Court Opinion

ID: 9561051
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:01:46.011119+00
Date Added: 2024-06-11T09:13:30.184404
License: Public Domain

Chief Justice EXUM
dissenting.
First I think it important to set out the procedural posture in which this case reaches the Court. Plaintiffs filed this action in November 1985 for a declaratory judgment that Durham’s ordinance rezoning the property in question from office institutional (0-1) to residential (R-10) was invalid because, among other reasons, *377it was an unconstitutional taking without just compensation under the state and federal constitutions. Only plaintiffs’ taking claims proceeded to trial. The jury was instructed by Judge Bowen in pertinent part as follows:
The enactment of zoning ordinances is not a contract with the property owners of the City and confers upon them no vested rights to have the ordinances remain forever in force, or to demand that the boundaries of each zone or the uses to be made of the property in each zone remain as declared in the original ordinance. Such legislation may be repealed in its entirety or amended as the City’s legislative body determines from time to time to be in the best interest of the public subject only to the limitations of the statutes and the limitations of the Constitution of North Carolina, and the Constitution of the United States.
The City Council may lawfully and without payment to the landowners regulate land and thereby reduce the value of land.
The mere fact that an ordinance resulted in depreciation of the value of individual property or restricts to a certain degree the right to develop it as he deems appropriate is not sufficient reason to render the ordinance invalid.
A rezoning or a regulation constitutes a taking of the landowner’s property and requires that the City pay just compensation to the landowner when the landowner is deprived of all practical uses of the property and the property is rendered of no reasonable value.
Members of the Jury, both the North Carolina Constitution and the United States Constitution prohibits a governmental taking of property without just compensation.
The R-10 zoning ordinance imposed by the City on the plaintiffs’ property is invalid and therefore, void if it constitutes a taking of the plaintiffs’ property.
The R-10 ordinance is an invalid exercise of police power and void at the taking if the plaintiffs were deprived of all reasonable, beneficial or practical use of their property, con*378sidering the economic and physical feasibility of the use of the property as R-10.
In considering this issue you may from all of the evidence examine the uses to which the plaintiffs’ property can be economically and practically put under the R-10 zoning classification.
So, Members of the Jury, if you find by the greater weight of the evidence that the plaintiffs were deprived of all reasonable, beneficial or practical use of the property, considering the economic and physical feasibility of the use of the property as R-10, then you should answer this issue, yes, that is, finding that the R-10 zoning is invalid.
If you fail to so find, then you should answer this issue, no.
The jury found there was a taking but found plaintiffs had suffered no damages.
Insofar as the jury found a taking, Judge Bowen entered judgment on the verdict and declared the ordinance invalid.1 He then allowed plaintiffs’ motion for judgment notwithstanding the verdict on the damages issue and awarded damages for a temporary taking of $150,937.50.2 He also allowed plaintiffs’ motion for costs of $600 and attorney’s fees of $61,598.61.
*379In an apparent effort to guard against an appellate court holding that the taking question should be decided by the court and not a jury (as defendant contended) Judge Bowen noted in his judgment that “if the issue of a ‘taking’ had been tried by this Court, without a jury, this Court would have entered findings of fact and conclusions of law in accordance with the jury and as shown on judgment attached hereto as ‘Exhibit A.’ ” The alternative judgment attached as Exhibit A included the following pertinent findings:
28. The R-10 zoning classification in the City of Durham permits the Property to be used for a single-family residence, child care facility, church, community building, government building, family care home, school, swimming pool and other miscellaneous uses.
29. Under the present R-10 zoning classification, the Property may only be used for the construction of one single-family residence due to its shape, access and width of lots without obtaining a use permit and a use of the Property as a child care facility, church, community building, government building, school, swimming pool, family care home (limited to 5 persons) or other miscellaneous uses, requires the issuance of a special use permit by the Board of Adjustment of the City of Durham.
30. If the Property were developed for residential purposes and subdivided into more than one lot, upon completion of curb, gutter and other city required improvements, the market value of the houses and lots would be less than the cost of constructing the houses with requisite streets and utilities.
31. There is no market for the sale of the Property for residential purposes or other permitted uses under the R-10 *380zoning classification and the Property has no reasonable value for the permitted uses.
32. The downzoning of the Property rendered the development of the Property for the permitted uses under the R-10 zoning classification impractical and unsuitable.
33. The downzoning of the Property deprived the Plaintiffs of the beneficial use of the Property by precluding all practical uses and the only use to which it is reasonably adopted.
