Lamb v. Styles , 263 N.C. App. 633 ( 2019 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-350
Filed: 5 February 2019
Madison County, No. 17 CVS 191
JOHN HENRY LAMB, JR., ALMA LAMB ROBERTS, and KAY LAMB LUNSFORD,
Plaintiffs,
v.
ALAN B. STYLES and ALAN B. STYLES LAND SURVEYING, PLLC, Defendants.
Appeal by Plaintiffs from order entered 13 November 2017 by Judge R. Gregory
Horne in Superior Court, Madison County. Heard in the Court of Appeals 14
November 2018.
Sharpe & Bowman, PLLC, by Brian W. Sharpe, for Plaintiffs-Appellants.
Long, Parker, Warren, Anderson, Payne & McClellan, P.A., by Robert B. Long,
Jr. and Ronald K. Payne, for Defendants-Appellees.
McGEE, Chief Judge.
John Henry Lamb, Jr., Alma Lamb Roberts, and Kay Lamb Lunsford
(“Plaintiffs” or “the Lambs”) filed a negligence action against Alan B. Styles Land
Surveying, PLLC and its owner Alan B. Styles (together, “Defendants”) on 12 June
2017. Defendants performed a survey of a tract of real property adjoining Plaintiffs’
real property in 2007 that incorrectly identified the boundary line between the
properties. As a result, Plaintiffs filed suit against their neighbors with claims for
quiet title, declaratory judgment, and trespass. The trial court in that case entered
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Opinion of the Court
an order declaring that the area of real property in dispute was owned by Plaintiffs.
Plaintiffs now seek to recover the cost of the prior litigation from Defendants,
claiming that Defendants’ negligent performance of the survey necessitated the
litigation. The trial court entered an order on 13 November 2017 dismissing
Plaintiffs’ action for failure to state a claim pursuant to N.C. Gen. Stat. § 1A-1, Rule
12(b)(6).
I. Factual and Procedural History
Plaintiffs were joint owners as tenants in common of 36.32 acres of real
property located in Madison County (“Lamb property”). John Henry Lamb, Jr.
received his interest in the Lamb property in 2011 from his mother, Kay Lamb
Lunsford, who is the sister of Alma Lamb Roberts (collectively, “the Lamb sisters”).
The Lamb sisters had received the Lamb property from their parents in a deed dated
9 May 1996 and recorded in Deed Book 228, Page 37 in the Madison County Registry.
The Lamb sisters contracted with Dry Ridge Land Surveying (“Dry Ridge”) in
2008 to survey and draft a plat of the Lamb property. During the course of the
preparation of the plat, Dry Ridge discovered several other plats associated with
adjoining property owners. Those plats were prepared by Defendants in 2007, at the
request of William Holt and Harold Holt (“the Holts”). The plats Defendants had
prepared for the Holts incorrectly depicted 17.632 acres of the Lamb property as being
part of the Holts’ property. The erroneous plats made by Defendants for the Holts
were prepared based on statements made by the Holts to Defendants. Those plats
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noted that the line separating Plaintiffs’ property from the Holts’ property was drawn
“per parol evidence from William and Harold Holt.”
The Lamb sisters filed an action on or around 28 October 2009 against the
Holts for quiet title, declaratory judgment, and trespass. John Henry Lamb, Jr. was
later added as a party to the action. During the course of that litigation, the trial
court ordered a neutral surveyor to map the true boundary line between the
properties. The neutral surveyor filed his survey with the trial court on 30 July 2013,
matching the description set forth in Deed Book 228, Page 37, which was the deed
that conveyed the property to the Lamb sisters by their parents. The trial court
ordered the neutral surveyor to amend the filed survey. The amended map also
showed that 17.15 acres of the disputed area was owned by the Lambs. The trial
court entered an order granting partial summary judgment in favor of the Lambs,
dismissing the Holts’ claims to the disputed 17.15 acres, and declaring the 17.15 acres
of property was owned by the Lambs.
