Court Opinion

ID: 2727069
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:11:20.196198+00
Date Added: 2024-06-11T10:54:43.887833
License: Public Domain

NO. COA14-225

                       NORTH CAROLINA COURT OF APPEALS

                             Filed: 15 July 2014

JOHN C. PRELAZ and DEBORAH A.
PRELAZ,

     Plaintiffs,

     v.                                      Haywood County
                                             No. 11 CVS 587
TOWN OF CANTON, a North Carolina
Municipal Corporation,

     Defendant.

     Appeal    by    plaintiffs    and     cross-appeal   by   defendant     from

judgment entered 16 May 2013 by Judge W. David Lee in Haywood

County Superior Court.          Heard in the Court of Appeals 3 June

2014.

     Roberts & Stevens, P.A., by Mark C. Kurdys and Ann-Patton
     Hornthal for plaintiffs-appellants.

     McGuire Wood & Bissette, P.A., by Sabrina Presnell Rockoff,
     and Frank G. Queen and Burton C. Smith, Jr. for defendant
     cross-appellant and defendant-appellee.

     ELMORE, Judge.

     John     C.    Prelaz   and    Deborah      A.   Prelaz   (“plaintiffs”)

commenced this action against the Town of Canton (“the Town”) in

Haywood   County     Superior     Court.     Plaintiffs   prayed   the      trial

court   for   a     declaration    of    title   recognizing    them   as    the
                                      -2-
rightful title holders of certain real property and to enter an

order for the recovery of rents.            This real property consists of

approximately 110 acres and is known as Camp Hope (“the Camp

Hope property” or “the property.”).              A trial began in the matter

on 6 May 2013.         At trial, plaintiffs argued that title to the

property reverted to them when the Town                   violated an express

condition     of   a   governing    deed.     The    Town    argued   that   the

language in the deed upon which plaintiffs relied was precatory.

The trial court, finding that the language was not precatory,

submitted to the jury the question of whether the Town violated

an express condition by allowing a third party to operate a

summer camp on the Camp Hope property primarily for the benefit

of residents of areas and states other than Canton, Haywood, and

adjoining counties.       Unanimously ruling in the Town’s favor, the

jury answered “no.”       On 16 May 2013, the trial court entered an

order declaring that the Town retained fee simple determinable

title to the Camp Hope property.             Plaintiffs now appeal, inter

alia,   the   trial    court’s     denial   of    their     (1)   motion   for   a

directed verdict, (2) motion for judgment notwithstanding the

verdict, and (3) motion for a new trial.                  In its cross-appeal,

the Town appeals the trial court’s denial of its motion for a

directed verdict.       After careful consideration, we conclude that
                                        -3-
the trial court erred when it denied the Town’s motion for a

directed verdict.        Accordingly, we reverse the trial court’s 16

May 2013 order and remand this matter to the trial court for

entry of a judgment in favor of defendant on directed verdict.

                                  I.     Background

    The relevant facts of this case are largely undisputed and

are as follows: By deed dated 4 May 1992 (“the Deed”), Champion

International Corporation (“Champion” or “grantor”), as party of

the first part, conveyed title to the Camp Hope property to

Donald   W.    Randolph,   Carl    M.    Gillis,   and   R.    Cecil    Roberts,

Trustees      of   the   Robertson      Memorial   Young      Men’s    Christian

Association (“YMCA”), as party of the second part, and to the

Town, a municipal corporation, as party of the third part.                   The

Deed is recorded in Book 426 at Page 771 in the Office of

Register of Deeds in Haywood County.

    Specifically, the Deed conveyed to the YMCA a fee simple

determinable estate in the property so long as the property was

used in accordance with certain enumerated express terms and

conditions set forth in the Deed.             The Deed conveyed to the Town

a reversionary interest in the Camp Hope property which would,

by operation of law and without re-entry or suit, cause title of

the property to revert to the Town should the YMCA violate any
                                      -4-
of the express terms and conditions.            Should the Town take title

to the property, the Deed also required that the Town abide by

certain     enumerated     express    terms     and    conditions     or      risk

forfeiting title.        If the Town violated the express conditions

contained in the Deed, Champion provided that title to the Camp

Hope property would, by operation of law and without re-entry or

suit, revert to Champion, or its successor corporation, as party

of the first part.        The YMCA subsequently forfeited its title to

the Camp Hope property, and the Town took title to it on 25 July

1996.     The Town has held title to the property as party in the

third part since that time.

