Court Opinion

ID: 4260651
Source: CourtListenerOpinion
Date Created: 2018-04-04 05:18:04.401232+00
Date Added: 2024-06-11T07:49:21.046681
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  No. COA17-1117

                                  Filed: 3 April 2018

Iredell County, No. 16 CVS 259

REGENCY LAKE OWNERS’ ASSOCIATION, INC., and CHARLES HUFFMAN,
Plaintiffs,

              v.

REGENCY LAKE, LLC, COURTLAND PROPERTIES, INC., and JOSEPH
MACMINN, Defendants.

        Appeal by plaintiffs from order entered 31 March 2017 by Judge Jeffrey K.

Carpenter in Iredell County Superior Court. Heard in the Court of Appeals 6 March

2018.

        Jones, Childers, Donaldson & Webb, PLLC, by Kevin C. Donaldson and C.
        Marshall Horsman, for plaintiff-appellees.

        Eisele Ashburn Greene & Chapman, PA, by Kathleen L. Vogel and Douglas G.
        Eisele, for defendant-appellants.

        TYSON, Judge.

                                    I. Background

        In July 1969 and October 1970, Rolling Homes, Inc. (“Rolling Homes”) acquired

two adjacent tracts of land situated in Davidson Township, Iredell County. The deeds

are recorded in book 485, page 64, and book 494, page 192, respectively, in the Iredell

County Registry. Rolling Homes developed the Regency Lake Village subdivision by

dividing the two combined tracts into streets, lots, a playground and a lake access
             REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                  Opinion of the Court

area (the “Access Area”). The subdivision plat for Regency Lake Village (the “Plat”)

was recorded in the Iredell County Registry at plat book 10, pages 59 and 59A.

      The Regency Lake Village Access Area includes a boat ramp for owners to

access Lake Norman. The Access Area is bounded on the east by a lot, on the south

by Lake Norman, on the west by a dam impounding a private lake, and on the north

by a road.

      The first deed conveying a lot in Regency Lake Village was granted to Cecil B.

Tucker and wife, Francis W. Tucker, in October 1970, after the Plat was recorded.

The deed conveyed to the Tuckers makes reference to the Plat. After October 1970

and until early 1973, Rolling Homes conveyed several other lots in Regency Lake

Village to numerous individuals. All of these deeds reference the Plat.

      Auto Storage Company acquired all of the remaining property in Regency Lake

Village, which had not been previously conveyed by Rolling Homes, by a substitute

trustee’s deed in 1973. The deed to Auto Storage Company is recorded in book 536,

page 499, of the Iredell County Registry. This deed also references the Plat.

      Defendants Regency Lake, LLC, Courtland Properties, Inc., and Joseph P.

MacMinn (collectively, “Appellees”) obtained title to the Access Area from Auto

Storage Company by a quitclaim deed recorded in April 2001 in book 1258, page 1701

of the Iredell County Registry.

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                  Opinion of the Court

      In October 2015, Defendants recorded a plat, at plat book 64, page 19 of the

Iredell County Registry, subdividing the Access Area into two separate lots with the

intention that they would develop one lot, designated as Lot 1, for residential

purposes, and reduce the size of the originally platted Access Area, designated as Lot

1A.

      Plaintiff Charles Huffman (“Huffman”) is an owner of property located within

Regency Lake Village and a member of Plaintiff Regency Lake Owners’ Association

(collectively, “Appellants”). On 2 February 2016, Appellants filed a verified complaint

against Defendants seeking: (1) a declaratory judgment declaring Appellants and

other purchasers and owners of lots described in the October 1970 plat have a private

easement to the Access Area; (2) a motion for preliminary injunction to enjoin

Defendants from altering the Access Area or preventing Appellants from entering

and using the Access Area; and, (3) in the alternative, a declaration that there exists

an easement to the Access Area for purchasers and owners of lots in Regency Lake

Village.

