Court Opinion

ID: 2728785
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:36:14.338298+00
Date Added: 2024-06-11T09:53:11.554736
License: Public Domain

NO. COA13-686

                     NORTH CAROLINA COURT OF APPEALS

                           Filed:    15 April 2014

DUKE ENERGY CAROLINAS, LLC,
     Plaintiff

     v.

BRUTON CABLE SERVICE, INC.,                  Randolph County
     Defendant/Third-Party                   No. 11 CVS 1771
     Plaintiff

     v.

ROBERT WAYNE TAYLOR and wife, LOIS
K. TAYLOR; DAVIS-MARTIN-POWELL AND
ASSOCIATES, INC., and JON ERIC
DAVIS,
     Third-Party Defendants

     Appeal     by   defendant/third-party           plaintiff     from    order

entered   11   October   2012   by   Judge    Lucy    N.   Inman   in   Randolph

County Superior Court.      Heard in the Court of Appeals 6 November

2013.

     Biesecker, Tripp, Sink & Fritts, L.L.P., by Joe E.
     Biesecker, for third-party plaintiff-appellant Bruton Cable
     Service, Inc.

     Pharr Law, PLLC, by Steve M. Pharr, for                       third-party
     defendant-appellees   Davis-Martin-Powell and                 Associates,
     Inc. and Jon Eric Davis.

     CALABRIA, Judge.
                                           -2-
       Defendant/third-party plaintiff Bruton Cable Service, Inc.

(“Bruton”) appeals from an order granting summary judgment in

favor       of    third-party        defendants          Davis-Martin-Powell           and

Associates,           Inc.    (“DMP”)      and     Jon     Eric        Davis     (“Davis”)

(collectively “defendants”).                Bruton voluntarily dismissed its

claims against third-party defendants Robert Wayne Taylor and

Lois K. Taylor (“the Taylors”) on 29 April 2013.                               Duke Energy

Carolinas, LLC (“Duke”) voluntarily dismissed its claims against

Bruton on 2 May 2013.            Neither the Taylors nor Duke are parties

to the instant appeal.           We reverse.

                                     I. Background

       In    April      2005,    Bruton,     a     North        Carolina   corporation,

purchased Lots 7 and 59 (“the property”) from the Taylors.                             The

property was located in the Randolph Hills Subdivision, Phase II

(“the subdivision”), in Randolph County, North Carolina.                             Prior

to Bruton’s ownership of the property, DMP, a North Carolina

corporation engaged in the business of surveying, engineering,

and land planning, prepared the plat.                    Davis, a DMP employee and

registered surveyor, certified the plat that was recorded on 8

July    2003     at    Plat   Book   84,    Page    95     at    the   Randolph     County

Register of Deeds.            The final recorded plat showed Duke’s right-
                                        -3-
of-way     easement    (the    “Duke    easement”       or   “Duke’s    easement”)

pursuant to an agreement dated 20 May 1970.

      According to Davis’ plat, Duke’s easement extended 150 feet

over and across Lots 7 and 59 of the subdivision.                      Relying on

the information in the recorded final subdivision plat (“the

plat”) depicting a 150-foot Duke easement, Bruton planned the

location of single-family homes and a septic tank repair and

drain field on the property. Bruton began construction in 2006.

      On   31    October   2006,      Duke    representative       Ervin    Summers

(“Summers”)      visited      the    property    to    determine      whether      the

construction     was   within       Duke’s    easement.      Summers      then   sent

Bruton a letter dated 8 February 2007 stating Duke’s objection

to   all   encroachments       that    existed    within     Duke’s    deeded    and

recorded 200-foot easement for the property.                  Summers requested

the removal of the encroachments on Duke’s easement.                         At the

time Bruton received Duke’s letter, the house on Lot 59 was

almost complete and the house on Lot 7 was approximately 60%

complete.       Bruton also sent DMP several letters regarding the

encroachment due to the inaccurate survey.

