July 2002

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Wright v. Smith, 144 NCApp. ____ (2002), No. COA01-530, Filed on 18 June 2002 is a case that should provide a measure of comfort for title examiners. This case assures that an applicable statute of limitations is not tolled by N.C.G.S. Sec. 1-22 where an administrator has never been qualified.

The plaintiff in this appeal filed a complaint dated in December of 1998 alleging that John Wright, Sr. (Wright, Sr.) contracted to devise certain property at his death to John Wright, Jr. (Wright, Jr.). Plaintiff sought specific performance of the contract against defendant Marion Smith, as administrator of the estates of Wright, Sr. and Wright, Sr.'s wife. Wright, Sr. conveyed a tract of land to Wright, Jr. on 18 May 1977. A message was typed on a map of the conveyed tract of land which stated: "To whom it may concern: Jr. and Dorothy Wright has paid $1000 for this 4 acre tract. And at my death the remainder of my estate goes to my son, John Wright, Jr. for the love and care he has taken of me and Mom." The paper was signed, "J. E. Wright". Wright, Sr. died intestate in 1978 and Wright, Jr. died intestate in 1989. Wright Sr.’s widow conveyed about five acres of land to her daughter, defendant Burleson, in 1991and died intestate in 1995. Plaintiff contends this property was part of the estate Wright, Sr. contracted to give to Wright, Jr. in 1977.

The trial court granted defendant Burleson's motion for summary judgment after determining that the action was barred by the applicable statute of limitations. Plaintiff appealed contending that the statute of limitations in this matter did not begin to run until an administrator was appointed for Wright, Sr.'s estate, which did not occur until 1998.

In affirming the trial court, the Court of Appeals noted that Wright Sr.'s administrator never had possession of or title to the tract of land. "‘When a property owner dies intestate, the title to his real property vests immediately in his heirs.’" Swindell v. Lewis, 82 N.C. App. 423, 426, 346 S.E.2d 237, 239 (1986); N.C. Gen. Stat. § 28A-15-2(b) (1999) (‘The title to real property of a decedent is vested in his heirs as of the time of his death[.]’)". Title to the disputed real property passed to and vested in Wright, Sr.'s wife immediately upon the death of Wright, Sr. The administrator of Wright, Sr.'s estate never possessed title to the disputed real property. N.C.G.S Sec. 1-22 (1999) provides: "If a person against whom an action may be brought dies before the expiration of the time limited for the commencement thereof, and the cause of action survives, an action may be commenced against his personal representative or collector after the expiration of that time; provided, the action is brought or notice of the claim upon which the action is based is presented to the personal representative or collector within the time specified for the presentation of claims in G.S. 28A-19-3."

The Court observes that N.C.G.S. Sec. 1-22 allows for a suspension of the statute of limitations between the period from the death of the decedent and the appointment of an administrator. The Court found that N.C.G.S. Sec. 1-22 is not applicable in this case. "Our Supreme Court stated in Ragan v. Hill, 337 N.C. 667, 447 S.E.2d 371 (1994) that "our statutory scheme for handling claims against decedents' estates presumes the appointment of a personal representative or collector to receive those claims. We do not believe that the legislature intended the non-claim statute to operate where no personal representative or collector has been appointed." Id. at 673, 447 S.E.2d at 375. In Ragan, our Supreme Court focused on N.C. Gen. Stat. § 28A-19-3 and did not specifically mention N.C.G.S. § 1-22. However, N.C.G.S. § 1-22 also presumes an administrator has been appointed. The title of N.C.G.S. § 1-22 reads "Death before limitation expires; action by or against personal representative or collector[,]" in part indicating the legislature intended the statute to apply only when a personal representative has been appointed. N.C.G.S. § 1-22 also requires that an action be brought in compliance with the time specified for the presentation of claims in N.C.G.S. § 28A-19-3. Given these provisions, we hold no suspension of the statute of limitations can occur until a personal representative is appointed to administer the estate. If such an appointment occurs before the statute of limitations lapses, N.C.G.S. § 1-22 will allow the time limit within which to file an action against the estate to be extended according to N.C.G.S. § 28A-19-3. However, if a personal representative is not appointed, these two statutes are not activated, and the claim is subject to the traditional statute of limitations that apply to the particular cause of action."

