North Carolina Lawyers Weekly
Last week Lawyers Weekly published the biggest plaintiffs’ verdicts and settlements of 2018. This week we present the biggest eminent domain verdicts and settlements of 2018, along with our selections for the top defense verdicts of the year.
In a typical eminent domain case, where the government exercises its right to seize privately owned land for a public purpose, the landowner is technically the defendant—although several eminent domain attorneys have pointed out to us that their work is in practice much more akin to representing plaintiffs. After taking a tract of land, the government deposits the amount that its appraisers think the government owes, and then owners typically have to sue to get anything close to fair compensation.
That job has gotten tougher for attorneys in recent years. In 2011, the state legislature instructed the state’s Department of Transportation, by far the most active user of eminent domain powers, to begin outsourcing more of its work, including land appraisals. As such, deposits have gotten smaller, and in many cases landowners are securing verdicts or settlements several times larger than the DOT’s initial deposit.
Lawyers Weekly calculates our top eminent domain verdicts and settlements by subtracting the amount of the deposit from the client’s ultimate recovery. As a result, the rankings you see here may not always correspond to the size of the numbers cited in the headlines.
When it comes to defense verdicts, compiling our annual list requires significantly more editorial discretion. A lawsuit with a high demand but a weak legal claim may not present nearly as much risk for the client as one brought by a serious plaintiff with real resources, whatever the nominal demand. As such, we don’t rank defense verdicts in our review—the verdicts we’ve selected for inclusion are presented in no particular order.
Candidly, not many defense verdicts are reported to Lawyers Weekly. We certainly understand and sympathize with the many obvious reasons for that, but to the extent that clients authorize it, we strongly encourage attorneys to report their defense verdicts to us. Defending clients is an aspect of the legal profession every bit as important as representing plaintiffs, and it is our strong desire to recognize those attorneys’ work as well.
Follow David Donovan on Twitter @NCLWDonovan
Top Eminent Domain Verdicts & Settlements of 2018
- Landowners win $2.6M verdict in eminent domain case
A Brunswick County jury has awarded $2.6 million to a pair of landowners whose property was taken by the North Carolina Department of Transportation for the construction of Interstate 140.
The award is almost 20 times the amount that the DOT originally offered, said Brian McMillan of Brooks, Pierce, McLendon, Humphrey & Leonard in Greensboro, who represented the landowners along with Robert King and Kimberly Marston.
In December 2013, the DOT condemned 10.9 acres and severed a separate 5.84-acre tract from the main body of the property. It deposited a combined total of $130,728 as its estimate of what the land’s owners were entitled to in fair compensation.
Superior Court Jack Hooks Jr. granted the landowners’ request to combine the tracts and consolidate the two cases for trial after a hearing during which Hooks visited the site. Hooks ruled that under North Carolina’s “unity rule,” the two tracts were united physically in use and ownership and should be treated as one for the purpose of determining proper compensation, McMillan said.
The jury reached its verdict on compensation Oct. 17, 2018 after a five-day trial. Deliberations lasted an hour and 45 minutes.
“They had two questions to answer—what was the land worth before the DOT project, and what was the remainder worth after the project,” McMillan said. “Based on the jury’s verdict, we were able to carry the burden of persuasion on both issues. I think that the weight and credibility of our experts’ testimony on those two issues and our closing statements persuaded the jury to answer those questions in our client’s favor.”
Under state law, the landowners are entitled to interest on the amount of the award in excess of the deposits, back to the date when the property was taken. That interest is expected to add an amount in the high six figures to the final award, McMillan said.
VERDICT REPORT — EMINENT DOMAIN
Amount: $2,612,000
Injuries alleged: Taking of 10.9 acres and damage to 5.84-acre remainder
Case name: Department of Transportation v. CP Brunswick LLC; Department of Transportation v. 74 Holdings LLC
Court: Brunswick County Superior Court
Case Nos.: 13 CVS 2276 and 13 CVS 2277
Judge: Jack Hooks Jr.