      On 7 July 2011,          since the parties were unsuccessful in

negotiations     regarding      the    disputed       easement,    Duke    filed    a

complaint against Bruton alleging that a portion of Bruton’s
                                         -4-
house     that    was   under    construction        encroached       upon   Duke’s

easement,    and    sought,     inter     alia,    an    order   to    remove    the

encroachment from the 200-foot wide electrical transmission line

easement.        Duke   also    sought    a    permanent    injunction       against

Bruton,    prohibiting     it    from    further    interfering       with   Duke’s

ability to protect the safety of the public, provide reliable

electrical       service   to   the     public,    and    properly     and   safely

maintain its transmission lines.

    On 22 December 2011, Bruton filed an answer and a third-

party complaint against DMP and Davis.                   In its answer, Bruton

denied liability and acknowledged that any alleged liability was

the result of Bruton’s reasonable and justifiable reliance upon

defendants’ actions, representations, and warranties that the

Duke easement was 150 feet wide.

    In     its    third-party     complaint       against   defendants,       Bruton

alleged, inter alia, that

             DMP and Davis, in the course of their
             business and profession, prepared the final
             map for the Randolph Hills Subdivision,
             Phase II, for the benefit of persons who
             would acquire Lots 7 and 59.     [Defendants]
             reasonably knew that a purchaser of Lots 7
             and   59  would   reasonably   rely  on   the
             information and representation contained in
             that survey as shown on the map.

             33. In performing the services necessary for
             the production of the map . . . [defendants]
                     -5-
were required to comply with the provisions
of N.C.G.S. § 47-30(f)(8). [Defendants] did
not comply with that statute.    The failure
to comply with that statute caused [Bruton]
to incur damages.   That statute was enacted
for the benefit and protection of the
general public. [Bruton], as a purchaser of
Lots 7 and 59 and as a member of the general
public, is one of the class of persons for
whose benefit [defendants] supplied the
information and statements shown on the
plat.    [Bruton] is a person for whose
protection that statute was enacted by the
legislature.    Although [Bruton] was not
personally aware of the defect in the map,
[Bruton]   was entitled to rely on the
accuracy of that map.   [Defendants] knew or
should have known that members of the public
such as [Bruton] and other purchasers of
lots in that subdivision would rely on the
accuracy of that map.

34. On or about 29 April 2005 [Bruton]
acquired ownership of Lots 7 and 59, Phase
II, Randolph Hills Subdivision according to
the plat which is duly recorded in Plat Book
84, Page 95 in the Register of Deeds of
Randolph County, North Carolina.

. . .

37.    [Bruton]    reasonably    relied    on
[defendants’] representation of the [Duke]
easement as shown on the final recorded map.

38. After acquiring the two lots, [Bruton]
began construction of a house on each lot in
late 2006. Each house was located in order
to comply with the required set-back and
zoning limits, the requirements of the
Restrictive Covenants, other applicable laws
and rules and outside the [Duke] easement as
shown on the plat prepared by [defendants].
[Bruton’s] agents relied on the plat.
                     -6-

39. On or about February 10, 2007, [Bruton]
received a letter dated February 8, 2007
from [Duke].     The letter asserted that
[Duke] had a 200-foot wide easement on Lots
7 and 59. [Duke] informed [Bruton] that no
portion of either house, driveway, septic
system   or  other  improvements   could  be
located within any area of the 200-foot wide
easement.

. . .

41. When [Bruton] received that letter, the
house on Lot 59 was almost complete and the
house on Lot 7 was approximately sixty
percent   (60%)   complete.      To   mitigate
possible damages, [Bruton] ceased work on
each house and incurred expenses to relocate
the septic tank system on Lot 59 outside of
the alleged Duke easement.      Approximately
50% of the house on Lot 7 is within the
alleged [Duke] easement.       If the Court
grants [Duke] any or all the relief it
requests, the house on Lot 7 will have to be
disassembled and demolished.      Both houses
were planned as single-family residences.

42. [Bruton] spent approximately $191,301.90
for Lot 7 and construction of the house on
Lot   7.     [Bruton]   spent  approximately
$224,821.23 for Lot 59 and construction of
the house on Lot 59. [Bruton] will have to
remove the house on Lot 7 and remove the
unused septic system from encroaching on the
easement. [Bruton] will incur expenses.