      Defendants filed their answer to Appellants’ complaint on 15 April 2016. The

trial court entered a preliminary injunction on 31 May 2016, which ordered that

Defendants “shall not perform any acts on the Access Area which would alter its

current condition and shall not prevent the Plaintiffs from entering and using the

Access Area pending further orders of this Court.”

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             REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                    Opinion of the Court

      The matter was heard on 20 March 2017. The parties waived the right to a

jury trial and chose to proceed with a bench trial. Following the presentation of

evidence and testimony of witnesses, but before a verdict was rendered, the trial court

ex mero motu entered an order on 31 March 2017, which concluded that all necessary

parties were not joined in the action, that all necessary parties should be joined, and

that the matter should be re-heard after all of the necessary parties are joined. The

trial court ordered that all “the remaining owners of property in Regency Lake Village

Subdivision shall be joined as parties to this action.” The trial court did not certify

its order for immediate appeal under Rule 54(b) of the North Carolina Rules of Civil

Procedure.

      Plaintiffs filed notice of appeal of the trial court’s order.

                                       II. Analysis

                                  A. Substantial Right

      Appellants concede this appeal is interlocutory. “Generally, there is no right of

immediate appeal from interlocutory orders and judgments.” Goldston v. American

Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). “An interlocutory order

is one made during the pendency of an action, which does not dispose of the case, but

leaves it for further action by the trial court in order to settle and determine the entire

controversy.” Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (citations

omitted), reh’g denied, 232 N.C. 744, 59 S.E.2d 429 (1950).

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                    Opinion of the Court

      “If a party attempts to appeal from an interlocutory order without showing that

the order in question is immediately appealable, we are required to dismiss that

party’s appeal on jurisdictional grounds.” Hamilton v. Mortg. Info. Servs., Inc., 212

N.C. App. 73, 77, 711 S.E.2d 185, 189 (2011) (citation omitted). “[I]mmediate appeal

is available from an interlocutory order or judgment which affects a substantial

right.” Sharpe v. Worland, 351 N.C. 159, 162, 522 S.E.2d 577, 579 (1999) (citations

and internal quotation marks omitted).

      The trial court’s order is interlocutory, because it does not dispose of all of the

issues in the case. The trial court ordered that all lot owners in Regency Lake Village

be joined as necessary parties to the action and the evidence be re-heard following

joinder of the necessary parties.

      To determine whether an interlocutory order is immediately appealable when

an appellant claims to have been deprived of a substantial right: (1) “the right itself

must be substantial [,]” and (2) “the deprivation of that . . . right must potentially

work injury . . . if not corrected before appeal from final judgment.” Frost v. Mazda

Motors of Am., Inc., 353 N.C. 188, 192, 540 S.E.2d 324, 327 (2000) (citation and

internal quotation marks omitted).

      In order to determine whether jurisdiction over this appeal exists, “we must

discern the precise nature of the right the appellant claims as substantial.” Neusoft

Med. Sys., USA Inc. v. Neuisys, LLC, 242 N.C. App. 102, 107, 774 S.E.2d 851, 855

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                   Opinion of the Court

(2015). The burden rests upon the appellant to demonstrate that the order “deprives

the appellant of a substantial right which would be jeopardized absent a review prior

to a final determination on the merits.” Jeffreys v. Raleigh Oaks Joint Venture, 115

N.C. App. 377, 380, 444 S.E.2d 252, 254 (1994) (citations omitted).

      Appellants argue the order’s requirement to join other lot owners in Regency

Lake Village deprives them of a substantial right “by completely eliminating

[Huffman’s] individual property rights and replacing these rights with a group

property right which only exists when exercised in concert with other property

owners.”   In ordering that the other lot owners in the subdivision be joined as

necessary parties, the trial court relied on N.C. Gen. Stat. § 1-260 and § 1A-1, Rule

19 of the North Carolina Rules of Civil Procedure.

