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Issue  160
Published:  11/1/2008

Unilateral Easement Relocation by Servient Owner Quashed
Chris Burti, Vice President and Legal Counsel

The North Carolina Court of Appeals in the decision in A. Perin Development Company, LLC, v.  Ty-Par Realty, Inc., COA07-1500, filed on October 21, 2008 sidestepped an opportunity to consider a new look at the need for a modern doctrine providing landowners right to seek a relocation of an easement through judicial intervention when an agreement between the parties cannot be reached.

The Court of Appeals considered the relevant facts to be “simple and undisputed.” The parties own adjoining tracts of land in Union County , North Carolina . The defendant owns a duly recorded access easement across the plaintiff's land derived by express grant by the plaintiff's predecessor in title. The plaintiff graded and apparently dedicated a public road across its tract to a point adjoining the defendant's tract.  The plaintiff appealed from a dismissal by the trial court of its complaint seeking, alternatively, a declaratory judgment or a judgment quieting title. The complaint asked the trial court to “purge…the Easement…” or alternatively to permit the plaintiff to relocate the easement to the public road. The trial court dismissed the complaint for failure to state a claim upon which relief may be granted.

The Court of Appeals affirmed the trial court’s dismissal of the complaint seeking declaratory relief because, as it stated, the “North Carolina Supreme Court has categorically held that jurisdiction does not exist under the Act for the purpose of declaring a conveyance void or nullifying a written instrument. Town of Nags Head v. Tillett, 314 N.C. 627, 629, 336 S.E.2d 394, 396 (1985). Omitting the rest of the Court’s citations, the opinion clearly and cogently sets out the doctrine that declaratory action are to be used solely when there is a dispute over the rights of the parties arising out of a disagreement over the interpretation of an instrument or of the application of the law to those rights.

When the plaintiff asked the trial court to purge the easement from the county registry, the Court of Appeals stated that it “was in essence the same as a request to void a conveyance or to nullify a written instrument. Therefore, we conclude plaintiff sought relief which was beyond the scope of the [Declaratory Judgment] Act. Accordingly, the trial court lacked jurisdiction to hear that portion of the complaint and properly dismissed it.”

The defendant apparently provided no cases citations, and the court found none that prevented the trial court from considering a complaint where the owner of the servient estate seeks to quiet title with regard to the location of an easement. Citing York v. Newman, 2 N.C. App. 484, 163 S.E.2d 282, cert. denied, 274 N.C. 518 (1968) we quote: “(‘[T]he complaint filed herein meets the minimum requirements of G.S. 41-10 in that it alleges that the plaintiffs own the described land and that the defendant claims an interest therein adverse to them.’ (Emphasis in original.)), Here, it is undisputed that plaintiff owned the servient estate and that defendant claimed an interest, an easement, adverse to plaintiff. However, we conclude that even though the trial court had jurisdiction to hear the claim to relocate the easement, plaintiff's claim is meritless.” The court justified this conclusion by stating, “‘Grantees take title to lands subject to duly recorded easements which have been granted by their predecessors in title.’ Hensley v. Ramsey, 283 N.C. 714, 730, 199 S.E.2d 1, 10 (1973) (citation and quotation marks omitted). Furthermore, once a party has acquired title to the use of an easement, even if by prescription, the owner of the servient estate may “not deprive him of his easement by providing another outlet.” Smith v. Jackson, 180 N.C. 115, 117, 104 S.E. 169, 170 (1920).”

The plaintiff admitted that its land is subject to the easement and conceded that under the existing common law of North Carolina the trial court had no authority to order the relocation of a duly recorded easement. The plaintiff asked the Court of Appeals to adopt a new rule, citing MPM Builders, LLC v. Dwyer, 442 Mass. 87, 809 N.E.2d 1053 (2004), as well as cases from other jurisdictions which have rejected the majority common law rule and allowed unilateral relocation if it was consistent with the purpose of the easement and if it encouraged development of the servient estate.

The new Restatement (Third) of Property (Servitudes), Sec. 4.8(3), states:
“Unless expressly denied by the terms of an easement . . . the owner of the servient estate is entitled to make reasonable changes in the location or dimensions of an easement, at the servient owner’s expense, to permit normal use or development of the servient estate, but only if the changes do not (a) significantly lessen the utility of the easement, (b) increase the burdens on the owner of the easement in its use and enjoyment, or (c) frustrate the purpose for which the easement was created.”

