Opinion
No. COA15-740
05-17-2016
TOWN OF CARY, Plaintiff, v. SYDNEY DUANE SOUTHERLAND, JR., and LINDA L. SOUTHERLAND, Defendants.
Brown & Bunch, PLLC, by LeAnn Nease Brown, for Plaintiff. Law Office of James C. White, P.C., by James C. White and Michelle M. Walker, for Defendants.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. Wake County, No. 13 CVS 4896 Appeal by Defendants from order entered 9 January 2015 by Judge Paul C. Ridgeway in Wake County Superior Court. Heard in the Court of Appeals 2 December 2015. Brown & Bunch, PLLC, by LeAnn Nease Brown, for Plaintiff. Law Office of James C. White, P.C., by James C. White and Michelle M. Walker, for Defendants. STEPHENS, Judge.
Defendants Sydney Duane Southerland, Jr., and Linda L. Southerland ("the Southerlands") appeal from the trial court's order denying their motion pursuant to section 40A-47 of our General Statutes for determination of issues other than just compensation in an action brought by Plaintiff Town of Cary ("the Town") for condemnation against a portion of the Southerlands' real property. Because this issue was not preserved for appellate review, we dismiss the Southerlands' appeal.
Factual Background and Procedural History
On 8 April 2013, the Town filed a complaint, declaration of taking, and notice of deposit in Wake County Superior Court pursuant to Chapter 40A of our General Statutes to acquire by condemnation a 643-square-foot utility and pipeline easement over a portion of the Southerlands' property. In the third paragraph of its complaint, in order to satisfy the statutory requirements that a public condemnor provide "[a] description of the entire tract or tracts of land affected by the taking sufficient for the identification thereof" and "[a] statement of the property taken and a description of the area taken sufficient for the identification thereof[,]" N.C. Gen. Stat. § 40A-41(2), (3) (2015), the Town alleged that a document attached to the complaint and labeled as Exhibit A included "a description of the entire tract or tracts of land affected by the taking and a statement and description of the property taken." Exhibit A described a 0.015-acre tract across one corner of the Southerlands' land that would connect an adjacent property owner to an already-existing 1.6-acre sanitary sewer easement ("the Existing Easement") that the Southerlands had deeded to the Town in 2007. Pursuant to section 40A-41(5) of our General Statutes, the Town estimated just compensation for the taking would amount to $720.00, which it deposited with the clerk of court.
On 6 August 2013, the Southerlands filed an answer and request for jury trial in which they responded to the third paragraph of the Town's complaint by stating that "[t]he document attached as Exhibit A is in writing and is the best evidence of its content. Except as expressly admitted, denied." The Southerlands also included in their answer a heading labeled "General Denial" which stated, "Except as expressly admitted or not[]admitted above, each and every paragraph of the [Town's] Complaint is denied." The Southerlands' answer also raised a range of affirmative defenses, including that the Town's claims should be barred as a matter of public policy; that the Town had acted in bad faith by initiating condemnation proceedings while the Southerlands were negotiating for the sale of the same land with an adjoining private developer; that the Town's actions were arbitrary and capricious; that the Town had violated the Southerlands' right to due process; and that the Town had failed to offer just compensation for the taking.