The Lambs faced financial difficulties as a result of the cost of litigation and
filed a voluntary dismissal without prejudice of the remaining claims against the
Holts in December 2013. The Holts voluntarily dismissed their counterclaims that
had been asserted against the Lambs on 6 December 2013. The North Carolina Board
of Examiners for Engineers and Surveyors (“the Board”) issued a Notice of
Contemplated Board Action on 13 August 2014 charging Defendant Alan B. Styles
with “gross negligence, incompetence, and/or misconduct.” The Board received no
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response from Defendant Alan B. Styles and entered a final decision and order on 16
September 2014, requiring Defendant Alan B. Styles to pay a penalty of $2,000.00
and to earn a passing grade in a professional ethics course within three months. The
Board based its action on evidence showing Defendant Alan B. Styles “performed
inaccurate or substandard surveys . . . failed to make adequate investigation
. . . failed to report results of surveys in a clear and factual manner . . . and failed to
identify all reference sources.”
John Henry Lamb, Jr. also filed a new complaint against the Holts on 30
November 2015 asserting claims for quiet title and declaratory judgment. The trial
court entered a memorandum of judgment and order on 27 June 2016 divesting the
Holts of any right, title or ownership of the disputed property. The trial court further
ordered that any purported interest arising from the disputed property be vested in
fee simple in John Henry Lamb, Jr. and Alma Lamb Roberts, as tenants in common.
Plaintiffs filed a complaint on 12 June 2017 asserting a claim of “Professional
Negligence” against Defendants. Defendants filed a motion to dismiss on 16 August
2016 pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6), for failure to state a claim
upon which relief could be granted. Defendants argued that a surveyor did not owe
any duty of care to adjoining property owners who had not contracted with the
surveyor or who did not rely on the survey in any way. The trial court heard
Defendants’ motion to dismiss on 9 October 2017 and entered an order on 13
November 2017 granting Defendants’ motion to dismiss. Plaintiffs appeal.
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II. Analysis
Plaintiffs argue that the trial court erred in granting Defendants’ motion to
dismiss for failure to state a claim pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6).
We disagree.
The motion to dismiss under [Rule] 12(b)(6) tests the legal
sufficiency of the complaint. In ruling on the motion, the
allegations of the complaint must be viewed as admitted,
and on that basis the court must determine as a matter of
law whether the allegations state a claim for which relief
may be granted.
Kohn v. Firsthealth Moore Reg’l Hosp., 229 N.C. App. 19, 21, 747 S.E2d 395, 397
(2013) (quoting Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979)).
It is well-settled that a plaintiff’s claim is properly
dismissed under Rule 12(b)(6) when one of the following
three conditions is satisfied: (1) the complaint on its face
reveals that no law supports the claim; (2) the complaint
on its face reveals the absence of facts sufficient to make a
valid claim; or (3) the complaint discloses some fact that
necessarily defeats the claim.
Grich v. Mantelco, LLC, 228 N.C. App. 587, 589, 746 S.E.2d 316, 318 (2013) (citation
omitted). This Court reviews a trial court’s ruling on a motion for Rule 12(b)(6) de
novo. Id.“While the concept of notice pleading is liberal in nature, a complaint must
nonetheless state enough to give the substantive elements of a legally recognized
claim or it may be dismissed under Rule 12(b)(6).” Raritan River Steel Co. v. Cherry,
Bekaert & Holland, 322 N.C. 200, 205, 367 S.E.2d 609, 612 (1988). While Plaintiffs’
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complaint alleged a claim for “Professional Negligence,” this Court must determine
whether the complaint states the substantive elements of “some legal theory, whether
properly labeled or not.” Harris v. NCNB, 85 N.C. App. 669, 670, 355 S.E.2d 838, 840
(1987) (citing Stanback, 297 N.C. 181, 254 S.E.2d 611). A claim of professional
negligence requires plaintiff establish: “(1) the nature of the defendant’s profession;
(2) the defendant’s duty to conform to a certain standard of conduct; and (3) a breach
of the duty proximately caused injury to the plaintiffs.” Associated Indus. Contr’rs,
Inc. v. Fleming Eng’g, Inc., 162 N.C. App. 405, 413, 590 S.E.2d 866, 872 (2004).
