COA Reconsiders Encroachment as Continuing Trespass
Chris Burti, Vice President and Senior Legal Counsel

Graham v. Deutsche Bank National Trust Company, et al (13-881-2), filed February 17, 2015.

The plaintiff and the defendant in this action are the owners of two adjoining parcels of land in a subdivision in Guilford County, North Carolina ("Lot 1" and "Lot 2" respectively). Neither party had their respective lot surveyed at the time they acquired the property. At some point, a prospective purchaser of Lot 2 had the property surveyed, and the survey, which he provided to the plaintiff, disclosed that portions of the house and septic system on Lot 2 encroached upon Lot 1. The plaintiff's title insurance company then secured another survey of the property which confirmed that the encroachments, which were originally constructed in 1994, existed.

The plaintiff filed a complaint alleging that the encroachments were an "ongoing and continuing trespass" on her property. The defendant answered and counterclaimed for reformation of its deed, to quiet title, and included a third-party complaint against the holder of the deed of trust encumbering the plaintiff's lot. The trial court entered summary judgment in favor of the plaintiff and her mortgagee on the trespass claim which was appealed to the Court of Appeals. In July 2014, the Court of Appeals reversed the trial court's order, and remanded for the entry of summary judgment in favor of the defendant. The Court of Appeals granted the plaintiff's petition for rehearing and upon rehearing, reversed itself concluding that the trial court's order should be affirmed. A discussion of the analysis of the Court of Appeals follows.

In the first opinion by the Court of Appeals in this case, the Court concluded that because the plaintiff was not in possession of the property when the trespass initially occurred that summary judgment in favor of the plaintiff and third party defendant was improper having failed to establish a threshold element of a claim for trespass. In so holding, the Court relied upon in Woodring v. Swieter, 180 N.C. App. 362, 637 S.E.2d 269 (2006) an earlier Court of Appeals decision. After reconsidering the case and analyzing Woodring, the court concluded that the portion of Woodring it initially applied in this action is inconsistent with controlling prior North Carolina appellate decisions interpreting the law of continuing trespass to real property.

The opinion cites Singleton v. Haywood Elec. Membership Corp., 357 N.C. 623, 627, 588 S.E.2d 871, 874 (2003)  in setting out the basic rule that "[Al claim of trespass requires: (1) possession of the property by plaintiff when the alleged trespass was committed; (2) an unauthorized entry by defendant; and (3) damage to plaintiff." (citation and quotation marks omitted). Relying on the 1984 opinion of the Court of Appeals in Bishop v. Reinhold, 66 N.C. App. 379, 384, 311 S.E.2d 298, 301, disc. review denied, 310 N.C. 743, 315 S.E.2d 700 (1984), that an action seeking removal of an encroachment by and adjoin property owner "would not be barred until defendants had been in continuous use thereof for a period of twenty years so as to acquire the right by prescription." Simply stated, the wrongful maintenance of a structure encroaching upon an adjoiner's property "is a separate and independent trespass each day it so remains" with the result that the three-year statute of limitations applicable to trespass claims begins to run every day the encroaching structure remains on the plaintiff's land.

While the application of a statute of limitations issue was not argued in the current case, the precedential effect of Bishop implicates the principle that the first element of a trespass claim is satisfied even where the landowner asserting the claim did not own the property at the time the continuing trespass was initiated as long the complaining owner was in possession of locus un quo while the trespass was ongoing and the action commenced. The opinion declares that subsequent landowners who purchase the affected property "after the encroaching structure has already been built may still meet the first element of a trespass claim given that the maintenance of the encroaching structure is itself a trespass that continues each day the encroachment exists. See Adams Creek Assocs. v. Davis, N.C. App. ___, ___, 746 S.E.2d 1, 9, disc. review denied, 367 N.C. 234, 748 S.E.2d 322 (2013) (determining that plaintiffs stated valid claim for trespass even though defendants' encroaching structures were built before plaintiffs acquired possession of property at issue)."

The Court of Appeals found support for this conclusion from the North Carolina  Supreme Court in Caveness v. Charlotte, Raleigh & S. R.R. Co., 172 N.C. 305, 90 S.E. 244 (1916) where the Supreme Court "explained that

[a] subsequent purchaser cannot recover for a completed act of injury to the land, as, for instance, the unlawful cutting down of trees; but if the trespasser unlawfully remains upon the land after the sale, or returns and carries away the trees, he becomes liable to the then owner, in the first case for a continuing trespass, and in the latter for a fresh injury.

Id. at 309, 90 S.E. at 246 (citation and quotation marks omitted)" The Court of Appeals also found and cited materials in accord with its conclusion discussing "generally accepted principles of the law of trespass."

In our prior opinion in this case, we relied on this Court's decision in In Woodring, the defendants constructed an underground water pipeline that encroached upon the neighboring property. Woodring, 180 N.C. App. at 366, 637 S.E.2d at 274. Gary and Henry Woodring, who each at varying times owned the neighboring property, filed a complaint against the defendants alleging various claims, including a claim for trespass. Id. The trial court granted summary judgment in favor of the defendants on the trespass claim, and we affirmed the trial court's ruling. Id. at 364, 637 S.E.2d at 273.

The Court resolved its prior reliance upon Woodring in reaching a contrary result as follows"

It is well established that as a general rule we are bound by the prior decisions of this Court. See In re Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989) ("Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.")

However, it is also well settled that "where there is a conflicting line of cases, a panel of this Court should follow the older of those two lines." Respess v. Respess, ___ N.C. App. ___, ___, 754 S.E.2d 691, 701 (2014) (citation and quotation marks omitted)

On rehearing, we determine that we are not bound by the portion of the Woodring decision suggesting that a trespass claim can never succeed when the party asserting the claim was not in possession of the property at the time the unauthorized entry first occurred. Such a proposition is inconsistent with both our earlier opinion in Bishop and our Supreme Court's discussion of the law of continuing trespass in Caveness. Therefore, we conclude that Woodring does not control the outcome of the present case. See Respess, N.C. App. at, 754 S.E.2d at 702.

The defendant also contended that summary judgment was improper because it did not personally construct "the encroaching structures, was not in possession of the property when the structures were first built, and is ‘a mere successor in title' to the party who committed the original unauthorized entry onto Plaintiff's property." The opinion dispose of this argument by succinctly recognizing that the wrongful maintenance of an encroaching structure "is itself a ‘trespass each day it so remains' and constitutes a distinct wrong. Bishop, 66 N.C. App. at 384, 311 S.E.2d at 301. Thus, because it is undisputed that Defendant failed to remove the encroaching structures from Plaintiff's property, the second element of Plaintiff's trespass claim is likewise established."

Because the record this case showed that all of the elements of a trespass claim were satisfied, the Court of Appeals concluded that the trial court's summary judgment order in favor of the plaintiff and third party defendant was correct. Relying on the opinion in Williams v. S. & S. Rentals, Inc., 82 N.C. App. 378, 346 S.E.2d 665, (1986) the court also affirmed the trial court's issuance of a mandatory injunction requiring the defendant to remove the encroaching portions of the structures.