The trial court in MPM Builders, denied relief, but, the Massachusetts high court on appeal adopted the Restatement rule and remanded. The Massachusetts court noted that precedent had previously established that a dominant owner of an easement could not relocate the easement for its convenience. It further concluded that the existing common law rule in the state also precluded the servient owner from relocating the easement. Yet, it elected to repudiate that rule and adopt the Restatement approach. In departing from the established majority position, it noted that several other courts had already elected to follow the Restatement. The Massachusetts court refused to permit unilateral relocation of easements and required that parties seeking relocation obtain judicial approval before moving ahead.

Commentators have argued that adopting the rule prospectively would do little harm to vested interests and would simply require lawyers drafting easement agreements to negotiate terms addressing subsequent modification. In the view of some, applying the Restatement rule to existing easements denies the property rights bought and paid for by dominant tenants. In their view, the easement is an interest in land that can be modified by agreement only and permitting judicial modification would disrupt the reasonable expectations of parties who had invested in the property in the expectation of enjoying the easement in its original location.

This argument ignores the common reality that all too often there never was any negotiation or concern regarding the location. Instead, the location was determined by mutual convenience at the time and the only concern was simply providing access. Subsequently, when the need of the servient owner for relocation arises, the resulting dispute is either an attempt by the dominant owner to impress control over the proposed new use of the servient tract or simple monetary extortion. Without a right to seek a remedy from the courts, there is no impetus for the dominant owner to act in a reasonable manner. This effectually creates rights in the easement that are more akin to possessory rights arising in a fee simple absolute than should be warranted in an incorporeal hereditament in the nature of a mere access easement.

In Lewis v. Young, 92 N.Y.2d 443, 705 N.E.2d 649, 682 N.Y.S.2d 657 (1998) the New York Court of Appeals stated “in the absence of a demonstrated intent to provide otherwise, a landowner burdened by an express easement of ingress and egress may narrow it, cover it over, gate it or fence it off, so long as the easement holder's right of passage is not impaired” the court looked to the policy considerations and it stated that traditionally, “reasons given for denying easement holders the right to make changes in location are that "treating the location as variable would depreciate the value of the servient estate, discourage its improvement, and incite litigation" (Restatement [Third] of Property [Servitudes] Tentative Draft No. 4, §4.8(3), comment f). Those same policy reasons, however, do not justify denying a landowner's (or "servient owner's") limited authority to move an unlocated right of way. Indeed, recognizing that authority likely increases the value of the servient estate, and encourages the landowner to make improvements. Moreover, because a landowner's authority to relocate a right of way without consent is limited in that relocation may not impair the easement holder's rights both parties have an incentive to resolve any dispute prior to relocation. The easement holder has an interest in influencing the landowner's choice of a new location, and the landowner will want to avoid the risk and cost of allowing a court to make an after the fact determination as to the propriety of the relocation.”

In reversing the case, the Supreme Court observed that where “the language of a grant does not itself reveal an intent to preclude the landowner's right to relocate the right of way, consideration must also be given to circumstances surrounding the conveyance, including the conduct of the parties both prior and subsequent to the grant (cites omitted) Here, however, nothing in the conduct of the parties or other surrounding circumstances indicates an intent to deny the landowner's right to relocate the driveway. Thus, the only remaining fact question is whether the relocation impairs or diminishes plaintiff's right of ingress and egress.” This is a balancing test that prevents either party from diminishing the value and usefulness of the other party’s property interest.

It can be fairly said from a review of the easement in question that the original easement document evidences a clear intent that the access contemplated an access that would be paved and ultimately dedicated to the public. There is nothing in the instrument that suggests that the location of the easement was secured to satisfy the dominant owner. Rather, it is the character of the easement that most of the verbiage addresses.  In the instance where the easement has actually been carefully negotiated, there will be a record of that negotiation. If the record of negotiation suggests that the actual location of the easement was a material consideration of the dominant owner, then that should be considered as controlling by the courts in a subsequent relocation action unless the servient owner can show overriding hardship in holding to that location together with a lack of material harm to the dominant tract. The result of adopting such a rule would likely result in more reasonable negotiations between parties and perhaps a lessening of legal challenges to easement rights by servient owners.

