Dep't of Transp. v. Bloomsbury Ests., LLC

• Court: Supreme Court of North Carolina
• Decided: August 23, 2024
• Docket: 250PA21-2
• Status: Published

Opinion

IN THE SUPREME COURT OF NORTH CAROLINA

No. 250PA21-2

Filed 23 August 2024

DEPARTMENT OF TRANSPORTATION

v. BLOOMSBURY ESTATES, LLC,

BLOOMSBURY ESTATES CONDOMINIUM HOMEOWNERS’ ASSOCIATION, INC.

On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision

of the Court of Appeals, 281 N.C. App. 660 (2022), reversing in part and affirming in

part the order and final judgment entered on 3 March 2021 by Judge Vinston M.

Rozier Jr. in Superior Court, Wake County and remanding the case. Heard in the

Supreme Court on 31 October 2023.

No brief for plaintiff-appellee Department of Transportation.

Thomas, Ferguson & Beskind, LLP, by Jay H. Ferguson for defendant- appellant Bloomsbury Estates, LLC.

Law Firm Carolinas, by T. Keith Black and Harmony W. Taylor; and Rossabi Law Partners, by Gavin J. Reardon, for defendant-appellee Bloomsbury Estates Condominium Homeowners Association, Inc.

RIGGS, Justice.

This case asks us to examine the scope of issues that must be resolved within

an eminent domain action under N.C.G.S. §§ 136-103 to -121.1 when the subject DEP’T OF TRANSP. V BLOOMSBURY ESTS., LLC

Opinion of the Court

property is part of a condominium association. A complicating factor in this case is

that the property subject to the taking was owned by a condominium association and

the condominium declaration granted development rights for a portion of the property

to defendant-appellant, Bloomsbury Estates, LLC (the Developer). Therefore, both

the Developer and the Bloomsbury Estates Condominium Homeowners Association,

Inc. (the Association) were parties to the eminent domain action and had rights to

the property at the time of the taking.

Outside of this eminent domain action (the Taking Action), however, the

Developer and the Association initiated separate litigation regarding the validity of

the development rights and the interests of the property at the time of the taking. By

litigating the development rights separately—that is, to some extent, initiating

litigation of the interests in the land outside of the eminent domain action and, more

specifically, outside of the hearing pursuant to N.C.G.S. § 136-108—the Developer

and the Association created three proceedings with interconnected issues and now

ask this Court to determine whether the Taking Action can be resolved prior to the

resolution of the other claims in the separately-filed actions. The Developer argues

the other claims can be litigated separately and the trial court appropriately granted

the Developer’s motion for summary judgment, distributing the bulk of the

compensation from the taking to the Developer. In contrast, the Association contends

that issues in the other cases affect the valuation of the property on the date of the

taking and therefore must be decided before the compensation can be distributed.

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We hold that the trial court did not err in granting summary judgment prior

to resolution of the parties’ issues in other cases because those issues were not

pleaded in the Taking Action on appeal here. Summary judgment is proper when all

pleaded issues affecting the rights of the property as of the date of the taking are

resolved prior to final judgment. See Century Commc’n, Inc. v. Hous. Auth., 313 N.C.

143, 145 (1985) (“Summary judgment is appropriate only if the pleadings and other

materials before the trial judge show that there is no genuine issue of material fact

and that any party is entitled to a judgment as a matter of law.”). Section 136-108 of

the General Statutes establishes that, in a hearing under this statutory provision,

“the judge . . . shall . . . hear and determine any and all issues raised by the pleadings

other than the issue of damages, including, but not limited to, if controverted,

questions of necessary and proper parties, title to the land, interest taken, and area

taken.” N.C.G.S. § 136-108 (2023).

Here, the parties settled via consent judgment the total amount of damages

(just compensation), so there can be no dispute of material fact as to that matter. To

the extent there was a dispute over how the just compensation should be distributed

amongst the parties the trial court adopted the Association’s appraisal on relative

distribution and the Developer disclaims any dispute over that on appeal. Thus, the

matter was ripe for resolution on a motion for summary judgment.

At the hearing for determination of issues other than damages (the N.C.G.S.