Date of verdict: Oct. 17, 2018
Demand: $3.2 million
Deposit: $130,728
Attorney for plaintiff: Martin McCracken of the N.C. Dept. of Justice in Raleigh
Attorneys for defendant: Brian McMillan, Robert King, and Kimberly Marston of Brooks, Pierce, McLendon, Humphrey & Leonard in Greensboro
- State pays storage facility $3.29M for land-taking
The North Carolina Department of Transportation Turnpike Authority has settled with a self-storage facility in Matthews for $3.29 million over a disagreement over the value of a piece of property that was taken to build a new highway, a lawyer for the facility reports.
Stephanie Autry of Cranfill Sumner & Hartzog in Raleigh reports that her client, a company called Interchange X that operates a storage facility located on Independence Boulevard in Matthews, argued it would be negatively impacted by the DOT’s decision to elevate the existing roadway 25 feet, effectively separating the facility from the highway and eliminating exposure to passing cars.
Interchange also claimed that it lost convenient access for vehicles, a strip of right-of-way at the front of the property, a permanent utility easement that paralleled the right-of-way, and all five of the business’s parking spaces. Autry said that the biggest issue in the case was the state’s failure to offer compensation for the permanent utility easement.
“Lots of times, appraisers ignore the public utility easement,” she said. “Where they really messed up was failing to recognize the damage to the remaining property caused by the easement … the law says juries should consider the effect of the [easement] as though DOT will use those rights taken to the fullest extent.”
An initial DOT appraisal noted some of the negative effects of the taking, including the loss of access and the loss of the parking lot, but didn’t take into account the impact of the easement on parking, and valued fair compensation at $1.47 million, which the DOT offered as its deposit.
Interchange hired Richard Marchitelli of Cushman & Wakefield in Charlotte and a second appraiser who both agreed that the access changes were compensable and pointed out that the loss of the permanent utility easement increased the cost to remedy the loss of parking.
SETTLEMENT REPORT — EMINENT DOMAIN
Amount: $3.29 million
Injuries alleged: Taking of right of way, permanent utility easement, temporary construction easement, lost parking, lost access, lost exposure, and zoning compliance setbacks
Case name: NC Department of Transportation Turnpike Authority v. Interchange X, LP, et al.
Court: Union County Superior Court
Case No.: 16 CVS 1202
Mediator: Sam Carlisle of Pinehurst
Date of settlement: Aug. 1, 2018
Deposit: $1.47 million
Most helpful experts: Richard Marchitelli of Cushman & Wakefield in Charlotte (appraiser)
Attorney for plaintiff: Martin McCracken of the N.C. Dept. of Justice in Raleigh
Attorneys for defendant: George Autry and Stephanie Autry of Cranfill Sumner & Hartzog in Raleigh
- Landowner to collect $2.5M from DOT, nearly 3x deposit
The North Carolina Department of Transportation will pay $2.5 million—almost three times what it initially deposited—for taking almost an acre and a half of right-of-way, plus other takings, from a four-acre tract in Union County as part of its construction of the Monroe Bypass, the landowner’s attorneys report.
Brady Wells, Jeremy Hopkins, George Autry and Stephanie Autry of Cranfill Sumner & Hartzog in Raleigh report that their client, Verena Keller, owned just over four acres in Stallings that was developed with an RV dealership.
Before the taking, the property had full access to Highway 74, and Keller contended that its prime location made it perfectly suited for retail development. But the DOT’s taking severed the property in two, took away its highway access, and left it situated well below the highway, which now sends traffic over and past the property.
Keller and the DOT disagreed greatly over both how much the property had been worth before the taking, and how much it was worth afterwards. The DOT also contended that the property could still be used for commercial purposes, while Keller argued that the changes eliminated any commercial potential of the property.
On June 21, 2018, shortly after a mediated settlement conference, the parties settled the case for $2,500,000, which was close to Keller’s estimate of just compensation, and well above the $881,950 that the DOT had deposited. Two remnants were deeded to DOT as part of the settlement.
Erwin Spainhour of Concord mediated the settlement.
