Karner v. Roy White Flowers, Inc.

• Decision Date: 07 September 1999
• Docket Number: No. COA98-80.,COA98-80.
• Citation: 134 NC App. 645,518 S.E.2d 563
• Parties: Janet L. KARNER and Lyman G. Welton, Plaintiffs, and Loretta Lee Pendergrast, Aprille L. Shaffer and Shelly Jordan, Intervenor Plaintiffs, v. ROY WHITE FLOWERS, INC., Roy J. White, Jr., Margaret C. White, and Edward A. White, Defendants.
• Court: North Carolina Court of Appeals

518 S.E.2d 563

134 NC App. 645

Janet L. KARNER and Lyman G. Welton, Plaintiffs, and Loretta Lee Pendergrast, Aprille L. Shaffer and Shelly Jordan, Intervenor Plaintiffs, v. ROY WHITE FLOWERS, INC., Roy J. White, Jr., Margaret C. White, and Edward A. White, Defendants.

No. COA98-80.

Court of Appeals of North Carolina.

September 7, 1999.

James, McElroy & Diehl, P.A., by Paul P. Browne and Law Offices of Kenneth T. Davies, by Kenneth T. Davies, Charlotte, for plaintiff-appellants.

Odom & Groves, P.C., by George J. Miller and L. Holmes Eleazer, Jr., Charlotte, for defendant-appellees.

HUNTER, Judge.

Briefly, the record reveals that the parties are all property owners in Elizabeth Heights, a neighborhood in Charlotte which was developed as a residential subdivision around the turn of the century. Each of the conveyances of lots in Elizabeth Heights to the original grantees, and their heirs and assigns, contained a restrictive covenant that encumbered the lots for use for residential purposes only.

In 1995, defendants began to clear four (4) of their six (6) lots in Elizabeth Heights. After it was reported in a local newspaper that defendants intended to demolish three vacant houses on the property in question and construct a 5,300 square foot commercial building, plaintiffs filed a complaint 5 October 1995 seeking, inter alia, to enjoin defendants from erecting a commercial structure. Defendants answered and raised several affirmative defenses, including a defense that the action was barred by N.C. Gen.Stat. § 1-50(a)(3), the six-year statute of limitations for injury to an incorporeal hereditament, and that the use and character of the neighborhood had changed over the years to such an extent that it was not desirable or economically feasible to use the properties for residential purposes and such covenant should be annulled by the court.

On 18 March 1996, plaintiffs moved the trial court to require defendants to join all other landowners within the relevant area as third party defendants. The court denied plaintiffs' motion in an order entered 9 May 1996.

The case came on for trial and following the presentation of evidence by both parties, the trial court entered an order of directed verdict against plaintiffs on the grounds that their claims were barred by N.C. Gen.Stat. § 1-50(a)(3). Plaintiffs appeal the denial of their motion for joinder and the directed verdict as to lots one (1) through four (4).

I. Joinder

First, plaintiffs argue that the trial court erred in denying their motion to require joinder of the non-litigant property owners in Elizabeth Heights. Plaintiffs contend that defendants' changed conditions defense could result in the invalidation of the restrictive covenants which apply to Elizabeth Heights; consequently, all landowners in the subdivision are "necessary parties" because their property rights could therefore be affected.

The removal of restrictive covenants is an equitable action based upon whether changed conditions of an area are a "substantial departure" from the purposes of the original plan, and is a matter to be decided in light of the specific circumstances of each case. Hawthorne v. Realty Syndicate, Inc., 300 N.C. 660, 667, 268 S.E.2d 494, 499,reh. denied,301 N.C. 107, 273 S.E.2d 442 (1980). Rule 19 of the North Carolina Rules of Civil Procedure provides that those who are united in interest must be joined as plaintiffs or defendants. N.C. Gen.Stat. § 1A-1, Rule 19(a) (1990). The court may determine any claim before it when the rights of others not before the court are not prejudiced, but when a complete determination of such claim cannot be made without the presence of other parties, the court shall order such other parties summoned to appear in the action. N.C. Gen.Stat. § 1A-1, Rule 19(b) (1990). A necessary party "is one who is so vitally interested in the controversy that a valid judgment cannot be rendered in the action completely and finally determining the controversy without his presence[;]" however, a proper party "is one whose interest may be affected by a decree, but whose presence is not essential in order for the court to adjudicate the rights of others." Carding Developments v. Gunter & Cooke, 12 N.C.App. 448, 451-52, 183 S.E.2d 834, 837 (1971). While "necessary parties" must be joined in an action, "proper parties" may be joined, and whether proper parties will be ordered joined rests within the sound discretion of the trial court. Id.

