Found At: www.statewidetitle.com
Issue 208 Article 342
2012-2013 Summary Case Update
Chris Burti, Vice President and Senior Legal Counsel
Here is a summarization of some real property cases that we have not discussed in depth in prior articles for quick reference.
North Carolina Court of Appeals
Statute of repose for Developer's Defective Road Construction
The Glens of Ironduff Prop. Owners Ass'n, Inc. v. Daly , (12-52) December 4, 2012
In this case the HOA was suing the developers alleging negligent construction of the subdivision roads. The trial court issued a summary judgment order in favor of the defendants who then appealed. The Court of Appeals state the hornbook law that whether a statute of repose has run is a question of law and is proper if the uncontradicted pleadings show that it has passed. The facts in evidence demonstrated that the existing farm road was graded and widened and put to use in the year prior to its paving. The Court of Appeals held that since it was put to use for its intended purpose, it was "substantially completed" when put use rather than when paved.
The plaintiffs also contended that N.C.G.S. Section 47F-3-111(c) made the six-year statute of repose in N.C.G.S. Section 1-50(a)(5)(a) inapplicable to its claim where the statute provides:
(c) Any statute of limitation affecting the association's right of action under this section is tolled until the period of declarant control terminates. A lot owner is not precluded from bringing an action contemplated by this section because the person is a lot owner or a member of the association. (emphasis added)
The Court of Appeals noted that N.C.G.S. Section 47F-3-111 only tolls statutes of limitation and distinguished those from statutes of repose in affirming the trial court's decision.
Lender's Fiduciary Relationship to Borrower
Dallaire v. Bank of Am., N.A., (12-626) December 18, 2012
This case resulted when plaintiffs attempted to sell their home and apparently found themselves obligated to satisfy a debt discharged in bankruptcy after the defendant lender bungled a refinance by leaving a junior lien of record and unsatisfied. They alleged and pleaded numerous causes of action and the trial court entered summary judgment order dismissing their complaint. Most of the plaintiff's claims were deemed by the Court of Appeals to have been abandoned. However among the claims, the plaintiff argued that the lender negligently misrepresented that the new loan would receive first priority status. "'The tort of negligent misrepresentation occurs when a party justifiably relies to his detriment on information prepared without reasonable care by one who owed the relying party a duty of care.'" stated the opinion and quoting Raritan River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 367 S.E.2d 609 (1988). The court determined that the plaintiffs had alleged sufficient facts to survive summary judgment because "when a financial institution undertakes to provide a customer with a service beyond that inherent in the creditor-debtor relationship, it must do so reasonably and with due care." The Court of Appeals remanded the case for hearing on the facts.
Case note: it is likely to be of interest to practitioners that the Court of Appeals states in a footnoted comment:
Following the application and in accordance with general procedure, Defendant Bank of America ordered a "title search" from its subsidiary, Defendant HomeFocus (now Landsafe Services).1 This "title search" showed the three liens held against Plaintiffs home. Defendant Bank of America employed LSI Title Agency (LSI), upon which Defendant employed to do "curative title work[,]" to assess the validity of the BB&T lien. LSI gathered information from Plaintiffs and noted that
In their briefs, both parties refer to the research performed by Defendant HomeFocus (now LandSafe Services) as a "title search." We have placed this language in quotations because a title search in North Carolina is an act which constitutes the practice of law as defined by N.C. Gen. Stat. § 84-2.1 (2011). We also note that corporations are prohibited from practicing law. See N.C. Gen. Stat. § 84-5 (2011).
Acceptance of Offer of Dedication
Waterway Drive Prop. Owners' Ass'n, Inc. v. Town of Cedar Point, (12-614) December 18, 2012
This case sets out the essential elements for proof of an offer and acceptance of dedication of a public street, ultimately affirming the trial court's finding that that the city had not met its burden of proof. "A dedication of a road is a revocable offer until it is accepted on the part of the public in some recognized legal manner and by a proper public authority. A proper public authority is a governing body having jurisdiction over the location of the dedicated property, such as . . . an
incorporated town . . . or any public body having the power to exercise eminent domain over the dedicated property. Accepting in some recognized legal manner includes both express and implied acceptance. Kraft v. Town of Mt. Olive, 183 N.C. App. 415, 420-21, 645 S.E.2d 132, 137 (2007) (citations omitted) (internal quotation marks omitted)." It should be noted that attempts by the town to utilize catch-all street dedication acceptances were found insufficient by the Court of Appeals because they either did not name the streets or were prospective in application. Some cases say that control and maintenance of the street in question evidences acceptance by a municipality. In this case, the Court of Appeals citing "Concerned Citizens of Brunswick County Taxpayers Ass'n v. Holden Beach Enterprises, Inc., 95 N.C. App. 38, 46, 381 S.E.2d 810, 815 (1989) quotes itself stating: "[M]erely providing municipal services to homeowners in a subdivision within a municipality does not constitute an implied acceptance by the municipality of dedication of a road when the homeowners have paid for those services by the payment of their ad valorem taxes." It is significant to note that the inclusion by the town on the towns' Powell Bill street map was not sufficient in and of itself to establish acceptance. However, it was competent evidence per citation to Tower Dev. Partners v. Zell, 120 N.C. App. 136, 461 S.E.2d 17, (1995).