     In    March   2006,    plaintiffs      purchased    a   tract    of      land

adjacent to the Camp Hope property.             Soon thereafter, in April

2006,     International    Paper     Company,   successor     by     merger     to

Champion, assigned and conveyed its reversionary interest in the

Camp Hope property to plaintiffs by assignment and Quitclaim

Deed recorded in Book 667 at Page 179 in the Haywood County

Register of Deeds. Plaintiffs have held a reversionary interest

in the property as party in the first part since that time.

     In    April   2005,    the    Town   negotiated    a    five-year     lease

agreement with Wellspring Adventure Camp, LLC (“Wellspring”) for

the operation of a weight loss and fitness summer camp to be
                                            -5-
located on the Camp Hope property.                      Wellspring is a for-profit

limited      liability      company       that     operates          weight     loss      camps

throughout the United States and Europe.                       On 11 April 2006, the

Canton Board of Aldermen approved a two-year extension of the

lease agreement.            Pursuant to the lease terms, Wellspring has

primary use and control of the property from 15 May through 15

September      each    year     for       the    duration       of     the    lease       term.

Wellspring     is     responsible         for    maintaining          the     property      and

paying a $700.00 monthly rental fee to the Town.                              In addition,

the    lease   requires       that     Wellspring        not    violate        any     of   the

enumerated conditions set forth in the Deed.                          Evidence at trial

tended to show that Wellspring campers reside throughout the

United      States    and     may     select      the    camp        location     of      their

choosing.        Approximately            978     campers      participated          in     the

Wellspring summer camp at the Camp Hope property during the

summers of 2005-2011.              Of these, only 20 or so campers resided

permanently in Haywood or adjoining counties.

       A clause in the Deed provides:                   “the Town will not operate

on    the   property    a    summer       camp    primarily      for    the     benefit      of

residents of other areas and states.”                       Because so few campers

resided     permanently       in    the    local    community,         plaintiffs         filed

suit against the Town based on an alleged violation of this
                                        -6-
clause,     which plaintiffs argued was an express condition.                       At

trial, the Town took the position that the clause was merely

precatory.        Alternatively,       the    Town   argued     that    it   did   not

violate this express condition (assuming it was one) because the

operation of the Wellspring camp did, in fact, primarily benefit

local residents, not residents from other areas and states.                        The

Town    presented     the    following        evidence    in     support     of    its

position:     (1) the Town has received over $450,000 in capital

improvements to the Camp Hope property as a result of its lease

with Wellspring; (2) the local economy has been boosted because

Wellspring       contracts    with    local       exterminators,       electricians,

plumbers,    and    external    vendors      to    maintain     the    grounds;    (3)

Wellspring       operates     family     workshops       that     bring      $200,000

annually to local businesses; (4) Wellspring recommends Canton

and    Haywood     County    hotels    and    restaurants       to     the   campers’

families; and (5) the Wellspring lease allows local residents to

use the Camp Hope property from 15 September to 15 May each

year.

       To reflect the jury’s determination that the Town did not

violate the condition requiring that it not allow a summer camp

that primarily benefited residents from other areas and states

to operate on the Camp Hope property, the trial court entered an
                                              -7-
order declaring that the Town retained fee simple determinable

title to the property.            Both parties now appeal.

                                        II.     Analysis

       The Town raises one issue on cross-appeal—that the trial

court erred in denying its motion for a directed verdict because

the clause relied upon by plaintiffs in the Deed is precatory as

a   matter      of   law.        We   agree    with   the   Town     on   this   issue.

Therefore, we need not address plaintiffs’ issues on appeal.

       Initially we note that, although the jury ruled in favor of

the Town, that favorable outcome does not prohibit the Town from

raising this issue on appeal.                   See Finkel v. Finkel, 162 N.C.

App.     344,    349,      590    S.E.2d      472,    475   (2004)    (holding      that

generally “the party who prevails at trial may appeal where the

judgment is less favorable than that party thinks is just”).

“The   standard       of    review     of   directed    verdict      is   whether   the

evidence, taken in the light most favorable to the non-moving

party, is sufficient as a matter of law to be submitted to the

jury.”       Davis v. Dennis Lilly Co., 330 N.C. 314, 322-23, 411

S.E.2d 133, 138 (1991) (citing Kelly v. Int’l Harvester Co., 278

N.C. 153, 179 S.E.2d 396 (1971)).