43. [Defendants] were negligent in that they
failed to accurately identify and locate the
[Duke] easement on the map . . . as required
by N.C.Gen.Stat. [sic] § 47-30(f)(8) and
other   applicable   law.     Such   failure
constitutes negligence. [Defendants] failed
to exercise that care and competence in
                                           -7-
           obtaining    and    communicating   accurate
           information regarding the [Duke] easement.
           [Defendants] negligently misrepresented the
           accurate width of the [Duke] easement.   The
           actions of [defendants] constitute a mistake
           on their part.

           44. As a direct and proximate result of
           [defendants’] negligence, [Bruton] has been
           damaged in an amount incurred or to be
           incurred   in  excess   of   $10,000.00  for
           purchase price of each lot, construction of
           each house, removal of the house on Lot 7
           and removal of the septic tank system on Lot
           59.

           45. [Bruton] could not have prevented the
           damages it has incurred or will incur.

    On 9 January 2012, defendants filed an answer to Bruton’s

third-party    complaint.        As    one        of    the   affirmative   defenses,

defendants alleged Bruton’s claims were barred by the statute of

limitations.        On 18 July 2012, defendants filed a motion to

dismiss the complaint,        and in the alternative,                    a motion    for

summary judgment.          After a hearing on 17 September 2012, at

which   defendants    specifically          argued       that   Bruton’s    claim    was

time-barred    by    the   statute         of    limitations,      the    trial   court

granted    summary    judgment        in        favor    of   defendants.         Bruton

appeals.

                           II. Standard of Review

    “Our standard of review of an appeal from summary judgment

is de novo; such judgment is appropriate only when the record
                                       -8-
shows that ‘there is no genuine issue as to any material fact

and that any party is entitled to judgment as a matter of law.’”

In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576

(2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d

382, 385 (2007)).      “A genuine issue of material fact arises when

the facts alleged . . . are of such nature as to affect the

result of the action.”      N. Carolina Farm Bureau Mut. Ins. Co. v.

Sadler, 365 N.C. 178, 182, 711 S.E.2d 114, 116 (2011) (citation

and quotation marks omitted).          In a summary judgment motion, the

court   may   consider    “the    pleadings,       depositions,      answers    to

interrogatories,    and    admissions        on   file,   together      with   the

affidavits” to see if there is any genuine issue of material

fact.   N.C. Gen. Stat. § 1A-1, Rule 56(c) (2013).                     This Court

reviews the pleadings and all other evidence in the record in

the light most favorable to the nonmoving party and draws all

reasonable inferences in that party’s favor.                 Sadler, 365 N.C.

at 182, 711 S.E.2d at 117.

                          III. Summary Judgment

    Bruton    argues     that    the   trial      court   erred   in    admitting

unsworn letters and considering them in the decision to grant

defendants’ motion for summary judgment, and more importantly by

basing that decision on the statute of limitations.               We agree.
                                         -9-
A. Admission of Correspondence

      As an initial matter, submitted affidavits must meet the

requirements of Rule 56(e) of the North Carolina Rules of Civil

Procedure:      “affidavits shall be made on personal knowledge,

shall set forth such facts as would be admissible in evidence,

and shall show affirmatively that the affiant is competent to

testify to the matters stated therein.”             N.C. Gen. Stat. § 1A-1,

Rule 56(e) (2013).           Unsworn letters and correspondence are not

the type of evidence considered by the court pursuant to Rule

56,   and   should     not    be   considered   during    summary   judgment.

Strickland v. Doe, 156 N.C. App. 292, 296, 577 S.E.2d 124, 129

(2003).     Instead, “parties are required to set forth facts in

affidavits or as otherwise provided.”               Id., 577 S.E.2d at 129

(quotation marks omitted).           See also Draughon v. Harnett Cty.

Bd. of Educ., 158 N.C. App. 705, 709, 582 S.E.2d 343, 345-46

(2003) (unsworn statements and inadmissible hearsay “cannot be

relied upon” in a summary judgment motion).