34. The City of Durham, by downzoning the Property, deprived the Plaintiffs of all practical, reasonable, and beneficial use of the Property and rendered the Property valueless.
35. The City of Durham, by downzoning the Property, deprived the Plaintiffs of all economically viable use of the Property and the Plaintiffs have lost their investment backed expectations.
First, I believe Judge Bowen correctly submitted the taking issue to the jury. The evidence on this issue was in conflict. Plaintiffs’ evidence tended to support a taking and defendant’s evidence tended to the contrary. It was for the jury to resolve the conflict and determine the issue under correct instructions. See Helms v. Charlotte, 255 N.C. 647, 657, 122 S.E.2d 817, 825 (1961) (jury trial waived and taking issue submitted to judge by agreement). I believe it did so, and I vote to affirm Judge Bowen’s judgment entered on the verdict as to the taking issue.
I have no quarrel with the majority’s exposition of the proper legal standard to be used in determining whether a zoning ordinance constitutes an unconstitutional taking of property without due process. My disagreement is with the majority’s application of that standard to the evidence in this case.
The standard, as the jury was here instructed, is whether the zoning deprives owners (actual, or as here, beneficial) of all practical uses of their property so that it has no reasonable value. Responsible Citizens v. City of Asheville, 308 N.C. 255, 263-64, 302 S.E.2d 204, 209-10 (1983); Helms v. Charlotte, 255 N.C. at 653, 122 S.E.2d at 822. The standard is essentially the same under the state and federal constitutions. Compare Citizens and Helms with Agins v. Tiburon, 447 U.S. 255, 260-61, 65 L.Ed.2d 106, 112 (1980), and Penn Central Transp. Co. v. New York City, 438 U.S. *381104, 123-28, 57 L.Ed.2d 631, 647-51, reh’g denied, 439 U.S. 883, 58 L.Ed.2d 198 (1978). The standard does not require that the zoning prohibit all possible uses or that it render the property absolutely valueless. The key words in the standard are “reasonable” and “practical.” In Helms the Court remanded the taking issue for further findings and conclusions because:
The findings of fact and conclusions of law with respect to the indicated question do not support the judgment on this issue. The court found that a residence could be built, but it did not find that it would be practical, desirable and of reasonable value. In short, the court did not find that the lot had any reasonable value for residential use and that such use was practical.
Helms v. Charlotte, 255 N.C. at 657, 122 S.E.2d at 825.
The controlling issue before us is whether there is evidence in the case which, when viewed in the light most favorable to plaintiffs and when all conflicts, contradictions, and inconsistencies in the evidence are resolved in plaintiffs favor, is sufficient to support the jury’s determination that the rezoning deprived plaintiffs of all practical use of their property so that it had no reasonable value. See Williams v. Jones, 322 N.C. 42, 47-48, 366 S.E.2d 433, 436, reh’g denied, 322 N.C. 486, 370 S.E.2d 237 (1988).
I am confident there is such evidence. Much of it is summarized in the majority opinion. As the majority notes, both of plaintiffs’ real estate experts testified ultimately that the rezoning had deprived plaintiffs of all reasonable, practical, and beneficial use of their property. These opinions were based on the experts’ thorough familiarity with and their careful and well-documented study of the property. The experts did not overlook, but had carefully considered and were duly examined about, many of the uses of the property permitted by R-10 zoning.
The majority attempts to discredit this evidence. The majority states plaintiffs’ experts’ testimony was “in fact equivocal” and “[a] review of the experts’ testimony shows their opinions seem to be based partly on the likelihood that plaintiffs would not recapture their investment in the property.” The majority also states “that the only potential use for the property that plaintiffs evaluated in some detail in their evidence was the possibility of fully developing [the property] residentially” and “plaintiffs presented no evidence *382of the submission of a proposed development plan in an attempt to have the property rezoned for more dense residential use or other use.” The majority suggests the experts’ testimony supports its conclusion that the property has “both practical use and reasonable value” because it “shows that several uses permitted under R-10 zoning could be made of the property” and “that the property could have been sold undeveloped for between $20,000 and $25,000 at the time of trial.”
