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Real Property – Municipal – Condemnation – Easement – Unity of Ownership – LLC — Temporary Inverse Condemnation – Construction Uses – Regulatory Taking

Town of Midland v. Wayne (Lawyers Weekly No. 13-07-0876, 17 pp.) (Chris Dillon, J.) Appealed from Cabarrus County Superior Court (C.W. Bragg, J.) N.C. App.

Holding: When the plaintiff-town condemned part of a tract owned by defendant as a trustee for a trust, there was no unity of interest between the partially condemned tract and an adjacent tract, which is owned by a limited liability company of which defendant is a member.

We affirm the trial court’s finding of a temporary inverse condemnation and its finding of no unity of ownership. We reverse and remand the trial court’s finding of a regulatory taking.

Unity of Ownership

Absent unity of ownership, two parcels of land cannot be regarded as a single tract for purposes of determining a condemnation award. Board of Transp. v. Martin, 296 N.C. 20, 249 S.E.2d 390 (1978). Further, the Martin court held that a parcel of land owned by an individual and an adjacent parcel of land owned by a corporation of which that individual is the sole or principal shareholder cannot be treated as a unified tract for the purpose of assessing condemnation damages. Based on Martin, we conclude the trial court did not err in concluding that there was no unity of ownership between the tracts owned by Darryl Wayne as trustee for a trust and the tract owned by a separate limited liability company.

Mr. Wayne, individually, has no interest in the tract owned by Park Creek, LLC. Rather, he merely owns an interest in the LLC which owns the tract. Unlike a general partnership, a corporation and an LLC are established by their owners, in part, to secure the advantage of a shield from the liabilities of the entity. Defendant cannot now ask this court to disregard the entity.

Inverse Condemnation

The town condemned an easement across part of defendant’s land in order to install a natural gas pipeline and a fiber optic line. During installation, the town’s contractor parked construction vehicles and built a temporary road on land outside the easement. The trial court correctly concluded that this constituted a temporary inverse condemnation.

The town’s easement prevents defendant from developing the tract in the manner set out in a 1997 development plan approved by the Cabarrus County Planning and Zoning Commission. However, this does not mean that there is no practical use for the tract. In fact, the trial court found that defendant would have to submit a new plan for approval by the county. The trial court’s findings do not support defendant’s claim for inverse condemnation based on a regulatory taking.

Our holding does not prevent defendant from presenting evidence at a subsequent trial on damages with respect to an inability to develop the land in accordance with the 1997 plan. Such evidence could be determined to be competent to show the diminution in value of the land resulting from the taking of the easement.

Affirmed in part; reversed and remanded in part.


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