Duke Energy Carolinas, LLC v. Bruton Cable Service, Inc. , 233 N.C. App. 468 ( 2014 )

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.
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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-
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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
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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]
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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.
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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
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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
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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.
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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
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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.
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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
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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.
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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.
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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,”
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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
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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.