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Issue  125  Article  213
Published:  12/1/2005

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Marketable Title Act Decision
Chris Burti, Vice President and Legal Counsel

We have a recent decision on the relative burdens of the parties claiming rights to a landing area offered for dedication in a subdivision plat in Hill v. Taylor, COA04-1698, filed in the North Carolina Court of Appeals on November 15, 2005. Access to water is becoming an increasingly litigated property issue as affordable waterfront property becomes increasingly scarce. This decision should shed some light on the continued viability of some of the older dedications so frequently seen in the early waterfront developments.

The plaintiffs in this case claim an interest in a lot in Carteret County shown as Lot 1, Block 6, on a recorded plat titled "Map Showing Property of Beaufort Houseing [sic] Corporation. The plat lays out the lots and streets in the subdivision, and bears the legend "Landing for Lot owners", with respect to the disputed tract.

Beaufort Housing Corporation conveyed various lots, including lots currently owned by several plaintiffs, and referenced the plat in these conveyances. There generally has been a dock extending from the landing into the waters of Taylor 's Creek since the 1940's. Since then, owners of property within the subdivision, including several plaintiffs and their predecessors in interest, have used the landing and the piers located there for access to Taylor's Creek.

Defendant recorded a deed in 1993 purporting to convey the landing to the defendant. In 1997 or 1998, the defendant constructed a new dock at the landing. Later, the defendant constructed a gate on the dock and marked the gate with a "private dock" sign. The plaintiffs then filed a complaint to quiet title and for declaratory judgment in 2000.

Plaintiffs alleged in the alternative that they:
“(a) [were] the owners of the lot identified as "Landing for lot owners," on the plat recorded in Book 1, page 226, Carteret County Registry, and they, or their predecessors in title [had] been owners of said plat since the recording of said plat [in] February, 1945; or,”
“(b) [held] an easement to and right to use the lot identified as "Landing for lot owners," on the plat recorded in Book 1, page 226, Carteret County Registry, and they, or their predecessors in title, [had] been owners of said plat since the recording of said plat [in] February, 1945.”

“Plaintiffs also alleged that defendant claimed an estate or interest in real property adverse to plaintiffs and that defendant was obstructing plaintiffs in their use of the landing. Defendant answered and counterclaimed, alleging that he was the owner in fee simple of the real property described by plaintiffs as the landing.”

At trial, the plaintiffs introduced into evidence a connected chain of title dating back to a deed dated April 26, 1945 to Beaufort Housing Corporation, which also included ownership of the landing. At the conclusion of plaintiffs' evidence, the trial court granted defendant's motion for a directed verdict pursuant to Rule 50 of the North Carolina Rules of Civil Procedure as to all plaintiffs except Lawrence B. Wilson, Jr., Elizabeth B. Wilson, L. Jarvis Herring, Sally Herring and Suzanne Hill (remaining plaintiffs). “In support of its ruling, the trial court determined that the North Carolina Real Property Marketable Title Act (Marketable Title Act) did not apply because of the exception to the Marketable Title Act at N.C. Gen. Stat. § 47B-3(3) (the possession exception).”

“Defendant presented his evidence as to remaining plaintiffs. Defendant's evidence was followed by a rebuttal from remaining plaintiffs. At the conclusion of all the evidence, defendant renewed his Rule 50 motion for a directed verdict. The trial court granted defendant's motion as to remaining plaintiffs. The trial court orally stated the bases for its ruling. First, the trial court reiterated its ruling that the Marketable Title Act did not apply by virtue of the possession exception and directed a verdict for defendant on that ground. Second, the trial court also directed a verdict for defendant on the basis that remaining plaintiffs never established the on-the-ground location of the landing in accordance with Day v. Godwin, 258 N.C. 465, 128 S.E.2d814 (1963).”

On the appropriateness of the directed verdict, the Court set out the procedural rule as follows:

“Pursuant to N.C. Gen. Stat. § 41-10 (2003), "[a]n action may be brought by any person against another who claims an estate or interest in real property adverse to him for the purpose of determining such adverse claims[.]" In order to establish a prima facie case for removing a cloud on title, two requirements must be satisfied: "(1) the plaintiff must own the land in controversy, or have some estate or interest in it; and (2) the defendant must assert some claim in the land adverse to [the] plaintiff's title, estate or interest." Hensley v. Samel, 163 N.C. App. 303, 307, 593 S.E.2d 411, 414 (2004) (citing Chicago Title Ins. Co. v. Wetherington, 127 N.C. App. 457, 461, 490 S.E.2d 593, 597 (1997), disc. review denied, 347 N.C. 574, 498 S.E.2d 380 (1998)). "'[O]nce a plaintiff establishes a prima facie case for removing a cloud on title, the burden rests upon the defendant to establish that his title to the property defeats the plaintiff's claim.'" Id. (quoting Wetherington, 127 N.C. App. at 461, 490 S.E.2d at 597).”

The trial court had ruled that plaintiffs could not use the Marketable Title Act to prove their interests because defendant was and had been in possession of the real property at the time the suit was filed. The Court of Appeals ruled that the trial court had erroneously applied the possession exception to the Marketable Title Act. Relying on Heath v. Turner, 309 N.C. 483, 308 S.E.2d 244 (1983) the Court noted that the mere fact of possession by the defendants does not by itself establish their ownership of the land. The possession exception only operates to defeat a competing marketable title if the possessors show that they own the real property independently.

The court noted with citations that it is well settled that a lot owner who purchases real property in reliance on a plat depicting certain amenities obtains an interest in those amenities in the nature of an easement appurtenant. The plaintiffs made a sufficient showing establishing prima facie ownership of an easement in the landing in their chain of title, which then placed the burden on the defendant to prove a superior title.

Since the possession exception did not prevent the plaintiffs from relying on the Marketable Title Act to establish prima facie ownership, the defendant's possession only protected whatever interest he owned at the commencement of the action. It was a jury question as to whether plaintiffs owned any interests in the landing, and if so, whether defendant owned an interest that defeated plaintiffs' interests.

Plaintiffs also contended that the trial court erroneously granted defendant a directed verdict at the close of all the evidence on the ground that plaintiffs failed to locate the description of the landing contained in their chains of title on the earth's surface. The Court of Appeals noted that in “Batson v. Bell, 249 N.C. 718, 719, 107 S.E.2d 562, 563 (1959), our Supreme Court noted:
The rules applicable to the ascertainment of boundaries trace back to the early history of the State. They are firmly established by numerous consistent decisions.”

“What are the boundaries is a matter of law to be determined by the [trial] court from the description set out in the conveyance. Where those boundaries may be located on the ground is a factual question to be resolved by the jury.”

In Paper Company v. Jacobs, 258 N.C. 439, 442, 128 S.E.2d 818, 820 (1963), our Supreme Court held that if there is any competent evidence locating a tract of land on the ground, the issue of location becomes a jury question and a directed verdict is not proper. In the present case, plaintiffs presented sufficient competent evidence establishing the on-the-ground location of the landing. Therefore, the trial court erred by directing a verdict for defendant on this basis. One can take great comfort in that it is exceedingly rare for a property to be found incapable of proof as to its location or boundaries.

We are often asked to insure possessory interests over possible claims arising from plat dedications involving somewhat vague water access rights. This decision and the cases cited herein, illustrate our courts’ willingness to protect the interests of lot owners in such access and therefore, why it is imprudent to ignore them.

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