A careful review of the testimony makes plain, in my view, that the experts’ opinions were not equivocal and were based not on whether plaintiffs could recapture their investment in the property, but rather on a thorough evaluation of the property as rezoned. In addition, their testimony cannot be fairly characterized as detailed only with respect to an evaluation of developing the property residentially; rather their evaluations included analyses of the feasibility and practicality of a number of potential R-10 uses including development as a church or a day care center. Both experts’ evaluations of the site were based on topographic, environmental, and market considerations. While, as the majority correctly notes, plaintiffs’ experts did testify that several uses permitted under R-10 zoning could possibly be made of the property, they both testified that none of these possible uses were reasonable, practical, or beneficial because there was very little, if any, market for these uses. This testimony was corroborated by defendant’s witness Hay, who admitted on cross-examination that it could take “six months to a year” or even longer to find a purchaser for this property as zoned R-10. Witness Ward testified that he had “not seen any evidence on any information that has been produced that would indicate that the City Council would vote to change this zone to anything else” other than R-10, thereby demonstrating that any attempt to have the property rezoned for a more dense residential use would be fruitless. Moreover, an unsuccessful petition to rezone should not be a prerequisite to plaintiffs’ challenge to the present zoning ordinance as an unconstitutional taking.3 *383Finally, both of plaintiffs’ experts testified that the value of the property immediately before the rezoning was $550,000. Witness Cochran valued the property after the rezoning as an undevelopable tract at $20,000; and witness Ward, at $25,000.
Mr. Ralph Cochran, President of Allenton Development, Inc., testified that he was thoroughly familiar with the property in question, situated at the intersection of Interstate 85 and a busy, four-lane intercity connector known as Hillandale Road. Mr. Cochran was familiar with the property both before and after it was rezoned from O-I to R-10. He testified that in order to develop the property for single-family residential purposes, the only permitted use at time of trial not requiring a use permit to be issued by the Board of Adjustment, the owner would have to install a 32-foot wide street with curbing and asphalt paving and an eight-inch municipal sewer line with a fire hydrant as prescribed by municipal regulations. Installation of the street and sewer lines would permit as many as eight single-family residence building lots, provided the Board of Adjustment permitted size variances on two of the lots which would be slightly undersized. The cost of the improvements in Mr. Cochran’s opinion would be approximately $121,500 after which the eight lots could be sold for an average price of $13,500. The result is that the property would have a negative value for development for single-family residential purposes. Without the street and sewer improvements the land would accommodate only one single-family residence lot.
Mr. Cochran testified that he also gave consideration to all other uses under R-10 zoning which required the issuance of a use permit by the Board of Adjustment. He said that while the site “physically would fit a church,” there would be no market for the property for church use because churches “have to go where the people are .... [T]hey are going to the suburbs where the residential developments are going, where the young people are . . . .” Mr. Cochran testified that he had dealt professionally with approximately a dozen churches in an effort to locate sites for *384them. No church had ever chosen to locate on the quadrant of any intersection on Interstate 85, the Durham East-West Expressway or Interstate 40. In his opinion there would be “a very slim margin out there of buyers” for church purposes. Mr. Cochran testified that assuming the Board of Adjustment would issue a use permit for a day care center, nursery, preschool kindergarten, or retirement home, the property would be topographically suitable for such functions but there would be little if any market for a child care facility because of the heavy traffic and noise level and because people desire to locate them in the suburbs. He said the construction of private clubs in the Durham area in the last twenty years had been on the downswing and most private organizations were looking for land out in the county rather than in Durham.
Ultimately Mr. Cochran testified that based on his twelve years’ experience in the Durham real estate market and his familiarity with the development of R-10 property in Durham, the subject property was “just not suitable for that kind of development.” In his opinion the zoning change from O-I to R-10 deprived the plaintiffs “of the beneficial use of the property.” He valued the property zoned O-I at $520,000 as developable land and, zoned R-10, at $20,000 as undevelopable land. On cross-examination Mr. Cochran did not retreat from any of the opinions he offered on direct. Regarding the property’s use as a church, the following question and answer did occur on cross-examination:
Q. This property for use for a church would also have a value in excess of One Hundred Thousand and in excess of Two Hundred Thousand, wouldn’t it, sir?
A. I think that’s probably true. I don’t have specific numbers on what churches are paid these days.
Earlier, however, during cross-examination, Mr. Cochran made it clear that there was little if any market for the property as a church because, “my opinion is that most churches that are buying sites today are buying those sites in the suburbs and not in the maturing neighborhoods.”
On redirect examination Mr. Cochran testified that, under R-10 zoning, the property could not legally be developed for many of the uses he was asked about on cross-examination. He said it could not be developed for apartments, offices, or condominiums.