A. Duty of Care
“It is fundamental that actionable negligence is predicated on the existence of
a legal duty owed by the defendant to the plaintiff.” Derwort v. Polk Cty., 129 N.C.
App. 789, 791, 501 S.E.2d 379, 381 (1998). This Court has not yet addressed whether
a surveyor owes a duty of care to adjoining landowners when performing a survey
and recording plats. Plaintiffs argue several reasons why this Court should establish
a rule that “holds licensed surveyors accountable for damages that foreseeably result
from” their conduct: (1) N.C. Gen. Stat. § 1-47(6) (2017) demonstrated that the
General Assembly has sought to subject land surveyors to expanded civil liability, (2)
N.C. Gen. Stat. § 89C-2 and 21 N.C.A.C. 56.0701 create specific standards of care by
which a land surveyor’s actions may be judged, and (3) general negligence principles.
Plaintiffs argue further that, even if this Court fails to recognize that surveyors owe
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a duty of care to adjoining landowners, Plaintiffs sufficiently alleged a breach of the
common law duty to exercise ordinary care.
1. N.C. Gen. Stat. § 1-47(6)
“Generally, a surveyor or civil engineer is required to exercise ‘that degree of
care which a surveyor or civil engineer of ordinary skill and prudence would exercise
under similar circumstances, and if he fails in this respect and his negligence causes
injury, he will be liable for that injury.’” Fleming, 162 N.C. App. at 410, 590 S.E.2d
at 870 (quoting Davidson and Jones, Inc. v. County of New Hanover, 41 N.C. App.
661, 668, 255 S.E.2d 580, 585, disc. review denied, 298 N.C. 295, 259 S.E.2d 911(1979)). Plaintiffs argue that N.C.G.S. § 1-47(6) subjects land surveyors to a
heightened standard of care in that N.C.G.S. § 1-47(6) creates a ten-year statute of
limitations for actions “[a]gainst any registered land surveyor as defined in [N.C.]G.S.
89C-3(9) or any person acting under his supervision and control . . . for economic or
monetary loss due to negligence or a deficiency in the performance of surveying or
platting[.]” See Duke Energy Carolinas, LLC v. Bruton Cable Serv., Inc., 233 N.C.
App. 468, 474-75, 756 S.E.2d 863, 867-68 (2014). Other professional negligence
claims are subject to only a three-year statute of limitations pursuant to N.C. Gen.
Stat. § 1-52 (2017).
Plaintiffs contend that the General Assembly’s decision to impose a longer
statute of limitation on claims against surveyors “demonstrates North Carolina’s
willingness to subject the profession of land surveying to robust regulation and
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expanded civil liability in the interest of safeguarding property rights and public
welfare.” We disagree. “A statute of limitations functions to limit the amount of time
that a claimant has to file an action.” KB Aircraft Acquisition, LLC v. Barry, ___ N.C.
App. ___, ___, 790 S.E.2d 559, 566 (2016). “Statutes of limitation are purely
procedural bars to the bringing of claims; they ‘affect only the remedy and not the
right to recover.’” Id. (quoting Tipton & Young Constr. Co. v. Blue Ridge Structure
Co., 116 N.C. App. 115, 117, 446 S.E.2d 603, 604 (1994)). Therefore, the imposition
of a longer statute of limitations for negligence claims against surveyors does not
create or expand their duty of care.
2. Statutory Standard of Care
Plaintiffs next argue that there are both statutory and regulatory standards of
care imposed upon surveyors for the protection of those who may be damaged by the
surveyor’s negligence under N.C. Gen. Stat. § 89C-2 and 21 N.C. Admin. Code
56.1601. Courts “may adopt as the standard of conduct of a reasonable man the
requirements of a legislative enactment or an administrative regulation[.]” Hall v.
Toreros, II, Inc., 176 N.C. App. 309, 317, 626 S.E.2d 861, 867 (2006) (citing Hutchens
v. Hankins, 63 N.C. App. 1, 303 S.E.2d 584 (1983)).
