Water authority wanted a do-over on property seizure, but didn’t get it 

There are no refunds in condemnation actions.

That’s the hard lesson the Onslow County Water and Sewer Authority learned recently when it tried to back out of a deal for some 350 acres needed to expand a wastewater treatment facility.

In April 2008, the authority condemned four tracts of land just outside of Richlands, owned by the Rogers and Boggs families. The authority appraised the tracts as farmland, and deposited $1.9 million as just compensation. Shortly after, the owners discovered that two of the tracts had significant limestone deposits underneath, and brought in a geologist to take samples.

“The limestone’s got to be of good quality, there’s got to be enough of it, and you’ve got to be able to get to it in order for it to be worth anything,” said George Autry, an attorney for the property owners. “The reports came back that it was of remarkable quality and very easy to get to.”

Mineral appraisers estimated that, based on a royalty approach, the property was worth between $12 million and $14 million.  The values based upon an income approach – where an owner-operator is capable of mining it – were even higher, in the $30 million range.

Knowing that the case would now head off in a different direction, Autry shared the reports with the authority’s attorney, Wilmington’s David Nash.  “Rock changes everything,” Nash said, according to Autry, and the authority asked for additional time to get its own experts.

But very little new in the way of expert reports came back from the authority, Autry said, until the mediation ten days before trial. The authority then produced a report that valued the rock at $6.5 million, but said it couldn’t pay that amount.

“It was clear then that they were going to try and dismiss the case,” Autry said.

No sooner was the mediation over, and the authority did just that, filing a motion seeking a dismissal and the return of the $1.9 million deposit.

“By this point, both of the Rogers have died and we’re dealing with their children,” Autry said.  “And in the Boggs family, the father has died.  So the authority wants people who aren’t even parties to the original action to give the money back. It’s becoming the theater of the absurd.”

On the first day of trial, Onslow County Judge Phyllis M. Gorham denied the motion to dismiss, telling the authority that it could not force the property back on the owners.

At trial, the authority’s witnesses testified about the difficulties in mining for limestone.  “The last witness, the state geologist, testified about the difficulties in getting permits,” Autry said.  “I looked at him and said, ‘You’ve been there for 39 years; how many limestone permits have been denied?  His answer: ‘None.’”

Before the case went to the jury, the judge called in both sides and told them that it was “critical” that the case settle, according to Autry.  “We left that night, and they had an emergency meeting,” he said.

The parties settled at $9,415,000.

An Onslow Water and Sewer Authority spokeswoman told the Jacksonville Daily News that the authority agreed to the settlement in order to “avoid the possibility of a potentially devastating amount being set by the jury.”

Nash did not return a call for comment.

Settlement Report

Type of Action: Eminent domain/land condemnation

Injuries Alleged: Taking of four tracts of vacant land in Onslow County for Regional Wastewater Treatment Facility

Name of case: ONWASA v. Hubert N. Rogers, Jr., et al, and ONWASA v. Sue T. Boggs, et al.

Court: Onslow County Superior Court                  

Case No.: 08 CVS 1391 and 08 CVS 1445 (Consolidated)                  

Tried Before: Judge                  

Name of judge: Phyllis M. Gorham

Verdict or Settlement: Settlement

Amount: $9,415,000                  

Date of verdict or settlement: Nov. 28, 2011

Most helpful experts: John J. Manes, C.M.A., P.G., Scottsdale, AZ; James Izzell, P.G., Garner; Frank Catlett, MAI, Todd, NC and Tampa, FL.; Dennis W. Gruelle, MAI, SRA, Raleigh and Va. Beach.

Attorney for plaintiff: David Nash, Wilmington

Attorneys for defendant: George B. Autry, Jr., Stephanie H. Autry, Brady W. Wells, and Dan M. Hartzog, Jr., Cranfill, Sumner & Hartzog, Raleigh