$995,000 – Eminent Domain | Thomas, Ferguson & Beskind, LLP

Eminent domain jury verdict says that the NC DOT owes 66 times over its initial land offer. Jurors award $995,000 to Durham businessman; State DOT had offered $14,959.

Heraldsun.com
The state thought $14,959 was the right price to pay a Durham businessman for two road easements at a busy Durham intersection. Durham County jurors were of a different mind. This week, the eminent domain verdict from a jury decided that the Department of Transportation must pay Holmes Oil Co. $995,000 for the land — 66 times the DOT’s initial offer. Two of Holmes lawyers, as well as other attorneys familiar with such cases, said 66 was perhaps the largest multiplier ever achieved in a local condemnation action. The next highest multiplier anyone could remember was 13. “In all my 15 years practicing eminent domain law, it is the highest multiple I can recall ever being paid in a DOT case,” lawyer Emmett Haywood said Friday of the Holmes verdict. The DOT did not indicate whether it would appeal.

Attorney Spurgeon Fields, representing the DOT, had no comment Friday. Haywood, who represented Holmes, along with attorney Jay Ferguson, said the law requires DOT to pay not only for the land it takes, but also for damages to what’s left. “The DOT wants to put blinders on and say they should just pay for what they are taking and not pay for any of the damages they are causing,” Haywood said. In the Holmes case, an appraiser testified that the company’s gas station and convenience store complex at N.C. 54 and N.C. 55 was left a “dysfunctional mess” by the DOT’s condemnation, which was undertaken to widen the highway there. The appraiser estimated damages to Holmes at $850,000. “The backbone of our economy is small business,” said Haywood. “Holmes Oil operates 19 convenience stores today and employs 160 people. Government gives subsidies to the big companies to relocate here, but yet that same government doesn’t want to help the small business, which is being hurt by the government’s own actions.”

According to Haywood, the Holmes case points to a need for reform in the “just-compensation” clause that controls condemnation payments. “The government’s right to seize someone’s property is one of its greatest powers,” she said. “If the property owner has to fight to be paid fairly and has to pay his own real estate appraiser, attorney, engineer and other experts, how can this be just compensation?” The DOT’s highest offer for the Holmes property, made not long before trial, was $25,000 — still magnitudes below the $995,000 jury verdict. Ferguson said Friday that even though only a small portion of the Holmes property was condemned, the remaining portion became far less valuable — largely because the gas station and convenience store was left with only one driveway entrance instead of two. “It will no longer have suitable access,” said Ferguson. “Mr. Holmes doesn’t know if he can continue to operate or not.” The DOT, he said, uses all its power to take people’s property as cheaply as possible. So when the DOT takes only a portion of the property, it’s vital for landowners to understand the full impact, he said. “While sometimes only small portions of a piece of property are taken, the impact can be devastating,” Ferguson said. For that reason, it is critical to have engineers, appraisers and other experts evaluate the damages caused by DOT, he said. “When landowners are having their property taken by the government, they should know that the government is trying to get the property at a rock-bottom price, and they don’t have to accept what the government is offering,” the lawyer said. “Our Constitution requires that landowners be given full and fair compensation for their property. Landowners should never settle for less.”

The Holmes case was not Ferguson’s first victory against the DOT in a condemnation action. Three years ago, he won $98,219 for Irving and Gloria Whitney over 0.07 of an acre the state condemned to widen Cheek Road at Midland Terrace. That jury award was more than 13 times the DOT offer of $7,300. DOT also has endured several other higher jury-awarded sums here in recent years: *Last winter, a jury decided DOT must pay $66,509.62 for 1,271 square feet of land at N.C. 55 and Sedwick Road, near Interstate 40. At one point, DOT had offered only about $900 for the property, but it eventually upped the ante to $14,605.

*Last year, to avoid the uncertainty of a jury trial, DOT agreed to pay an investment company $950,000 for 0.1 acre at Hillandale Road and Interstate 85. The state’s original offer was $165,000.

*In 2003, DOT indicated it would pay $207,000 for property occupied by the former Pan-Pan diner, also at Hillandale Road and I-85. Jurors awarded more than $1 million after deliberating only 15 minutes.

*In November 2004, another jury deliberated just 11 minutes before deciding the state should pay $2.3 million for 0.6 acre it took from a Howard Johnson’s hotel at the same roadway construction site. The jury award was more than seven times the $291,000 state officials initially were willing to pay.

Location, location, location goes the real estate mantra, and Irv Whitney figured the location of his little piece of God’s green earth on Cheek Road was worth a lot more than the state Department of Transportation was willing to pay for a sliver. Five years ago, DOT took 0.07 acre of Whitney’s land for a widening project, paying him $7300. Them’s fightin’ figures, or so Whitney might have said. He filed suit against DOT. Last week, a Durham County jury awarded Whitney $98,219 – 13 times the amount DOT paid him – for that 0.07 acre.

Was the award fair to the taxpayers of North Carolina? No. Was it fair to Whitney? You bet it was. As Whitney put it, his 3.6 acres on Cheek Road is “pretty much our 401(k) plan.” The 0.07 acre taken by the DOT thus had far more importance to Whitney and his wife than anyone else.

DOT took 3,049 square feet of Whitney’s land. The Jury award in effect set the price at $32.21 a square foot. In Whitney’s defense, we should note that if a house in good condition had been on his 3,049 square feet, DOT likely would have paid much more than $98,219.

Whitney’s attorney, Jay Ferguson, engineered the courtroom victory. This is Lawyer Ferguson’s second trump of DOT. Two years ago, he won a jury award of $135,475 for a Wake Forest couple that had been offered $34,500 for part of their property.

Moral of these stories: If you think government is shortchanging you in a property taking, get an independent appraisal, a sharp lawyer and go to court. You might win the legal Powerball, just as Irv Whitney did.