N.C.G.S. § 89-C provides “[i]n order to safeguard life, health, and property, and
to promote the public welfare, the practice of engineering and the practice of land
surveying in this State are hereby declared to be subject to regulation in the public
interest.” Plaintiffs argue that “the legislature intended its rules on the practice of
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surveying to protect property interests in North Carolina.” In In re Suttles Surveying,
P.A., 227 N.C. App. 70, 76, 742 S.E.2d 574, 578-79 (2013), this Court acknowledged
“as N.C. Gen. Stat. § 89C–2 makes clear, the Legislature intended its rules on the
practice of surveying to protect property interests in North Carolina.”
In Fleming, the defendant surveying company, challenged the trial court’s
finding that the defendant “failed to meet its legal duty and failed to meet the
standard of care created by N.C.G.S. § 89C–2 and N.C.G.S. § 89C–3.” Fleming, 162
N.C. App. at 413, 590 S.E.2d at 872. This Court held that “[t]o the extent that [the
trial court] suggests that N.C. Gen. Stat. §§ 89C–2, –3 (2003) create a specific
standard of care, . . . the trial court erred in relying on those statutes.” Fleming, 162
N.C. App. at 413, 590 S.E.2d at 872. Therefore, to the extent Plaintiffs argue that
N.C.G.S. § 89-C creates a standard of care, their argument is without merit.
The regulatory provisions governing the conduct of surveyors similarly do not
create a standard of care. “[A] safety regulation having the force and effect of a
statute creates a specific duty for the protection of others. A member of the class
intended to be protected by a statute or regulation who suffers harm proximately
caused by its violation has a claim against the violator.” Baldwin v. GTE South, Inc.,
335 N.C. 544, 546, 439 S.E.2d 108, 109 (1994) (internal citations omitted). However
“‘not every statute [or regulation] purporting to have generalized safety implications
may be interpreted to automatically result in tort liability for its violation.’” Toreros,
176 N.C. App. at 318, 626 S.E.2d at 867 (quoting Williams v. City of Durham, 123
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N.C. App. 595, 598, 473 S.E.2d 665, 667 (1996)). In order for the regulation to be
adopted as a standard of care, the purpose of the regulation must be exclusively or in
part:
(a) to protect a class of persons which includes the one
whose interest in invaded, and
(b) to protect the particular interest which is invaded, and
(c) to protect that interest against the kind of harm which
has resulted, and
(d) to protect that interest against the particular hazard
from which the harm results.
Hutchens, 63 N.C. App. at 14, 303 S.E.2d at 592.
21 N.C.A.C. 56.0701 specifies the Rules of Professional Conduct for engineers
and land surveyors and states:
(b) A licensee shall conduct the practice in order to protect
the public health, safety and welfare. The licensee shall at
all times recognize the primary obligation to protect the
public in the performance of the professional duties. If the
licensee’s engineering or land surveying judgment is
overruled under circumstances where the safety, health
and welfare of the public are endangered, the licensee shall
inform the employer, the client, the contractor, other
affected parties and any appropriate regulatory agency of
the possible consequences of the situation.
In Suttles Surveying, this Court noted “[t]he Legislature has expressly
endowed the Board with the authority to promulgate Rules of Professional Conduct
and to discipline licensees that violate those rules.” 227 N.C. App. at 77, 742 S.E.2d
at 579. The Board has therefore established standards of practice for land surveyors
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in order to better regulate the practice of land surveying. 21 N.C.A.C. 56.1601.
Therefore, the intent of 21 N.C.A.C. 56.0701(b) is not to create a private right of action
or standard of care for surveyors, but rather to express the public policy
considerations the Board will consider in promulgating and enforcing its rules.
3. Negligence Principles
Plaintiffs’ final and primary argument is that general negligence principles
necessitate that this Court establish a rule that holds licensed surveyors accountable
for damages that foreseeably result to adjoining landowners from their negligent
performance. We disagree.
Cases involving whether a professional owes a duty of care to a third party are
often analyzed based on negligent misrepresentation. Negligent misrepresentation
occurs when a party justifiably relies to the party’s detriment on information
prepared without reasonable care by one who owed the relying party a duty of care.
