In 1977, Herbert I. Crabtree and Alene C. Holloway
(“defendants”) acquired approximately 150 acres of rural,
undeveloped farm land in Orange County (“property”) from theirfather. In 1991, defendants began work to develop the property
into a residential subdivision. Among other things, defendants (1)
surveyed the boundary of the property; (2) ordered soil analyses
done by the Orange County Health Department to determine the
property's suitability for septic systems; (3) obtained approval
for the location of septic systems on each lot; (4) installed and
upgraded underground electrical service; (5) contracted for the
provision of electrical service; (6) constructed a new road and
improved an existing road providing access to the property; (7)
recorded a subdivision plat of the property entitled “Eno West
Fork” depicting 14 separate lots; (8) obtained separate Parcel
Identification Numbers for each lot; and (9) paid separate tax
bills for each lot for five years. Each of the 14 lots were over
ten acres, bordered a public road, and had frontage on the Eno
River. Defendants also intended to reserve lots for their own use.
In November 1992, defendants learned that their property was
under consideration by the City of Hillsborough (“plaintiff”) as
the site of plaintiff's new reservoir. Defendants ceased
developing their property upon learning it was under consideration
for the new reservoir. Nearly four years later, on 17 July 1996,
defendants received “official notice” of plaintiff's intent to
acquire their property for the new reservoir. On 13 January 1997,
plaintiff authorized the acquisition of defendants' property.
Nearly a year after defendants received “official notice,” on
20 June 1997, plaintiff filed an action in Orange County Superior
Court to condemn the property. Defendants answered the complaint
on 21 October 1997, and prayed,
inter alia, for a jury trial on theissue of just compensation. On 20 September 1999, plaintiff filed
a pretrial motion to have the trial court determine the interest in
the property taken and the proper measure of compensation for the
interest in the property taken. Plaintiff sought to have the
property treated as a single tract of land for the purposes of
valuation. Defendants argued that the property was made up of 14
separate lots at the time of the condemnation. On 28 January 2000
the trial court ordered:
1. The Town in this action condemned all 14 lots
in the Eno West Fork, which subdivision is depicted
on a plat recorded at Plat Book 59, Page 157 of the
Orange County Registry.
2. That at the time of the taking, the property
taken by the Town in this action did not constitute
a single tract of land for the purposes of
valuation.
3. At the trial of this action on the issue of
just compensation, otherwise admissible evidence
may be introduced as to the value, at the time of
taking, of each of the 14 lots condemned by the
Town.
Plaintiff appeals.
[1]Plaintiff assigns as error the trial court's conclusion
that plaintiff's condemnation of defendants' property was a taking
of 14 separate tracts of land for the purpose of determining
compensation. Plaintiff contends, as it did in the trial court,
that the condemnation was a taking of a single tract of
approximately 150 acres. We disagree, and affirm the trial court's
order.
Plaintiff argues that the property must be treated as a single
tract for compensation purposes because defendants' property ismerely a “paper” or “imaginary” subdivision. As a “
;paper”
subdivision, plaintiff asserts that the 14 individual lots should
be ignored and the property treated as a single tract for purposes
of compensation.
In support of its argument, plaintiff cites the landmark case
of
Barnes v. N.C. State Highway Comm'n, 250 N.C. 378, 109 S.E.2d
219 (1959). In
Barnes, the State Highway Commission condemned a
portion of landowner's property in order to relocate and improve
U.S. Highways 158 and 421 in Winston-Salem. Prior to the
condemnation, the landowner had not taken steps to develop the
property. Landowner attempted to establish the value of his
condemned property by the introduction of plats drafted “
after the
taking of the property.”
Id. at 386, 109 S.E.2d at 226. The plats
depicted the property as a subdivision with mixed business and
residential uses. Our Supreme Court held that:
'It is well settled that if land is so situated
that it is actually available for building
purposes, its value for such purposes may be
considered, even if it is used as a farm or is
covered with brush and boulders. The measure of
compensation is not, however, the aggregate of the
prices of the lots into which the tract could be
best divided, since the expense of cleaning off and
improving the land, laying out streets, dividing it
into lots, advertising and selling the same, and
holding it and paying taxes and interest until all
of the lots are disposed of cannot be ignored and
is too uncertain and conjectural to be computed.'