Proper Venue for Action Against Borrower by National Bank
TD Bank, N.A. v. Crown Leasing Partners, LLC, (12-648) December 31, 2012
This decision stems from the alleged default of a note and liability under a personal guarantee of a loan. The holder of the loan is a South Carolina bank, the defendants were Catawba County residents and the action was filed in Buncombe County. The Court of Appeals confirms that the proper venue for entities created and organized by acts of the United States Congress, that are not domestic corporations lies in the County of residence of the defendants.
Evidence of Last Furnishing in a Lienable Service Contract- Split Panel
Ramey Kemp & Assocs., Inc. v. Richmond Hills Residential Partners, LLC, (12-121) February 5, 2013
In this appeal, the defendant lender contended that the trial court erroneously entered a summary judgment order in favor of the plaintiff's arguing that the plaintiff failed to file its claim of lien within 120 days of the last date upon which it furnished labor or materials and further that the work that the plaintiff performed was insufficiently connected to the land in question to support a Chapter 44A lien. The Court of Appeals affirmed the trial court. This involved a development project and the plaintiff performed "professional design services in regards to traffic engineering services".
At issue was whether a summary status report requested over a year after the last work was furnished set the date of last furnishing under the statute. The plaintiff contended that its "work often spans months or even years in a given development, sometimes with long gaps between service", that the "parties in this case intended that such services would be provided for this development as a single seamless contract", that the services provided "were not piecemeal and subject to separate contracts or work orders, but constituted a single [c]ontract," with all work being identified by the contractor using the same Project Number and that the "last work performed by Plaintiff on the property was at the specific request of Steve Saieed on behalf of Richmond Hills" and "included tasks that would have been contemplated, expected, and required in a project such as this one."
Both opinions go to great lengths to discuss evidentiary rules with respect to summary judgment as well as the weight and significance of the evidence proffered. It is significant that the reply was not verified so its allegations were not evidentiary and the discussion centered on the evidence proffered by the plaintiff or in discovery. The majority (coupled with a number of snarky footnotes directed to the dissenting judge) concluded that evidence plaintiff, "which is not contradicted by any other admissible evidence, (emphasis added) clearly establishes that the last date upon which Plaintiff provided labor or materials to the project under its contract..."
It seems that with respect to professional design services, requesting a status report of the work performed a year after the work was done is sufficient to extend the lien statute's grasp. While not controlling law, the bankruptcy judge in All Points Capital Corp. v. Laurel Hill Paper Company (In re Laurel Hill Paper Company), 393 B.R. 372 (Bankr. M.D.N.C. 2008) invalidated a claim of lien because the court determined that the notice was filed outside the 120 days prescribed by N.C.G.S. Section 44A-12 where the alleged work which consisted of the claimant's removal of trailers containing the debtor's supplies was deemed insufficient to constitute 'last work' for purposes of N.C.G.S. Section 44A-12 because the removal was not required under any aspect of the contractual arrangement between the debtor and the supplier. It would appear that a factual question could be argued in respect to whether the status letter qualified as work under the contract. The North Carolina case law cited in the Bankruptcy court's opinion is quoted as follows; "where the time allowed for filing has begun to run, the claimant cannot thereafter extend the time within which the lien may be filed by doing or furnishing small additional items for that purpose. Priddy v. Kernersville Lumber Co., 258 N.C. 653, 129 S.E.2d 256 (1963); Blalock Elec. Co., Inc. v. Grassy Creek Dev. Corp., 99 N.C.App. 440, 393 S.E.2d 354 (1990)."
The case is on appeal at the time of this writing.
