Real Property – Easements – Lake Norman – Third-Party Docks

With the intent to create a lake for use in a hydroelectric project, defendant Michael Kiser’s grandparents granted a broad easement to plaintiff’s predecessor (Duke). The easement granted Duke “absolute water rights” and the right “to treat said 280.4 acres, more or less, in any manner deemed necessary or desirable by Duke Power Company.” This broad easement gave Duke the authority to allow third-party homeowners to build structures over and into the submerged property and to use the lake in a recreational manner.

We reverse the Court of Appeals’ decision to the contrary.

Relying on Lovin v. Crisp, 36 N.C. App. 185, 243 S.E.2d 406 (1978), the Court of Appeals adopted a bright-line principle that “unless an easement explicitly states otherwise, an easement holder may not permit strangers to the easement agreement to make use of the land, other than for the use and benefit of the easement holder, without the consent of the landowner where such use would constitute additional burdens upon the servient tenement.” Therefore, according to the Court of Appeals, because the third-party homeowners here are not mentioned in the easement and did not have a property interest in the land when the easement was created, “Duke exceeded its scope of authority by permitting the [third-party homeowners] to construct and maintain structures over and into the Kisers’ submerged land without the Kisers’ consent.”

Lovin, however, is readily distinguishable from the facts here, is not binding on this court, and establishes a principle that narrows the easement’s broad and unambiguous language.

In Lovin, a landowner conveyed an easement by deed to his neighbor. The language of the easement permitted the easement holder “to install and maintain a water line” on a specific tract of land. Because the easement’s language was narrowly confined to benefit one parcel of land and the surrounding property was not described in the easement, the court held that the easement holder could not install additional water lines to benefit neighboring lands.

Here, however, unlike the limited easement in Lovin confining the use of the easement to a specific tract of land for a narrow purpose, the language of the easement is broad and does not constrain how Duke may treat the easement property. There is a vast difference between intending to create and maintain a lake versus allowing a water line to cross a property. As such, under the broad language of the easement here, Duke may permit third parties to use the easement property when such use is necessary or desirable to Duke.

Therefore, because the easement in Lovin and the easement here serve different purposes and contain material differences, the Court of Appeals erred by relying on Lovin and applying a novel principle that contradicts and narrows the clear language of the easement at issue.

The easement’s unambiguous language granting Duke broad authority over the submerged property is consistent with the purpose of Duke’s federal licensing obligations over Lake Norman and allows Duke to comply with its Federal Energy Regulatory Commission license requirements.

Moreover, Duke’s broad grant of authority has been confirmed by the parties’ practice over the past 60 years, during which third-party homeowners have applied to Duke – not the Kisers – for permission to build docks and related structures. In fact, the Kisers themselves sought and received permission from Duke to build shoreline structures extending from their lot and into the submerged property.

The plain language of the easement is unambiguous and grants Duke broad authority to treat the submerged easement property in any manner Duke deems necessary or desirable. Therefore, Duke acted within the scope of its broad authority under the easement by allowing the third-party homeowners to build docks, piers, and other structures over and into the submerged land without the Kisers’ consent.

Duke Energy Carolinas, LLC v. Kiser (Lawyers Weekly No. 010-015-23, 16 pp.) (Paul Newby, C.J.) Appealed from Catawba County Superior Court (Nathaniel Poovey, J.) Kiran Mehta, Christopher Browning and Victoria Alvarez for plaintiff; Ty Kimmer McTier and David Redding for defendants; David Parker, Mark Childers and Kevin Donaldson for third-party defendants. North Carolina Supreme Court