§ 136-108 hearing) the trial court resolved controverted questions of title to the land

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and interest taken that were raised in the action’s pleadings. See generally id.

Specifically, although the eminent domain statutory scheme is comprehensive and

generally designed to avoid piecemeal litigation, the validity of the amendment at

issue in this case was determined in a separate action and the parties were estopped

then from relitigating that matter at the N.C.G.S. § 136-108 hearing.

Along a similar vein, we are generally hesitant to stay or interrupt all

condemnation proceedings until later-instituted parallel proceedings conclude. See

Watters v. Parrish, 252 N.C. 787, 791 (1960) (recognizing that a trial court’s decision

to hold one lawsuit in abeyance pending the outcome of another case will not be

disturbed absent an abuse of discretion). Here, where the legal question of the

parties’ relative interests in the taken property had already been settled, staying the

Taking Action for final resolution of all other litigation serves no purpose. For the

reasons articulated below, we thus reverse the Court of Appeals’ decision.

I. Factual & Procedural Background

A. Factual Background

The Bloomsbury Estates Condominium Development is situated on a tract of

land in downtown Raleigh, adjacent to Raleigh Union Station. Development of the

property began in 2006 when the Developer received approval from the City of

Raleigh Planning Commission and City Council to build two phases of condominium

buildings on the property. Phase I consisted of a building with fifty-six condominiums

and Phase II consisted of an additional building with an additional fifty-four

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condominiums and amenities to serve both buildings, including a proposed pool and

fitness center. The Developer built the Phase I building and sold the fifty-six

condominiums in the Phase I building before the Department of Transportation

(DOT) initiated the Taking Action on 27 July 2015. In the Taking Action, the DOT

permanently took approximately one-third of the Phase II land for a railroad right of

way and temporarily took an additional quarter acre for a construction easement to

expand the Raleigh Union Station. The land the DOT took coincided with the

planned location of the Phase II building, preventing the construction of the Phase II

building until the temporary easement ended on 13 September 2017, and affecting

the cost of construction for the Phase II building.

After Phase I was completed but before the Taking Action was commenced, the

Developer recorded a Declaration of Condominium (Declaration) for the property

pursuant to the North Carolina Condominium Act, N.C.G.S. § 47C-2-101 (2023),

which legally established the Association on 13 July 2009. The Declaration

transferred ownership of the property to the Association but, in this case, gave the

Developer control over the Association and reserved the Developer’s right “[t]o

complete, within five years of the date of recordation of this Declaration of

Condominium, any and all improvements indicated on the plats and plans up to a

maximum of 140 Units.” The Developer recorded multiple amendments to the

Declaration, ultimately recording the Fifth Amendment on 8 March 2013. The Fifth

Amendment, provided for, inter alia, transferring control of the Association from the

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Developer to the unit owners and extending the Developer’s right to complete Phase

II until 13 July 2017. The Fifth Amendment stated that the amendment was agreed

to by the Developer and at least sixty-seven percent of the unit owners; the Fifth

Amendment was recorded on 8 March 2013.

On 27 July 2015, when the DOT initiated the taking, the Developer had not

begun construction of the Phase II building and the taking prevented the construction

of the Phase II building until after the DOT returned the property. At the time of the

taking, the DOT anticipated keeping the temporary construction easement beyond 13

July 2017, the date when the Developer’s rights to develop Phase II expired under

the Fifth Amendment. The DOT ultimately terminated the temporary easement and

returned control of the land to the Developer and the Association on 13 September

2017. When the DOT returned the property, the Developer’s right to construct Phase

II under the Fifth Amendment had expired.

The DOT initiated the Taking Action by filing a declaration of taking with an

estimate of the just compensation for the taking and deposited the sum of $779,050

with the clerk of court as required by N.C.G.S. § 136-103. The DOT’s filings

referenced the Declaration and all five amendments as liens and encumbrances

applicable to the property. The Developer and the Association jointly filed a

responsive pleading arguing that the amount was grossly insufficient. This joint

responsive pleading did not indicate any dispute over the validity of the Fifth

Amendment or how the compensation would be apportioned between the parties.

