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Issue  231  Article  371
Published:  10/31/2016

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Atlantic Coast Props., Inc. v. Saunders, (365A15) 4/15/2016
Chris Burti, Vice President and Senior Legal Counsel

Supreme Court sets Proof of Ouster of Tenant in Common

One of the challenges in establishing title by adverse possession is overcoming the hurdle presented with extinguishing the interests of tenants in common. In order to prove adverse possession against cotenants, one must prove exclusive control and ouster for the prescribed period of twenty years, or at a minimum, constructive ouster. This appeal was the culmination of the litigation that resulted when a purchaser of an undivided one-half interest in land brought a special proceeding to partition the property. The respondent cotenants claimed that they had acquired sole title to the property as the result of their ancestor's constructive ouster of all others having an ownership interest in the land. The North Carolina Supreme Court affirmed per curiam the opinion issued by the North Carolina Court of Appeals in its file No. COA14-1278 filed October 6, 2015 determining that constructive ouster had not been proved for summary judgment purposes and remanding the case to the trial court for further proceedings.

Three children inherited their father's 14-acre tract of land in Currituck County at his death in the early 1920s. One of these children remained on the property, lived there throughout his life and his descendants continued to live on the property. The other two children moved away from North Carolina and eventually their shares in the property passed through the process of family inheritance until only two of the original three families each owned an undivided one-half interest in the property. One being the family that was still living on the property and the other being one of the families living out of state who was the predecessor in title to the petitioner in the original proceeding. According to the factual recitation in the opinion, the two families did not keep in touch, and the out-of-state family never visited the property. The facts were extensively discussed in the majority and dissenting opinions and the record in the case reflected that there was substantial evidence introduced from which a jury could decide that the family living on the land acknowledged the interest of their out-of-state relatives in various ways, "even at one point suggesting that they partition the property to give the out-of-state relatives sole title to their share." In 2005, the out-of-state family sold their interest in the property to the petitioner.

The respondents are the descendants of the original heir who stayed on the land and as a defense to the partition proceeding they asserted for the first time that they had acquired sole title to the property over 80 years earlier by adverse possession under the theory of constructive ouster. The trial court granted summary judgment in their favor, concluding that the petitioner "failed to forecast sufficient evidence to rebut Respondents' showing of constructive ouster." The Court of Appeals did not agree with the trial court's conclusion and the North Carolina Supreme Court succinctly agreed.

The Court of Appeals majority opinion summarizes the issue succinctly: "If one cotenant has been in 'sole and undisturbed possession and use of the property for twenty years, without any demand for rents, profits or possession by the cotenants, constructive ouster of the cotenants is presumed.' Herbert v. Babson, 74 N.C. App. 519, 522, 328 S.E.2d 796, 798 (1985). But if the occupying tenant 'does anything to recognize title of the cotenants during the twenty-year period, the presumption of ouster does not arise.'" The opinion then discusses the evidence introduced in the case suggesting that as "all of the original heirs to this property are long dead, so no one can testify directly to what was said in the 1920s or 1930s." This Court observed that "under Supreme Court precedent, a reasonable jury could conclude from this evidence that the family living on the property always recognized their out-of-state relatives' interests. That is all that is required to defeat summary judgment. Private property rights are the bedrock of liberty in our nation. In a case like this one, where a joint property owner's rights are threatened through the legal fiction of constructive ouster, without any actual ouster, we must be particularly vigilant in applying the well-settled summary judgment standard and permitting a jury to resolve fact disputes. To hold otherwise would expose well-intentioned property owners across our State to losses from the legal gamesmanship of their cotenants."

The opinion notes that an appeal from a summary judgment is reviewed de novo and it thoroughly analyzes the facts interposing precedent cited for both admissibility, probity and weight, and ultimately concluding that while there was evidence of exclusive possession, there was also sufficient evidence which "taken together and viewed in the light most favorable to [the petitioner], creates a genuine issue of material fact as to whether [the North Carolina] heirs recognized the ownership interest of the [out of state heirs] thus defeating the presumption of constructive ouster."

The dissenting opinion expresses the view that as there was no such admissible evidence presented showing such recognition in the first twenty years, that constructive ouster had established the right of possession and the evidence in the case of the more recent actions of the heirs in possession should be disregarded as irrelevant. The opinion makes a compelling argument about the absence of evidence and the great length of the possession. This would have more merit had there been any evidence concerning that period rather than mere inference from an absence of evidence. The majority opinion discourses upon the issue as follows:

Our Supreme Court considered and rejected this precise argument in a nearly identical context, holding that evidence from outside a particular twenty-year period can be used to infer a consistent position within that twenty-year period. See Clary v. Hatton, 152 N.C. 107, 67 S.E. 258, 259 (1910). In Clary, three siblings inherited property from their parents in 1872. Id. The brother lived on the property during his lifetime; his two sisters did not. When the brother died in 1908, his heirs claimed the entire property by adverse possession. Id. Although there was no evidence that the brother recognized his sisters' interests from 1872 to 1892, the sisters presented evidence that their brother acknowledged their interest in 1900, telling another man that "he only claimed or owned one third of the lot and his sister each owned a third." Id. The Supreme Court held that the brother's "declaration in 1900 in acknowledgement and recognition of his sisters' title is evidence that prior to then he had never claimed adversely to them." Id. This was sufficient evidence "to go to a jury that the possession of [the brother] was never adverse to the rights of his sisters ... and that consequently [the brother] acquired no title by reason of his possession."

It is important to consider that the possession arguments tend to lose traction in the context of family lands where more informal recognition of property rights commonly carry greater weight among family members than they do among strangers. It is to be observed that there apparently never was any ownership issue among family members until a third party acquired the one half interest and partitioned the land. It is also very important to recognize that the Court of Appeals was not willing to terminate property rights simply because one part of the family had moved away...even after 85 years. As the majority asserts:

Finally, there are important policy reasons for following Clary and reversing the entry of summary judgment in this case. As this Court previously has observed, a rule requiring specific, concrete evidence from each twenty-year time period could encourage a cotenant "to deal with his fellow tenants in a less than open and honest manner." Sheets v. Sheets, 57 N.C. App. 336, 338, 291 S.E.2d 300, 301 (1982). An occupying tenant could repeatedly reassure his cotenants that their interests are secure and then, after the passage of time has removed the records or witnesses, abruptly change position and claim title by constructive ouster occurring decades, or even centuries, ago. Private property rights are the bedrock of liberty. It is one thing to lose property rights to the open and notorious adverse possession of another. But in a case like this one, where a joint property owner's rights are threatened through the legal fiction of constructive ouster without any actual ouster, courts must be particularly vigilant in applying the well-settled summary judgment standard and permitting a jury to resolve fact disputes about who told what to whom.

The North Carolina Supreme Court's lack of comment in its per curiam affirmation can be said to speak volumes as well.

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