Converted WP file 061044-1

Appeal by plaintiffs from order dated 6 April 2006 by Judge Ronald K. Payne in Watauga County Superior Court. Heard in the Court of Appeals 15 March 2007.

Miller & Johnson PLLC, by Paul E. Miller, and Linda L. Johnson, for plaintiff-appellant.

Attorney General Roy Cooper, by Assistant Attorney General J. Bruce McKinney, for defendant-appellee.

    ELMORE, Judge.

    Mack D. Brown (Brown) and Willa Jean Brown appeal from an order dated 6 April 2006 in favor of the Department of Transportation (DOT).
     The DOT entered into negotiations with Brown to obtain a right-of-way for a state highway project. In 1997, Brown granted the DOT a right-of-way to three parcels of real property on which the DOT would build State Highway Project 6.759003T. The DOT designated the three parcels of real property as Parcels 8, 9, and 10.    According to Brown, he would not have settled right-of-way claims with the DOT during 1997 if he had been aware that the elevation of the new US 421 highway, located at Parcel 9, would be 968.848 meters instead of 965.550 meters. Brown contends that the DOT, through its division engineer, Wade Hoke, made oral representations that the elevation of the new highway would be no higher than the base of a fraser fir tree located on Parcel 9, which was 965.550 meters. Brown alleges that the breach of the oral agreement with Wade Hoke resulted in the DOT taking a compensable interest in his property without just compensation in violation of N.C. Gen. Stat. § 136-111.
    N.C. Gen. Stat. § 136-111 allows individuals whose property has been taken by the DOT without just compensation to file a complaint in the superior court. On 17 December 2004, Brown filed his complaint against the DOT for a taking of a compensable interest without just compensation, a violation of the North Carolina Constitution, and the Constitution of the United States. Brown also brought claims against the DOT for breach of contract and for rescission of deeds due to fraud and/or mutual mistake.
    N.C. Gen. Stat. § 136-108 allows the individual and the DOT to have the merits of their dispute, except for the issue of damages, heard and ruled on by the trial court. On 7 January 2006, the DOT moved for the trial court to hold a hearing pursuant to N.C. Gen. Stat. § 136-108 to determine any and all issues raised by the pleadings other than the issue of damages. On 6 April 2006, the trial court dismissed Brown's complaint, finding that Brown failedto present credible evidence to support the allegations in the complaint, and that there was insufficient evidence that a taking of a compensable interest of Brown's land had occurred.
    Brown appeals the decision of the trial court to this Court, assigning as error the trial court's dismissal of his claims for breach of contract and relief for rescission of deeds based on mutual mistake and/or fraud. However, Brown did not assign as error the trial court's dismissal of his claims that a taking of compensable interest of land had occurred, that a violation of the North Carolina Constitution had occurred, and that a violation of the Constitution of the United States had occurred; therefore, we do not address those issues.
    The dismissal of Brown's complaint by the trial court, based on conclusion of law number five, concluding that Brown failed to present credible evidence to support the allegations in his complaint, is reviewed de novo by this Court. Evans v. Evans, 169 N.C. App. 358, 360, 610 S.E.2d 264, 267 (2005).    The issue before this Court is whether the trial court correctly applied N.C. Gen. Stat. § 136-108 in dismissing Brown's breach of contract and rescission of deeds claim. We determine that the trial court was correct, and thus find no error.
    N.C. Gen. Stat. § 136-111 “provides a remedy for persons whose 'land or compensable interest therein' has been taken by the DOT when the DOT has not filed a complaint or declaration of taking.” National Advertising Co. v. N.C. Dept. of Transportation, 124 N.C. App. 620, 623, 478 S.E.2d 248, 249 (1996). N.C. Gen. Stat. § 136-111 provides that allegations “shall be deemed denied,” thus making it unnecessary for the DOT to file an answer. N.C. Gen. Stat. § 136-111 (2005). The statutory language further states that “[t]he procedure hereinbefore set out shall be followed for the purpose of determining all matters raised by the pleadings and the determination of just compensation.” N.C. Gen. Stat. § 136-111 (2005). The “hereinbefore set out” language references a hearing pursuant to N.C. Gen. Stat. § 136-108. See Lautenschlager v. Board of Transportation, 25 N.C. App. 228, 228-29, 212 S.E.2d 551, 551 (1975).
    At a hearing held pursuant to N.C. Gen. Stat. § 136-108, the trial court will resolve all issues, other than damages. Dep't of Transp. v. Rowe, 351 N.C. 172, 175, 521 S.E.2d 707, 709 (1999). N.C. Gen. Stat. § 136-108 provides: “[T]he judge, upon motion and 10 days' notice by either the Department of Transportation or the owner, shall . . . hear and determine any and all issues raised by the pleadings other than the issue of damages . . . .” N.C. Gen. Stat. § 136-108 (2005) (emphasis added). The “any and all issues” of § 136-108 include Brown's breach of contract and rescission of deeds claims. Therefore, because Brown did not seek any damages, the trial court had the authority, pursuant to § 136-108, to hear and dismiss every allegation in Brown's complaint.
    Brown argues that the trial court acted outside of its authority in dismissing the breach of contract and rescission of deeds actions. Brown cites Southern Furniture Co. v. Dept. of Transportation as precedent for this argument. 122 N.C. App. 113,468 S.E.2d 523 (1996). However, the issue in Southern Furniture Co. was whether the DOT had waived its sovereign immunity in entering into a contract with the plaintiff. Id. at 115, 468 S.E.2d at 525. By contrast, the issue in the case at hand is not sovereign immunity, but whether the trial court erred in dismissing all the allegations in Brown's complaint pursuant to N.C. Gen. Stat. § 136-108. This Court, in Southern Furniture Co., correctly relied on N.C. Gen. Stat. § 136-111 (1996) when it determined that the DOT had waived its sovereign immunity, and the plaintiff's breach of contract action was not barred.   (See footnote 1) Id. at 115, 468 S.E.2d at 525.
    Brown incorrectly asserts that Southern Furniture Co. stands for the proposition that a hearing held pursuant to N.C. Gen. Stat. § 136-108 is an inappropriate forum to hear a breach of contract and rescission of deeds claim. It should be clear that in Southern Furniture Co., this Court simply held that the DOT had waived its sovereign immunity when it entered into a contract with a private individual. Id. at 115, 468 S.E.2d at 525. However, nowhere in Southern Furniture Co. did this Court remove the trial court's power to decide any and all issues, except for damages, in a hearing pursuant to N.C. Gen. Stat. § 136-108, as Brown contends. Id. at 115, 468 S.E.2d at 525. Even though the DOT had waived its sovereign immunity in Southern Furniture Co., the trial court stillhad the authority pursuant to N.C. Gen. Stat. § 136-108 (1996)   (See footnote 2) to hear all issues presented by the plaintiff except for damages. Id. at 115, 468 S.E.2d at 525. In the instant case, once the motion for the section 136-108 hearing was filed and noticed for hearing, the trial court had jurisdiction to hold the hearing, receive evidence, and rule on the sufficiency of the allegations in the complaint. Brown did not testify at trial nor did he offer any evidence to support the alleged oral agreement between himself and the DOT. Therefore, the trial court's dismissal of all the allegations in Brown's complaint was proper.
    Affirmed.
    Judges MCGEE and STEPHENS concur.
    Report per 30(e).

Footnote: 1