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After mediation in June of 2017, the DOT, the Developer, and the Association

entered a consent judgment establishing that $3,950,000 was just compensation for

the entire taking. The consent judgment did not establish how the just compensation

would be divided between the Developer and the Association. Once the DOT

deposited the full sum with the clerk of court, the DOT’s involvement in the litigation

ended.

During the pendency of the Taking Action, the Developer and the Association

each filed a complaint against the other party regarding rights to the property. In

the first of the related lawsuits the Developer filed a complaint against the

Association seeking, inter alia, equitable reformation of the Fifth Amendment to

allow the Developer additional time to develop Phase II of the property (Developer’s

Action). The Association responded to this claim asserting, among other things, that

“the time limit expired within which development rights shall have been exercised

pursuant to the Declaration and North Carolina law, and the time limit cannot be

extended as a matter of North Carolina Law.” The Association filed a separate

complaint against the Developer shortly thereafter alleging twelve causes of action

including, inter alia, a request for declaratory judgment to determine the Developer’s

rights to develop Phase II (Association’s Action).

In the Developer’s Action, the Developer and the Association litigated the

validity of the Fifth Amendment in a hearing held on 28 August 2017. The trial court

in that action granted partial summary judgment in favor of the Developer by finding

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the one-year statute of limitations in N.C.G.S. § 47C-2-117(b) barred the Association

from challenging the validity of the Fifth Amendment. The trial court concluded the

Fifth Amendment was valid and the “parties [were] bound by the rights and

obligations contained therein.” Because the Fifth Amendment was valid, the

Developer held the right to construct the Phase II building. In other words, at the

time the DOT took control of the property, the Developer held valid rights even

though those rights had expired by the time of the return of the property under the

temporary easement.

Subsequently, the Developer filed a motion for a N.C.G.S. § 136-108 hearing in

the Taking Action. In that motion, the Developer contended the parties were bound

by the trial court’s ruling in the Developer’s Action, and the Fifth Amendment

controlled distribution of the compensation. The trial court in the Taking Action held

a hearing in April 2018 and entered an order concluding that the Association was

precluded from relitigating the validity of the Fifth Amendment. Determining that

estoppel principles required that the ruling in the Developer’s Action bound the court

in the Taking Action, the trial court held that the Fifth Amendment was valid and

that, as of the time of the taking, the Developer held a valid right to develop Phase II.

Subsequently, on 13 November 2019, the Association moved to stay the distribution

of the funds pending resolution of the other claims, which would allow the Association

the right to appeal the validity of the Fifth Amendment. Additionally, the Association

requested consolidation of the claims. The trial court denied the motion to stay the

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matter on 31 December 2019.

After the N.C.G.S. § 136-108 hearing in April of 2018, the Developer and the

Association commissioned appraisals to provide opinions on the appropriate

apportionment of the settlement. After the appraisals were complete, the Developer

moved for summary judgment on 13 July 2020, requesting distribution of the taking

compensation according to its appraisal. The Association, referencing the interplay

between the claims, again asked the trial court to stay the action and to consolidate

the claims. The Association argued that if, on appeal in the Developer’s Action, the

Fifth Amendment was found to be invalid, the conclusions of the appraisers would be

invalid. The Developer argued that the appraisers agreed—albeit, premised upon the

validity of the Fifth Amendment—that the majority of the value of the property taken

resided in the development rights. If the Fifth Amendment was not valid, the

appraisers for the Association reported that the compensation for the taking should

be paid entirely to the Association. After a hearing on 22 July 2020, the trial court

granted the motion for summary judgment in favor of the Developer pursuant to the

valuation of property rights provided by the Association’s appraiser, not the valuation

set by the Developer’s appraiser.1 The trial court also consolidated all three actions.

The Association filed a motion to amend the summary judgment order and requested

the trial court’s reconsideration. After a hearing on this motion, the trial court

1 Again, the Developer does not contest on appeal the use of the Association’s appraisal.

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amended the order by decoupling the Taking Action from the other two actions but

otherwise left the order untouched.

The trial court in the Taking Action ultimately entered an order and final

judgment concluding that the loss to the Developer from the taking, based upon the

Association’s appraisal, was $3,350,000 and the remainder of the compensation

should be assigned to the Association. The trial court found that under N.C.G.S.