*385Mr. Frank Ward, President of Frank Ward Realty and Insurance Company, testified that he had had many years’ experience in appraising, listing, selling and developing properties, advising and counseling people in the real estate business in Durham and around Durham. He was thoroughly familiar with the evolution of the subject property over the last thirty years, including the construction of Interstate 85 and the enlarging of Hillandale Road to a major, four-lane intercity connector and north-south artery. He recalled the first commercial development in the Hillandale 1-85 quadrant to be a service station in the northwest corner. In the late 1960s or early 1970s, before the enlargement of Highway 70 to Interstate 85 and before Hillandale Road became a major four-lane artery, St. Luke’s Episcopal Church was built at or near the intersection. Since the upgrading of Highway 70 to Interstate 85 and the enlarging of Hillandale Road, however, all of the development in and around this quadrant had been exclusively commercial. The traffic is such at this intersection, according to Mr. Ward, that to go through the intersection on Hillandale Road and negotiate all the traffic signals requires two to three minutes.
In Mr. Ward’s opinion the property is too small for use as a church. Regarding the R-10 zoning of the property, Mr. Ward testified, “My opinion is from the point of practicality and financial consideration it is not a practical use for the piece of property.” Mr. Ward further stated that in his opinion the plaintiffs have been deprived of “all reasonable, practical and beneficial use” of the property. He said “from practical financial consideration . . . to try ... to use the property for single-family use would be foolhearted, and I think showing very poor judgment on the part of someone.” In Mr. Ward’s opinion the property zoned O-I had a value of $550,000 as developable land and, zoned R-10, $25,000 as undevelopable, vacant land.
Mr. Ward testified that he considered all other permitted uses in an R-10 zone “and I ended up rejecting these optional uses because of supply and demand situations that I’ve seen in the market place and because of competitive situations that I think exist in most of these situations where people have to make decisions about them.” He testified, “As a practical matter I do not see it as a church location and I would not suggest to a church that they locate there . . . unless the consideration was the best that I could get for my money or I could do much better there for my money than I can do some other place.” As for day care *386centers Mr. Ward said, “They want to be in a location where they will be the most successful . . ., where they will have the greatest appeal, the greatest convenience to their customers, and I do not think this is that kind of location. . . . [T]he traffic in and out of there . . . would be horrendous. . . .” In Mr. Ward’s opinion there was no practical use for the property for any type of child care institution; and there was no demand for the property for use as a community center, club or fraternal organization.
In Mr. Ward’s opinion the property, zoned R-10, would be worth $25,000 “for speculative investment” only. Mr. Ward said, “Most property zoned R-10 is not on the quadrant of an interstate highway and most of it is zoned and sold for residential purposes.” He said that in the last ten to fifteen-year period he could not recall the development of any property for any of the permitted uses within an R-10 zone on any quadrant of the various Durham street intersections with Interstate 85, the East-West Expressway, or Interstate 40.
Again, Mr. Ward did not retreat on cross-examination from any of the opinions he firmly expressed on direct.
Accepting plaintiffs’ evidence as true and viewing it in the light most favorable to plaintiffs, as the majority concedes is required, I conclude there was sufficient evidence from which the jury could find that the rezoning had deprived plaintiffs all practical use of the property so that it had no reasonable value.
There can be cases in which the evidence is so one-sided that rezoned property can be said as a matter of law to have or not to have “practical use” and “reasonable value.” This is not such a case. Here the evidence is conflicting, and even the plaintiffs’ evidence considered alone would not be enough to conclude as a matter of law that a taking occurred. Rather it is for the jury first to decide what evidence it finds credible and second to apply the legal standard as given it by the trial court to that evidence to determine whether a taking has occurred. Plaintiffs’ evidence, if believed, is enough for a jury to conclude under the standard that a taking occurred.
If plaintiffs’ evidence is believed, the rezoned property is analogous to an automobile which has been completely destroyed, “totaled” in the vernacular, in a collision. Although the automobile has some value as junk, its owner has been deprived of all practical *387use of the automobile so that it has no reasonable value as an automobile. Similarly, here plaintiffs’ evidence tended to show that after rezoning the property had only minimal, residual value as undevelopable land. The rezoning deprived plaintiffs of all practical use of their property so that its minimal, residual value as undevelopable land was simply no longer reasonable. At least the evidence was such that a jury could so find.
I also disagree with the position taken by Justice Martin in his concurring opinion. First, the City of Durham does not rely on the fact that the contract between plaintiffs and the owners for the sale of the property had not been closed and title transferred at the time of rezoning. This point was neither briefed nor argued before us, except in response to questions directed to counsel by Justice Martin.
