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Home / Courts / N.C. Court of Appeals / Real Property – Condemnation – Parking Spaces & Retaining Wall – Civil Practice – Rule 60 Relief

Real Property – Condemnation – Parking Spaces & Retaining Wall – Civil Practice – Rule 60 Relief

Although there were indicia of fraud and misrepresentation in the Department of Transportation’s communications with the defendant-landowner, since DOT’s forced taking of defendant’s property was not an arms-length transaction, the trial court could grant defendant relief under N.C. R. Civ. P. 60(b)(6), with its more lenient time limit, rather than Rule 60(b)(3).

We affirm the trial court’s grant of defendant’s motion for relief from the parties’ consent judgment.

Background

DOT informed the defendant-hotel’s president that DOT intended to take a small amount of the hotel’s land. The proposed taking would not eliminate any of the hotel’s parking spaces. The proposal indicated a retaining wall but not its height.

DOT offered defendant $25,700, and defendant countered at $35,000. The parties agreed to that amount, but defendant’s lender would not consent.

DOT made changes to its intended taking – eliminating several of the hotel’s parking spaces – and offered defendant $35,000. Defendant accepted. Defendant contends DOT did not inform defendant of the changes to its plans.

When DOT completed its project, defendant had lost enough parking spaces to put it in violation of local codes. Moreover, DOT’s retaining was 15 feet tall and completely blocked the hotel’s visibility from the street.

Defendant successfully moved for relief from the parties’ consent judgment under Rule 60(b)(6), and DOT appeals.

Discussion

Even though this appeal is interlocutory – the issue of just compensation remains undecided – and even though the order does not affect a substantial right, the court elects to grant certiorari so as to address the merits of this matter.

It is true that Rule 60(b)(6) – under which a motion must be made within a reasonable time – cannot be the basis for a motion to set aside judgment if the facts supporting it would more appropriately support one of the five preceding clauses of Rule 60(b) – under some of which a motion must be brought within one year. However, even where a case involves various indicia of fraud or misrepresentation, relief may be appropriate pursuant to Rule 60(b)(6) if those facts are accompanied by circumstances that justify relief from the operation of the judgment. This is such a case.

While defendant waited a year and a half after the wall was finished (and more than two and a half years after the parties’ consent judgment was filed) to file his Rule 60 motion, given the complexities of this case, the trial court did not abuse its discretion when it found that defendant’s motion was brought within a reasonable time.

Defendant’s president testified that DOT did not inform him of the changes to its plans when it offered him $35,000. DOT presented evidence to the contrary, even though its modified offer – which DOT contends reflected the amended calculation of just compensation in light of the plan revisions – was the exact amount of defendant’s counteroffer to DOT’s initial offer, and which the parties had agreed upon.

DOT’s right of way agent testified that he told defendant’s president that the state was looking out for the landowner’s best interest. In contrast to DOT’s assertion on appeal that it “had no duty to disclose additional information,” DOT was obligated to deal in a fair manner with defendant. The transaction was a condemnation proceeding – that is, a forced sale of defendant’s private property for public use. As such, DOT was required to provide defendant with just compensation.

In light of the constitutional protections at hand, we are satisfied that the fact that DOT inadequately informed defendant of the extent of its taking was sufficient to establish (1) that extraordinary circumstances exist, and (2) that justice demands relief.

It is undisputed that the amount reflected in DOT’s second appraisal did not account for the loss of parking spaces. Nor did it account for the height of the retaining wall or the loss of visibility suffered by the hotel. Moreover, if the sum of $35,000 was just compensation for a lesser taking, then it could not be just compensation after DOT substantially increased the scope of the taking.

Affirmed.

North Carolina Department of Transportation v. Laxmi Hotels of Spring Lake, Inc. (Lawyers Weekly No. 010-161-18, 25 pp.) (Valerie Zachary, J.) Appealed from Cumberland County Superior Court (Mary Ann Tally, J.) Alvin Keller Jr., and James Aldean Webster III for plaintiff; Richard Wiggins for defendants.

 

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