Howell v. Fisher, 49 N.C. App. 488, 272 S.E.2d 19 (1980), disc. rev. denied, 302 N.C.
218, 277 S.E.2d 69 (1981). In Raritan, 322 N.C. 200, 367 S.E.2d 609, our Supreme
Court adopted the approach of the Restatement (Second) of Torts § 552 (1977) to
determine an accountant’s liability for negligent misrepresentation (“Restatement
approach”). The Restatement approach holds:
(1) One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the
guidance of others in their business transactions, is subject
to liability for pecuniary loss caused to them by their
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justifiable reliance upon the information, if he fails to
exercise reasonable care or competence in obtaining or
communicating the information.
(2) Except as stated in Subsection (3), the liability stated in
Subsection (1) is limited to loss suffered
(a) by the person or one of a limited group of persons
for whose benefit and guidance he intends to supply
the information or knows that the recipient intends
to supply it; and
(b) through reliance upon it in a transaction that he
intends the information to influence or knows that
the recipient so intends or in a substantially similar
transaction.
(3) The liability of one who is under a public duty to give
the information extends to loss suffered by any of the class
of persons for whose benefit the duty is created, in any of
the transactions in which it is intended to protect them.
Our Supreme Court in Raritan praised the Restatement approach because it
recognizes that liability should extend not only to those
with whom the accountant is in privity or near privity, but
also to those persons, or classes of persons, whom he knows
and intends will rely on his opinion, or whom he knows his
client intends will so rely. On the other hand . . . it prevents
extension of liability in situations where the accountant
“merely knows of the ever-present possibility of repetition
to anyone, and the possibility of action in reliance upon [the
audited financial statements], on the part of anyone to
whom it may be repeated.”
Id. at 214-15, 367 S.E.2d at 617. Therefore, “[i]f he knows at the time he prepares
his report that specific persons, or a limited group of persons, will rely on his work,
and intends or knows that his client intends such reliance, his duty of care should
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extend to them.” Id. at 215, 367 S.E.2d at 618.
We find Raritan’s approach beneficial in assessing whether a land surveyor
can be held liable for negligent misrepresentation by an adjacent landowner. Similar
to an accountant, surveyors have little control over the distribution of their surveys
once provided to their client. Surveyors also specifically contract with individual
clients to perform their surveys. Therefore, applying the Restatement approach
appropriately limits the scope of potential liability for surveyors. See Ballance v.
Rinehart, 105 N.C. App. 203, 207-08, 412 S.E.2d 106, 109 (1992) (extending Raritan’s
rationale to real estate appraisers).
Applying this standard to the present case, Plaintiffs have failed to sufficiently
allege that they are within either category of persons that the Restatement approach
identifies: (1) the class of persons whose benefit and guidance Defendants intended
to supply the survey, or that Defendants knew that the Holts intended to supply it to
Plaintiff, or (2) Defendants or the Holts intended Plaintiffs to rely on the survey in a
transaction. Therefore, Plaintiffs failed to allege a valid claim for negligent
misrepresentation.
Plaintiffs argue that the cause of action of negligent misrepresentation “has no
application under the facts of the instant case,” because “[t]here is no allegation that
. . . [P]laintiffs relied on [D]efendants’ survey work to their detriment.” Instead,
Plaintiffs argue “[a] third party who might be affected by negligence of a surveyor can
still bring a suit against the surveyor for pecuniary harm.” In support, Plaintiffs cite
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Davidson, 41 N.C. App. at 666, 255 S.E.2d at 584, which held “[t]he law imposes upon
every person who enters upon an active course of conduct the positive duty to exercise
ordinary care to protect others from harm and calls a violation of that duty
negligence.”
In Davidson this Court examined whether two defendants – an architect and
an engineering firm – were liable for damages sustained by the plaintiff. In the
portion quoted by Plaintiffs in the case before us, this Court was addressing the
architect’s liability and stated:
An architect, in the performance of his contract with his
employer, is required to exercise the ability, skill, and care
customarily used by architects upon such projects. Where
breach of such contract results in foreseeable injury,
economic or otherwise, to persons so situated by their
economic relations, and community of interests as to impose
a duty of due care, we know of no reason why an architect
cannot be held liable for such injury. Liability arises from
the negligent breach of a common law duty of care flowing
from the parties’ working relationship. Accordingly, we
hold that an architect in the absence of privity of contract
may be sued by a general contractor or the subcontractors
working on a construction project for economic loss
foreseeably resulting from breach of an architect's common
law duty of due care in the performance of his contract with
the owner.