§ 47C-1-107, the Developer must be fully compensated for the loss of the development

rights first and any remaining funds should be distributed to the Association. See

N.C.G.S. § 47C-1-107 (2023). After adjusting the settlement amount based on

prejudgment interest, attorneys’ fees, and property taxes, the trial court ordered that

$2,929,225 be distributed to the Developer and $54,410 to the Association. The

settlement funds were distributed to the parties pursuant to this order.

B. Procedural Background

On appeal, a unanimous panel of the Court of Appeals held that the Developer

was not entitled to summary judgment and distribution of settlement funds. Dep’t of

Transp. v. Bloomsbury Ests., LLC, 281 N.C. App. 660, 669 (2022). The Court of

Appeals held that the issues presented in the Developer’s Action and the Association’s

Action represented material facts affecting the apportionment of the settlement funds

between the Developer and the Association in the Taking Action. Id. at 667–68.

Additionally, the Court of Appeals held that because the valuation involves the

opinion of appraisers, a jury should determine the credibility of each appraiser. Id.

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at 668. The Court of Appeals affirmed the trial court’s order regarding the

consolidation of the actions but reversed the trial court’s summary judgment order

and remanded for further proceedings. The Developer filed a petition for

discretionary review, and we allowed it.

II. Analysis

The key issue in this case is whether the trial court appropriately resolved,

under its authority pursuant to N.C.G.S. §§ 136-108 and -117, the interests in the

taken property and the allocation of the just compensation settled in the consent

judgment, such that summary judgment and distribution of just compensation was

proper. The Developer argues that the validity of the Fifth Amendment was the only

issue that affected the rights to the property on the date of the taking and, therefore,

summary judgment and the distribution of compensation was appropriate before the

resolution of the other claims. The Developer argues, that to the extent that the

Association contends that any issues in the other actions affect the value of the

property on the date of the taking, the Association had a duty to present those issues

at the N.C.G.S. § 136-108 hearing. The Association provides multiple reasons that

the other actions must be resolved before the compensation is distributed. However,

at the core of its arguments is the correct but ultimately ancillary argument that the

Developer should not be allowed to “double dip” by recouping essentially all of the

just compensation for the loss of its development rights and then also seek to

equitably reform the Fifth Amendment to restore and extend its development rights

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after the taking. Recognizing the inequity in the Developer’s position, we nonetheless

hold, after consideration of the record and the other claims in the matter at hand,

that the trial court properly granted summary judgment in favor of the Developer

after resolving all issues presented for resolution at the N.C.G.S. § 136-108 hearing,

and we trust a later trial court to weigh the Developer’s future development rights in

equity.

Fundamental to the “right to take private property for public use” is the

requirement to pay “fair compensation for the property.” Town of Morganton v.

Hutton & Bourbonnais Co., 251 N.C. 531, 533 (1960). When the public entity only

takes a portion of the property, “just compensation consists of the difference between

the fair market value of the entire tract immediately before the taking . . . and the

fair market value of the land remaining immediately after the taking.” Dep’t of

Transp. v. M.M. Fowler, Inc., 361 N.C. 1, 5 (2006). In a similar vein, when the

property taken has been approved for development, the value of those development

rights affects the value of the taken property. See Town of Midland v. Wayne, 368

N.C. 55, 66 (2015) (recognizing that approved development rights are “an important

feature of the condemned land” affecting the measure of damages).

Typically a judge or jury determines the value of the property in an eminent

domain action. N.C.G.S. § 136-112 (2023). In this case, the value of the property was

agreed upon in a consent judgment. The controversy at hand centers on the validity

of the Fifth Amendment—an issue answering the question of which party held the

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development rights to the property when the DOT instituted the Taking Action—

outside of this action. Importantly, while the Developer’s Action is an action

collateral to the Taking Action, the legal question in that matter was resolved prior

to the N.C.G.S. § 136-108 hearing.

