Duke Energy Carolinas, LLC v. Kiser

• Decision Date: 19 October 2021
• Docket Number: No. COA20-333,COA20-333
• Citation: 867 S.E.2d 1
• Parties: DUKE ENERGY CAROLINAS, LLC, Plaintiff, v. Michael L. KISER, Robin S. Kiser, and Sunset Keys, LLC, Defendants/Third-Party Plaintiffs, v. Thomas E. Schmitt and Karen A. Schmitt, et al., Third-Party Defendants.
• Court: North Carolina Court of Appeals

867 S.E.2d 1

DUKE ENERGY CAROLINAS, LLC, Plaintiff,

v.Michael L. KISER, Robin S. Kiser, and Sunset Keys, LLC, Defendants/Third-Party Plaintiffs,

v.Thomas E. Schmitt and Karen A. Schmitt, et al., Third-Party Defendants.

No. COA20-333

Court of Appeals of North Carolina.

Filed October 19, 2021

Redding Jones, PLLC, Charlotte, by Ty K. McTier and David G. Redding, for Defendants-Appellants.

Troutman Sanders LLP, Charlotte, by Kiran H. Mehta and Victoria A. Alvarez, for Plaintiff-Appellee.

Jones, Childers, Donaldson & Webb, PLLC, by Mark L. Childers, Mooresville, Kevin C. Donaldson, Mooresville, and C. Marshall Horsman, III, for Third-Party Defendants-Appellees.

David P. Parker, PLLC, by David P. Parker, Statesville, for Thomas E. Schmitt, Karen A. Schmitt, Linda Gail Combs, and Robert Donald Shepard, Third-Party Defendant-Appellees.

WOOD, Judge.

¶ 1 This case concerns the rights of third-party landowners to build and maintain docks and other structures over and into the submerged land belonging to another, such land comprising a portion of the lakebed, subject to the easement of a power company. For reasons outlined below, we reverse and remand.

I. Factual and Procedural Background

¶ 2 From 1946 to 1960, before the construction of Lake Norman, B. L. and Zula Kiser (the "Kiser Grandparents") acquired the land at issue in fee simple. In 1960, much of the bed of Lake Norman was dry. By 1961, Duke Power Company ("Duke")¹ intended to flood lands adjacent to the Catawba River, the river that now feeds Lake Norman, with the construction of the Cowan's Ford Dam. Duke obtained titles and easement rights to those lands that are now submerged under Lake Norman pursuant to the requirements of a Federal Energy Regulatory Commission ("FERC") license. The majority of the owners of the now submerged land sold their property in fee to Duke, while the Kiser Grandparents chose to grant only easements to Duke. The Kiser Grandparents granted Duke the following easements:

[A] permanent easement of water flowage, absolute water rights, and easement to back, to pond, to reaise [sic], to flood and to divert the waters of the Catawba River and its tributaries in, over, upon, through and away from the 280.4 acres, more or less, of land hereinafter described, together with the right to clear, and keep clear from said 280.4 acres, all timber, underbrush, vegetation, buildings and other structures or objects, and to grade and to treat said 280.4 acres, more or less, in any manner deemed necessary or desirable by Duke Power Company.

....

And ... a permanent flood easement, and the right, privilege and easement of backing, ponding, raising, flooding, or diverting the waters of the Catawba River and its tributaries, in, over, upon, through, or away from the land hereinafter described up to an elevation of 770 feet above mean sea level, U.S.G.S. datum, whenever and to whatever extent deemed necessary or desirable by the Power Company in connection with, as a part, of, or incident to the construction, operation, maintenance, repair, altering, or replacing of a dam and hydroelectric power plant to be constructed at or near Cowan's Ford on the Catawba River ....²

¶ 3 The first easement (the "Flowage Easement") references 280.4 acres of land by metes and bounds, which topographically rested below an "elevation 760 feet above mean sea level," and which would become part of the bed of Lake Norman. The second easement (the "Flood Easement") references land by metes and bounds which topographically rested between 760 feet and "770 feet above mean sea level," that would remain dry land, but subject to flooding, after the creation of Lake Norman. The Kiser Grandparents and their successors made no further grants or conveyances of the land to Duke.

¶ 4 In 1963, Duke flooded the lands that today comprise Lake Norman. Of those lands not submerged, the Kiser Grandparents retained an area of land that became an island (the "Kiser Island"). The Kiser Grandparents subsequently subdivided the Kiser Island into residential waterfront lots and conveyed title in fee simple to most of those lots to various buyers (the "Third Parties") between 1964 and 2015. The Kiser Grandparents retained at least one lot (the "Kiser Lot") for their continued personal use.

¶ 5 Consistent with its license from the FERC to dam the Catawba River, Duke instituted a project plan that outlined requirements and a permitting process for the construction of shoreline improvements into the waters of Lake Norman. Relying upon Duke's permitting process, many of the Third Parties on Kiser Island proceeded to construct docks and other structures that extended from the dry land of their lots over and into the waters of Lake Norman, and "that are anchored to or at least touch in some way ... the submerged tract, the Kiser property that's beneath Lake Norman." Some of these structures were built prior to when Duke's permitting process began and were memorialized as existing when the procedure commenced.