Id. at 667, 255 S.E.2d at 584 (emphasis added). This Court has subsequently
interpreted Davidson to require some “working relationship” or “community of
interests” between a plaintiff and defendant. See Pompano Masonry Corp. v. HDR
Architecture, Inc., 165 N.C. App. 401, 409, 598 S.E.2d 608, 613 (2004). Critically, in
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addressing the engineering firm with whom the plaintiff had no contractual
relationship in Davidson, this Court applied the Restatement approach discussed
above requiring reliance. 41 N.C. App. at 668-69, 255 S.E.2d at 585.
Plaintiffs argue that this Court should apply a six-factor balancing test
outlined in United Leasing Corp. v. Miller, 45 N.C. App. 400, 406-407, 263 S.E.2d 313,
318 (1980) in this case. This Court has previously acknowledged that:
[U]nder certain circumstances, one who undertakes to
render services to another which he should recognize as
necessary for the protection of a third person, or his
property, is subject to liability to the third person, for
injuries resulting from his failure to exercise reasonable
care in such undertaking.
Condominium Assoc. v. Scholz Co., 47 N.C. App. 518, 522, 268 S.E.2d 12, 15 (1980).
However, the extent of such a duty is limited. United Leasing enumerated six factors
to determine “[w]hether or not a party has placed himself in such a relation with
another so that the law will impose upon him an obligation . . . to act in such a way
that the other will not be injured[,]” including:
(1) the extent to which the transaction was intended to
affect the other person; (2) the foreseeability of harm to
him; (3) the degree of certainty that he suffered injury; (4)
the closeness of the connection between the defendant's
conduct and the injury; (5) the moral blame attached to
such conduct; and (6) the policy of preventing future harm.
United Leasing, 45 N.C. App. at 406-7, 263 S.E.2d at 318 (citing Petrou v. Hale, 43
N.C. App. 655, 260 S.E.2d 130 (1979), dis. rev. denied, 299 N.C. 332, 265 S.E.2d 397(1980)).
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In addressing the first factor, “our courts have generally focused on whether
the attorney’s (or other professional’s) conduct, based on a contractual agreement
with the attorney’s client, was intended or likely to cause a third party to act in
reliance on the deficient service performed by the attorney for his client.” Leary v.
N.C. Forest Products, Inc., 157 N.C. App. 396, 405, 580 S.E.2d 1, 7 (2003). Without
an allegation in the complaint that a defendant’s action “induced any action on the
part of the plaintiff in reliance on the [defendant’s] conduct[,]” “plaintiff has failed to
state a claim upon which relief can be granted[.]” Id. (emphasis added). Therefore,
Plaintiffs’ argument that their “theory of liability does not require reliance” is
incorrect. Plaintiffs have failed to identify a duty of care that a surveyor owes to a
non-reliant third party.
B. Damages
Even assuming arguendo Plaintiffs had sufficiently alleged that Defendants
owed a duty of care, Plaintiffs failed to sufficiently allege damages attributable to
Defendants’ actions. Plaintiffs’ complaint alleged Defendants’ negligent acts caused
Plaintiffs to suffer and incur the following injuries and
damages:
a. Reasonable attorneys’ fees for resolving the cloud on
Plaintiffs’ title, contesting the adverse claims of
ownership asserted by the Holts, and correcting the
misrepresentation appearing of record in the public
land registry;
b. Court costs and other expenses, including, but not
limited to, expert witness fees and recording fees,
arising from the First Litigation and the Second
Litigation; and
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c. Costs for producing corrective surveys and plats of
the Plaintiffs’ real property.
Plaintiffs’ alleged damages were all costs expended in connection with their
prior litigation against the Holts for quiet title, declaratory judgment, and trespass.