Restrictive Covenants - Standing
McCrann v. Pinehurst, LLC, (12-680) February 5, 2013
The plaintiffs in this section were seeking a declaratory judgment concerning a waiver of restrictive covenants created in deeds between Pinehurst, LLC, Village Chapel, Inc., and The Village of Pinehurst. The plaintiffs were not parties to the deeds in which the restrictive covenants were created, they were not successors in title or interest to the land burdened or benefited by the restrictive covenants. The Court of Appeals determined that they were not intended beneficiaries of the restrictive covenants, concluding that they are not interested parties such as to give them standing under the Declaratory Judgment Act.
Power of Testamentary Trust Beneficiary to Intervene if PR is a Party
Charles Schwab & Co., Inc. v. McEntee, (12-897) March 5, 2013
Decedent opened an IRA account naming his future wife as sole beneficiary. After marrying, the pair subsequently separated and she assigned all rights in the IRA to him in the Separation Agreement they executed. The decedent left a will but did not contact the plaintiff to remove his wife as beneficiary of the account. The Personal Representative contacted the plaintiff and proffered the separation agreement as evidence of entitlement and claimed the funds. The ex wife also claimed the funds from the plaintiff, alleging that "she and the Decedent had remained friends following their divorce, that the Decedent had consistently expressed his intent to provide for her after his death, and that the Decedent's failure to remove her as the designated beneficiary of the IRA was evidence of this intent." The litigation was resolved between the ex wife and the Personal Representative on behalf of the estate pursuant to a mediated settlement. The testamentary trust beneficiary sought to intervene and the trial court denied its motion. The Court of Appeals observed that Intervention is possible pursuant to Rule 24(a)(2) which provides a non-statutory basis for intervention when as stated in Alford v. Davis, 131 N.C. App. 214, 218, 505 S.E.2d 917, 920 (1998); "'...(1) the movant has an interest relating to the property or transaction; (2) denying intervention would result in a practical impairment of the protection of that interest; and (3) there is inadequate representation of that interest by existing parties.'" The opinion analyzed the statutory and testamentary powers and duties of the Estate personal representative and the court concluded that the third element was not met because the beneficiary had "not alleged facts which would indicate that its interest was not adequately represented by the personal representative..."
Guarantor Not Entitled to N.C.G.S. Sec. 45-21.36 Deficiency Defense
Wells Fargo Bank, N.A. v. Arlington Hills of Mint Hill, LLC, (12-1060) March 19, 2013.
Shortly before the completion of the foreclosure proceedings the debtor LLC transferred its interest in the property to its members by general warranty deed. Loan guarantor received a 40% undivided interest in the distribution. Lender purchased the property at the foreclosure sale and prosecuted a deficiency action against the guarantor. The guarantor claimed a right of offset pursuant to N.C. Gen. Stat. § 45-21.36 claiming the value of the property far exceeded the lender's bid at the foreclosure sale. While the Court of Appeals agreed with the guarantors assertions the controlling case law requires that a party claiming a defense pursuant to N.C.G.S. Section 45-21.36 be liable on the underlying debt and hold a property interest in the mortgaged property, it determined that the statute did not apply to the guarantor under the facts because the statute expressly provides its protections to "the mortgagor, trustor or other maker of any such obligation whose property has been so purchased". (emphasis added) The Court of Appeals states that "although Guarantor received an interest in the property and is liable on his guaranty, he is not the 'mortgagor, trustor or other maker of any such obligation whose property has been so purchased[.]' N.C. Gen. Stat. § 45-21.36. The general warranty deed by which Guarantor acquired his interest in the property did not indicate that Guarantor assumed any of Borrower's obligations to Bank under the promissory note."
Though not controlling, the Court of Appeals found the U. S. District Court for the Western District of North Carolina's analysis in Poughkeepsie Sav. Bank, FSB v. Harris, 833 F. Supp. 551 (W.D.N.C. 1993), persuasive. "In Poughkeepsie, the court addressed whether the offset defense in N.C. Gen. Stat. § 45- 21.36 was available to a guarantor who also owned an interest in the property. The court concluded that where the guarantor was sued for a deficiency solely in his capacity as a guarantor, the offset defense was unavailable. Poughkeepsie, 833 F. Supp. at 554. The court reasoned that '[t]o permit Defendants to raise a defense only available to them in their capacity as owners, when they are being sued for their duties as guarantors, would erase their duty as guarantors.'"