       The Deed specifically grants:

              To the party of the third part a fee simple
              determinable estate in the lands hereinafter
                            -8-
       described (known as the Camp Hope property)
       which fee simple determinable estate shall
       automatically arise at such time as the
       parties of the second part, [the YMCA],
       shall violate any of the conditions imposed
       upon the parties of the second part as
       hereinafter enumerated.      The fee simple
       determinable estate hereby granted to the
       party of the third part, once it has come
       into being, shall last so long as the said
       lands (and buildings that may be erected
       thereon) are used by the Town of Canton in
       accordance   with   the   express   conditions
       hereinafter   enumerated,   and   no   longer.
       [Emphasis added].

The Deed also describes the Town’s interest as follows:

       Once its estate has arisen by operation of
       law . . .    The Town of Canton, shall have
       and hold the above described land and
       premises [the Camp Hope property], together
       with all the privileges and appurtenances
       thereunto belonging, or in anywise thereunto
       appertaining, so long as the lands are used
       for the purposes hereinafter set out and in
       accordance with the conditions hereinafter
       set out and no longer, and when the party of
       the third part ceases to use said property
       for said purposes or when the party of the
       third   part   shall    violate any  of   the
       conditions placed upon the party of the
       third part; the title to said lands and
       premises shall, without re-entry or suit,
       automatically revert to the party of the
       first     part,      Champion   International
       Corporation, or its successor corporation.
       [Emphasis added].

       The Town of Canton will hold title to the
       Camp Hope property hereinafter described and
       will use the same for the benefit of the
       same persons and groups of persons who have
                                         -9-
            historically used the facilities of the YMCA
            in the Town of Canton and the Camp Hope
            property.   This shall include citizens of
            the Town of Canton and citizens of Haywood
            County and adjoining counties but should not
            preclude the use of the property by persons
            from other areas, but the Town will not
            operate on the property a summer camp
            primarily for the benefit of residents of
            other areas and states.    The Town will use
            its best efforts to see that the users of
            the   facilities   are    those   who    have
            historically used the same.         [Emphasis
            added].

       As to the express conditions imposed on the YMCA, the Deed

sets    forth     fourteen     numbered        paragraphs   preceded     by    the

sentence:       “The conditions hereby placed upon the party of the

second part . . . are as follows[.]”                   As to the conditions

imposed on the Town,           the Deed sets forth          seventeen   numbered

paragraphs preceded by the sentence:                  “The conditions hereby

placed upon the party of the third part, The Town of Canton, are

as   follows[.]”         The   express    conditions    placed   on     the   Town

include:

            1.   The property will be used for active
            recreational purposes.

            2.   The Town of Canton will keep the
            property free of trash and debris, clearing
            underbrush and will keep grassed areas mowed
            and in good condition.

            3.     The    Town of Canton will maintain all
                    -10-
structures existing at the time of this
conveyance in good condition, ordinary wear
and tear excepted. It will keep up the
walls, roof, interior and exterior of the
dining hall and all residence buildings and
all water and sewer lines and septic
facilities.   If  any   structures  must  be
removed because of age and ordinary wear and
tear they will be cleared away and not
allowed to remain in place.

4.    The   Town of Canton will use the
property for active recreational purposes
such as camping for scout troops, organized
camping programs for other organizations,
picnicking, social and political gatherings,
games    such   as  shuffleboard,  baseball,
softball, tennis, football, hiking, etc. but
will not permit the land to be used solely
in a passive manner such as reverting to its
nature state with the sole recreational use
being hiking.

5.   No general timbering operations will be
allowed other than the cutting of diseased
or dead timber and the ordinary thinning of
new growth.

6.   All  camp  fires  will  be  carefully
contained and built only in designated
areas, such as on concrete pads or outdoor
grills.

7.   No firearms will be allowed within the
area and no hunting or trapping of any kind
will be allowed except the hunting or
trapping of dangerous animals or snakes by
proper governmental agencies.

8.   The Town of Canton may build further
recreational building, cabins, gyms, etc.,
but must maintain any such buildings so
built.
                    -11-
9.   The Town of Canton will permit no
illegal activity to take place on the
property.

10. The Town of Canton will permit no
garbage or waste disposal on the property
and will permit no hazardous substances to
be brought on to the property or stored
thereon.