At common law neither party recovered costs in a civil
action and each party paid his own witnesses. Today in
this State, all costs are given in a court of law by virtue of
some statute. The simple but definitive statement of the
rule is: Costs, in this state, are entirely creatures of
legislation, and without this they do not exist.
City of Charlotte v. McNeely, 281 N.C. 684, 691, 190 S.E.2d 179, 185 (1972) (citations
and quotations omitted). Plaintiffs fail to cite any statute authorizing them to recover
their court costs and attorney’s fees in the present case.
C. Causation
Dismissal of Plaintiffs’ claims was also proper because Plaintiffs failed to
sufficiently allege that Defendants’ survey was the proximate cause of their damages.
In Arnesen v. Rivers Edge Golf Club & Plantation, Inc., 368 N.C. 440, 781 S.E.2d 1(2015), our Supreme Court addressed whether real estate appraisers who conducted
appraisals on behalf of a bank could be held liable to future purchasers if the
appraisals were incorrect. The Court held that the plaintiffs had failed to established
that the appraisers owed them a duty of care. Id. at 454, 781 S.E.2d at 11. However,
the Court further held that, even if the appraisers owed a duty of care to potential
purchasers, the plaintiffs had failed to establish that the faulty appraisals were the
proximate cause of their damages because the plaintiffs failed to allege that they had
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relied on the appraisals in deciding to purchase or finance their purchases of the real
estate. Id. at 455, 781 S.E.2d at 11.
In the case before us, Plaintiffs do not allege that they relied on the erroneous
surveys. Plaintiffs also do not allege that the Holts or anyone else acted in reliance
on the erroneous surveys in a manner that caused damages. Instead, Plaintiffs claim
that Defendants’ actions were the proximate cause of their damages because
Defendants “wrongfully created a cloud on the title to Plaintiffs’ real property,” which
“necessitated” their litigation expenses. “A cloud upon title is, in itself, a title, or
encumbrance, apparently valid, but in fact invalid. . . . A cloud [on title] may be
created by anything that may be a muniment of title or constitute an encumbrance.”
York v. Newman, 2 N.C. App. 484, 488, 163 S.E.2d 282, 285 (1968).
In the case before us, there are doubts about whether the recorded plat was
“apparently valid” as Defendants failed to conduct a complete survey and noted the
deficiency of their work directly on the plat with the annotation “per parol evidence
from William and Harold Holt.” Nevertheless, a muniment of title is “[d]ocumentary
evidence of title, such as a deed or a judgment regarding the ownership of property.”
Black’s Law Dictionary 1043 (8th ed. 2004). The deficient nature of Defendants’
survey would make the recorded plats insufficient evidence of title and would not
create a cloud on title. See Parrish v. Haywood, 138 N.C. App. 637, 640-41, 532 S.E.2d
202, 205 (2000) (noting that where a plat does not sufficiently describe an
encumbrance it is void). Therefore, Plaintiffs failed to allege how Defendants’ conduct
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was the proximate cause of Plaintiffs’ damages. If a party were to rely on Defendants’
plats to encroach on Plaintiffs’ property rights, then liability would be with the
encroaching party rather than Defendants.
III. Conclusion
A surveyor does not owe a duty of care to landowners that are not in privity
with the surveyor and who do not rely on the survey. Additionally, Plaintiffs failed
to sufficiently allege that they were damaged by Defendants’ conduct. The only
damages alleged were litigation costs of an action in which Defendants were not a
party. Plaintiffs failed to cite any statute that would entitle them to recover their
litigation costs from Defendants. Finally, where Defendants relied on their client’s
statements in ascertaining the boundary line between the properties and
conspicuously noted such on the plat, Defendants were not the proximate cause of
Plaintiffs’ alleged damages. Therefore, Plaintiffs failed to sufficiently allege a claim
for negligence against Defendants. For these reasons, the trial court did not err in
granting Defendants’ motion to dismiss for failure to state a claim pursuant to Rule
12(b)(6).
AFFIRMED.
Judges DIETZ and ARROWOOD concur.
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