In this unanimous opinion from the North Carolina Court of Appeals the Court considered issues of real property law involving contract enforcement, and statutory interpretation. The dispute arose from a failed real estate transaction involving 61 acres of undeveloped land in Union County, North Carolina. Central issues on appeal included the dismissal of an unjust enrichment claim, the propriety of submitting a statutory slander of title claim to the jury under the Real Property Marketable Title Act (N.C.G.S. Section 47B-6), and the denial of a motion for judgment notwithstanding the verdict (JNOV) or a new trial.

The appellate court affirmed the dismissal of the unjust enrichment claim and the denial of JNOV but reversed the trial court's denial of a new trial, holding that it erred in applying N.C.G.S. Section 47B-6 to the facts presented. This decision clarifies the limits of the application of statutory slander of title and reinforces distinctions between common law and statutory remedies in real estate litigation.

The defendants, acting individually and as executors of the estate of Joe Fielden, owned the subject property as tenants in common. They sought to sell the property while preserving a life estate for their father on a portion of the land. The plaintiff, a real estate investment company, expressed interest in purchasing the land for the purpose of reselling it to a third-party developer. The parties entered a series of four contracts, setting a closing date of June 30, 2021, with a contract expiration date of July 15, 2021. The plaintiff had a resale contract in place with for $4.5 million, contingent on combining the subject parcel with an adjacent one, but the buyer never authorized closing, and the defendants notified the plaintiff of the contract's termination after the it expired and subsequently signed a letter of intent with another developer.

The plaintiff subsequently filed this action, recorded a notice of lis pendens and the defendants counterclaimed for slander of title. The trial court dismissed the plaintiff's unjust enrichment claim and submitted the slander of title counterclaim to the jury under N.C.G.S. Section 47B-6. The jury returned a verdict for the defendants on both the breach of contract and slander of title claims, awarding $152,001 in damages. The plaintiff's motions for JNOV and a new trial were denied.

The plaintiff challenged three key rulings: the dismissal of Unjust Enrichment Claim, the submission of Statutory Slander of Title to the jury and the denial of JNOV and a new trial. The trial court dismissed plaintiff's unjust enrichment (quantum meruit) claim on the basis that an express contract governed the transaction. The appellate court affirmed, applying long-standing precedent that an express contract precludes implied contract recovery where both address the same subject matter.

The parties' agreement explicitly contemplated development activities by the plaintiff including zoning changes and land entitlement - which underpinned the plaintiff's claims. the Court determined that these services were not "extra-contractual" and fell within the scope of the express agreement, barring an unjust enrichment claim.

The plaintiff argued that the defendants' counterclaim was pleaded under common law, not under N.C.G.S. Section 47B-6, and that submitting the statutory claim to the jury lowered the evidentiary burden. The Court of Appeals acknowledged this argument but held that the counterclaim provided sufficient notice to support a claim under the statute even without citing the statute explicitly.

However, the court ultimately reversed the trial court's denial of Plaintiff's motion for a new trial. It concluded that N.C.G.S. Section 47B-6 was misapplied by the trial court because the plaintiff had not "registered a notice" under the Marketable Title Act. Instead, it filed a notice of lis pendens governed by entirely separate statutory provisions under N.C.G.S. Section 1-116. The appellate court emphasized that a notice of lis pendens is not recorded with the register of deeds but rather with the clerk of superior court. These do not assert substantive property interests but merely gives notice of pending litigation and filing notice of lis pendens does not qualify as "registering a notice" for the purposes of the Marketable Title Act.

The court emphasized the statutory language of N.C.G.S. Section 47B-6, which prohibits registering notices "hereunder" (i.e., under the Marketable Title Act) for false or fictitious claims. Because the plaintiff never registered a notice with the register of deeds asserting any interest under the Marketable Title Act, N.C.G.S. Section 47B-6 did not apply. As a result, submitting the statutory slander of title claim to the jury constituted legal error, warranting a new trial on the defendants' slander of title counterclaim.

The Court of Appeals noted that instructing the jury under the provisions of the Marketable Title Act, rather than the common law standard, allowed the defendants to avoid having to prove two critical elements: malice and falsity. These elements are required under common law but not under the statutory scheme, which requires only proof of intent. The jury found for the defendants and awarded damages based on the statutory instruction. Because the statutory standard materially reduced the burden of proof, the Court of Appeals held that this likely affected the verdict on the slander of title counterclaim and it could not stand.

The Court of Appeals found that the counterclaim sufficiently alleged the essential elements of slander of title under North Carolina's notice pleading standard, that the required special damages were implied by the facts alleged, that the complaint put the plaintiff on adequate notice and the trial court's denial of JNOV was affirmed.

However, the appellate court further conducted a careful statutory analysis of the Real Property Marketable Title Act, emphasizing the legislative purpose of simplifying real estate transactions and reducing title disputes. It noted that: statutes in derogation of common law must be construed narrowly; that the General Assembly did not intend for N.C.G.S. Section 47B-6 to apply to filings outside the statutory registration process (such as lis pendens); that misapplying the lis pendens filings could deter legitimate use of lis pendens and interfere with judicial efficiency.

Because the plaintiff's filing of a notice of lis pendens with the Clerk of Superior Court was not a "registered notice" under the Marketable Title Act, the statutory cause of action under the Act was inapplicable, and the jury should have been instructed under the higher common law standard.

Some key takeaways for legal practitioners: With regard to unjust enrichment claims, where an express contract governs the subject matter, implied contract remedies (quantum meruit) are unavailable - even if performance is disputed. With regard to the procedural distinction between the filing of a notice of lis pendens vs. "registered notice", a notice of lis pendens under N.C.G.S. Section 1-116 is procedurally distinct from a "registered notice" under the Marketable Title Act and mischaracterizing it can result in reversible error. As to slander of title claims, litigants must clearly distinguish between common law and statutory causes of action. Practitioners should plead the elements of statutory claims explicitly when relying on the Marketable Title Act. As to jury instructions' improper jury instructions that lower the burden of proof, by omitting malice and falsity in this instance, are likely to result in reversal and remand for new trial. With regard to insurable title, often record matters will be required to have been cleared up judicially before a title insurer will be willing to insure without exception to the matter. A clear understanding of the issues at play in this case will be helpful and often necessary in obtaining a satisfactory resolution.