SETTLEMENT REPORT – EMINENT DOMAIN
Amount: $2.5 million
Injuries alleged: Taking of approximately 1.44 acres of right-of-way
Case name: N.C. Department of Transportation, Turnpike Authority v. Verena E. Keller and Carolina Premier Bank
Court: Union County Superior Court
Case No.: 16 CVS 1158
Mediator: Erwin Spainhour of Concord
Settlement date: June 21, 2018
Deposit: $881,950
Most helpful experts: Dennis Gruelle of Virginia Beach, Virginia (appraiser)
Attorney for plaintiff: Martin McCracken of the N.C. Dept. of Justice in Raleigh
Attorneys for defendants: Brady Wells, Jeremy Hopkins, George Autry and Stephanie Autry of Cranfill Sumner & Hartzog in Raleigh
- City of Charlotte settles airport runway lawsuits for $1.5M
The city of Charlotte will pay more than $1.5 million to compensate property owners who sued the city over the 2010 opening of a new runway at Charlotte-Douglas International Airport, the plaintiffs’ attorneys reported.
Tommy Odom of the Odom Firm in Charlotte reports that the landowners filed actions for inverse condemnation in 2012 for the taking of a flight easement over their properties. The landowners claimed the flights negatively impacted the fair market value of the land because of the noise generated by planes arriving throughout the day. The city denied the allegations.
In total, 47 separate cases were filed related to the runway. The North Carolina Supreme Court designated the cases as exceptional and appointed Superior Court Judge Forrest Bridges to oversee them. The actions were stayed, and attorneys negotiated the terms of the settlements for 18 months.
The parties negotiated the language of the aviation easements, the fair market values of the properties, the amounts to be paid by the city for the purchase of the entire property or the easement, attorney fees, and the costs and expenses to be reimbursed to each landowner, Odom said.
The city ultimately purchased six of the properties. It paid between 4.5 percent and 13 percent of the agreed upon value of each property for an aviation easement over the remaining 41 properties, with the amount paid depending upon the location of each property.
SETTLEMENT REPORT – EMINENT DOMAIN
Amount: $1,563,761
Injuries alleged: Negative impact to fair market value of land
Case Name: Flaherty v. City of Charlotte, et. al.
Court: Mecklenburg County Superior Court
Case No.: 12 CVS 155
Judge: Forrest D. Bridges
Most helpful experts: Nancy S. Timmerman, P.E., of Boston (consultant in acoustics and noise control)
Attorneys for plaintiff: Tommy Odom and David Murray of The Odom Firm in Charlotte
Attorneys for defendant: Rebecca Cheney and Keith Merritt of Hamilton, Stephens, Steele and Martin in Charlotte
- Union Co. landowner to get $2M from DOT, almost 3x deposit
The North Carolina Department of Transportation will pay slightly more than $2 million for the taking of roughly 16 acres of right-of-way from a large tract of undeveloped land in Union County as part of the construction of the Monroe Bypass, the landowner’s attorneys report.
George Autry, Stephanie Autry, Brady Wells and Jeremy Hopkins of Cranfill Sumner & Hartzog in Raleigh report that the roughly 124-acre tract is located next to or near several successful residential divisions in Indian Trail, and that it was and remains suited for future residential development itself. The Monroe Bypass will cut a swath through the property, dividing into two distinct tracts.
Stephanie Autry said that parties in the dispute disagreed substantially over both the land’s original value and even more so over its residual value after the taking.
Autry said that an appraiser for the state concluded that the project would only reduce the value of the remaining land by 10 percent, but the property owner’s appraiser found that the effects would be more profound. One of the two new parcels created would be only a narrow strip sandwiched between an existing road and the new bypass.
“When setbacks from both roads were applied, there was little land left to develop,” Autry said. “The [smaller tract] would lose the economies of scale it had before the project, and fixed costs would be spread over fewer lots.” The larger of the two parcels would lose access to a highly-trafficked roadway, she added.
The two sides ultimately reached a settlement on March 6, 2018. The $2,050,000 payout is almost three times the state’s initial $684,200 deposit. Sam Carlisle of Pinehurst mediated the settlement, and Heyward Cantrell of Jacksonville, Florida, provided the appraisal for the property owners.
SETTLEMENT REPORT – EMINENT DOMAIN
Amount: $2,050,000
Injuries alleged: Taking of approximately 16 acres of right-of-way from an approximately 123.8-acre undeveloped tract
Case name: N.C. Department of Transportation turnpike Authority v. Swallowtail Pool I Owner, LLC, et al.
