Duke Energy Carolinas, LLC v. Gray
369 N.C. 1
| N.C. | 2016Background
- Duke Energy holds a recorded 1951 easement over a 200-foot strip on property now owned by Herbert Gray; the easement grants rights to construct/maintain transmission lines and to keep the strip free of structures.
- A house was built on Lot 533 in 2006 by Wieland (builder); foundation surveys were performed before sale; Gray purchased the lot in early 2007 and received the foundation survey.
- In February 2010 Duke notified Gray that part of his house encroached on its easement and requested removal; Gray did not comply.
- Duke sued Gray in December 2012 seeking injunctive relief to remove the encroachment; Gray and Wieland moved for summary judgment asserting the six-year statute of limitations under N.C.G.S. § 1-50(a)(3) barred the claim.
- The trial court and Court of Appeals granted summary judgment for defendants, holding the claim was an action for injury to an incorporeal hereditament subject to a six-year limit and that the limitations period began by issuance of the 2006 certificate of occupancy.
- The Supreme Court granted discretionary review to decide whether the claim is governed by the six-year incorporeal hereditament limit or the twenty-year real property recovery limit (N.C.G.S. § 1-40).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitations applies to Duke’s suit to remove an encroachment on its easement? | The claim seeks recovery of real property (full use of the easement) and thus is governed by the 20-year rule in § 1-40. | The claim is for injury to an incorporeal hereditament (an easement) and is governed by the 6-year limit in § 1-50(a)(3). | Court held the action is for recovery of real property (the easement area) and § 1-40’s 20-year limitations period applies; § 1-50(a)(3) does not bar the suit. |
| Does the nature of an easement as an incorporeal hereditament mean actions to remove encroachments are barred by the shorter limitations period? | Even though an easement is an incorporeal hereditament, an action to recover possession/use of the easement is an action for recovery of real property. | Encroachments injure the incorporeal hereditament, so § 1-50(a)(3) controls. | Court held easements are real property interests and recovery of possession falls under Article 4 (real property) not Article 5. |
| Does Pottle v. Link control that § 1-40 is inapplicable to easement-encroachment suits? | Argues Pottle was wrongly decided on this point and § 1-40 should apply. | Relied on Pottle to support application of § 1-50(a)(3). | Court overruled Pottle to the extent it held § 1-40 inapplicable to encroachment actions. |
| Are additional defenses (lack of material interference; laches) resolved by deciding the limitations issue? | Duke did not need to have alleged material interference to pursue recovery; laches was not properly before the Court on discretionary review. | Defendants argued Duke failed to allege material interference and laches may bar relief if Duke knew earlier. | Court declined to decide these issues (discretionary review improvidently allowed as to them) and remanded for further proceedings consistent with its holding on limitations. |
Key Cases Cited
- Pottle v. Link, 187 N.C. App. 746 (2007) (Court of Appeals decision previously holding encroachment claims governed by § 1-50(a)(3), overruled in part)
- Davis v. Robinson, 189 N.C. 589 (1925) (discusses easement as an incorporeal hereditament and as an interest in real property)
- Atl. & Pac. R.R. v. Lesueur, 2 Ariz. 428 (1888) (historical authority describing easements as real property interests)