11. The Town of Canton will carry liability
insurance on the property in amounts it
deems appropriate.

12. No permanent or semi-permanent hookups
for mobile homes or recreational vehicles
will be allowed on the property.    Any such
hookups in existence at the time that the
Town of Canton’s estate in the property
arises will be removed from the property at
the sole cost and expense of the Town of
Canton.   No mobile homes will be allowed on
the property and recreational vehicles will
be allowed only when such vehicles have
their own source of power, water and sewer
and then only for two weeks (or a lesser
period).     Recreational vehicles will be
allowed on the property only in conjunction
with other types of camping such as when a
scout troop uses the area, the scout masters
may bring a self-contained recreational
vehicles on the property.

13. In the operation of the Camp Hope
facilities by the Town of Canton, it may
charges fees sufficient to enable the Town
of Canton to recover the ordinary costs of
the maintenance and operation of the Camp
Hope facilities but will not charge fees in
excess of those fees which would ordinarily
recoup the expense of the maintenance and
operating costs of the facilities. The Town
of Canton will not operate Camp Hope as a
profit making venture.
                             -12-

         14. No building located on the property at
         such time as the Town of Canton’s Estate may
         arise or    no building erected thereafter
         will be occupied by any person or group of
         persons as a permanent residence except that
         one structure may be occupied by a caretaker
         of the property and his immediate family.

         15. The    Town  of   Canton  will   actively
         maintain the property at all times and will
         actively operate a program on the property
         (at least in warmer months) at all times.

         16. Should The Town of Canton violate one
         or more of conditions number 1 through 14
         and such violation is not remedied and
         continues for a period of 90 days after
         Champion International Corporation has given
         to the Town of Canton written notice of the
         violation, the continued violation of any
         one of conditions 1 through 14 for 90 days
         after such written notice will cause an
         automatic reverter of the title from Town of
         Canton to the party of the first part,
         Champion International Corporation.

         17. Should the Town of Canton fail to
         actively maintain the property or actively
         operate a program on the property as such
         obligation   is  placed   on   the  Town  by
         condition number 15, and such failure to
         maintain or actively operate a program on
         the property shall continue for a period of
         one (1) year, the title to the property will
         also automatically revert from the Town of
         Canton to the party of the first part,
         Champion International Corporation.

    On appeal, plaintiffs do not allege that the Town violated

any of these seventeen conditions.   Instead, it is plaintiffs’
                                             -13-
position that the clause in the Deed, “but the Town will not

operate on the property a summer camp primarily for the benefit

of    residents      of     other     areas    and   states[,]”        constitutes      an

express    condition,         which,     if    violated,         triggers   plaintiffs’

reversionary interest.              Further, given that the Town (allegedly)

violated this condition, plaintiffs contend that the trial court

erred in denying their motion for a directed verdict and their

motion for judgment notwithstanding the verdict.                       Alternatively,

it is the Town’s position that the clause is precatory and,

therefore, merely advisory.                  Thus, any violation could not by

operation       of    law    trigger     plaintiffs’        reversionary       interest.

Again, we agree with the Town.

     “In construing a conveyance executed after January 1, 1968, in

which there are inconsistent clauses, the courts shall determine

the effect of the instrument on the basis of the intent of the

parties    as    it    appears        from    all    of    the    provisions    of     the

instrument.”         N.C. Gen. Stat. § 39-1.1 (2013).                  “[T]he meaning

of [a deed’s] terms is a question of law, not of fact.”                          Elliott

v. Cox, 100 N.C. App. 536, 538, 397 S.E.2d 319, 320 (1990).

Even “[a]mbiguous deeds traditionally have been construed by the

courts according to rules of construction, rather than by having

juries    determine         factual    questions      of   intent.”         Robinson    v.
                                             -14-
King,      68    N.C.     App.     86,     89,   314     S.E.2d     768,    771    (1984).

Therefore, the question of whether the language contained in a

Deed is precatory is to be decided by the Courts as a matter of

law.

       “A grantor can impose conditions and can make the title

conveyed dependent upon [a grantee’s] performance.                          But if [the

grantor] does not make any condition, but simply expresses the

motive which induces him to execute the deed, the legal effect

of   the     granting      words    cannot       be    controlled    by    the    language

indicating the grantor’s motive.”                     Ange v. Ange, 235 N.C. 506,

508,    71      S.E.2d     19,     20-21     (1952)      (internal       quotations    and

citations omitted).              It is well established that “[t]he law does

not favor a construction of the language in a deed which will

constitute a condition subsequent unless the intention of the

parties to create such a restriction upon the title is clearly

manifested.”        Washington City Board of Education v. Edgerton,

244 N.C. 576, 578, 94 S.E.2d 661, 664, (1956) (emphasis added).

For a reversionary interest to be recognized, the deed must

“contain        express     and     unambiguous        language     of     reversion    or

termination upon condition broken.”                    Station Associates, Inc. v.