Court: Union County Superior Court
Case number: 16 CVS 745
Mediator: Sam Carlisle of Pinehurst
Date of settlement: March 6, 2018
Deposit: $684,200
Most helpful experts: Heyward Cantrell of Jacksonville, Florida (appraiser)
Attorney for plaintiff: Martin McCracken of the N.C. Dept. of Justice
Attorneys for defendants: George Autry, Stephanie Autry, Brady Wells and Jeremy Hopkins of Cranfill Sumner & Hartzog in Raleigh
***
Top Defense Verdicts of 2018
Restaurant not liable for DUI crash
An Asheville restaurant and sports bar franchise has successfully fended off a $350,000 dram shop suit, its attorneys report.
Jeremy Stephenson of Golding, Holden & Pope in Charlotte reported that William Erickson had been drinking at LJ Wings, his client, before causing a car crash that injured Dung Trang in August 2015. Receipts showed that Erickson purchased 19 drinks that day at LJ Wings, but testimony showed that he was buying drinks for friends as well as for himself, Stephenson said.
A bartender testified that he “saw something off” with Erickson, so he took Erickson’s beer and gave him food and water. The bartender asked Erickson how he was getting home, Stephenson said, to which Erickson replied that he had called a friend.
“Unknown to Wings, Erickson had actually driven himself away,” Stephenson said.
An hour later, Erickson struck the plaintiff’s vehicle on I-26, causing minor injuries to Trang’s finger and neck. Erickson blew a .18, more than twice the legal limit, and eventually pleaded guilty to driving under the influence.
Stephenson said his client demonstrated at trial “extensive training materials given several times per year,” and bartenders testified that they counted drinks and saw no signs of intoxication until Erickson was cut off. Even then, Erickson, a regular patron, didn’t appear substantially or materially impaired.
“No witness testified that Erickson actually appeared intoxicated while at Wings,” Stephenson said. He said Erickson’s carrier offered to settle immediately after the accident, but that plaintiff’s counsel refused, and Trang was not present at any time during trial.
Stephenson said Trang’s expert toxicologist testified that Erickson most likely would have shown signs of intoxication while at Wings, but Doug Scott, testifying in rebuttal, opined that those opinions were “speculative, unreliable, and not scientific.”
A mistrial was granted when a clerk found a law review article in the jury room, Stephenson said, but after the dismissal of the jury foreman for cause and two other jurors for health issues, the plaintiff’s motion for mistrial was withdrawn.
Ultimately, the trial lasted for five days and the jury deliberated approximately 10 hours before finding LJ Wings not liable.
VERDICT REPORT — DRAM SHOP
Amount: $0
Injuries alleged: Finger and neck injury
Case name: Dung Thang Trang v. LJ Wings, Inc. and William Robert Erickson
Court: Buncombe County Superior Court
Case No.: 15 CVS 4470
Judge: J. Thomas Davis
Date of verdict: March 27, 2018
Demand: $350,000
Most helpful experts: Doug Scott of Drug and Alcohol Risk Management, Inc. in Lillington
Attorneys for plaintiff: Lakota Denton of Asheville and Lucas Baker of Concord
Attorneys for defendants: Jeremy Stephenson of Golding, Holden & Pope in Charlotte for LJ Wings and Ellen Wortman of Marshall, Williams & Gorham in Wilmington for Erickson
Verdict directed for defense in food poisoning case
A Wake County judge has granted a directed verdict in favor of a maker of refrigerated foods after a cafeteria patron alleged that the company’s potato salad caused him to suffer severe food poisoning.
Matthew Little of Teague Campbell in Raleigh, who represented St. Clair Foods, said the case against his client ended when Superior Court Judge Carl Fox declared there wasn’t enough evidence to hold it responsible.
“The plaintiff did not have a food science expert nor any witness who would say anything was wrong at the plant,” Little said. “The judge said he’s only ever entered a directed verdict once or twice … he felt there was a complete failure of proof by the plaintiff.”
Claude Burgess alleged that he went to a K&W Cafeteria restaurant in southeast Raleigh for dinner one evening, and that when he took a bite of the potato salad, it burned going down his throat but he continued eating.
Shortly thereafter, Burgess became very ill and began vomiting uncontrollably. Emergency responders were called and he was taken to the hospital. Little said that Burgess testified that instead of the potato salad being stored in a tub of ice, it appeared to have been stored under a light, causing it to become discolored.
