A fairly short one from the North Carolina Court of Appeals, but well worth your time to read.
Mata v. N.C. Dep't of Transportation, No. COA23-1140-1 (July 16, 2024) is the latest in the "Map Act" takings cases that we have long covered. There, N.C. legislature adopted a statute that identified future highway corridors and then "restricted [owners'] fundamental rights to improve, develop, and subdivide their property for an unlimited period of time." Kirby v. N.C. Dep’t of Transp., 239 N.C. App. 345, 769 S.E.2d 218 (2015), aff’d, 368 N.C. 847, 786 S.E.2d 919 (2016). The Map Act also classified these properties as eligible for a 20% to 50% reduction of the appraised value for property tax purposes.
In Kirby, the North Carolina Supreme Court held that the restrictions the Act imposed amounted to a taking. In response, the N.C. legislature rescinded the Map Act.
The Matas own property that was burdened by the Map Act restrictions from the time of the adoption of the Act until it was repealed (August 1996 to July 2016). The question in the case is calculation of the amount of just compensation that NCDOT must provide.
First, the court rejected NCDOT's argument that the taking here was permanent and not temporary. True, Kirby held that the Map Act restricted owners' uses "for an unlimited period of time," but that was before the lege repealed the statute. Slip op. at 9-10. As the court noted:
The Map Act restrictions dates in effect were properly defined from DOT’s recording the highway corridors on 6 August 1996 until the corridors were rescinded as of 11 July 2016. The taking was no longer “indefinite.” The trial court correctly defined and concluded the dates above are the operative dates of Plaintiffs’ alleged temporary taking.
Slip op. at 10.
The court next rejected the trial court's conclusion that rental value was the proper way to determine just compensation for the temporary taking. But wait, you say, isn't rental value the time-tested method of determining just compensation for temporary takings? Yes, for sure.
But here, the court of appeals concluded that in an earlier case, Chappell v. N.C. Dep’t of Transp., 374 N.C. 273, 841 S.E.2d 513 (2020) (which we summed up here), the court held the "before and after" method was the right way. Consequently, the court of appeals held:
The damages are calculated based upon the diminution in value of Plaintiffs’ property during said period. Id. The trial court erred in ordering a calculation based on “rental value,” as the proper measure is any proven diminution in value during the relevant period “taking into account all pertinent factors” to include the reduction in accessed [sic] ad valorem taxes Plaintiffs benefited from during the relevant temporary taking. Id.
Slip op. at 10-11.
This strike us as odd. It's one thing to say that as a general proposition compensation for a temporary taking is calculated as the "diminution of value during the relevant period 'taking into account all pertinent factors'[,]" and another entirely to reject the trial court's conclusion that rental value is a way to make the determination apparently because it didn't "show its work" and invoke the magic words. On remand, would it pass muster for the trial court to conclude, "After taking into account all pertinent factors, the court concludes that rental value to be the proper measure of damages in this temporary taking"? We'd think so.
We suspect the court of appeals isn't reading Chappell properly. To us, that case did not hold that "all pertinent factors" are words that must be expressly invoked, but instead concluded that there are multiple ways to value temporary takings, as long as those methods take into account all pertinent factors (as all valuations must do, no?). It hardly seems like error here for the trial court to have reached the conclusion (after, we assume, assessing all pertinent factors that go into an expert's valuation opinion) that indeed, rental value is the most accurate way to ensure the owner has been put in a position he would have been had his property not been taken.
Will there be more? Stay tuned.
Mata v. N.C. Dep't of Transportation, No. COA23-1140-1 (N.C. App. July 16, 2024)