Dare Cnty., 350 N.C. 367, 370, 513 S.E.2d 789, 792 (1999).                             “[A]

mere expression of the purpose for which the property is to be
                                      -15-
used    without      provision   for         forfeiture     or    re[-]entry     is

insufficient to create an estate on condition[.]”                    Id. at 373,

513 S.E.2d 793.

       Applying this law to the Deed in the present case, we note

that the document does, in fact, contain language of reversion

or   termination.        However,       the    reversionary      language   is   in

reference to the seventeen enumerated conditions, not the clause

on which plaintiffs rely.            The Deed provides, should the Town

cease “to use said property for said purposes” or “violate any

of the conditions placed upon [the Town],” title to the property

“shall, without re-entry or suit, automatically revert to . . .

Champion . . . or its successor corporation.”                    At the outset of

the Deed, the grantor specified that both the YMCA and the Town

could     maintain    title   only      if    each   used    the     property    in

accordance with the “express conditions hereinafter enumerated

and no longer.”        “Enumerate” means “to count off or designate

one by one; to list.”         BLACK’S    LAW DICTIONARY 574 (8th ed. 1999).

AS cited above, the Deed enumerates seventeen conditions placed

upon the Town, none of which reference the clause at issue.

Taken as a whole, it is apparent that the grantor intended to

trigger reverter only if one of the enumerated conditions was

broken.     Further, condition #4 serves as a restraint on use,
                                            -16-
providing that the Town must use the property for recreational

purposes.       Arguably, if the grantor intended to further restrain

the Town’s use of the property by prohibiting it from operating

a   summer      camp    that      primarily      benefited        residents       of    other

states, it would have done so in an enumerated paragraph.

      However, the paragraph in which the clause is written is

un-numbered and devoid of any express and unambiguous language

of reversion upon condition broken.                    In fact, in their brief,

plaintiffs do not direct us to any reversionary language in

direct reference to this clause.                   Thus, nowhere in the paragraph

or in the Deed itself is it “clearly manifested” that title to

the property is to revert to Champion, or its successor, upon

the   Town’s        violation     of   the    clause.           See    Edgerton,        supra.

Moreover, the clause is followed by a sentence in which the

grantor asks that the Town use its “best efforts” to ensure

“that     the       users    of    the      facilities          are    those      who    have

historically used the same.”                 The inclusion of such subjective

language       in   this     paragraph      is   additional           evidence    that    the

grantor did not envision this paragraph or the clause therein to

inflict    a    rigid       restriction      upon    the    title       or   to   create    a

condition subsequent.               Instead,       we hold that this clause is

precatory.           Champion      merely     sought       to    express     an    intended
                                       -17-
purpose for which the property was (hopefully) not to be used.

See Ange, 235 N.C. at 509, 71 S.E.2d at 21 (holding that a

conveyance of land containing the clause “for church purposes

only,” did not create a condition subsequent because, without

reservation of power of termination or right of re-entry for

condition broken, the clause merely expressed the motive and

purpose    which   prompted      the   conveyance);      see   also   Nelson    v.

Bennett, 204 N.C. App. 467, 472, 694 S.E.2d 771, 775 (2010)

(concluding that the portion of a will providing that “[t]he

house is not to be used for a business or Bed and Breakfast and

is not to be leased out by [Ms.] Frejlach” was precatory because

it   was   unaccompanied    by    express     and   unambiguous      language   of

reversion or termination upon condition broken).

                                  III. Conclusion

      In sum, the trial court erred in denying the Town’s motion

for a directed verdict at the close of plaintiffs’ evidence and

again at the close of all evidence.                 As a matter of law, the

language relied upon by plaintiffs is precatory and could not

trigger    plaintiffs’     reversionary       interest    in   the    Camp   Hope

property.    We remand this matter to the trial court for entry of

a judgment in favor of defendant on directed verdict.

      Reversed and remanded.
                         -18-
Judges McGEE and McCullough concur.