While representing a property owner in an eminent domain case, two experienced land condemnation lawyers in Raleigh alleged that they had discovered that a prolific real estate appraiser for the North Carolina Department of Transportation based his cost estimate on the opinion of a contractor he’d never contacted.
The DOT’s appraiser, Haywood Newkirk, claimed that one of his associates had spoken with the contractor, John Cockrum, as part of the appraisal process for a commercial property in New Hanover County.
Cockrum’s name appeared in the appraisal documents that Newkirk submitted. But when George and Stephanie Autry – married lawyers who practice at Cranfill Sumner & Hartzog – contacted Cockrum, he said he’d never talked with Newkirk about the property, a ProBuild building materials store in Wilmington.
“That’s right,” Cockrum said in an interview. “In the ProBuild case, my name was used in the appraisal and I had never provided any opinion of cost or any detailed information regarding that property. I didn’t know anything about it until George and Stephanie called to get my feedback on it.”
The Autrys ended up hiring Cockrum to evaluate the property and he testified for ProBuild at trial. His estimate was in line with the valuation of ProBuild’s appraiser, who determined that ProBuild was entitled to $2,995,000 in compensation for the loss of part of its property.
Newkirk’s appraisal, the one allegedly based on Cockrum’s opinion, came in at $303,525.
The jury went with ProBuild’s appraisal. After adding interest, the award totaled nearly $3.5 million.
The case was one of four that the Autrys tried in 2015 and that resulted in jury verdicts that were far in excess of the DOT’s offers. Newkirk did not provide appraisals in the other three cases.
But the Autrys alleged that another appraiser involved in one of the pre-ProBuild actions last year, Jeff Siebold, had also used Cockrum’s name in appraisal documents without Cockrum’s knowledge. In that case, the DOT offered the owner $263,007 and the jury awarded $1.2 million.
“The way we dealt with it at that time was I just questioned the guy [Siebold] but we didn’t have Cockrum standing by with testimony. But we started smelling a rat,” George Autry said.
Siebold denied the allegation that he’d falsified appraisal documents, saying in an interview that he met with Cockrum “at least once, maybe twice” and they discussed cost estimates. “As I recall, we sat down and I had a list of questions and he gave me some answers and I jotted them down,” Siebold said. He added that he never paid Cockrum, who said that he always gets fees for his work.
“I’ve had other appraisers call and ask for cost information,” he added, “and when they do that I always ask them to send me something in writing and I always respond back in writing.”
Newkirk did not respond to interview requests. During the ProBuild trial, he relied on a handwritten note from his office to prove that one of his associates had talked with Cockrum.
“He brought in one sheet of paper with five or six words written on it and no one could tell what they meant,” George Autry said. “It [the note] had John Cockrum scribbled on it.”
In an email responding to the Autrys’ allegations, DOT spokesman Steve Abbott wrote that the agency’s appraisers “must use a nationally-recognized estimator service and then verify the results with local input and information.”
“DOT is not aware of any instance where our appraiser did not follow proper procedure in appraising property on behalf of DOT,” he added.
Roberta Ouellette, as assistant state attorney general and legal counsel for the North Carolina Appraisal Board, which oversees the state’s appraisers, was unaware of the agency ever having received a complaint centered on allegations like the ones the Autrys have made against Newkirk and Siebold.
If the board and its investigators determined that an appraiser issued a misleading report, disciplinary action could range from having to take a class up to suspension or revocation, Ouellette said.
“Generally, we don’t get complaints in litigation matters because we will look at all appraisals done on whatever the assignment is,” she added.
Asked why she and George Autry did not file a complaint with the board, Stephanie Autry said, “We don’t believe it’s our role to seek disciplinary action from a licensing board. The litigants can do that if they want, but usually they’re more concerned about getting fairly compensated by the DOT.”
She also asserted that winning big verdicts against the DOT sends a stronger message than complaining to the board.
“The way we stop this is by getting the verdicts we’ve been getting. We believe it’s the jury’s role to decide who’s telling the truth and the jury has clearly decided,” she said. She estimated that she and George Autry have recovered $155 million more than what the DOT offered their property owner clients.
“It’s been eight years since we’ve tried a case and the jury didn’t award as much or more than our appraiser’s amount,” George Autry said. “And it’s not because we’re geniuses. Anybody looking at it from the outside would recognize that something’s broken.”
George Autry, who worked as an eminent domain lawyer for the state for about eight years before going into private practice, said the culture at the DOT has changed.
“The right-of-way department at the DOT is doing it the wrong way,” he said. “They don’t listen to the lawyers. They just want to get the land as cheap as they can.”
And the DOT’s go-to appraisers “are a product of the culture they’re exposed to,” Stephanie Autry added.
Newkirk testified during the ProBuild trial that he’d been hired to perform at least 800 appraisals for the DOT within the past three years. He also said DOT jobs account for at least half of his work. Newkirk’s associates handle the appraisals and he signs off on their reports.
“He’d have to be signing an appraisal report almost every single day,” George Autry said. “These are 70- to 80-page documents that go into great detail about the property in the before condition and after condition.”