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Cole v. Bonaparte's Retreat Property Owners' Association, Inc.

Court of Appeals of North Carolina

April 17, 2018

ALLAN and JENNIFER COLE, Plaintiffs,
v.
BONAPARTE'S RETREAT PROPERTY OWNERS' ASSOCIATION, INC.; BONAPARTE'S RETREAT I PROPERTY OWNER'S ASSOCIATION, INC.; and CHARLES G. HAMILTON, JR., Defendants.

          Heard in the Court of Appeals 4 October 2017.

          Appeal by Plaintiffs from summary judgment entered 19 December 2016 by Judge Ola M. Lewis in Brunswick County Superior Court, No. 15 CVS 1620

          Hodges Coxe Potter & Phillips, LLP, by Bradley A. Coxe, for Plaintiffs-Appellants.

          Marshall Williams & Gorham, LLP, by John L. Coble, for Defendants-Appellees.

          INMAN, JUDGE.

         When a grantor who owns one parcel of land and adversely possesses an adjacent parcel without color of title conveys both parcels to grantees by deed that describes only the parcel in which the grantor holds title, the grantees may not tack their time of possession to the grantor's time to satisfy the statutorily prescribed period for adverse possession. Further, a trial court may not impose an easement when neither party has raised the issue, the easement is not suggested by the evidence, and the relief results in substantial prejudice to the owner of the servient parcel.

         Plaintiffs Allan and Jennifer Cole ("Mr. Cole" and "Mrs. Cole, " respectively; collectively "Plaintiffs") appeal from the entry of summary judgment in favor of defendants Bonaparte's Retreat Property Owners' Association, Inc. ("BRPOA"), Bonaparte's Retreat I Property Owner's Association, Inc. ("BRIPOA"), and Charles G. Hamilton, Jr. ("Mr. Hamilton, " collectively "Defendants"). Plaintiffs contend that: (1) they were entitled to summary judgment granting them title to real property by adverse possession and rescinding its prior transfer from BRPOA to BRIPOA; (2) the trial court erred in granting summary judgment on all claims in favor of Defendants; and (3) the trial court erred in ordering an easement over their property for Defendants' benefit. After careful review, we affirm in part and reverse in part.

         I. FACTUAL AND PROCEDURAL HISTORY

         In 1972, real estate developer Ocean Side Corporation ("Ocean Side") began development of the Bonaparte's Retreat I subdivision along the Calabash River in Brunswick County, North Carolina. The developer filed a plat map of the subdivision with the Brunswick County Register of Deeds (the "Register of Deeds"), designating discrete lots for development as well as various "reserved areas." One such designated lot, Lot 18, was located on the north side of the development and, per the plat map, was bordered to the south by a cul-de-sac, to the west and east by Lots 17 and 19, respectively, and to the north by a reserved area (the "Reserved Area"). This particular Reserved Area was bordered to the south by Lots 17 through 22 and to the north by the Calabash River. An excerpt from a plat map showing the above areas is provided below, with italicized annotations by this Court for legibility:

         (Image Omitted.)

         On 22 July 1981, Ocean Side conveyed Lot 18 to Gerald Rodney Earney ("Mr. Earney") by warranty deed. The property description in the deed describes only Lot 18 and, by express reference to a plat map filed with the Register of Deeds, does not include the Reserved Area between Lot 18 and the Calabash River.

         BRPOA incorporated in August of 1984 to serve as a homeowner's association for the Bonaparte's Retreat subdivision. The following year, Ocean Side conveyed several properties to BRPOA by non-warranty deed, including the Reserved Area north of Lot 18. After taking ownership of the Reserved Area, however, BRPOA failed to file the necessary reports with the North Carolina Secretary of State and was suspended by the State on 24 January 1986. In 1991, homeowners in Bonaparte's Retreat decided to "reincorporate" as a second homeowner's association, BRIPOA, rather than revive BRPOA.

         Sometime after purchasing Lot 18, Mr. Earney built a pier into the Calabash River off of a portion of the Reserved Area located between Lot 18 and the river ("Parcel A"). According to an affidavit executed by his son, Mr. Earney mistakenly believed that Parcel A was part of Lot 18 and considered Lot 18 to be waterfront property. Mr. Earney cleared and landscaped Lot 18 and Parcel A, docked boats at the pier on Parcel A, used Parcel A to access the pier, and prohibited other people from using the pier without his permission. Mr. Earney had a septic tank installed but built no other structures on Lot 18 or Parcel A. An excerpt from a survey obtained by Plaintiffs showing the pier, lot, and parcel is provided below, with italicized annotations by this Court for legibility:

         (Image Omitted.)