Second, at the time of rezoning plaintiffs were under a contractual obligation to purchase the property at the agreed-upon price. I am confident that the sellers of the property would have been entitled to specific performance of the contract at the agreed price had plaintiffs refused to comply with the contract.
As to when specific performance [of a contract for conveyance of land] will be enforced in this jurisdiction the rule is clearly stated in Combes v. Adams, where Hoke, J., speaking for the Court, said: ‘It is accepted doctrine that a binding contract tp convey land, when there has been no fraud or mistake or undue influence or oppression, will be specifically enforced. . . . [M]ere inadequacy of price, without more, will not as a rule interrupt or prevent the application of the principle.’
Knott v. Cutler, 224 N.C. 427, 432, 31 S.E.2d 359, 361 (1944) (citations omitted). I can find no reported case in this jurisdiction where specific performance of a contract for the sale of land, at least in the absence of fraud, mistake, undue influence or the equivalent, has not been awarded against the nonperforming party. See, e.g., Texaco v. Creel, 310 N.C. 695, 314 S.E.2d 506 (1984) (specific performance approved despite rather severe “inequities” to seller). While Byrd v. Freeman, 252 N.C. 724, 114 S.E.2d 715 (1960), relied upon by Justice Martin, does quote broader language from American Jurisprudence, the Court there affirmed a decree of specific performance awarded by the trial court.
*388In conclusion and for the reasons stated I would vote to affirm the trial court’s entry of judgment on the verdict as to the taking issue. My inclination, for the reasons set out above in footnote 2., would be to vacate the trial court’s allowance of plaintiffs’ motion for judgment notwithstanding the verdict on the damages issue and remand this issue for a jury trial.
Justices Frye and Webb concur in this dissenting opinion.

. The remedy for a zoning ordinance which amounts to an unconstitutional taking is to declare the ordinance void insofar as it applies to the property taken. See Helms v. Charlotte, 255 N.C. 647, 653, 122 S.E.2d 817, 822 (1961), citing McQuillin on Municipal Corporations.

. Damages based on a temporary taking were calculated as follows: value of the property immediately prior to the taking ($550,000), less the value of the property immediately after the taking ($25,000), multiplied by the market rate of return (10%), and by the length of time of the taking in years (from 6 May 1985 through 18 March 1988).
I believe (and there seems to be no dispute between the parties on this point) that, assuming there has been a temporary unconstitutional taking, i.e., from the time of the ordinance’s enactment to the time it was declared void, damages are properly allowed for it. The trial court instructed the jury to calculate these damages essentially as it did when determining them itself. It also instructed the jury that the damages thus derived “should be adjusted by any appreciation of the land that has occurred during the time the R-10 zone was in effect.” Considering the post-verdict motions, the trial court presumably thought this “appreciation” instruction was responsible for the jury’s not awarding any damages for a temporary taking and was error. It, therefore, awarded plaintiff’s motion for judgment notwithstanding the verdict on the damages issue and proceeded to calculate these *379damages itself, without any adjustment for appreciation, based on the plaintiffs evidence.
Without intending to express a firm opinion, I doubt that the trial court had authority to enter judgment notwithstanding the verdict in favor of plaintiffs on the damages issue. This is tantamount to a directed verdict in favor of the party with the burden of proof on an issue in the case on which the evidence was in sharp conflict. The better course would have been for the trial court simply to set aside the verdict on the damages issue as being against the greater weight of the evidence or because, as may have been the case here, the court thought it had committed error in its instructions on this issue. The court could then order a new trial in which the jury, on proper instructions, could assess the damages based on how it viewed the evidence.

. A rezoning application prerequisite to a taking claim fails to take into account the nature of these claims and the remedies available. As to the landowner’s primary remedy, the prerequisite is illusory and provides ultimately no real, additional protection for the zoning authorities. This is so because if the landowner succeeds in establishing a taking by the challenged zoning classification, the ordinance will simply be voided insofar as it applies to the landowner’s property. At that point the zoning authorities must consider other possible zoning classifications. I believe zoning authorities would prefer to have their zoning classifications *383remain in effect until it has been judicially determined that they are invalid, rather than respond, short of such a determination, to an application for a change which they have already, by implication if not expressly, rejected. For a secondary remedy the landowner may also be entitled to damages for any temporary taking of his property during the time an invalid zoning classification remained in effect. A rezoning application prerequisite to a taking claim eliminates altogether this secondary remedy.