of property the moment the complaint was filed. Advising your clients of this paradigm early can help with planning and decision-making.
Hopefully, these insights will help. And should a client pose a question you can’t answer, reach out to a lawyer specializing in eminent domain law.