On 14 August 2013, the Town sent the Southerlands its first set of interrogatories and its first request for production of documents. In its interrogatories, the Town defined the term "Property Taken" to mean "that portion of the Property identified on Exhibit A to the [Town's] Complaint in this action," and, in Interrogatory 23, asked the Southerlands, "if you contend that the Property Taken is different than as defined herein, describe the property you contend was taken." In addition, the Town's Interrogatory 24 requested that the Southerlands "state in detail the facts and circumstances under which you deeded to [the Town] the [Existing Easement.]" The Southerlands filed their responses to these interrogatories on 16 October 2013. In response to Interrogatory 23, the Southerlands stated that they objected to the question posed "because it is vague and ambiguous inasmuch as the property condemned by this action is as it is described in the documents filed. Without waiving this objection and the General Objections, [the Southerlands] reserve the right to object to deficiencies in the description of the Property Taken in this action." In response to Interrogatory 24, the Southerlands objected that the question posed was "overbroad, unduly burdensome or requires unreasonable efforts or expense" and also because "it seeks information that is not relevant to the subject matter of this litigation and is not reasonably expected to yield information relevant to the allegations, to the proposed relief, or to any defenses." In response to the Town's request for production of documents, the Southerlands produced an appraisal describing the property the Town sought to condemn as 643-square-feet or 0.015 acres but did not produce any document concerning the scope of the Existing Easement. On 18 February 2014, depositions were taken of both Mr. and Mrs. Southerland, who each testified that they believed they had the right to sell access to the Existing Easement.
On 6 May 2014, a case management order was entered setting the trial in this action for 3 November 2014, with all dispositive motions required to be heard by 13 October 2014 and discovery closed by 2 September 2014. On 20 May 2014, the Town filed notice of hearing for 28 July 2014 on, inter alia, whether an evidentiary hearing pursuant to section 40A-47 of our General Statutes was necessary to determine if any issues other than just compensation existed for trial. However, on 21 July 2014, counsel for the Southerlands forwarded a letter and draft amended answer to the Town's counsel, stating that his clients intended to "raise issues regarding the actual extent of the taking." On 24 July 2014, the Southerlands filed a stipulation withdrawing all defenses raised by their original answer except for the Town's failure to pay just compensation, and also requested that the matter be removed from the 28 July 2014 calendar. The Town's counsel contacted the trial court administrator but was unable to get the matter removed pursuant to local rules, and on 28 July 2014, a hearing was held at which no one appeared on behalf of the Southerlands and during which counsel for the Town informed the court that "to my knowledge, there are no issues other than determination of just compensation pending before the [c]ourt at this time."
On 30 July 2014, the Southerlands filed a motion to amend their answer. In support of this motion, the Southerlands argued that although their original answer had denied that "Exhibit A is a description of the entire tract of land affected by the taking" and denied that "Exhibit A is a statement and description of the property taken," they nonetheless proposed amending their answer "to clarify this narrow issue" of the actual extent of the taking and whether Exhibit A to the Town's complaint had accurately identified the property taken and the entire tract or tracts of land affected by the taking. In their proposed amended answer, the Southerlands contended—for the first time in the course of the litigation—that the Existing Easement was only temporary in scope. In support of this argument, the Southerlands emphasized that the Existing Easement's terms state that it "supplements but does not supersede that certain unrecorded Easement and Agreement [the "Unrecorded Easement"] between [the Southerlands] and Derby Downs, LLC, as grantee, dated November 8, 2005, which Easement and Agreement shall control in the event of any conflict with the Easement granted herein[.]" As explained in their proposed amended answer, the Unrecorded Easement had originally been negotiated in 2005 as a private agreement between the Southerlands and the owners of an adjoining residential development in order to provide access to the Town's existing sewer line, but its terms made clear that
[i]f at any time after the installation and commencement of utilization of the Improvements Grantee shall abandon use of the Improvements for their intended purpose, this Easement shall terminate. In addition, this Easement shall terminate not later than six months following the activation of service lines and related improvements constructed to replace the Improvements.Given the allegations in their proposed amended answer that the Town had nearly completed construction of infrastructure for a new wastewater treatment plant to serve the area, thus obviating any need for Derby Downs to continue utilizing the Unrecorded Easement, the Southerlands argued that the Town's condemnation action would result in a permanent taking of not just the 0.015 acres identified in Exhibit A to the Town's complaint but also the entirety of the Existing Easement, thereby substantially increasing the scope of the lands affected by the taking.