Plaintiffs assert that under Sheets v. Dillon, 221 N.C. 426, 20 S.E.2d 344 (1942), all property owners in Elizabeth Heights must be joined as necessary parties in the present case. In Sheets, the plaintiff sought to enforce a contract of sale of real property, which the defendant refused to complete after learning of residential restrictive covenants in the plaintiffs' chain of title. The trial court found that the defendant was not required to act under the contract. The plaintiff raised the issue of changed conditions in the neighborhood, asserting that the residential covenants were no longer valid, and our Supreme Court remanded the case, stating:

[T]here is some evidence that plaintiff acquired title under a general scheme or at least tending to show that other grantees of the original grantor may be interested in attempting to so prove. It follows that the original grantor is, and its other grantees may be, interested in the enforcement of the covenant plaintiff seeks to annul.

The judgment herein is not conclusive as to any one other than plaintiff and defendant. Plaintiff's predecessor in title and those who may claim that the covenant was inserted pursuant to a general plan or scheme of development are not estopped from hereafter asserting their rights thereunder. Under such circumstances equity will not require defendant to comply with his contract in direct violation of the stipulation that the property is to be conveyed free of restrictive covenants. If plaintiff desires to have this covenant invalidated and stricken from the deed of the original grantee, he must bring in the interested parties and give them a day in court.

Id. at 431-32, 20 S.E.2d at 347-48 (emphasis added). We interpret Sheets to stand for the proposition that if one party seeks to "annul" or invalidate a restrictive covenant in equity, based on changed conditions, the interest of other property owners, who may challenge this cause of action, must be represented in the suit. In Sheets, the plaintiff property owner sought to annul restrictive covenants, and the defendant had no property interest in the subject property. Therefore, the interest of other landowners, who may have contested the invalidation, was not represented.

To the contrary, in the present case, the interest of landowners wishing to either oppose or support the assertion of changed conditions is fully represented by the present parties. Other landowners in Elizabeth Heights are not necessary parties for the court to determine whether or not the character of the neighborhood has changed to such an extent that the residential covenants should be annulled. Nor are they necessary for the court to determine any other issue presented in this case. If other landowners in Elizabeth Heights choose to join either the plaintiffs or defendants as parties in this suit, the court could order their joinder as proper; however, the joinder of each individual landowner is not necessary for the action to proceed. Accordingly, we hold that the record reveals no abuse of discretion by the trial court in its denial of the motion for joinder of all property owners in Elizabeth Heights in the present action.

II. Statute of Limitations

Plaintiffs assert that the trial court erred in entering a directed verdict under the authority of N.C. Gen.Stat. § 1-50(a)(3), a six-year statute of limitation "[f]or injury to any incorporeal hereditament," because the correct statute of limitation in the present case is the "prescriptive period" of twenty years.

Plaintiffs filed suit to enforce a restrictive covenant. "A restrictive covenant is a servitude, commonly referred to as a negative easement, and an easement is an incorporeal hereditament." Hawthorne v. Realty Syndicate, Inc., 43 N.C.App. 436, 440, 259 S.E.2d 591, 593 (1979), aff'd, 300 N.C. 660, 268 S.E.2d 494, reh. denied, 301 N.C. 107, 273 S.E.2d 442 (1980) (citation omitted). The term "incorporeal hereditament" derives from English law and is defined as:

Anything, the subject of property, which is inheritable and not tangible or visible. A right issuing out of a thing corporate (whether real or personal) or concerning or annexed to or exercisable within the same. A right growing out of, or concerning, or annexed to, a corporeal thing, but not the substance of the thing itself.

Black's Law Dictionary 726 (6th ed. 1990). This Court has held that N.C. Gen.Stat. § 1-50(a)(3) requires that an action for injury to any "incorporeal hereditament" be brought within six years, and applies to restrictive covenants. Hawthorne, 43 N.C.App. at 440, 259 S.E.2d at 593.

Plaintiffs argue that the statute of limitations rule enunciated in Hawthorne does not apply in the present case. They contend that their claims are subject to a twenty-year "statute of limitations" because they are seeking an injunction and "[a]n easement may be extinguished by adverse use by the owner of the servient property for the prescriptive period." Skvarla v. Park, 62 N.C.App. 482, 488, 303 S.E.2d 354, 358 (1983). Plaintiffs rely on Bishop v. Reinhold, 66 N.C.App. 379, 311 S.E.2d 298, disc. review denied, 310 N.C. 743, 315 S.E.2d 700 (1984), for this proposition. The defendant's home in Bishop was partially erected on the plaintiff's property in 1973 and plaintiffs sued in 1980 on the basis of continual trespass, seeking removal of the building from their property. The Court noted that in the case of an actual encroachment, a plaintiff "is limited to a single recovery of all...