         On 22 September 2000, Mr. Earney conveyed Lot 18 to Plaintiffs by general warranty deed. Per the deed, Mr. Earney conveyed only Lot 18 to Plaintiffs and, by reference to a plat map on file with the Register of Deeds, excluded from the property description Parcel A and the Reserved Area. Although the real estate listing that led Plaintiffs to purchase Lot 18 advertised the property as waterfront, Plaintiffs never met or spoke with Mr. Earney to inquire about the discrepancy between the listing and all of the conveyance documents, including the deed. Mr. Cole acknowledged that, "everything [Mr. Earney] signed said Lot 18."

         Plaintiffs, like Mr. Earney, mistakenly believed Lot 18 was a waterfront lot. Beginning in 2001, Plaintiffs started clearing trees and mowed Parcel A. In 2002, Plaintiffs began repairing and renovating the pier, adding a gate and handrails. Plaintiffs tied a rope or chain across the pier entrance, posted no trespassing signs on the pier, and hired a landscaper to mow and maintain Lot 18 and Parcel A during this time. Plans to build a home on Lot 18 coalesced and Plaintiffs hired a contractor to construct their house in 2008. When their contractor surveyed the property prior to the start of construction, Plaintiffs discovered for the first time that they did not, in fact, own Parcel A. Plaintiffs' contractor also told them that construction of their home would require a variance from the Town of Calabash's Board of Adjustment (the "Board of Adjustment"), because Plaintiffs planned to construct the house within 25 feet of Parcel A in violation of the town's setback requirements.

         Upon learning they did not own Parcel A, Plaintiffs sought to purchase Parcel A from BRIPOA's board of directors. The sale was stymied, however, because the board of directors discovered it was without requisite authority under BRIPOA's declarations to approve such a transfer.[1] Plaintiffs then applied to the Board of Adjustment to obtain the necessary setback variance. In the variance hearing on 24 June 2008, the Calabash Building Inspector/Code Enforcement Officer "acknowledged that [Parcel A] is owned by the Bonaparte Retreat Property Owner's Association (POA) and is used for common open space. The POA property abuts the Calabash River." In ruling on the variance application, the Board of Adjustment made findings of fact, including findings that "the adjacent property to the rear is open space owned by the subdivision's Property Owner's Association[, ]" and "the adjoining rear property is required open space for the subdivision[.]" The variance was approved contingent on BRIPOA's consent, and BRIPOA's board of directors provided written consent to the variance to the Board of Adjustment a few days later.

         Construction began on Plaintiffs' home in 2013. Plaintiffs placed "no trespassing" signs on Lot 18 and Parcel A to keep people off the building site and used Parcel A to store materials during construction. In October of 2014, Plaintiffs again sought to purchase Parcel A from BRIPOA. When BRIPOA's board of directors once more ascertained that they could not sell Parcel A to Plaintiffs under their by-laws, Plaintiffs rescinded their offer.

         Plaintiffs filed their complaint for adverse possession against BRPOA on 2 September 2015. Two days later, BRPOA's corporate status was reinstated by the North Carolina Secretary of State. On 9 September 2015, BRIPOA's board of directors met and voted to appoint various officers of BRPOA, naming Mr. Hamilton president of the newly-revived entity. On 28 October 2015, BRPOA conveyed the Reserved Area including Parcel A to BRIPOA by special warranty deed, with Mr. Hamilton signing as president of BRPOA. Plaintiffs filed an amended complaint on 1 March 2016, adding Mr. Hamilton and BRIPOA as defendants and, in addition to seeking a declaratory judgment that they owned Parcel A by adverse possession, asked the court to order by specific performance the rescission or correction of the special warranty deed. Defendants filed their answer to the amended complaint and asserted no counterclaims.

         All parties moved for summary judgment. Following a hearing, the trial court granted summary judgment in favor of Defendants and declared BRIPOA to be owner of Parcel A. The trial court also declared "an easement for ingress and egress across . . . Lot 18" in favor of BRIPOA. Plaintiffs timely appealed.

         II. STANDARD OF REVIEW

         We review entry of summary judgment de novo, Matter of Will of Allen, __ N.C.App. __, __, 801 S.E.2d 380, 383 (2017), meaning this Court "considers the matter anew and freely substitutes its own judgment for that of the lower tribunal." Craig v. New Hanover Cty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (internal quotation marks and citation omitted). Rule 56 of the North Carolina Rules of Civil Procedure allows for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c) (2015). In considering the record, we do so "in a light most favorable to the party against whom the order has been entered to determine whether there exists a genuine issue as to any material fact." BellSouth Telecomms., Inc. v. City of Laurinburg, 168 N.C.App. 75, 80, 606 S.E.2d 721, 724 (2005).

         III. ...


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