On 18 August 2014, the Southerlands filed a motion pursuant to section 40A-47 of our General Statutes for determination of issues other than just compensation. In this motion, the Southerlands argued that although they had already moved to amend their answer "[o]ut of an abundance of caution," they believed that an evidentiary hearing was required based on their original answer, which provided a bare denial to the allegation in the Town's complaint that Exhibit A described the property taken and the entire tract of land affected by the taking. In support of the motion, the Southerlands relied on this Court's decision in City of Winston-Salem v. Slate, 185 N.C. App. 33, 647 S.E.2d 643 (2007) as authority for the proposition that "th[is] denial alone was sufficient to raise the issue in the pleadings," thereby necessitating a hearing pursuant to section 40A-47.
After a hearing held on 29 September 2014, the trial court entered an order on 20 October 2014 in which it denied the Southerlands' motion to amend their answer. In its order, the court took judicial notice of the record from an interrelated civil proceeding involving the same parties in which the Southerlands had unsuccessfully sought a preliminary injunction to prevent the Town from pursuing condemnation against their property ("the Preliminary Injunction Action"). In its findings of fact, the court summarized the procedural history of both the Town's condemnation action and the Southerlands' Preliminary Injunction Action and found (1) that the Southerlands had failed to raise the scope of the Existing Easement at any point during the Preliminary Injunction Action; (2) that although the Southerlands "lodged a general denial" in response to the allegation in the Town's complaint describing the property affected, neither the affirmative defenses set out in their answer, nor their deposition testimony or responses during discovery to the Town's interrogatories and requests for production of documents sought to raise the scope of the Existing Easement in relation to the extent of the property taken and lands affected by the taking; (3) that prior to the Town's filing its complaint for condemnation, the Southerlands had acted inconsistently with their new contention that the Existing Easement was merely temporary in duration by, inter alia, offering to sell access to it to the owners of an adjacent property; and (4) that although the Southerlands' motion to amend their answer was "based on information available to [them] prior to the filing of this action and at all times during the pendency of this action," there was no evidence that the Town was ever provided a copy of the Unrecorded Easement until the Southerlands filed their motion to amend more than a year after the action's initiation. Based on these findings, the trial court concluded that the Southerlands' motion to amend "is not a clarification of their original Answer, it presents a new theory not raised in the original Answer," and consequently, the court denied the motion to amend on the grounds of undue delay and unfair prejudice to the Town. The Southerlands did not appeal from this ruling.
On 19 December 2014, the trial court conducted a hearing on the Southerlands' motion pursuant to section 40A-47 to determine whether the pleadings raised any issues that necessitated an evidentiary hearing apart from just compensation. During that hearing, the Southerlands argued that an evidentiary hearing was required based on our decision in Slate because the bare denial in their original answer to the Town's description of the property taken and lands affected by the taking was legally sufficient to raise the issue in the pleadings. While acknowledging that "the pleadings as originally stated [in this case] are very close to the Slate case," the court also stated that the Southerlands' failure to raise the issue of the Existing Easement's scope throughout more than a year of extensive discovery
almost rises to, in my view, as to the extent of a judicial estoppel, but where there may have been at one point on the bare pleadings been this right [to an evidentiary hearing under section 40A-47] that it is too late in the game to amend the pleadings and it's too late in the game to now say we've changed our theory.The court ultimately held that it would "stand on my original order on the motion to amend" because the Southerlands' argument regarding the scope of the Existing Easement
is the same issue that was specifically addressed in the motion to amend and my order relating thereto. And that the detailed findings of fact[] and conclusions of law explain
why, in my view, that issue was not raised by the pleadings, it is not in the pleadings as they exist today, and so therefore there is nothing to be heard other than just compensation.(Emphasis added). On 9 January 2015, the trial court entered an order in which it incorporated by reference its order denying the Southerlands' motion to amend and found that the facts and issues raised therein had not been raised previously, tended to contradict the positions the Southerlands had already taken throughout the litigation, and "were not a clarification of [the Southerlands'] original Answer but a new theory not raised in the original Answer." Based on these findings and the fact that the Southerlands had not identified any issues raised by the pleadings other than the issue of just compensation, the court concluded that no section 40A-47 hearing was required and the matter was ripe for trial on the issue of just compensation. The Southerlands gave notice of appeal from this order to this Court on 28 January 2015.