While we still do not have a case from the North Carolina Supreme Court interpreting this statute in this context, we would expect this reasoning to withstand scrutiny. It should provide title examiners some assurance concerning the enforceability of stale claims in title to property derived from old un-administered estates.

INTERMOUNT DISTRIBUTION, INC. v. PUBLIC SERVICE COMPANY OF
NORTH CAROLINA, INC., 44 NCApp. ____ (2002), No. COA01-238, Filed on 4 June 2002. This is an appeal that stems from a dispute over the width of an easement granted in 1955. It should be enlightening to title examiners in that it demonstrates the need to make decisions concerning the length of title examinations instead of merely defaulting to an arbitrary period such as thirty years.

Public Service Company of North Carolina, Inc. (PSNC) appeals from an order granting partial summary judgment in favor of Intermount Distribution, Inc. (Intermount). The relevant facts are as follows: Intermount is the successor in interest to Bessie Riddle ("Riddle") of a tract of land subject to an easement acquired by PSNC from Riddle in 1955. "The agreement granted PSNC and its successors and assigns, the right to maintain, construct, replace, change the size of, or lay one or more pipelines across the property for the transportation of natural gas and other materials that may be transported through a pipeline. The agreement gave PSNC the right to select the route by laying the first pipeline." Initially, PSNC laid an eight-inch pipeline within the easement. In 1997, PSNC began installing a second twelve-inch pipeline parallel to the original line. PSNC had maintained for many years that its easement was thirty-five feet to the west and fifteen feet to the east of the existing line. However, in an effort to accommodate Intermount's construction plans, PSNC relocated its easement and constructed the new line to the west of the old one. This gave Intermount an additional twenty feet east of the existing line for construction. This would locate the building fifteen feet from all lines as required by industry standards.

Intermount began to construct its building within ten feet of the old line. PSNC gave notice to Intermount that a clearance of fifteen feet was necessary for safety reasons. This action resulted from their inability to resolve the conflict. The only issue before the court was the enforceable width of the easement claimed by PSNC and the court granted partial summary judgment holding that PSNC's pipeline easement was eight inches wide.

The Court of Appeals noted that although, "the right-of-way agreement did not distinctly specify the width of the easement, the agreement provided that PSNC shall have ‘all other rights and benefits necessary or convenient for the full enjoyment or use of the rights herein granted including the right from time to time, to lay, construct, maintain, alter, repair, remove, change the size of, and replace one or more additional lines of pipe approximately parallel with the first pipe line laid by’ PSNC."

The Court observes "that an easement deed, such as the one disputed in the instant case, is a contract. See Cochran v. Keller, 84 N.C. App. 205, 211, 352 S.E.2d 458, 462 (1987), disc. review denied, 322 N.C. 605, 370 S.E.2d 244 (1988). ‘In North Carolina, it is an established principle that the possessor of an easement has all rights that are necessary to the reasonable and proper enjoyment of that easement.’ Keller v. Cochran, 108 N.C. App. 783, 784, 425 S.E.2d 432, 434 (1993). Employing rules of construction of contract the Court states that if "‘"the conveyance is silent as to the scope of the easement, extrinsic evidence is inadmissible as to the scope or extent of the easement."’ Swaim v. Simpson, 120 N.C. App. 863, 864, 463 S.E.2d 785, 786-87 (1995)(quoting Patrick K. Hetrick & James B. McLaughlin, Jr., Webster's Real Estate Law in North Carolina, § 15-21 (4th ed. 1994)), affirmed, 343 N.C. 298, 469 S.E.2d 553 (1996). However, in this situation, a reasonable use is implied. Id. In such cases, ‘"[a]n easement in general terms is limited to a use which is reasonably necessary and convenient . . . for the use contemplated."’ Shingleton v. State, 260 N.C. 451, 457, 133 S.E.2d 183, 188 (1963)(quoting 12A Am. Jur., Easements, § 113, pp. 720, 721); see also Keller, 108 N.C. App. at 784-85, 425 S.E.2d at 434. ‘Whether a specific use of an easement constitutes a reasonable use is a question of fact and is not a matter of law.’ Id."

