Source: https://www.statewidetitle.com/newsletterarticle.asp?Article=400
Timestamp: 2019-04-19 14:25:20+00:00

Document:
Four sisters each inherited a one-fourth, undivided interest in the real property at issue, located in Asheville, as tenants in common from their father. The property in this action consisted of multiple parcels of property zoned residential, which were designated as Parcel One, Parcel Two, and Parcel Three by the trial court. Two of the sisters owned residential tracts adjoining Parcel two and three. The Solesbees petitioned for a partition by sale of the Parcels. The Browns and Angels filed a response to the petition, and they also admitted that a sale was necessary. The Debruhls filed a separate answer to the petition, acknowledging that Parcel One should be sold but also requesting an in-kind allotment of Parcels Two and Three that adjoin their residential property.
The Debruhls appealed an order requiring the partition by sale of all parcels at issue in this action arguing that the trial court erred in its findings that an actual partition could not be made without injury. The Court of Appeals concluded that the trial court erred in finding that an actual partition could be made without causing injury to one or more of the parties because the trial court failed to make specific findings of fact as to: (1) the value of each individual Parcel; and (2) the value of each share of Parcels Two and Three, were those Parcels to be physically partitioned.
finding and concluding that: (1) a partial physical partition of the lands cannot be made without causing substantial injury to one or more of the interested parties; and (2) Janet H. Solesbee and Carl Solesbee (collectively, "the Solesbees"), who sought a partition by sale of the real property, could later pursue an in-kind allotment if the trial court decided against ordering the sale of the parcels, thereby complicating the partial actual allotment sought by the Debruhls. After careful review, we reverse the trial court's decision and remand the case so that the trial court can make the specific findings of fact required by law and then re-examine its conclusions of law.
Janet H. Solesbee, Cheryl H. Brown, Gwenda H. Angel, and Lisa H. Debruhl are sisters (collectively, "the Sisters"). Each sister inherited a one-fourth, undivided interest in the real property at issue, located in Asheville, as tenants in common from their father, Walter Honeycutt. The property is comprised of multiple parcels, which were designated as Parcel One, Parcel Two, and Parcel Three by the trial court (collectively, "the Parcels"). The Solesbees and the Debruhls individually own and reside on real property adjacent to Parcels Two and Three. The Parcels and the residences are all zoned for residential use.
On 9 January 2015, the Solesbees petitioned for a partition by sale of the Parcels.2 The Browns and Angels filed a response to the petition, and they also admitted that a sale was necessary. The Debruhls filed a separate answer to the petition, acknowledging that Parcel One should be sold but also requesting an in-kind allotment of Parcels Two and Three that adjoin their residential property. On 28 December 2015, the Clerk of Buncombe County Superior Court ordered the Parcels be sold by private sale. The Debruhls timely appealed to the Superior Court. On 3 May 2016, the trial court issued its Corrected Order, in which it concluded that: (1) an actual partition of the lands could not be made without causing substantial injury; and (2) the fair market value of each cotenant's share in an actual partition would be materially less than the amount each cotenant would receive from the sale of the whole. The trial court arrived at this conclusion after comparing the fair market value of Parcels Two and Three to one-fourth of the combined fair market value of all of the Parcels as a whole. Since the trial court found that "[i]t is inevitable" that the Parcels will be rezoned for commercial use, which would bring "a far higher value for the property than residential use," it assigned a range of fair market values for each Parcel as opposed to a specific value. Specifically, the trial court found that, since "Parcel One is currently zoned for residential use, but could likely be re-zoned for 2 Although the Sisters' husbands are not record owners of the Parcels, each husband is a proper party to this action because they have inchoate marital interests in the Parcels.
commercial use," the "fair and reasonable market value of Parcel One . . . [was somewhere between] $190,000.00 to $300,000.00." For Parcel Two, the trial court found that "[i]n light of the nature of Parcel Two, including being encumbered by numerous sewer line and road easements, extremely steep and rocky terrain, flood plains, and erratic shape, there is practically no useable land on Parcel Two, except as presently being used," making the "fair and reasonable market value of Parcel Two . . . $19,550 to $20,000." Finally, the trial court found that there was "practically no or very limited useable land on Parcel [Three]," making the "fair and reasonable market value . . . $16,800.00 to $30,000.00." The trial court then found that the combined value of Parcels Two and Three was $36,350 to $50,000, and that the fair market value of all the Parcels was "$225,350 to $350,000, with a one-fourth interest in all the Parcels being $56,337.50 to $87,500."3 Accordingly, the trial court found that "[t]he fair market value of Parcels Two and Three combined ($36,5004 to $50,000) is substantially less than one-fourth of the total fair market value ($56,337.50 to $87,500)." In determining that actual partition would result in substantial injury, the trial court considered these values as well as: (1) the personal value of the Parcels to 3 We note that the sum of $36,350 and $190,000, the value of Parcel One, is $226,350, not $225,350, making the one-fourth interest in all Parcels $56,587.50, not $56,337.50. 4 We also note that the trial court refers to the combined fair market value of Parcels Two and Three as $36,500 here, but that the earlier reference to those same Parcels noted their valuation was $36,350, as the sum of $19,550 and $16,800 is $36,350, not $36,500.