      N.C. Gen. Stat. § 1-260 requires, in relevant part: “[w]hen declaratory relief is

sought, all persons shall be made parties who have or claim any interest which would

be affected by the declaration, and no declaration shall prejudice the rights of persons

not parties to the proceedings.” N.C. Gen. Stat. § 1-260 (2017). The Supreme Court

of North Carolina has also provided guidance that the last clause of the quoted

sentence of N.C. Gen. Stat. § 1-260 “should not be relied on by the courts as authority

to proceed to judgment without the presence of all necessary parties, when in the

course of a trial the absence of such parties becomes apparent.” Morganton v. Hutton

& Bourbonnais Co., 247 N.C. 666, 669, 101 S.E.2d 679, 682 (1958).

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                   Opinion of the Court

      A necessary party is any person with “material interests in the subject matter

of a controversy, which interests will be directly affected by an adjudication of the

controversy.” N.C. Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633,

639, 180 S.E.2d 818, 821 (1971). If there is an absence of necessary parties, the trial

court should correct the defect ex mero motu upon failure of a party to make a proper

motion. White v. Pate, 308 N.C. 759, 764, 304 S.E.2d 199, 202-03 (1983).

      Before assessing whether the trial court’s order deprives Appellants of a

substantial right, we must first determine if the other lot owners in Regency Lake

Village are necessary parties. To determine whether the other Regency Lake Village

lot owners are necessary parties, this Court’s opinion in Rice v. Randolph, 96 N.C.

App. 112, 384 S.E.2d 295 (1989), is dispositive.

      In Rice,

             [p]laintiffs brought suit to enjoin defendants from
             interfering with plaintiffs’ user rights in an easement . . .
             created by deeds referencing a recorded plat of a
             subdivision in which the parties’ land is located.
             Defendants raised abandonment of the easement as a
             defense and also counterclaimed for a declaration of their
             rights to the land described in their deed, which purported
             to convey fee ownership to a tract of land consisting of a
             portion of lot 1 in the subdivision as well as a portion of the
             easement. Defendants claimed ownership of that portion of
             the easement by virtue of seven years’ adverse possession
             under color of title and, alternatively, by twenty years’
             adverse possession.

             A jury answered the questions of abandonment and
             adverse possession in favor of defendants, and the trial

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                   Opinion of the Court

             court entered judgment decreeing defendants owners of the
             property described in their deed free and clear of any
             claims of plaintiffs to the right of way shown on the
             subdivision plat and further enjoining plaintiffs from
             interfering with or going upon defendants’ property.

      Id. at 112-13, 384 S.E.2d at 296.

      The plaintiffs appealed, but this Court determined it need not consider

plaintiffs’ arguments because “the verdict and judgment must be vacated because

necessary parties were absent from the action.” Id. at 113, 384 S.E.2d at 296. This

Court vacated and remanded the action for the joinder of necessary parties because

             a dispute as to the extinguishment of a subdivision
             easement by abandonment or adverse possession cannot be
             resolved without the joinder of . . . the record owners of lots
             in the subdivision, who have user rights in the easement.
             Those owners of interests in the easement have a material
             interest in the subject matter of the controversy, and their
             interest will be directly affected by the court’s decision.

      Id. at 114, 384 S.E.2d at 297. Here, we have similar facts to those in Rice. As

in Rice, Appellants are seeking a judicial determination that they have rights in the

easement to the Access Area created by deeds referencing the recorded plat of a

subdivision. See id. The other owners and purchasers of lots in Regency Lake Village

have user rights in the Access Area and, have material interests in the subject matter

of Appellants’ action. See id. The other lot owners in Regency Lake Village are

necessary parties, whose “interest[s] . . . would be affected by the declaration” sought

by Appellants, and are required to be joined under N.C. Gen. Stat. § 1-260.