Principles of res judicata preclude “a second suit based on the same cause of

action between the same parties.” State ex rel. Tucker v. Frinzi, 344 N.C. 411, 413

(1996) (cleaned up). The resolution of the Fifth Amendment’s validity in the

Developer’s Action led the trial court in this matter to hold that validity of the Fifth

Amendment could not be relitigated in this action. However, the trial court in the

Developer’s Action has not yet decided whether the Fifth Amendment can be

equitably reformed to allow the Developer to develop the property after the taking

was justly compensated and when the temporary easement ended. The resolution of

the equitable reformation issue could affect which party held the development rights

when the condemned land was returned to the parties. Instead, the trial court in the

Taking Action—assuming no equitable reformation—held that the Developer lost

development rights due to the taking and distributed compensation for the loss of

those rights to the Developer. Plainly, to the extent the Developer wishes to press

the undecided equitable reformation issue in a collateral action, the fact that the

Developer has already been fully compensated for the loss of the development rights

in the Taking Action would be a relevant consideration in equity. See Surratt v. Chas.

E. Lambeth Ins. Agency, 244 N.C. 121, 131 (1956) (recognizing that when there are

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inconsistent rights or remedies of which a party may avail himself, a choice of one is

held to be an election not to pursue the other).

Because the trial court resolved all issues related to the interests in the

property and the just compensation was settled in a consent judgment, we hold that

the trial court properly granted summary judgment in favor of the Developer in the

Taking Action.

A. Eminent Domain Actions Generally

“The right to take private property for public use, the power of eminent domain,

is one of the prerogatives of a sovereign state. . . . Its exercise, however, is limited by

the constitutional requirements of due process and payment of just compensation for

property condemned.” State v. Core Banks Club Props., Inc., 275 N.C. 328, 334 (1969).

Both the U.S. Constitution and the North Carolina Constitution require due process

and just compensation when a public entity uses its eminent domain power to take

property. U.S. Const. amend. XIV, § 1 (“[N]or shall any State deprive any person of

life, liberty, or property, without due process of law . . . .”); N.C. Const. art. I, § 19

(“[N]o person shall be . . . deprived of his . . . property, but by the law of the land.”).

The General Assembly vested in the DOT the power of eminent domain and

provided procedures for exercising this power in N.C.G.S. §§ 136-103 to -121.1. See

N.C.G.S. § 136-19(a) (2023) (“The Department of Transportation is vested with the

power to acquire either in the nature of an appropriate easement or in fee simple such

rights-of-way and title to such land . . . as it may deem necessary and suitable . . . to

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enable it to properly prosecute the work, by purchase, donation, or condemnation, in

the manner hereinafter set out.”). When the DOT exercises its eminent domain

power, it must provide just compensation to the “person owning said property or any

compensable interest therein at the time of the filing of the complaint.”

N.C.G.S. § 136-104 (2023). Just compensation is defined as “the market value of

property at the time of the taking, unaffected by any subsequent change in the

condition of the property.” W. Carolina Power Co. v. Hayes, 193 N.C. 104, 107 (1927)

(cleaned up) (emphasis added).

When a partial tract of land is taken, the measure of damages, or just

compensation, “shall be the difference between the fair market value of the entire

tract immediately prior to said taking and the fair market value of the remainder

immediately after said taking, with consideration being given to any special or

general benefits resulting from the utilization of the part taken for highway

purposes.” N.C.G.S. § 136-112(1) (2023); see also Barnes v. N.C. State Highway

Comm’n, 250 N.C. 378, 387 (1959) (“In determining the value of land appropriated

for public purposes, the same considerations are to be regarded as in a sale of property

between private parties. The inquiry in such cases must be, what is the property

worth in the market, viewed not merely with reference to the uses to which it is at

the time applied, but with reference to the uses to which it is plainly adapted—that

is to say, what is it worth from its availability for valuable uses?” (quoting Carolina-

Tennessee Power Co. v. Hiawassee River Power Co., 186 N.C. 179, 183–84 (1923)).

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In a DOT condemnation action, the General Assembly created a process for

resolving questions related to the title of the land taken, interest in the land, proper

parties, and all issues other than damages in N.C.G.S. § 136-108. The statute

provides for a hearing to “eliminate from the jury trial any question as to what land

[the State] is condemning and any question as to its title.” N.C. State Highway

Comm’n v. Nuckles, 271 N.C. 1, 14 (1967). The statute provides the following:

After the filing of the plat, the judge, upon motion and 10 days’ notice by either the Department of Transportation or the owner, shall, either in or out of term, hear and determine any and all issues raised by the pleadings other than the issue of damages, including, but not limited to, if controverted, questions of necessary and proper parties, title to the land, interest taken, and area taken.