the parties; (2) the difficulty of physical partition; and (3) the "highest and best use" of the Parcels. Based on these considerations, the trial court ordered that all of the Parcels be sold together as one, or, alternatively, that Parcel One be sold individually and Parcels Two and Three be sold together, whichever would bring the highest sale price. The Debruhls timely appealed from the Corrected Order. I I . Standard of Review When the trial court sits without a jury: [T]he standard of review on appeal is whether there was competent evidence to support the trial court's findings of fact and whether its conclusions of law were proper in light of such facts. Findings of fact by the trial court in a nonjury trial have the force and effect of a jury verdict and are conclusive on appeal if there is evidence to support those findings. A trial court's conclusions of law, however, are reviewable de novo. Lyons-Hart v. Hart, 205 N.C. App. 232, 235-36, 695 S.E.2d 818, 821 (2010) (emphasis omitted). "[W]hether a partition order and sale should issue is within the sole province and discretion of the trial judge and such determination will not be disturbed absent some error of law." Whatley v. Whatley, 126 N.C. App. 193, 194, 484 S.E.2d 420, 421 (1997).
because there are slight disadvantages to it. Id. at 256, 139 S.E.2d at 583. Further, "[s]ince partition in kind is favored, such partition will be ordered, even though there may be some slight disadvantages . . . in pursuing such method." Id. at 256, 139 S.E.2d at 583. Before a trial court can order a partition by sale, then, the trial court must consider whether, by a preponderance of the evidence, "an actual partition of the lands cannot be made without substantial injury to any of the interested parties." N.C.G.S. § 46-22(a) (2015) (emphasis added). To overcome the presumption in favor of physical partition, the law requires: (b) In determining whether an actual partition would cause "substantial injury" to any of the interested parties, the court shall consider the following: (1) Whether the fair market value of each cotenant's share in an actual partition of the property would be materially less than the amount each cotenant would receive from the sale of the whole. (2) Whether an actual partition would result in material impairment of any cotenant's rights. (b1) The court, in its discretion, shall consider the remedy of owelty where such remedy can aid in making an actual partition occur without substantial injury to the parties. (c) The court shall make specific findings of fact and conclusions of law supporting an order of sale of the property. (d) The party seeking a sale of the property shall have the burden of proving substantial injury under the provisions of this section. N.C.G.S. § 46-22(b)-(d) (emphasis added).5 In parsing the language of this statute, this state's appellate courts have addressed: (1) whether slight economic disadvantage or convenience are sufficient justifications for ordering a partition in kind; (2) what specific findings a trial court must make before ordering partition in kind; and (3) whether those requisite findings may be circumvented based on the difficulty of physically partitioning the property at issue. At times, physical partition can be hampered by the nature of the property at issue. The issue of difficulty of physical partition was addressed by our Supreme Court in Brown v. Boger, 263 N.C. 248, 139 S.E.2d 577 (1965). In that case, our Supreme Court considered the appropriateness of a partition by sale of a roughly 1,250 acre property with irregular boundaries as well as different types and grades of land. Id. at 252, 139 S.E.2d at 580. The trial court had found that, "from an economic standpoint," it was in the best interest of the petitioners to sell the property as a whole as actual partition of the lands would cause "financial detriment to those who want to sell," and that the petitioners would "receive more from the sale of the lands as a whole" than they would receive from "the sale of that portion of the lands 5 In 2009, the General Assembly amended N.C.G.S. § 46-22(c) to "clarify the standard for determining what constitutes 'substantial injury.' " 2009 North Carolina Laws S.L. 2009-512 (H.B. 578). The phrasing changed from "the court shall specifically find the facts supporting an order of the sale of the property" to "the court shall makespecific findings of fact and conclusions of law supporting an order of sale of the property." Id. (emphasis added).
to pay his former cotenants money to equalize the value received by each cotenant." Partin, 112 N.C. App. at 812, 436 S.E.2d at 906. Specifically, N.C.G.S. § 46-22(b1) requires that "the court, in its discretion, shall consider the remedy of owelty where such remedy can aid in making an actual partition occur without substantial injury to the parties." (Emphasis added). Although in the present case the trial court did conclude that owelty was not an appropriate remedy, that determination cannot be upheld, even with the discretion granted to the trial court, because the trial court's conclusion was based on inappropriate findings. Until the trial court makes the requisite findings regarding the fair market value of the Parcels, it cannot decide whether owelty is an appropriate. Finally, the trial court determined that "[o]ffering Parcels Two and Three with Parcel One for sale [would] bring the tenants in common the highest value for the property as a whole" and that "[i]n reality the highest and best use of Parcels Two and Three is to combine them with adjoining property for commercial use." However, such conclusions fail to satisfy the standards required by N.C.G.S. § 46-22. N.C.G.S. § 46-22 does not state that "highest and best use" of the land should factor into the determination of whether actual partition would cause substantial injury. As such, physical partition does not work a substantial injury simply because it would not be the "highest and best use" of the land.
The trial court erred by failing to make specific findings as to the value of each Parcel and the value of each share of the Parcels were those Parcels physically partitioned. I t further erred in utilizing factors such as the personal value of the Parcels to the parties, the difficulty of physical partition, and the "highest and best use" of the Parcels in concluding that substantial injury would result by physical partition.
For the foregoing reasons, we reverse the trial court's order and remand with instructions for the trial court to make the specific findings of fact required by N.C.G.S. § 46-22 and our caselaw.
Judge CALABRI A and DIETZ concur.

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