Town of Midland v. Wayne
368 N.C. 55
| N.C. | 2015Background
- Wayne and Park Creek, LLC owned contiguous parcels subject to a preapproved 1997 Customized Development Plan (Park Creek), with infrastructure and two development phases largely completed; Wayne later conveyed his tracts to a revocable trust (defendant).
- In 2009 the Town of Midland filed condemnation actions to take a three-acre permanent easement and temporary construction easement for a gas pipeline and fiber optics across Wayne’s tracts; the Town did not name the LLC or list any taking of development rights.
- Defendant claimed the easement and adjacent construction staging areas impaired the approved subdivision plan, reduced developable area, lot yield, density, and flexibility, and asserted inverse condemnation for off-easement staging areas.
- The trial court found (1) a temporary inverse taking from off-easement staging areas, (2) defendant had a vested right (statutory and common law) to complete Park Creek under the 1997 plan, and (3) the vested right constituted a regulatory taking of the Wayne Tracts; it refused to treat the Wayne Tracts and LLC tract as a unified parcel for damages.
- The Court of Appeals affirmed the inverse-taking ruling, reversed the regulatory/separate taking conclusion, held loss of a vested right is not a separate item of damages but must be reflected in before-and-after valuation, and affirmed that unity of ownership did not exist between the trust and the LLC.
- The North Carolina Supreme Court affirmed the vested-right finding (on common-law grounds), held the trust and LLC satisfy unity-of-ownership/use for §40A-67 purposes given the joint vested development plan and Wayne’s controlling interest, and confirmed that loss of a vested right is not a separate element of damages but affects before-and-after valuation. The inverse-taking ruling was not disturbed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a vested right to complete Park Creek under the 1997 plan | Any statutory vested right lapsed or is inapplicable; common-law vested-right elements not satisfied on undeveloped tracts | Defendant made substantial expenditures in good-faith reliance on an approved, unexpired plan and thus has a common-law vested right to complete the subdivision | Court found common-law vested right exists (reasonable reliance, substantial expenditures, plan remained legally effective) |
| Unity of ownership/use for treating contiguous tracts as one parcel under §40A-67 | No unity of ownership because LLC owns adjacent tract and defendant only owns membership interest; Martin bars treating separately titled corporate land as unified | Vested, unified development plan and Wayne’s controlling interest create unity of use and sufficient unity of ownership | Unity of use and a modicum of ownership satisfied; Wayne’s control plus joint vested plan make the parcels a single tract for compensation purposes; Martin distinguished |
| Whether loss of the vested right is a separate compensable property interest | Town: the complaint properly identified land taken; any loss of development rights is reflected in diminution of land value, not a separate damage | Defendant: loss of vested right is a distinct property interest requiring specific identification and separate compensation | Loss of a vested right is not a separate compensable property interest; it is a quality of the land that must be reflected in the statutory before-and-after valuation |
| Inverse condemnation from off-easement construction staging areas | Town: no compensable taking outside the easement | Defendant: contractor staging areas outside easement caused a temporary inverse taking | Court of Appeals (affirmed) and Supreme Court left intact trial court finding of a temporary inverse taking for staging areas |
Key Cases Cited
- Town of Hillsborough v. Smith, 276 N.C. 48, 170 S.E.2d 904 (N.C. 1969) (common-law vested-right doctrine requires good-faith reliance and substantial expenditures)
- River Birch Assocs. v. City of Raleigh, 326 N.C. 100, 388 S.E.2d 538 (N.C. 1990) (preliminary/approved development plan is critical to vested-right analysis)
- Board of Transportation v. Martin, 296 N.C. 20, 249 S.E.2d 390 (N.C. 1978) (unity-of-ownership/use framework; separate-title issues caution against automatic unification)
- Barnes v. N.C. State Highway Comm’n, 250 N.C. 378, 109 S.E.2d 219 (N.C. 1959) (factors for treating contiguous tracts as a single tract: unity of ownership, use, and physical unity)
- Dep’t of Transp. v. M.M. Fowler, Inc., 361 N.C. 1, 637 S.E.2d 885 (N.C. 2006) (just compensation measured by before-and-after fair market value)
- Board of Transportation v. Jones, 297 N.C. 436, 255 S.E.2d 185 (N.C. 1979) (effects on remaining property admissible but not separate items of damages)