N.C.G.S. § 136-108. It is the responsibility of the parties to argue all issues of which

they are aware at the N.C.G.S. § 136-108 hearing. See City of Wilson v. Batten Fam.,

L.L.C., 226 N.C. App. 434, 439 (2013) (“[A]t a minimum, a party must argue all issues

of which it is aware, or reasonably should be aware, in a N.C.G.S. § 136-108

hearing.”).

After the trial court resolves any issues related to the title of or interests in the

property that was taken, then, under N.C.G.S. § 136-117, the trial court may

determine how the settlement should be distributed:

If there are adverse and conflicting claimants to the deposit made into the court by the Department of Transportation or the additional amount determined as just compensation, on which final judgment is entered in said action, the judge may direct the full amount

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determined to be paid into said court by the Department of Transportation and may retain said cause for determination of who is entitled to said moneys and may by further order in the cause direct to whom the same shall be paid and may in its discretion order a reference to ascertain the facts on which such determination and order are to be made.

N.C.G.S. § 136-117 (2023) (emphasis added). Generally, when there are conflicting

claims as to how the compensation for the property taken by eminent domain should

be apportioned, “a proper method of fixing the value of, or damage to, each interest

or estate, is to determine the value of, or damage to, the property as a whole, and

then to apportion the same among the several owners according to their respective

interests or estates.” Barnes v. N.C. State Highway Comm’n, 257 N.C. 507, 520

(1962).

With this general framework for an eminent domain action in mind, we now

turn to the process employed in this case.

B. Resolution of this Eminent Domain Action

Initially, the Developer and the Association jointly argued that the DOT’s

estimated compensation, which did not include any value for development rights, was

“grossly inadequate.” A party’s development rights in property, this Court has held,

is an interest affected by condemnation of the property, and the right of development

enhances the value of the property before the taking. See Wayne, 368 N.C. at 56

(holding that owners of an undeveloped portion of a subdivision had vested rights to

complete the subdivision and the vested rights enhanced the value of the property

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before the taking). Although the DOT originally valued the land, including damages

caused by the temporary taking, at $779,050, the Developer, the Association, and the

DOT agreed after mediation that the just compensation “for any and all claims for

interests and costs; for any and all damages . . . ; and for the past and future use” was

$3,950,000.

The Developer and the Association signed the consent judgment agreeing to

the total valuation without agreeing between themselves on the apportionment of

this compensation. The consent judgment which the Developer and the Association

signed indicated that “the title to the property is not in dispute” and is “subject only

to such liens and encumbrances as were set forth in Exhibit ‘A’ of the [c]omplaint and

[d]eclaration of [t]aking.” Exhibit “A” referenced the Declaration and all five

amendments to the Declaration.

After the entry of this consent judgment, but before any N.C.G.S. § 136-108

hearing in the Taking Action, the Developer filed a collateral action seeking a

declaratory judgment that the Developer “retains the right to develop Phase II until

[13 July 2017], pursuant to the Fifth Amendment,” and requesting reformation of the

Fifth Amendment “to extend the time for [the Developer] to develop Phase II for a

period of time equal to the time that the . . . DOT made it impossible for [the

Developer] to do so.” The Association filed a separate collateral complaint which

alleged, inter alia, that “[t]he Fifth Amendment was not approved with unanimous

consent of the unit owners.” The Association did not notice the N.C.G.S. § 136-108

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hearing prior to the resolution of the validity of the Fifth Amendment in the

Developer’s Action, although it could have. The trial court, in the Developer’s action,

held the Fifth Amendment was valid, establishing that the Developer held

development rights at the time of the taking and those rights expired during the time

that the DOT controlled a temporary easement on the property. The Association

appealed that ruling to the Court of Appeals but then voluntarily withdrew the appeal

on 5 January 2018. Bloomsbury Ests., LLC, 281 N.C. App. at 664. The Developer

then asked the trial court in this action to adopt that ruling, asserting that the

doctrine of collateral estoppel precluded the Association from relitigating the issue.