Nichols on Eminent Domain (3rd Edition), Vol. 4,
section 12.3142 (1), pp. 107-109. It is proper to
show that a particular tract of land is suitable
and available for division into lots and is
valuable for that purpose, but it is not proper to
show the number and value of lots as separated
parcels in an
imaginary subdivision thereof. In
other words, it is not proper for the jury in these
cases to consider an
undeveloped tract of land asthough a subdivision thereon is an accomplished
fact. Such
undeveloped property may not be valued
on a per lot basis.
Id. at 388-89, 109 S.E.2d at 228 (emphasis supplied).
The facts of the present case are clearly distinguishable from
the facts in
Barnes. Prior to notice of the condemnation,
defendants (1) surveyed and subdivided the property into 14
separate lots all with road access and frontage on the Eno River;
(2) ordered soil analyses done by the Orange County Health
Department to determine the property's suitability for septic
systems; (3) obtained approval for the location of septic systems
on each lot; (4) installed and upgraded underground electrical
service; (5) contracted for the provision of electrical service;
(6) constructed a new road and improved an existing road providing
access to the property; and (7) recorded a plat of the subdivision.
In 1993, Orange County assigned separate Parcel Identification
Numbers for each lot, and defendants paid separate tax bills for
each lot for five years. All of these actions demonstrate that the
defendants' property was not an “imaginary subdivision” like the
landowner's property in
Barnes. To the contrary, defendants' plan
to develop a rural Orange County residential development had been
accomplished.
Nonetheless, plaintiff argues that defendants' failure to
market and sell any of the lots necessitates a finding that the
property is a “paper” subdivision. This argument ignores the fact
that
plaintiff's actions prevented defendants from further
developing the lots. Defendants accomplished all of the above-listed improvements
and developments before plaintiff publically announced that
defendants' property was being considered as the site of the new
reservoir. Upon such announcement, defendants ceased developing
the property for five years before plaintiff instituted action.
Plaintiff cannot now claim that defendants' cessation of
development and failure to sell any of the lots demonstrates that
defendants' property was not an actual, existing subdivision.
[2]Plaintiff also argues in its brief to this Court that
N.C.G.S. § 40A-67 mandates that the interest it acquired in
defendants' property was the taking of a single tract of land.
Plaintiff's reliance on N.C.G.S. § 40A-67 is misplaced.
N.C.G.S. § 40A-67 (1999) provides:
For the purposes of determining just compensation
under this Article, all contiguous tracts of land
that are in the same ownership and are being used
as an integrated economic unit shall be treated as
if the combined tracts constitute a single tract.
This statute is a codification of a portion of the common law of
condemnation known as the “unity rule.” City of Winston-Salem v.
Yarbrough, 117 N.C. App. 340, 344, 451 S.E.2d 358, 362 (1994),
cert. denied, 340 N.C. 110, 456 S.E.2d 311 (1995), cert. denied,
340 N.C. 260, 456 S.E.2d 519 (1995). All the cases applying
N.C.G.S. § 40A-67 and the common law “unity rule” cited by
plaintiff to this Court are “partial taking” cases. At oral
arguments, plaintiff conceded that N.C.G.S. § 40A-67 and the “unity
rule” have only been applied to cases involving “partial takings.”
The trial court found that this case was not a partial takingscase:
19. This condemnation action does not involve a
taking of less than an entire tract of land; all 14
lots in the “Eno West Fork” subdivision are
affected by the taking and have been, in their
entirety, condemned by the Town.
This finding of fact is supported by competent evidence in the
record. Therefore, we decline plaintiff's invitation to extend the
application of N.C.G.S. § 40A-67 to the facts of this case. The
order of the trial court is affirmed.
Affirmed.
Judges MARTIN and TIMMONS-GOODSON concur.
*** Converted from WordPerfect ***