Executory Interest no Basis for Express Trust
Bissette v. Harrod, (12-921) March 19, 2013
In this appeal, the plaintiffs contended that the trial court improperly dismissed their complaint and argued that they had adequately pled claims for breach of an express trust and for the imposition of a constructive or resulting trust and that these claims were not barred by any applicable statute of limitations. The case arose out of an unlawful attempt to resubdivided two lots owned by the sellers in contravention of the prohibition of applicable restrictive covenants. (See: Moss Creek HOA, Inc., v. Bissette, 202 N.C. App. 222, 225, 689 S.E.2d 180, 183, disc. review denied, 364 N.C. 242, 698 S.E.2d 402 (2010)). As part of the process of the attempt a recombination plat was prepared and recorded whereby the seller would retain the rear portion of the lot to be sold. The purchaser, prior to obtaining any title to the retained portion of the resubdivided lot (sub-lot), executed an easement in favor of the sellers and allowed the closing attorney to hold it pursuant to a written agreement that provided it was not to take effect unless the seller was required to convey the sub-lot at which time it was to b e recorded.
As part of the litigation enforcing the restrictive covenants the trail court conveyed the sub-lot to the purchasers which order was affirmed on appeal, Moss Creek HOA, Inc. supra. This action was commenced more than three years after the trial court's order conveying the sub-lot. After an ample and convoluted discussion of the procedural aspects of the appeal, the Court of Appeals observed that:
"'An express trust has been defined as a fiduciary relationship with respect to property, subjecting the person by whom the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it. . . . To constitute this relationship there must be a transfer of the title by the donor or settlor for the benefit of another. The gift must be executed rather than executory upon a contingency.'" Bland v. Branch Banking & Tr. Co., 143 N.C. App. 282, 287, 547 S.E.2d 62, 66 (2001) (quoting Wescott v. Bank, 227 N.C. 39, 42, 40 S.E.2d 461, 462-63 (1946) (internal citation omitted). Thus, "[b]y definition, the creation of a trust must involve a conveyance of property, and before property can be said to be held in trust by the trustee, the trustee must have legal title[.]" In re Estate of Washburn, 158 N.C. App. 457, 461, 581 S.E.2d 148, 151 (2003) (internal citations omitted). In other words, creation of an express trust "presupposes that [the settlor] has control of the subject matter of the trust which he desires to create, and contributes it by conveyance of the land with that intent[.]" Taylor v. Addington, 222 N.C. 393, 397, 23 S.E.2d 318, 321 (1942). For that reason, "property which the settlor cannot transfer cannot be held in trust, and where a settlor has no legal authority to convey legal title to property, putting said property into an irrevocable trust is ultra vires and the ostensible trust created thereby is consequently void ab initio." 76 Am Jur 2d, Trusts § 41. As a result, "an interest which has not come into existence or an expectation or hope of receiving property in the future cannot be held in trust." The Infinity Group, LLC v. Lucas (In re Lucas), 477 B.R. 236, 244 (Bankr. M.D. Ala. 2012). In summary: By definition, the creation of a trust must involve a conveyance of property. For a settlor to have the power to create a trust, he must own a transferable property interest or have a power of disposition over such property interest[.] . . . Property which the settlor cannot transfer cannot be held in trust. . . . [A] "person lacking capacity to make an ordinary transfer of property has no capacity to create an inter vivos trust." Jewish Community Ass'n v. Community Bank, 6 P.3d 1264, 1266-1267 (Wyo. 2000) (citing Restatement of Trusts 2d § 79, and quoting Hilbert v. Benson, 917 P.2d 1152, 1156 (Wyo. 1996)).
Since the 'servient' property had not been conveyed by the judge at the time that the easement instrument was executed and delivered, it could not be delivered in trust. Thus, the Court of Appeals concluded that the matter was a contract action and the limitations period accrued form the date f the order which gave rise to the right to have the easement recorded and which accrued more than three years prior to the filing of the instant action. As many attorneys consider such documents to have been delivered to them "in trust" it important that we should more properly characterize them as being held in "escrow".
