You know the deal: property owner is sued by government to condemn her land. The owner believes that action doesn’t cover all of the property or interests that the government is actually taking. What to do next? Counterclaim in the eminent domain action, or separate inverse case?
There’s no one answer, and different jurisdictions have different requirements.
In Sanders v. N.C. Dep’t of Transportation, No. 87PA24-1 (Dec. 12, 2025), the North Carolina Supreme Court came down on the side of counterclaim in the condemnation action.
This is another one of those “Map Act” takings cases, so the facts are convoluted as in many of those cases. In Kirby v. NCDOT, the North Carolina Supreme Court held that NCDOT designating properties for possible future acquisition — which had the effect of “limiting the ability of property owners to improve their parcels and alerting potential buyers to the possibility that the land could be taken for roadway projects[,]” was a taking. Slip op. at 3.
In 1992, NCDOT recorded a map for the Fayetteville Outer Loop Project which covered 92 acres of Sanders’s property, and ten years later it filed a condemnation complaint and quick take to condemn 9 acres in fee simple and an easement over an additional 6 acres. Slip op. at 4. “Although unrelated to the Fayetteville Outer Loop Project, this taking included some of plaintiff’s property covered by the 1992 map.” Id. This case got settled with the court entering a consent judgment.
A few years later, NCDOT recorded another map, also related to the Fayetteville project. This map covered an additional 20 acres of Sanders’s land. Two years later, a second NCDOT condemnation action, by which it sought to acquire 101 acres in fee simple, and an easement on 3 acres. This case also settled with a consent judgment.
Next, the NC legislature then repealed the Map Act in response to Kirby. Then, Sanders instituted an inverse action in 2018, alleging that the consent judgments didn’t adequately compensate him for the Map Act restrictions on his land. Slip op. at 6. “[A]ccording to the complaint, NCDOT still owed plaintiff just compensation for the restrictions placed on his property by the 1992 and 2006 maps.” Slip op. at 6-7.
The trial court rejected NCDOT’s claim the action was res judicata because Sanders could have, and therefore must have, raised these claims in NCDOT’s condemnation actions. The court of appeals affirmed.
The North Carolina Supreme Court took up the case, and held that the owner needed to have raised his 2018 inverse claim in NCDOT’s 2010 direct condemnation action which sought to take a part of Sanders’s property. The court based this conclusion on the language of a North Carolina statute of limitations, statute which allows a claim for inverse “within 24 months of the date of the taking … or the completion of the project involving the taking, which shall occur later …” Slip op at 11. The court concluded that the statute’s description of the affected property by the government action which triggers the owner’s claim means NCDOT’s condemnation of any part of Sanders’s s land, and is not limited to just the land being condemned.
the court based this reasoning on North Carolina’s statutory requirement to value property in these cases by the before-and-after method:
Here, of course, the 2010 direct action resulted in a partial taking of plaintiff’s property, so subsection (1) would have governed the calculation of plaintiff’s damages. Map Act restrictions encumbered part of plaintiff’s property immediately before the 2010 direct action and continued to encumber 28.041 acres of plaintiff’s remaining property immediately after the 2010 condemnation. In his complaint, plaintiff alleged that the restrictions damaged his property by “severely impact[ing] [its] use, marketability, and value.” When accepted as true, as the allegations in a complaint must be when a court reviews a Rule 12(b)(6) dismissal motion, this allegation establishes that Map Act restrictions negatively affected the fair market value of plaintiff’s property both immediately before and after the 2010 taking. It follows that a court could not have properly determined plaintiff’s damages in the 2010 direct action without taking those restrictions into account. The restrictions were thus “pertinent to” the 2010 direct action, and N.C.G.S. § 136-106 required plaintiff to include them in a timely answer if he wanted them to be part of the damages calculation.
Slip op. at 14-15.
In short, the court held that NCDOT’s condemning a portion of Sanders’s land in 2010 didn’t just affect the portion taken, but may have damaged the other portions. In that case, Sanders needed to sue then, and not wait until later. Again, this all turns on how the term “affected property” in the statute is viewed. Sanders viewed it as the property being affirmatively condemned, while NCDOT and the NC Supreme Court concluded it was all of Sanders’s land.
The court also noted that this logic might also compel the conclusion that Sanders needed to sue for inverse even earlier, back in 2002 when NCDOT condemned a portion of his land. But the court didn’t so rule because in this case, NCDOT was content to limit its arguments to the 2010 condemnation.
What does this mean for those of us outside of North Carolina’s borders? We think it suggests the “sue early, sue often” approach is a good one, if your jurisdiction’s approach to this issue is at all unclear. As we noted above, some jurisdictions say that an inverse claim is a mandatory counterclaim to any straight taking complaint. While others allow an owner to make the claim via a separate, timely lawsuit for inverse.
If your rules are not clear, avoid the risk of losing a statute of limitations argument and bring it at the earliest possible opportunity.
Sanders v. N.C. Dep’t of Transportation, No. 87PA24-1 (N.C. Dec. 12, 2025)