Due to inherent defects with GrailCoat’s cladding system, however, this was not a feasible option for the Christies. Analysis of the Court of Appeals' Holding The statute of repose at issue in Christie 1 was N.C.G.S. § 1-50(a)(5), which provides “[n]o action to recover damages based upon . . . the defective or unsafe condition of an improvement to real property” is recoverable more than six years after “the specific last act or omission of the defendant . . . or substantial completion of the improvement.” Although prior decisions indicated an express long-term warranty permitting damages would be enforceable regardless of the expiration of the statute of repose, the lower court appeared to base its holding on the case of Roemer v. Preferred Roofing, 190 N.C. App. 813, 660 S.E.2d 920 (2008).

The limitations period in North Carolina is six (6) years within which to bring a lawsuit claiming an encroachment on an easement, which is an injury to an "incorporeal hereditament". NCGS 1-50(a)(3). In Duke Energy Carolinas, LLC v. Gray, No. COA14-283 (December 2, 2014), the N.C. Court of Appeals considered the utility's claim that defendant's home encroached on the utility's easement, and the defendants' statute of limitations defense to the utility's encroachment claim.

Statute of Limitations for Encroachment on an EasementInjury to easement versus removal of encroachment distinguished In our 2014-2015 Update we reported on the decision issued by the North Carolina Court of Appeals inDuke Energy, LLC v. Gray, 766 S.E.2d 354 (N.C. Ct. App. Dec. 2, 2014) where it was held that an action by Duke Power to remove an encroachment from its power line easement was subject to the six year statute of limitations applicable to claims for injuries to incorporeal hereditaments, N.C. Gen. Stat. § 1-50(a)(3). We offered in our Update that the decision was contrary to the generally understood rule that the twenty year statute applicable to adverse possession or prescription should apply.

In December of 2012, Duke Energy filed suit seeking injunctive relief. Both the trial court and the Court of Appeals determined an easement is an incorporeal hereditament and thus a six-year statute of limitations under N.C.G.S. § 1-50(a)(3) applied. The statute of limitations began when Duke “should have been aware” of the encroachment, which the court determined was when the certificate of occupancy was issued in October of 2006.

The Court noted that the parking lot likely would have violated a more comprehensive restrictive covenant that prohibited, for example, the “business activity of operating” the specified type of store.Actions to remove certain infringements on easements must be filed within six years after the infringement began, as opposed to the generally recognized twenty-year limitations period. In Duke Energy Carolinas, LLC v. Gray, 766 S.E.2d 354 (N.C. Ct. App. Dec. 2, 2014), the North Carolina Court of Appeals held that Duke Energy’s claim asserting an encroachment upon its easement was time-barred under N.C. Gen. Stat. § 1-50(a)(3), which the Court determined sets a six-year limitations period that begins to run at the time that any such injury to an incorporeal hereditament – such as an easement – occurs, “even when the injured party is unaware that the injury exists.” This is contrary to the generally understood rule that the 20 year time period applicable to adverse possession should apply.

For example, the North Carolina statute of repose provides that “[n]o action to recover damages based upon or arising out of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.” N.C. Gen. Stat. § 1-50(a)(5)(a). Over the years, North Carolina’s appellate courts have frequently described the statute of repose as an “unyielding and absolute barrier that prevents a plaintiff’s right of action even before his cause of action may accrue.”

North Carolina has a six-year statute of repose for causes of action arising out of defective construction, meaning anyone with a claim for damages arising out of a defective or unsafe condition of an improvement to real property must bring that claim within six years from the later of the last act of the defendant or substantial completion of the project. N.C.G.S. § 1-50(a)(5). The Christies conceded that their lawsuit was filed more than six years after substantial completion of the residence, but argued that because of GrailCoat’s 20-year express warranty, their claim was timely.

ions. The specific uncertainty relates to whether there can be different substantial completion dates for the contractor and each of its subcontractors, such that time limits begin to run at different times.In Gaston County Board of Education v. Shelco, LLC, et al., No. COA21-618, 2022-NCCOA-550, 877 S.E.2d 316 (August 16, 2022), the Court of Appeals addressed the definition of substantial completion in the context of a dispute where the owner sued a contractor, an engineer, an architect, and the architect’s subcontractor over a cracked retaining wall. The owner, contractor, and architect had signed a Certificate of Substantial Completion for the project generally. However, the engineer and the architect’s subcontractor had not. The Court considered the statutory definition for substantial completion which is “that degree of completion of a project, improvement or specified portion thereof… upon attainment of which the owner can use the same for the purpose for which it was intended.” NC Gen. Stat. § 1-50(a)(5)c. The statute also allows the parties to agree in writing upon the date of substantial completion, which in the industry is generally reflected in a Certificate of Substantial Completion.The court in the Gaston County case found that even though the contractor and the architect had signed a Certificate of Substantial Completion, that Certificate did not bind the engineer or the architect’s subcontractor because they had not signed that Certificate. Of course, subcontractors typically never sign certificates of substantial completion. So, does this mean that there are separate substantial completion dates for subcontractors? Maybe. North Carolina courts have not interpreted “substantial completion” in terms of construction projects which have multiple stages or scopes of work performed by subcontractors completed at different times, which, of course, is every project. In other words, the question is whether substantial completion for purposes of the statute of repose begins as to a sub

e not legally separated and the trial court lacked subject matter supervision to hear the equitable distribution claim. Jackie W. Autry, et al. v. Bill Clark Homes, LLE, et al., COA 22-293, 2022-NCCOA-833 Litigators are acutely aware of statutes of limitation, which can block otherwise meritorious cases. Less frequently encountered are statutes of repose, which “serve[] as an unyielding and absolute barrier that prevents a plaintiff’s right of action even before this cause of action may accrue[.]” Black v. Littlejohn, 312 N.C. 626, 633, 325 S.E.2d 469, 475 (1994). This otherwise unremarkable case demonstrates the effect of that barrier. Plaintiffs, subdivision homeowners, sued defendants, the subdivision developer. Plaintiffs alleged that defendants’ failure to maintain a drainage pipe that extended beyond the subdivision boundaries led to flooding damage within the subdivision. The trial court allowed defendants’ motion for summary judgment. The Court of Appeals affirmed, noting that N.C.G.S. § 1-50(a)(5)(a) provides that “[n]o action to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.” The evidence in this case indicated that defendant devised a plan to deal with potential flooding in 2000 and the materials were installed and the work completed in 2007. Though the statute of repose has exceptions for willful or wanton negligence in the development of real property, no evidence supported application of the exception here. Accordingly, plaintiffs’ claim failed before it even began.Devore v. Samuel, et al. and Kindercare Education, LLC et al. v. Charlotte-Mecklenburg Board of Education, et al. COA22-305, 2022-NCCOA-834.A bus operated by Charlotte-Mecklenburg Schools dropped off a student at KinderCare. As the child was crossing the street to t

Instead of applying the 20-year statute of limitations for adverse possession under N.C. Gen. Stat. § 1-40, the Court in Pottle held that the six-year statute of limitations in N.C. Gen. Stat. § 1-50(a)(3) applies, which governs actions for injury to an “incorporeal hereditament” – a term which the North Carolina Supreme Court has previously defined as “an intangible right in land, such as an easement.” The North Carolina Supreme Court agreed to review the Pottle decision based in large part on amici curiae (“friend of the court”) briefs submitted by several utility companies, but the appeal was dismissed as moot when the parties to the case settled.