DOT hit for ‘bad faith’

A trial judge has sanctioned the North Carolina Department of Transportation for failing to meet court-ordered deadlines for appraising Map Act properties and acting with “reckless indifference, gross negligence and bad faith.”

Forsyth County Superior Court Judge John Craig took the DOT to the woodshed in a July 6 order, finding that the appraisals in question hadn’t been carried out in a timely manner due to confusion, poor or nonexistent record keeping, communication breakdowns and a lack of supervision, among other things.  

In the wake of the benchslap, DOT spokesman Steve Abbott wrote in an email that the agency was “identifying processes and improvements to fix the deficiencies he [Craig] identified. We will accelerate and focus our efforts in resolving these cases fairly and expeditiously.”

So far, the DOT has paid nearly $6 million to outside law firms that are supposed to be helping the agency’s in-house lawyers handle Map Act litigation throughout the state. At least seven private firms are involved in the litigation in Forsyth, which is “ground zero,” said Matthew Bryant of Hendrick Bryant Nerhood Sanders & Otis in Winston-Salem.

Bryant, who spearheaded the Map Act suits against the state, said Forsyth is home to more than 330 of the nearly 500 Map Act cases statewide.  

“There are not nearly 500 lawsuits filed because this is some mere inconvenience to people’s lives, property values or future,” he said. “This is a serious and significant harm caused to these property owners.”

Despite shelling out millions of dollars for outside legal help, the DOT has lost five consecutive appeals over the Map Act, a now-defunct law that the state had used since the 1980s to to freeze or drive down land acquisition costs while it gathered money for road projects.

A Map Act filing prevented affected owners from developing or selling their property, which lost value while they waited years—and in some cases decades—for the state to pay up. Some died before they were paid.

The Map Act’s demise began in 2016, when the state Supreme Court held in Kirby v. NCDOT that Map Act filings constituted land takings. A string of appellate losses for the DOT followed Kirby, which went back up on appeal and resulted in another win for the plaintiff property owners.

In March, the Court of Appeals made it clear that it was time for the DOT to start cutting checks, with Judge Phil Berger Jr. writing that “there will be a high monetary price, and conceivably a political price as well, once NCDOT pays just compensation for exercising its eminent domain power, perhaps this will force NCDOT to respect the rights of our individual citizens and not restrict their rights without the ability or willingness to pay.”

That decision came two years after the Forsyth trial court ordered the DOT to begin appraising and making deposits over a six-month span to compensate owners of Map Act properties in Forsyth in the path of the Winston-Salem Northern Beltway. The court later stayed the order while the DOT pursued, and lost, an appeal. Afterward, in November 2017, the trial court reinstated the order, restarting the six-month deadline.

In late May, the plaintiff landowners told the court during a hearing that the DOT was not following the timeline, which was set to expire the next day. The testimony came as a surprise to Craig, who said the DOT had not asked the court for a deadline extension. A week later, the plaintiffs filed a motion seeking sanctions.

In granting the motion, Craig found that the DOT had inexplicably failed to “do anything during an early period of the six-month timetable,” which “caused it to fall behind almost immediately.” He also determined that the agency’s appraisers and officials were confused about when the court’s appraisal deadline expired; no one at the DOT kept track of the properties that needed to be appraised; and the agency’s employees had failed to notify counsel or their superiors when delays and difficulties arose. Instead, they “just continued in their effort to comply by merely doing their own small discrete tasks,” Craig wrote.

“No one at NCDOT sounded the alarm that delays were occurring,” he added. “At the [sanctions] hearing, NCDOT primarily engaged in finger-pointing, both within and without the NCDOT organizational structure.”

When the sanctions hearing occurred in late June, the Map Act plaintiffs and their attorneys had received about 65 appraisals from the DOT. Several more appraisals came in during and after the hearing, resulting in what Craig described as a “dump” on the plaintiffs—exactly what the court-ordered timeline was meant to prevent.   

Despite the last-minute appraisals, the DOT has “fallen well short” of complying with the order to complete 191 appraisals by the end of May, Craig found. He estimated that there were about 100 outstanding appraisals. And the agency has only made deposits for 40 of the 191 properties, and nine of those deposits were for $0.

“NCDOT’s inability to comply with the timeline in the order has burdened Plaintiffs’ counsel, cost the people of North Carolina additional accrued interest and legal fees, and further delayed Plaintiffs the long-awaited remedy granted to them under Kirby I and II,” Craig wrote.

He sanctioned the DOT by tossing all the appraisals and related expert testimony that the DOT dumped on the plaintiffs after the May 28 deadline. He also ordered the DOT to pay the plaintiffs’ attorneys’ fees and costs for bringing the sanctions motion. The total has yet to be determined.

“We have waited for the DOT to take this with some level of seriousness and we’re glad the judge recognized the constitutional issues that have affected these owners adversely for going on 21 years,” said Bryant, the property owners’ attorney.

“We have stood ready to sell the department property in the beltway since we started this back in 2010,” he added, “nothing has changed on that objective.”

Follow Phillip Bantz on Twitter @NCLWBantz