See generally Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1, 14–15 (2004)

(acknowledging that issue preclusion estops a party from relitigating an issue in a

later action after a final judgment has been entered on the merits in a prior judicial

proceeding).

Even though the order finding the Fifth Amendment valid in the Developer’s

Action was an interlocutory order, the trial court in the Taking Action concluded that

the “issue of the validity of the Fifth Amendment was fully litigated in [the

Developer’s] [A]ction and the [Association] enjoyed a full and fair opportunity to

litigate this issue.” In a condemnation action, the purpose of the N.C.G.S. § 136-108

hearing is to eliminate “any question as to what land the [DOT] is condemning and

any question as to its title.” Nuckles, 271 N.C. at 14; see, e.g., DeHart v. N.C. Dep’t.

of Transp., 195 N.C. App. 417, 421–22 (2009) (resolving in the N.C.G.S. § 136-108

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hearing an issue of whether a taking occurred). After the N.C.G.S. § 136-108 hearing,

the trial court concluded that the “issue of the validity of the Fifth Amendment was

a necessary ruling in [the Developer’s Action] and therefore, the Fifth Amendment

“is valid, and the parties are bound by the rights and obligations contained therein.”2

However, neither the Developer nor the Association requested that the trial

court address the issue of equitable reformation of the Fifth Amendment at the

N.C.G.S. § 136-108 hearing. The Developer argued that such a request would not

have been appropriate because any equitable reformation would not affect the value

of the property on the date of the taking, thus making any determination of equitable

reformation outside the scope of a N.C.G.S. § 136-108 hearing. However, with a

temporary construction easement, the total loss due to the taking is affected by the

value or condition of the property when it is returned to the owner. If the right to

develop the property existed when the DOT took the land and was extinguished

before the DOT returned the property, then the damages associated with the taking

include the loss of those rights. See Williams v. State Highway Comm’n, 252 N.C.

514, 517 (1960) (recognizing that in calculating damages, “all of the capabilities of the

property, and all of the uses to which it may be applied, or for which it is adapted,

2 The Association appealed this ruling to the Court of Appeals. The Court of Appeals dismissed the appeal as interlocutory since the Association “failed to meet its burden in its principal brief to show why it affects a substantial right or to demonstrate what substantial rights would be jeopardized absent immediate review by this Court.” Dep’t of Transp. v. Bloomsbury Ests., LLC, No. COA18-773, slip op. at 15–16 (N.C. Ct. App. Mar. 5, 2019) (unpublished). That decision was not appealed to this Court.

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which affect its value in the market are to be considered, and not merely the condition

it is in at the time and the use to which it is then applied by the owner” (cleaned up)).

While we do recognize that the Developer was fully compensated for the loss of its

development rights, we decline the Association’s invitation to rule in this case on the

equities of equitable reformation—such a determination was outside the scope of the

N.C.G.S. § 136-108 hearing, and a trial court will undoubtedly weigh the equities

taking into account this decision.

The legislature created this process “to eliminate from the jury trial any

question as to what land the [DOT] is condemning,” Dep’t of Transp. v. Rowe, 351

N.C. 172, 175–76 (1999) (quoting Nuckles, 271 N.C. at 14), and “title to the land,

interest taken, and area taken,” N.C.G.S. § 136-108. Principles of res judicata apply

to matters that have been fully litigated. See Gibbs v. Higgins, 215 N.C. 201, 204–05

(1939) (“The plea of res [ ]judicata applies, except in special cases, not only to the

points upon which the court was required by the parties to form an opinion and

pronounce a judgment, but to every point which properly belonged to the subject in

litigation and which the parties, exercising reasonable diligence, might have brought

forward at the time and determined respecting it.” (cleaned up)).

Because the parties in the Developer’s Action litigated the validity of the Fifth

Amendment, we conclude the trial court in this Taking Action did not err in

concluding that the Fifth Amendment was valid, and the parties were bound by the

rights and obligations of the Fifth Amendment.