      In the instant case, defendants introduced several letters

between     Bruton’s    counsel    and    defense    counsel   purporting   to

support their summary judgment motion.              While defendants contend

the letters were offered for the purpose of showing Bruton’s

awareness of damages, the reason for offering the letters does
                                             -10-
not negate the fact that the letters themselves were unsworn

correspondence that did not comply with the requirements of Rule

56.

      Bruton also argues that the letters should not have been

admitted    because       they    contained         impermissible          hearsay,    legal

opinions    and     presumptions,           and    statements       in     the     course   of

settlement negotiations.               However, since the trial court erred

by    improperly         considering         unsworn       correspondence            between

Bruton’s counsel and defense counsel, and defendants did not

comply with the requirements of Rule 56, it is unnecessary to

address these arguments.

B. Statute of Limitations

      In   addition       to     considering         unsworn        correspondence,         we

address whether the Bruton’s third-party action was barred by

the statute of limitations.

      To determine whether Bruton timely filed its third-party

complaint,    we    must       determine      when       Bruton,      as    the    aggrieved

party,     became       entitled       to     maintain         an    action.           Bruton

specifically        alleged       in        the     third-party          complaint       that

defendants,        as         registered          land     surveyors,             negligently

misrepresented          the     accurate      width       of    the        Duke    easement.

According to our Supreme Court in Raftery v. Wm. C. Vick Constr.
                                         -11-
Co., a statute of limitations begins to run against an aggrieved

party when that aggrieved party becomes entitled to maintain an

action for the wrongful act that was committed.                     291 N.C. 180,

186-87, 230 S.E.2d 405, 408 (1976) (citation omitted).                          In a

claim   specifically        alleging      negligent      misrepresentation,      the

cause of action accrues when two events occur: (1) the claimant

discovers the misrepresentation, and (2) the claimant suffers

harm because of the misrepresentation.                     Guyton v. FM Lending

Servs., Inc., 199 N.C. App. 30, 35, 681 S.E.2d 465, 478 (2009)

(citation omitted).

      Although defendants contend that N.C. Gen. Stat. § 1-52(16)

should apply, N.C. Gen. Stat. § 1-52(18) specifically excludes §

1-52(16) and includes § 1-47(6).                Pursuant to N.C. Gen. Stat. §

1-52(18)   (2013),     a    three-year      limitation       applies    to    actions

“[a]gainst any registered land surveyor . . . or any person

acting under his supervision and control for physical damage or

economic or monetary loss due to negligence or a deficiency in

the performance of surveying or platting as defined in G.S. 1-

47(6).”    According        to   N.C.    Gen.    Stat.   §   1-47(6),    an    action

against any registered land surveyor and any person acting under

his supervision or control for physical damage or for economic

or   monetary   loss       due   to     negligence    in     the   performance    of
                                      -12-
surveying or platting must be commenced “within 10 years after

the last act or omission giving rise to the cause of action.”

N.C. Gen. Stat. § 1-47(6)(a) (2013).                This limitation applies

to the exclusion of N.C. Gen. Stat. § 1-52(16).             N.C. Gen. Stat.

§ 1-47(6)(c) (2013).

    Since Davis is a registered land surveyor, DMP is a company

specifically engaged in surveying and platting, and this appeal

involves a complaint based upon negligent surveying that caused

Bruton    to    suffer   property    damage   and   economic   loss   due   to

defendants’ negligent survey, N.C. Gen. Stat. §§ 1-52(18) and 1-

47(6)    both   apply.     However,    both   statutes   provide   differing

limitation       periods    for     actions   against     registered    land

surveyors.       Pursuant to Fowler v. Valencourt, “[w]here one of

two statutes might apply to the same                situation, the statute

which deals more directly and specifically with the situation

controls over the statute of more general applicability.”                   334

N.C. 345, 349, 435 S.E.2d 530, 532 (1993) (citations omitted).

“Moreover, where there is doubt as to which of two possible

statutes of limitation applies, the rule is that the longer

statute is to be selected.”             Id. at 350, 435 S.E.2d at 533

(citation omitted).        Therefore, the ten-year limitation period

applies.
                                            -13-
    In        the      instant      case,     Bruton        officially          discovered

defendants’          misrepresentation        in     the    survey       regarding       the

location of the easement when Bruton received Summers’ letter

dated    8    February      2007   regarding        the    encroachments        on    Duke’s

easement.      Duke filed a complaint against Bruton on 7 July 2011.