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                  Opinion of the Court

      Despite the express language of N.C. Gen. Stat. § 1-260, and the trial court’s

reliance upon it in its order, Appellants fail to demonstrate why N.C. Gen. Stat. § 1-

260 is inapplicable. Appellants seek a declaration that they and other purchasers

and owners of lots in Regency Lake Village have a private easement to the Access

Area. Appellants do not dispute that other lot owners in Regency Lake Village may

have interests in the Access Area easement, and explicitly state in their complaint

that they seek declaratory relief “that the Access is dedicated to the private use of

owners and purchasers of lots in the Subdivision.”

       Appellants fail to argue how they have a substantial right to an individual’s

ability to seek declaratory relief, without joinder, when other necessary parties have

claims and interests in the Access Area which could be affected by the trial court’s

declaration. See N.C. Gen. Stat. § 1-260. The plain statutory language of N.C. Gen.

Stat. § 1-260 indicates Appellants individually have no such substantial right. The

trial court’s order does not deprive Appellants of their asserted substantial right.

                      B. Trial Court Did Not Order a New Trial

      Appellants assert an alternative argument that appeal lies of right in this court

pursuant to N.C. Gen. Stat. § 7A-27(b)(3)(d) because the trial court’s order grants a

new trial. We disagree.

      N.C. Gen. Stat. § 7A-27(b)(3) states, in relevant part:

             (b) Except as provided in subsection (a) of this section,
             appeal lies of right directly to the Court of Appeals in any

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                   Opinion of the Court

             of the following cases:

             ....

             (3) From any interlocutory order or judgment of a superior
             court or district court in a civil action or proceeding that
             does any of the following:

             ....

             d. Grants or refuses a new trial.

N.C. Gen. Stat. § 7A-27(b)(3) (2017).

      The plain language of the trial court’s order does not specify a “new trial,” but

instead indicates “[t]his matter should be reheard after all of the necessary parties

have been joined[,]” and “[t]his matter will be scheduled to be reheard and

peremptorily set for hearing at the May 29, 2017 term of Civil Superior Court.” The

trial court’s order does not specify a new trial.

      The trial court’s decree to rehear evidence is not an order for a new trial,

because a judgment has not been rendered in the case. Rule 59 of the North Carolina

Rules of Civil Procedure governs the authority of our courts to order new trials. Rule

59 contemplates that a new trial is a rehearing or reexamination that occurs post-

judgment. See Tetra Tech Tesoro, Inc. v. JAAAT Technical, ___ N.C. App. ___, ___,794

S.E.2d 535, 536 (2016) (“This Court has held that Rule 59 of the Rules of Civil

Procedure, which governs motions to alter or amend a judgment, only applies to post-

trial motions, and that holding is confirmed by the plain text of Rule 59.”); Bodie

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           REGENCY LAKE OWNERS’ ASSOCIATION, INC. V. REGENCY LAKE LLC

                                   Opinion of the Court

Island Beach Club Ass’n, Inc. v. Wray, 215 N.C. App. 283, 294, 716 S.E.2d 67, 77

(2011) (“[B]oth Rule 59(a)(8) and (9) are post-trial motions[.]”); see also Trial, New

Trial, Black’s Law Dictionary (8th ed. 2004) (defining “new trial” as “[a] postjudgment

retrial or reexamination of some or all of the issues determined in an earlier

judgment.”).

      Here, the trial court has not rendered a verdict nor entered a judgment. The

trial court’s order to rehear evidence is not tantamount to an order for a new trial.

Because the trial court did not order a new trial, Appellants are not entitled to an

interlocutory appeal of the trial court’s order under N.C. Gen. Stat. § 7A-27(b)(3)(d).

                                    III. Conclusion

      The order is not certified as immediately appealable. No showing is made that

the trial court’s interlocutory order affects a substantial right of Appellants. The

order does not decree a new trial entitling Appellants to appeal under N.C. Gen. Stat.

§ 7A-27(b)(3)(d). Plaintiffs’ appeal is dismissed as interlocutory. It is so ordered.

      DISMISSED.

      Judges BRYANT and DILLON concur.

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