Clerk's Dismissal is Res Judicata in Power of Sale Foreclosure
In re Foreclosure of Young, (12-1224) June 4, 2013
Following a hearing in a foreclosure proceeding, the assistant clerk of court entered an order dismissing the proceeding after finding that a prior appeal was still pending in the same matter. The petitioner appealed to the superior court for a hearing de novo. The petitioner "voluntarily dismiss[ed]" its prior appeal in an effort to complete a loan modification with no resolution. At the hearing, the trial court denied the petitioner's petition concluding that the petitioner's actions concerning the loan modification agreement, the petitioner did not have a legal right to foreclose because the doctrine of equitable estoppel barred the foreclosure action. This was a split decision of the panel of the Court of Appeals. The panel agreed that the record on appeal was inadequate for o determine the status of the prior proceedings that the assistant clerk concluded was pending. The determination was necessary because the trial court has no subject matter jurisdiction to hear foreclosure action if there is a prior action pending. The majority observes that with respect to the equitable relief granted, the superior court "'has no equitable jurisdiction and cannot enjoin foreclosure upon any ground other than the ones stated in [N.C. Gen. Stat. §] 45–21.16. Matter of Helms, 55 N.C. App. 68, 71-72, 284 S.E.2d 553, 555 (1981).'"
Of particular significance to foreclosure practitioners is the majority's statement and that of the dissenting Judge, that if the trial court has no subject matter jurisdiction due to the application of the doctrine of res judicata, the petitioner's "remedy would then be limited to judicial foreclosure procedures pursuant to N.C. Gen. Stat. § 1-339.1 et seq., rather than the summary proceedings provided under N.C. Gen. Stat. § 45-21.1 et seq.,"
Personal Representative's Authority Limited by Purpose of Will
RL Regi N.C., LLC v Moser, (11-1470) August 21, 2011
Executors continued business operations of decedent's corporation and executed an estate guarantee for a development loan that ultimately defaulted, the property sold for less than the debt and the note assignee sued upon the guarantee. The Will made no specific or express direction for the continuation of the business, merely directing satisfaction of debts and distribution to the devisee trustees.
The court finding a lack of authority for the Personal Representatives to bind the estate, stated that "the purpose of the Will was not to keep the Estate open indefinitely. N.C. Gen. Stat. § 28A-13-2 provides that:
A personal representative is a fiduciary who, in addition to the specific duties stated in this Chapter, is under a general duty to settle the estate of the personal representative's decedent as expeditiously and with as little sacrifice of value as is reasonable under all of the circumstances. A personal representative shall use the authority and powers conferred upon the personal representative by this Chapter, by the terms of the will under which the personal representative is acting, by any order of court in proceedings to which the personal representative is party, and by the rules generally applicable to fiduciaries, for the best interests of all persons interested in the estate, and with due regard for their respective rights. ...(emphasis added)."
In the absence of any provisions of the Will to the contrary, the Personal Representatives were under the statutory general duty to settle the estate in a reasonably diligent and expeditious manner. Continuing the business did not further that duty, thus there was no authority to do so or to bind the estate to the guaranty.
Short Term Rental Does Not Violate Commercial Usage Restriction
Russell v Donaldson, COA (12-183) September 4, 2012
As the executive boards of homeowners associations in planned communities become increasingly assertive in attempting to regulate their subdivisions, it is becoming increasingly common for inquiries to arise concerning whether or not short term rentals violate the restrictive covenants prohibiting commercial use of the properties. The North Carolina Court of Appeals in the unanimous opinion in Russell v Donaldson, COA (12-183) issued on September 4, 2012 answered the question unequivocally: "short term rental of the properties does not violate the restrictive covenants
Indexed Notice of Lis Pendens Effective even when original is AWOL
Reo Props. Corp. v. Smith, NO. COA12-860 May 21, 2013
An action for reformation was instituted to correct an erroneous description in a deed of trust and a notice of lis pendens was properly filed and indexed. The action was stayed while a subsequent bankruptcy proceeding was pending. After the property was abandoned in the bankruptcy proceeding, the action was revived and it was discovered that in the interim, the debtors had conveyed the property to third parties for consideration. A title searched had been done and the indexing of the notice was disclosed, but the original notice had been archived and destroyed. The purchasers intervened in the action, sought and obtained summary judgment and an order dismissing the action. Evidence was admitted that that court files are microfilmed prior to destruction and the microfilm is located in the office of the Clerk of Superior Court and are available at the state department of archives. The opinion suggests that the searching attorney was not aware of this until after being advised of the pending action.
The purchaser argued that the notice of lis pendens indexing was insufficient to impart actual or constructive knowledge claiming that the fact that the Clerk of Superior Court had destroyed the record means that the lis pendens was no longer a public record.
