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Le Oceanfront, Inc. v. Lands End of Emerald Isle Ass'n., Inc.

Court of Appeals of North Carolina

December 31, 2014

LE OCEANFRONT, INC.; RICHARD W. WILLIAMS; NORA J. WILLIAMS; KAREN W. JOHNSON; HORACE M. JOHNSON, Plaintiffs
v.
LANDS END OF EMERALD ISLE ASSOCIATION, INC., Defendant

Heard in the Court of Appeals, August 27, 2014

Ragsdale Liggett PLLC, by Amie C. Sivon, for Plaintiffs-appellants.[1]

Ward and Smith, P.A., by Ryal W. Tayloe, Alexander C. Dale, and Christopher M. Hinnant, for Defendant-appellee.

DILLON, Judge. Judge HUNTER, Robert C. and Judge DAVIS concur.

OPINION

Page 16

Appeal by Plaintiffs from judgment entered on 2 October 2013 by Judge Phyllis Gorham in Carteret County Superior Court, No. 11 CVS 1192.

DILLON, Judge.

Corporate Plaintiff Le Oceanfront, Inc. and individual Plaintiffs Karen W. Johnson, and Horace M. Johnson[2] appeal from a trial court's ruling granting summary judgment in favor of Defendant Lands End of Emerald Isle Association, Inc. (" the HOA" ), declaring the HOA to be the fee simple owner of a certain strip of land adjacent to the Atlantic Ocean's mean high water mark in Emerald Isle. For the following reasons, we vacate the trial court's judgment and remand for further proceedings consistent with this opinion.

I. Background

A. Summary

The Defendant HOA is a homeowners association for the Lands End residential subdivision (the " Subdivision" ) in Emerald Isle and owns all of the Subdivision's common areas. The individual Plaintiffs are owners of beachfront lots in the Subdivision. The corporate Plaintiff is an entity set up by the individual Plaintiffs.

The subject matter of this action is a strip of land, consisting of over 14 acres, which lies between the Subdivision and the Atlantic Ocean. (This strip of land is hereinafter referred to as " the Oceanfront Strip." ) The HOA claims that the Oceanfront Strip is actually part of the Subdivision's common area, which it acquired by deeds from developers of the Subdivision (hereinafter " the Developer[3]" ) in 1988 (hereinafter " the 1988 deeds" ) or, in the alternative, that the HOA has an easement to use the strip. Plaintiffs, however, claim that the 1988 deeds did not include the Oceanfront Strip and that the corporate Plaintiff became the owner of the Oceanfront Strip through three quitclaim deeds from the Developer delivered, one in 2011 and two in 2013 (hereinafter " the quitclaim deeds" ).

We hold that the 1988 deeds conveying land to the HOA did not include a conveyance of the Oceanfront Strip. We hold that the quitclaim deeds conveyed all interest the Developer had in the Oceanfront Strip to the corporate Plaintiff. We make no determination as to the nature of rights or interests the HOA has or may have with respect to the Oceanfront Strip or any portion thereof based on other theories, e.g., adverse possession, prescriptive easement, etc. Accordingly, we vacate the trial court's grant of summary judgment in favor of the HOA and remand this matter to the trial court for further proceedings consistent with this opinion.

Page 17

B. Subdivision History

In 1973, the Developer acquired adjacent tracts of land which would encompass the Subdivision proper and the Oceanfront Strip. This acreage is located on Bogue Banks, a narrow barrier island which extends east to west, with the Atlantic Ocean to its south.

The acreage is bounded on the north by Coast Guard Road.

The southern boundary of this acreage is the mean high water mark of the Atlantic Ocean. See N.C. Gen. Stat. § 77-20(a) (2011) (defining the seaward boundary of all property in North Carolina as " the mean high water mark" ).

The acreage is bounded on the east and west by what is now other residential subdivisions.

After acquiring the acreage, the Developer proceeded with the development of the Subdivision. In 1974, the Developer filed eight maps (" the 1974 maps" ), each depicting a different section of the to-be-developed Subdivision, which laid out the location of the proposed lots, streets, common areas, open spaces, and other features within that section. Two of these eight maps depict the sections of the Subdivision that are adjacent to the Oceanfront Strip. The other six maps depict sections that are inland and, therefore, are not relevant to this appeal. At this time, the Developer also recorded a Declaration of Covenants and Easements (" the 1974 Declaration" ), which referenced the 1974 maps.

In the 1980's, the Developer filed four maps (" the 1980's correction maps" ), correcting certain aspects of four of the original eight 1974 maps. Two of these maps correct the two 1974 maps which depict the sections of the Subdivision adjacent to the Oceanfront Strip.

The aforementioned maps represented that the Subdivision would contain approximately 300 individual home lots, forty-five of which were to be " beachfront," bounded on the south by the Oceanfront Strip. Other parcels within the Subdivision were also depicted to be bounded on the south by the Oceanfront Strip, including a lot for the proposed Subdivision clubhouse (which was completed in 1981) and areas of open space and strips of common area land leading from a Subdivision street to the northern border of the Oceanfront Strip.

In 1986, the HOA was formed. During this time, the Developer sold lots to individual homeowners.

In 1988, the Developer[4] executed the 1988 deeds, essentially conveying the open spaces and common areas depicted on the recorded maps to the HOA.

In 2004, the individual Plaintiffs purchased two of the Subdivision's beachfront lots. In their Complaint, the individual Plaintiffs allege that they believed the lots they were buying extended through the Oceanfront Strip all the way to the Atlantic Ocean's mean high water line. There is evidence that over the course of time, the individual Plaintiffs installed sand fences; planted sea oats; built decks, walkways and gazebos; paid beach nourishment assessments to the Town of Emerald Isle as oceanfront owners; and gave the Town easements for beach nourishment projects with respect to land within the Oceanfront Strip in front of their residence.

In 2005, the HOA, in response to inquiries regarding the installation of structures by homeowners encroaching on the Oceanfront Strip, sent letters to all beachfront lot owners claiming ownership of the Oceanfront Strip. Further, in 2010, the individual Plaintiffs observed that the HOA had pumped excess storm water into the Oceanfront Strip in front of their residence. The HOA presented evidence that it had, in fact, been pumping excess storm water into the Oceanfront Strip from time-to-time since the 1990's.

In 2011, the individual Plaintiffs formed the corporate Plaintiff and contacted the Developer -- who had not been involved in any Subdivision matters in over a decade -- to acquire legal title to the Oceanfront Strip. The

Page 18

three Developer entities, who executed the 1988 deeds, delivered the quitclaim deeds in 2011 and 2013, quitclaiming whatever interest these ...


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