¶ 6 In 2015, M. L. Kiser ("M.L."), a grandson of the Kiser Grandparents, erected a retaining wall (the "2015 wall") approximately seventeen and a half feet from the Kiser Lot into Lake Norman and upon the 280.4 acres to which Duke has an easement. M.L. began backfilling the wall to add additional dry surface area to the Kiser Lot, which extended his shoreline. Unlike the Third Parties, M.L. did not originally apply for a permit from Duke to construct the 2015 wall; though, the new construction did encompass land previously submerged and subject to Duke's Flowage Easement.

¶ 7 In response to this construction, Duke issued a Stop-Work Directive, and the North Carolina Division of Water Resources notified M.L. that the construction of the wall would impact the waters of Lake Norman. A survey conducted on the Kisers’ property by a licensed professional land surveyor in August 2016 revealed that "the total area of the retaining wall and backfill within Lake Norman is approximately 2,449 square feet."

¶ 8 After the death of M.L.’s father in March 2016, he and his two brothers became the owners of the land at issue. That land was then conveyed to Sunset Keys, LLC ("Sunset Keys"), of which M.L. and his two brothers are the members.

¶ 9 On January 27, 2017, Duke commenced this action against M. L. Kiser, his wife, Robin S. Kiser, and, later, Sunset Keys, LLC ("the Kisers") alleging trespass and wrongful interference with an easement and requested injunctive relief. The Kisers responded with counterclaims against Duke, challenging Duke's authority under the easements to demand removal of the 2015 wall, to issue permits to the Third Parties for the construction of docks on their lots, and to open the waters above those lots to recreational use. The Kisers subsequently moved to join the Third Parties as defendants on February 13, 2017.

¶ 10 Duke moved for partial summary judgment regarding its claim for injunctive relief on August 13, 2018. The trial court entered an order and judgment granting partial summary judgment on August 22, 2018 (the "2018 Order"), to have the 2015 retaining wall and the backfilled area cleared.³ Duke and the Third Parties then moved for summary judgment denying all of the Kisers’ counterclaims and allowing Duke's remaining trespass claim on October 24, 2019, and October 25, 2019, respectively. On November 15, 2019, the trial court entered an order and judgment enforcing the 2018 Order.

¶ 11 On January 2, 2020, the trial court entered an order and judgment (the "2020 Order) granting summary judgment in favor of Duke and the Third Parties by quieting title in the lots, improvements, and use of the waters to the Third Parties. The trial court ruled Duke had operated within its "Scope of Authority" when it granted permission for the Third Parties to construct improvements over and into the Kiser's submerged land. The trial court stated, "[T]his Order and Declaratory Judgment does not dispose of all the claims in this action." The Kisers filed and served a notice of appeal for the 2020 Order on January 24, 2020, and later filed and served a notice of appeal for the 2018 Order on February 3, 2020. While the 2020 Order was certified for review pursuant to N.C. Gen. Stat. § 1A-1, Rule 54(b), the 2018 Order was not.

II. Discussion

¶ 12 We review a trial court's summary judgment order de novo. Forbis v. Neal , 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007). "Under a de novo standard of review, this Court considers the matter anew and freely substitutes its own judgment for that of the trial court." Reese v. Mecklenburg Cnty. , 200 N.C. App. 491, 497, 685 S.E.2d 34, 38 (2009) (citations omitted). We cannot affirm a trial court's summary judgment order if a "genuine issue as to any material fact" remains when viewed in the light most favorable to the non-moving party. Forbis , 361 N.C. at 524, 649 S.E.2d at 385 (quoting N.C. R. Civ. P. 56(c) ). When reviewing a summary judgment order, "we view the evidence in the light most favorable to the non-movant." Scott & Jones, Inc. v. Carlton Ins. Agency, Inc. , 196 N.C. App. 290, 293, 677 S.E.2d 848, 850 (2009) (quoting Baum v. John R. Poore Builder, Inc. , 183 N.C. App. 75, 80, 643 S.E.2d 607, 610 (2007) (citation omitted)).

¶ 13 Because not all issues are disposed of in this case, we review this case as an interlocutory appeal. See Larsen v. Black Diamond French Truffles, Inc. , 241 N.C. App. 74, 76, 772 S.E.2d 93, 95 (2015). The parties correctly note that a non-certified, interlocutory judgment is not ripe for review when the appellant does not raise the issue in the appellant's principal brief. Id. at 79, 772 S.E.2d at 96. This being true of the 2018 Order, we decline to review the 2018 Order and limit our review and analysis to the 2020 Order.

A. Third Party Activity upon Easement

¶ 14 The Kisers first contend Duke did not act within its scope of authority when it permitted the use of the 280.4 acres to the Third Parties without the Kisers’ consent and the trial court...