Little said that K&W and Institution Food House, a food distributor settled claims confidentially, but his client decided to take the case to trial. Little said that while it is possible that the potato salad made Burgess sick, it was not the result of contamination during the manufacturing process.
“St. Clair Foods makes roughly 36 million pounds of potato salad each year … the tub this came from was from a batch of about 5,000 portions. If there had been a problem at the plant, hundreds or thousands of others would’ve been sick,” Little said. “But only he made a claim.”
Little described in detail the sanitization process that St. Clair Foods goes through twice daily to ensure cleanliness in their production facility, how they break down every piece of machine to the nuts and bolts to sanitize them. He also said that a USDA inspector goes through the plant daily to inspect and ensure the quality of the products.
“Mr. Burgess may or may not have had food poisoning, but he sure as heck didn’t get it from St. Clair,” Little said.
Drew Sprague of Raleigh represented Burgess. Sprague could not discuss the terms of the settlement agreements with the other defendants but said he felt that the case was a success despite the verdict in St. Clair’s favor.
VERDICT REPORT – PRODUCT LIABILITY
Amount: $0
Injuries alleged: Severe food poisoning
Case name: Burgess v. K&W Cafeterias Inc. et. al.
Court: Wake County Superior Court
Case No.: 16 CVS 01929
Judge: Carl Fox
Date of verdict: April 26, 2018
Attorney for plaintiff: Drew Sprague of Raleigh
Attorneys for defendants: Matt Little and Lindsey Revels of Teague Campbell in Raleigh
Contractor scores defense win against U.S. gov’t
The federal government has agreed not to continue appealing claims that a private contractor committed fraud under the False Claims Act after the contractor was granted summary judgment in federal court in North Carolina’s eastern district, defense attorneys report.
Hill Allen of Tharrington Smith in Raleigh and Joe Zeszotarski Jr. of Gammon Howard & Zeszotarski in Raleigh said the government brought the claim against their client, Odyssey Marketing Group, claiming that the business had obtained payment for unauthorized warehousing, logistical, and technical support services for their Army Reserves Family Program.
Allen and Zeszotarski said that this was not a qui tam action by a private relator, but a direct claim by the government. The government asserted damages greater than $9 million under the FCA, and both sides filed cross-motions for summary judgment.
In a lengthy opinion, U.S. District Judge Terrence Boyle granted Odyssey’s motion for summary judgment based on a lack of knowledge of wrongdoing and damages, both of which are required for an FCA claim.
After Boyle denied the government’s motion to reconsider, the government appealed. Before briefing, the government agreed to settle the case in exchange for a release of Odyssey’s claims for attorneys’ fees and costs.
“In essence, our folks dropped a claim for litigation costs that was much less than they would have spent defending the appeal,” Allen said. “The government insisted on protection from certain types of claims to resolve the case. Recovery of attorney’s fees under those claims is not the norm and would have required further expenditures by our clients.”
Allen said the settlement wouldn’t have happened without the federal district court opinion in his client’s favor.
“Through persistent discovery efforts, we were able to demonstrate that government employees had knowledge of Odyssey’s actions and billing, and that the government was not actually damaged,” Allen said. “The case was hotly contested at every stage by excellent counsel for the government, who had a very different view of the case than we did … The resolution completely vindicated our clients.”
Representatives from the U.S. Attorney’s Office for the Eastern District of North Carolina declined to comment.
SETTLEMENT REPORT — FALSE CLAIMS ACT
Amount: $0
Injuries alleged: Contracting fraud including false claims and false statements to the Army Reserve Family Program
Case name: U.S. v. Odyssey Marketing Group, et al.
Court: U.S. District Court for the Eastern District of North Carolina
Case No.: 5:15-cv-510
Judge: Terrence Boyle
Date of settlement: April 23, 2018
Demand: $9 million
Attorneys for plaintiff: U.S. Attorney’s Office for the Eastern District of North Carolina
Attorneys for defendant: F. Hill Allen of Tharrington Smith in Raleigh, Joseph Zeszotarski Jr. of Gammon Howard & Zeszotarski in Raleigh, and Jessica Abrahams of Drinker Biddle in Washington D.C.