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C. Summary Judgment

At the conclusion of the N.C.G.S. § 136-108 hearing, all issues except how the

compensation would be apportioned were resolved. Both parties previously agreed—

by consent order—that the total damages for the taking were $3,950,000. The sole

remaining issue was the appropriation of the compensation between the parties. In

eminent domain proceedings, N.C.G.S. § 136-117 gives the trial court the discretion

to “order a reference”—in this case, appraisals— “to ascertain the facts” as to “who is

entitled to said moneys.” N.C.G.S. § 136-117; cf. Va. Elec. & Power Co. v. Tillett, 316

N.C. 73, 77–78 (1986) (highlighting that the Rules of Civil Procedure are applicable

in eminent domain proceedings to the extent that the rules do not conflict with

procedures identified in the eminent domain statutes).

We review summary judgment de novo. Forbis v. Neal, 361 N.C. 519, 524

(2007). Summary judgment is appropriate only when the record shows that “there is

no genuine issue as to any material fact and that any party is entitled to a judgment

as a matter of law.” In re Will of Jones, 362 N.C. 569, 573 (2008) (quoting Forbis, 361

N.C. at 523–24). “An issue is material if the facts alleged would constitute a legal

defense, or would affect the result of the action, or if its resolution would prevent the

party against whom it is resolved from prevailing in the action.” Koontz v. City of

Winston-Salem, 280 N.C. 513, 518 (1972). “When considering a motion for summary

judgment, the trial judge must view the presented evidence in a light most favorable

to the nonmoving party.” Dalton v. Camp, 353 N.C. 647, 651 (2001).

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At summary judgment, the appraisers for the Developer and the Association

agreed that because the Fifth Amendment was valid, the Developer should be fully

compensated for the development rights, which—according to the Association’s

appraisal—were worth $3,350,000. The Association’s appraisal “determined the loss

to the [Developer] as a result of the partial taking, as of the date of the taking was

$3,350,000 . . . and thus the remainder of the recovery ($600,000) should be assigned

to the Association.” At the time of the summary judgment hearing, only $3,055,102

of the compensation remained due to disbursements for attorneys’ fees and costs. The

Association argued that there were material issues of fact precluding an entry of

summary judgment, i.e., whether the Association owned the property and the

development rights and the proper allocation of the eminent domain proceeds. The

trial court granted summary judgment and apportioned the remaining funds between

the parties based upon percentages from the Association’s appraisal. Because the

Fifth Amendment was found to be valid and because the appraisers agreed—based

upon the validity of the Fifth Amendment—that the Developer was entitled to

compensation for loss of the development rights, there was no dispute of material

facts. Therefore, the trial court did not err in granting summary judgment in favor

of the Developer. Further the trial court did not err in exercising its discretion under

N.C.G.S. § 136-117 to distribute the funds in a manner that compensated the

Developer for the loss of the development right and distributed the residual funds to

the Association.

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The Court of Appeals held that summary judgment was not proper, and that

“a jury should be allowed to determine the credibility of each appraiser and examine

their opinions of value.” Bloomsbury Ests., LLC, 281 N.C. App. at 668. However, the

Court of Appeals did not address the fact that the appraisers agreed that the

Developer should be compensated for the loss of the development rights.

Additionally, the plain language of N.C.G.S. § 136-117 allows the trial court the

discretion to order an appraisal that the trial court can use to determine the

apportionment of the compensation. See N.C.G.S. § 136-117; see also State Highway

Comm’n v. Cape, 49 N.C. App. 137, 140–41 (1980) (noting in the context of an eminent

domain proceeding related to multiple tracts of land that when the total

compensation is apportioned between distinct tracts of land, the trial court can

apportion the damages among several owners of a single tract according to their

respective interests and estates). The reference ordered by the trial court—the

appraisals—along with the Developer’s concession to use of the Association’s

appraisal established no dispute that the Developer was entitled to the compensation

associated with the loss of development rights. The trial court adopted the

Association’s appraisal for the value of those rights as allowed by N.C.G.S. § 136-117.

The Court of Appeals erred in concluding that the trial court did not have the

authority to do so.

III. Conclusion

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In sum, the trial court in the Taking Action appropriately granted summary

judgment after resolving all issues pleaded and argued at the N.C.G.S. § 136-108

hearing related to title and the interests taken as of the date of the taking.

Accordingly, we reverse the decision of the Court of Appeals.

REVERSED.

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