A litigant who wishes to impart effective constructive notice of a pending matter must file a Notice of Lis Pendens pursuant to N.C.G.S. Section 1-116(a)(2. Every subsequent purchaser and is thereby bound by all proceedings taken after the cross-indexing of the notice to the same extent as if made a party to the action. North Carolina common law holds that when a person buys property that is the subject of any pending action of which he has actual or presumed notice where title is in issue, the purchaser is bound by the judgment in the action, just as if made a party. The Court of Appeals cited Hill v. Memorial Park, 304 N.C. 159, 282 S.E.2d 779, (1981) (citation omitted) for the doctrine.
"Lis pendens does not 'protect intermeddlers.' Whitehurst v. Abbott, 225 N.C. 1, 6, 33 S.E.2d
129, 133 (1945). If the subsequent purchaser was not bound by the judgment, 'a party could always defeat the judgment by conveying in anticipation of it to some stranger and the claimant would be compelled to commence a new action against him." Id. Where a party prosecutes a suit 'with proper
diligence the lis pendens continues until the final judgment, or until it has been canceled under the directions of the court. The mere loss or destruction of the notice will not affect its efficiency, if the statute has been fully complied with.' Arrington v. Arrington, 114 N.C. 151, 159, 19 S.E. 351, 353 (1894) (citations omitted)."
The Court of Appeals determined that there was no support for the intervenors' arguments that the microfilm was unavailable to the public or that it was not a public record. Thus, the Court of Appeals determined that the purchasers were not bona fide purchasers for value, as they claimed, but merely subsequent purchasers for value as they should have discovered the notice of lis pendens. "Thus, they are 'intermeddlers,' and a Notice of Lis Pendens is not 'designed to protect intermeddlers.'"
North Carolina Supreme Court
Foreclosure Sale 10% below FMV - No Defense to Deficiency Action
Blue Ridge Sav. Bank, Inc. v. Mitchell, (98A12) December 14, 2012
We discussed this case last year on the issue of whether trial court properly allowed summary judgment for plaintiff lender. The Court of Appeals affirmed the trial court's judgment for plaintiff which in turn has been affirmed per curiam by the Supreme Court.
The admissible evidence in this case suggested that the lender's bid at the foreclosure sale was about 10 percent below fair market value. The Court of Appeals noted that North Carolina appellate courts have not set out particular guidelines as to what "substantially less" than the property's true value means entitling an owner to the deficiency defense set out in N.C.G.S. Section 45-21.36. However, First Citizens Bank & Trust Co. v. Cannon, 138 N.C. App. 153, (2000) affirmed a judgment that a bid that was twenty percent less than the appraised value of the property was "substantially less" than the property's true value and that the debtors in that case were entitled to the defense.
The Court of Appeals stated that although "the twenty percent mark is not a bright line rule or cut-off by any interpretation, defendants offer no authority (including any reference to Cannon) supporting their assertion that the bid was substantially less than the true value or fair market value of the property; indeed, the argument is based merely on the fact that both the appraised value and the subsequent sale price were more than the bid." As the statutory requirement is that the "bid be "substantially less" than true value, not just "less" than true value, and because defendants have offered no authority or cogent argument supporting their claim that plaintiff's bid was substantially less than the property's true value, we affirm the order of the trial court."
Is Subsequent Purchaser an 'Owner Under 44A? – Still Undecided
John Conner Constr., Inc. v. Grandfather Holding Co., LLC, (460A12) July 3, 2013
This case deals with the issue of whether a person who had no legal or equitable interest in real property when a construction contract was commenced, but subsequently acquired the property, can be an 'owner' for purposes of N.C.G.S. Section 44A-8. The Court of Appeals said 'no' in affirming the trial court. On discretionary review by the North Carolina Supreme Court, the Court split 3-3 with one abstention rendering the Court of Appeals decision affirmed "without precedential value".
Adverse Possession – Jury Instructions
Minor v. Minor, (25A13) June 13, 2013
This was a summary ejectment action in the defendant's counterclaim she alleged title based upon based on adverse possession. The jury found for ht Plaintiff and the defendant appeal arguing that the trial court committed reversible error when it declined to instruct jurors that they could find that defendant possessed part, but not all, of the property at issue. A divided panel of the Court of Appeals affirmed the trial court as did the Supreme Court which concluded that the trial court's instructions were consistent with the defendant's pleading and with the evidence she provided that she adversely possessed the entire tract. The Supreme Court admitted that one could claim less than the whole of a tract under adverse possession "if defendant's counterclaim had specifically identified the portion of the ... tract that she was claiming, and if she had presented evidence at trial to support all the elements of the claim, the trial court would have been obligated to give a jury instruction permitting the jury to find defendant adversely possessed that portion."