With no North Carolina decisions on point the Court found "guidance in other jurisdictions that have held that when the width of an easement is not specifically defined in the grant, such as the one in the instant case, then the ‘previously undefined width is then established by the rule of reasonable enjoyment.’ Sunnyside Valley Irrigation District v. Dickie, ____ Wash. Ct. App. ____, 43 P.3d 1277, 1281 (2002). Under the doctrine of reasonable enjoyment, the width of an undefined easement is determined by considering the purpose of the easement and establishing a width necessary to effectuate that purpose. Id. Where an easement is granted without limitations on its use, ‘the grantee may partake in other reasonable uses that develop over time if such uses significantly relate to the object for which the easement was granted.’ 61 Am. Jur. 2d, Pipelines, § 31 (2002)."

The necessity of finding these relevant facts precludes summary judgment. Therefore, the court remanded the case back to the trial court. It is becoming increasingly common to foreshorten the period of a title search for the sake of expediency. In highly developed metropolitan areas, this may not involve undue risk. However when examining the title of raw land the existence of these old, active easements may cause substantial problems if undiscovered prior to closing. The potential for problems is exacerbated by the diminished employment of surveys. It should also be noted that most easements of the type litigated in the instant case were recorded during the time period between 1930 and 1970. The title examiner must always evaluate the need for a longer or shorter search period on a case-by-case basis rather than adopting an arbitrary rule.

This is a question that we are asked by attorney offices because of requests that they receive from lenders and/or brokers.

We can issue commitments showing both loans to be insured on one commitment. This method has proved to be more efficient, less confusing to all parties, and many times it saves premium dollars to the consumer. One final title opinion can be completed, and one check can be issued from the attorney trust account.

When the final title opinion is submitted, two separate policies will be issued for the two separate lenders. If we are provided with the loan numbers, we will reference that number on each of the policies, which is helpful to the lender.

If you have any questions, or if there is some confusion from your lender/broker, do not hesitate to give us a call.

Statewide Title recognizes and appreciates the continued good work of Habitat For Humanity and all of its volunteers. Many families now have homes that they otherwise would not have been able to afford due to the generosity and hard work of many great Americans.

We at Statewide Title continue our commitment to provide four policies per county per year free of charge for the Habitat For Humanity homes. If you have any questions about a Habitat closing that you have and whether it qualifies for the free title insurance premium, please call any of our offices.

by Bonnie D. Windom, Eastern Operations Director

The Statewide Title Employee of the Month is Kay Easley, who works in our Document Imaging Department. Kay has been with the Company for a year. Prior to coming to work at Statewide, Kay had worked in telemarketing. She says that having worked in the noisy telemarketing field has caused her to really appreciate the serenity of a quiet office, so she loves her job as Document Imaging Specialist at Statewide.

Kay is originally from Lexington, NC. She moved to Salisbury in the summer of 1985 and loves the Salisbury life. Kay and her husband, Johnny, have been married for almost ten years, and she says that they both deserve a medal!

For relaxation, Kay enjoys reading, watching TV, and shopping. In the summer, you can find her at the pool every Saturday and Sunday. She has a pet dog named Ivey that is a Beagle/Cocker Spaniel mix.

If you haven’t met Kay, we know that you would enjoy meeting her. Congratulations, Kay, our Employee of the Month!

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Last Updated: Tuesday, January 18, 2005