Fulcher v. U.S.

• Decision Date: 22 December 1982
• Docket Number: 82-1246,Nos. 82-1212,s. 82-1212
• Citation: 696 F.2d 1073
• Parties: Arthur J. FULCHER, Jr., Appellee, v. UNITED STATES of America, Appellant. Arthur J. FULCHER, Jr., Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1073

696 F.2d 1073

Arthur J. FULCHER, Jr., Appellee, v. UNITED STATES of America, Appellant.

Arthur J. FULCHER, Jr., Appellant, v. UNITED STATES of America, Appellee.

Nos. 82-1212, 82-1246.

United States Court of Appeals Fourth Circuit.

Argued Nov. 11, 1982.

Decided Dec. 22, 1982.

Robert L. Klarquist, Dept. of Justice, Washington, D.C. (Carol E. Dinkins, Asst. Atty. Gen., Washington, D.C., Samuel T. Currin, U.S. Atty., Joseph T. Knott, III, Asst. U.S. Atty., Raleigh, N.C., Dirk D. Snel, Dept. of Justice, Washington, D.C., on brief), for appellant/cross-appellee.

Daniel D. Khoury, Manteo, N.C. (Christopher L. Seawell, Aldridge, Seawell & Khoury, Manteo, N.C., on brief), for appellee/cross-appellant.

Before PHILLIPS, MURNAGHAN, and ERVIN, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

The United States appeals a magistrate's order awarding compensation to Arthur J. Fulcher, Jr., for lands taken by the government for inclusion in the Cape Hatteras National Seashore Recreational Area. The magistrate found that Fulcher had brought a timely and well-founded claim under the Quiet Title Act, 28 U.S.C. Sec. 2409a, and awarded compensation accordingly. Because we find that Fulcher's claim is time-barred under the Quiet Title Act, we reverse.

I

The facts of this controversy are set out more fully in our prior en banc consideration of this case, Fulcher v. United States, 632 F.2d 278 (4th Cir.1980), and we discuss only the facts relevant to this appeal.

In 1959, the United States filed a complaint in condemnation and a declaration of taking pursuant to 40 U.S.C. Sec. 258a, to acquire land for inclusion in the Cape Hatteras National Park. The land, located on Hatteras Island, Dare County, North Carolina, was owned by Arthur J. Fulcher, Jr., ¹ who then resided in California. The government was successful in its condemnation action but, due to a defective title search, the compensation was awarded to a person other than the true owner. A local paper had published a notice impleading all unknown owners, but Fulcher received no actual notice of the proceeding and entered no appearance.

After discovering that his property had been condemned, Fulcher brought an action on July 5, 1977, under 28 U.S.C. Sec. 2409a ² to recover title to the property. The district court dismissed the action for failure to state a claim, holding that the United States could not be divested of title acquired by a condemnation action pursuant to 40 U.S.C. Sec. 258a. On appeal, the court reversed, 604 F.2d 295, holding that Fulcher had stated a claim under Sec. 2409a even though he could not divest the government of its title. The case was remanded for consideration of the merits, including the application of the appropriate statute of limitations. Fulcher, 632 F.2d at 280.

The parties on remand stipulated ³ that the only issues were: 1) whether Fulcher's claim was barred by the 12-year statute of limitations of the Quiet Title Act, 28 U.S.C. Sec. 2409a(f); and 2) if not, the amount of compensation owing to Fulcher.

The evidence showed that the Cape Hatteras National Park project had received extensive publicity, including newspaper coverage in area papers and public hearings on the matter. The National Park Service had also constructed a campground on the disputed property, and this campground was full to overflowing on weekends by the fall of 1964.

Despite these events, which occurred more than 12 years before this suit was filed, the magistrate held that Fulcher neither knew nor should have known of the government's claim prior to July 5, 1965. The magistrate reasoned that Fulcher had no actual or constructive notice of the claim because he had moved away from North Carolina by the early 1950's, the land was remote and had no visible boundary markers, the exact location of the property was unknown to Fulcher, and there was no evidence that Fulcher had actual knowledge of the operation of the campground prior to July 5, 1965. Fulcher was awarded compensation in the amount of $18,825.40.