However, the North Carolina Court of Appeals in this case stated the obvious noting that it “does not have authority to rely on cases from other jurisdictions and reject the common law of this State which has been set forth by the North Carolina Supreme Court. Cannon v. Miller, 313 N.C. 324, 327 S.E.2d 888 (1985) (vacating a decision of this Court which relied on the authority of other jurisdictions to abolish a cause of action recognized by the North Carolina Supreme Court). The law of North Carolina in this case is plain - plaintiff has no right to move defendant's duly recorded easement, even by providing him with an alternative means of access. Smith, 180 N.C. at 117, 104 S.E. at 170. The trial court correctly dismissed this portion of plaintiff's complaint for failure to state a claim upon which relief may be granted.”

Property values in recent years have accelerated far beyond any reasonable expectations of parties to decade’s old easements. Without some amelioration of this outdated rule of law, an otherwise worthless and unused easement can become a tool of extortion and reduce the value of the servient tract by orders of magnitude. Without recourse to the courts, a relocation right could likewise be wielded inappropriately and unfairly. Our Supreme Court, if provided the opportunity to consider this matter, would do well to look closely at the considerations of the New York and Massachusetts high courts. These courts have historically had to be the earliest ones dealing with the effect of economic change in our legal environment due to the higher population concentrations, higher transactional volumes and resulting acceleration in the evolution of transactional doctrine stemming from the new demands of a rapidly changing culture for innovation in these commercial markets. Common law doctrines that served our grandparents well frequently give rise to inequities in a changing world. That is the reason that our courts have the inherent power to change archaic doctrines when they no longer serve the public interest. Arguably, the Restatement position merits serious consideration by our North Carolina Supreme Court when availed of the opportunity.

Dirt Tales From the Deed Vault - Episode 19
John Dillard, Vice President and Legal Counsel

            In this month’s installment the Statewide Title Dirt Tales continues to look at the topic of Access. 

            Jim was interested in moving his family into the country.  After looking at houses and land they found the perfect house and acreage, but there was one small problem.  Jim’s attorney advised that the property did not have legal access.  His attorney drafted an easement agreement, but when he approached the property owners abutting the road, they refused to sign the easement.  The road had always been there, they said, and nobody had ever been asked to sign a piece of paper. 

            Jim was disheartened when he heard this from his attorney, but his attorney had another idea.  He told Jim a Special Proceeding could be filed with the Clerk of Court, and if sufficient facts were present, the Clerk could declare the road to be a public right of way.  The attorney told the seller’s attorney about a statute, NCGS §136-96.1 which says:

§ 136­96.1. Special proceeding to declare a right­of­way dedicated to public use.

(a) A special proceeding under Article 3, Chapter 1 of the General Statutes may be brought to declare a right­of­way dedicated to public use if:

(1) The landowners of tracts constituting two­thirds of the road frontage of the land abutting the right­of­way in question join in the action;

(2) The right­of­way is depicted on an unrecorded map, plat, or survey;

(3) The right­of­way has been actually open and used by the public; and

(4) Recorded deeds for at least three separate parcels abutting the right­of­way recite the existence of the right­of­way as a named street or road.

(b) In a special proceeding brought pursuant to this section, the clerk of court shall issue an order declaring the right­of­way to be dedicated to public use upon finding that the provisions of subsection (a) of this section have been proven.

(c) Any right­of­way found to be dedicated to public use pursuant to this section that is proposed for addition to the State highway system shall meet the requirements of G.S. 136­102.6.

(d) This section shall not apply to any right­of­way established by adverse possession or by cartway proceeding. (2001­501, s. 1.)

         NCGS §136-96.1 is often overlooked when property is lacking access because of its seemingly steep requirements.  Are the requirements so prohibitive so as to render the statute unusable?  Item a(1) may be the most difficult prerequisite to meet.  It requires the owners of two-thirds of the road frontage along the road join in the petition.  This isn’t the same as getting two-thirds of the owners, but regardless it sets a high bar.  A(2) can be met by having a current survey done.  A(3) can be met with affidavits of prior use.  A(4) at first seems difficult to meet, but in actuality it may not be.  Deed descriptions often run with existing roads and if at least three deeds along the road do run with the road or reference the road as a monument then this requirement will have been met.

         The issue of access in North Carolina continues to be a problem.  Title companies are becoming more reluctant to insure access solely on affidavits of use.  Title attorneys are being called upon to certify valid and legal access and familiarity with statutes such as NCGS §136-96.1 should be added to the attorney’s arsenal.

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