Bruton, as the aggrieved party in Duke’s complaint, was then

entitled to maintain a cause of action against the third-party

defendants for negligent misrepresentation of the easement.

    Since          Duke’s    allegations          caused    Bruton    economic         loss,

Bruton       filed     an   answer     and    third-party         complaint          against

defendants      on     22   December    2011,       alleging,     inter     alia,       that

Bruton reasonably relied upon the representation in the plat

prepared by Davis depicting Duke’s right of way as 150-feet

wide.        Since     Bruton      promptly       filed    its   third-party          action

against defendants after receiving the Duke action, we hold that

pursuant      to     N.C.   Gen.    Stat.     §    1-47(6),      which     is    the    more

specific statute, Bruton commenced its action within 10 years of

the last act giving rise to the cause of action.                                The trial

court    erred        by    granting    summary       judgment       for    defendants.

Bruton’s third-party complaint for negligent misrepresentation

against defendants was timely filed and was not time-barred.
                                   -14-
    Defendants     contend     that    Bruton’s   claim   for   negligent

misrepresentation of the easement accrued in 2006, when Summers

initially visited the property.        However, even if Bruton’s claim

accrued   in   2006,   the   third-party    complaint   was   still   filed

within 10 years, and thus timely filed pursuant to N.C. Gen.

Stat. § 1-47(6).

                 IV. Validity of Third-Party Action

    Since we conclude that Bruton’s third-party complaint was

timely filed and not time-barred by the applicable statute of

limitations, the final issue is whether Bruton was permitted to

file its third-party action.          Defendants contend that Bruton’s

claim is an inappropriate direct action disguised as a third-

party action.

    Pursuant to Rule 14, “any time after commencement of the

action a defendant, as a third-party plaintiff, may cause a

summons and complaint to be served upon a person not a party to

the action who is or may be liable to him for all or part of the

plaintiff’s claim against him.”           N.C. Gen. Stat. § 1A-1, Rule

14(a) (2013).    Since Bruton’s third-party complaint specifically

alleges “that the third-party defendants are liable to Bruton

Cable for all or part of [Duke’s] claims against Bruton Cable,”
                                     -15-
Bruton’s third-party complaint alleges indemnity with language

mirroring in part that of Rule 14(a).

      Defendants       also     contend      that      Bruton’s      negligent

misrepresentation claim is inappropriate because a third-party

plaintiff may only assert derivative damages against a third-

party defendant.        However, Rule 18 of the North Carolina Rules

of Civil Procedure states that “[a] party asserting a claim for

relief    as    an   original   claim,    counterclaim,   cross     claim,   or

third-party claim, may join, either as independent or alternate

claims, as many claims, legal or equitable, as he has against an

opposing party.”        N.C. Gen. Stat. § 1A-1, Rule 18(a) (2013).

Since Bruton properly alleges indemnification pursuant to Rule

14   in   the   third-party     complaint,    the    joinder   of   claims   is

permissible pursuant to Rule 18.

                                V. Conclusion

      Bruton’s        third-party        complaint     alleged       negligent

misrepresentation for justifiably relying to its detriment on

defendants’ misrepresentation of the accurate width of the Duke

easement in the recorded plat.              As a result, Bruton suffered

physical damage and economic or monetary loss.                    Because N.C.

Gen. Stat. § 1-47(6) applies pursuant to                Fowler, Bruton was

required to file its third-party complaint within 10 years of
                              -16-
the last act or omission giving rise to the cause of action.

Bruton’s third-party complaint was properly filed pursuant to

the North Carolina Rules of Civil Procedure within 10 years of

both Summers’ visit to the property in October 2006 and the

official letter from Duke in February 2007.     In the light most

favorable to Bruton as the nonmoving party, defendants are not

entitled to judgment as a matter of law.       For these reasons,

summary judgment should have been denied.   We reverse.

    Reversed.

    Judges HUNTER, Robert C. and HUNTER, JR., Robert N. concur.