II

Fulcher's claim for compensation is premised on the Quiet Title Act, 28 U.S.C. Sec. 2409a. Section 2409a authorizes quiet title actions against the United States if the action is commenced within 12 years after the cause of action accrues. Section 2409a(f) ⁴ provides that the action accrues at the time the plaintiff "knew or should have known of the claim of the United States." The single and dispositive issue is therefore the time at which Fulcher should have become aware of the government's claim. ⁵

The Quiet Title Act is a waiver of sovereign immunity by the United States. Such waivers can be limited by Congress, and any conditions imposed on the waiver, including time limits, must be strictly construed in favor of the sovereign. United States v. Kubrick, 444 U.S. 111, 117-18, 100 S.Ct. 352, 356, 62 L.Ed.2d 259 (1979). And because the Act waives the immunity of the United States, its construction is determined by federal law. See United States v. Standard Oil Co., 332 U.S. 301, 309-10, 67 S.Ct. 1604, 1609, 91 L.Ed. 2067 (1947); Amoco Production Co. v. United States, 619 F.2d 1383 (10th Cir.1980). Compatible state law is a valuable and appropriate tool, however, for meshing federal statutory language with the particular facts of a case, see Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 457, 77 S.Ct. 912, 918, 1 L.Ed.2d 972 (1957). This is especially true in conflicts involving real property, where the Supreme Court "has consistently held that state law governs issues relating to ... real property, unless some other principle of federal law requires a different result." Oregon ex rel. State Land Board v. Corvallis Sand & Gravel Co., 429 U.S. 363, 378, 97 S.Ct. 582, 590, 50 L.Ed.2d 550 (1977). Indeed, this court has earlier noted the propriety of looking to state law to determine when a litigant should have known of the government's claim to his land. King v. United States, 585 F.2d 1213 (4th Cir.1978); see also Amoco Production Co., 619 F.2d at 1387 (reliance on local practices and rules regarding when a party should have known a relevant fact is proper). Thus we turn to North Carolina law for guidance in ascertaining the date when Fulcher should have become aware of the government's claim.

The doctrine of constructive knowledge is rigorously applied in North Carolina to situations concerning limitations periods in actions involving real property. ⁶ In actions for relief from real estate transactions infected by mistake or fraud, the cause of action accrues ⁷ "when discovery was or should have been made by the exercise of ordinary diligence." Peacock v. Barnes, 142 N.C. 215, 218, 55 S.E. 99, 101 (1906); see also Ewbank v. Lyman, 170 N.C 505, 87 S.E. 348 (1915), Latham v. Latham, 184 N.C. 55, 113 S.E. 623 (1922). These cases recognize that it is a landowner's responsibility to exercise reasonable diligence in informing himself of the condition and extent of his property, and they hold that he is therefore chargeable with knowledge of those facts that reasonable diligence would reveal. As the court in Peacock recognized, a contrary view would penalize the observant landowner and reward the inattentive:

A man should not be allowed to close his eyes to facts readily observable by ordinary attention, and maintain for his own advantage the position of ignorance. Such a principle would enable a careless man, and by reason of his carelessness, to extend his right to recover for an indefinite length of time, and thus defeat the very purpose the statute was designed and framed to accomplish. In such case, a man's failure to note facts of this character should be imputed to him for knowledge, and ... the cause of action will be deemed to have accrued from the time when the fraud or mistake was known or should have been discovered in the exercise of ordinary diligence.

Id. at 219, 55 S.E. 99.

Similarly, North Carolina adverse possession decisions stringently impose upon landowners the continuing duty to remain informed of activities and events occurring on their property at peril of finding their titles divested by adverse possessors. If the adverse possessor occupies property in such a manner that the true owner by reasonable diligence could know of the adverse claim the true owner will be deemed to have knowledge of this factual predicate for an ejectment action. See J. Webster, Real Estate Law in North Carolina Sec. 290 (Rev. ed. 1981); see also Bowers v. Mitchell, 258 N.C. 80, 128 S.E.2d 6 (1962), Cothran v. Akers Motor Lines, Inc., 257 N.C. 782, 127 S.E.2d 578 (1962). That the true owner is actually unaware of the adverse claim or has not visited the property for many years does not negate the constructive knowledge of the right to bring an ejectment action, see Nichols v. York, 219 N.C. 262, 13 S.E.2d 565 (1941), because the owner is responsible for discovering and investigating the adverse claim of ownership, see Kennedy v. Maness, 138 N.C. 35, 50 S.E. 450 (1905).

From these North Carolina land law decisions we deduce the following principles as relevant guides to the appropriate meaning and application of the federal limitations provision. A landowner must use reasonable diligence in exerting dominion over his land. The ownership of property carries the concomitant responsibility of being informed, by personal observation or through an agent, of the events and conditions that occur on the property. In litigation involving conflicting title claims, any lack of knowledge that is attributable to negligence or inattention of a title claimant is properly disregarded, and the knowledge reasonably obtainable by a prudent owner will be imputed to him.

III

Guided by these principles, we disagree with the decision of the magistrate that...