Analysis
The Southerlands argue that the trial court erred when it concluded in its 9 January 2015 order that no evidentiary hearing was warranted under section 40A-47. Specifically, the Southerlands contend that this Court's decision in Slate makes clear that a defendant in a condemnation proceeding need only raise a bare denial in their answer to the descriptions of the property taken and lands affected by the taking in a public condemnor's complaint in order to raise an issue in the pleadings and thus necessitate an evidentiary hearing pursuant to section 40A-47. See Slate, 185 N.C. App. at 41, 647 S.E.2d at 649. We conclude that because the Southerlands failed to appeal from the 20 October 2014 order in which the trial court determined this issue, it is not properly before us.
We note here that because neither the 20 October 2014 order nor the 9 January 2015 order fully disposed of this action, both are interlocutory in nature. See Slate, 185 N.C. App. at 37, 647 S.E.2d at 646 ("Because the trial court's order left the issue of just compensation still to be resolved, it is an interlocutory order."). While there is generally no right to appeal from an interlocutory order, in the context of condemnation proceedings by State agencies or municipalities, orders concerning title and area taken address vital preliminary issues that affect the substantial rights of the parties and are therefore immediately appealable. See id.; see also Dep't of Transp. v. Rowe, 351 N.C. 172, 176-77, 521 S.E.2d 707, 709-10 (1999). Indeed, our Supreme Court has made clear that in condemnation cases, "appeal of an issue affecting title to land or area taken by the State is mandatory and the interlocutory appeal must be taken immediately." Stanford v. Paris, 364 N.C. 306, 312, 698 S.E.2d 37, 41 (2010) (citations omitted). Moreover, North Carolina Rule of Appellate Procedure 3 provides, in pertinent part, that an appellant's notice of appeal "shall designate the judgment or order from which appeal is taken ...." N.C.R. App. P. 3(d). Our case law makes clear that an appellant's failure to designate a particular judgment or order in the notice of appeal generally divests this Court of jurisdiction to consider that order. See, e.g., Fenz v. Davis, 128 N.C. App. 621, 623, 495 S.E.2d 748, 750 (1998) (holding that where the notice of appeal listed the trial court's order denying a new trial, but did not list the actual judgment entered upon the jury verdict, the Court lacked jurisdiction under Rule 3(d) to review any assignment of error related to the trial proceedings and judgment); see also In re A.V., 188 N.C. App. 317, 321, 654 S.E.2d 811, 813-14 (2008) (dismissing a juvenile's challenge to the trial court's disposition order because, by failing to include that order in his notice of appeal, which designated error only in the court's adjudication order, he violated the jurisdictional requirements imposed by Rule 3(d)).
In the present case, the Southerlands designated only the trial court's 9 January 2015 order in their notice of appeal to this Court. However, our review of the record demonstrates that in its 20 October 2014 order, the trial court made its determination that the Southerlands had failed to raise the descriptions of the property taken and lands affected by the taking provided in the Town's complaint as an issue in their pleadings or discovery responses or at any other point in the history of this litigation prior to filing their motion to amend. The Southerlands did not timely notice any appeal from the 20 October 2014 order after it was entered, nor did they designate it for appeal in their notice of appeal from the 9 January 2015 order. Moreover, the Southerlands' principal brief to this Court omits any reference whatsoever to the 20 October 2014 order. Consequently, we must conclude that we lack jurisdiction to review the trial court's 20 October 2014 order. Accordingly, the Southerlands' appeal is
DISMISSED.
Judges HUNTER, JR., and INMAN concur.
Report per Rule 30(e).