Court: Court of Appeals of North Carolina; October 16, 2001; North Carolina; State Appellate Court
Highlands Cove, L.L.C. appeals a jury verdict in favor of Whiteside Estates, Inc. for $500,000, as well as the trial court's denial of its motions for judgment notwithstanding the verdict and for a new trial, and the award of attorney and expert witness fees. The Court of Appeals of North Carolina affirms the jury's judgment but remands for a new trial solely on the issue of damages. The appeal comprises two consolidated cases: COA00-1378, regarding the verdict and motions, and COA00-1005, concerning the fee awards.
The facts indicate that Highlands Cove purchased approximately 400 acres of land in March 1998 for residential and golf course development, upstream from the 265 acres owned by Whiteside, which includes Young Lake formed by a dam built in 1957. Following significant rainfall in October 1998, sediment from Highlands Cove’s construction activities contaminated the creek and lake, damaging water quality and interfering with Whiteside's use of the property. Inspections by the North Carolina Division of Land Resources revealed non-compliance with the Sedimentation Pollution Control Act, although no formal violations were issued.
Whiteside sought a temporary restraining order against Highlands Cove, which was denied, leading to a complaint filed for nuisance, trespass, and violations of the Sedimentation Act. Highlands Cove counterclaimed for abuse of process. After trial, the jury found in favor of Whiteside without specifying damages by claim. The trial court denied Highlands Cove’s post-verdict motions, prompting the appeal. Additionally, Whiteside's counsel requested significant attorney and expert witness fees under G.S. 113A-66(c). The court's ruling on these fees was partially upheld and partially reversed.
Counsel filed copies of invoices for legal services and expert witnesses, along with affidavits from William Clarke and J. David Young, in support of the motion for fees. The plaintiff amended its request for attorney fees on May 8, 2000, reducing the amount by $7,700 for work related to a different matter. This amendment included a second affidavit from Clarke detailing the hourly rates charged, which were deemed appropriate for the work and consistent with community standards. On May 30, 2000, the trial court awarded the plaintiff $58,546.50 in attorney fees and $37,353.13 in expert witness fees, both amounts lower than requested. The defendant subsequently appealed, raising several issues: 1) the trial court's denial of motions for a directed verdict and judgment notwithstanding the verdict, arguing insufficient evidence for the plaintiff's claims; 2) rejection of the defendant's proposed jury instructions; 3) claims of excessive jury verdict influenced by passion; 4) admission of testimony from plaintiff witnesses and certain demonstrative evidence; and 5) the award of attorney and expert witness fees to the plaintiff.
In terms of evidence sufficiency regarding nuisance, the defendant contended that the plaintiff failed to demonstrate any interference with the corporate plaintiff's property use. To establish a nuisance claim, plaintiffs must prove unreasonable interference, which can arise from intentional or unintentional actions. Unintentional nuisance stems from negligent, reckless, or ultrahazardous conduct, while intentional nuisance focuses on the unreasonableness of the interference itself. A private nuisance can exist without negligence, and a party who intentionally creates or maintains a nuisance is liable for resulting injuries, regardless of the care taken to prevent them. Moreover, the use of advanced technology or lack of negligence in facility design does not exempt a defendant from liability in nuisance claims. Intentional interference occurs when a party acts with the intent to invade another's property rights or is aware that such an invasion will substantially result from their actions. However, not all intentional interferences are deemed unreasonable.
Factors to assess unreasonable intentional interference include the surrounding conditions, neighborhood character, nature and social value of the defendant's operation, the plaintiffs' use and enjoyment of their property, locality suitability for both parties, extent and frequency of harm to the plaintiffs, priority of occupation, and other relevant evidence. No single factor is definitive; all circumstances must be evaluated. For interference to be actionable, it must be both substantial, indicating significant harm to the plaintiff, and unreasonable, meaning it is not justifiable for the defendant to cause such harm without compensation. Once the plaintiff establishes the invasion as unreasonable, they must prove it resulted in substantial injury to their property interest.
In the case discussed, the plaintiff, the property owner, presented evidence that the defendant's land-disturbing activities initiated in July 1998 caused sediment runoff into the plaintiff's creek and lake after rainfall, despite the defendant's erosion control measures. Photographic evidence showed a significant decline in the lake's clarity, transforming from clear to murky post-activity. Expert testimony indicated a marked decrease in water quality and increased erosion, with water sampling revealing heightened turbidity levels. The defendant's sedimentation control plan was deemed inadequate, negatively impacting aquatic life. An inspector confirmed that sediment had escaped the defendant's project area, although he did not verify the effect on the plaintiff’s property directly.
The testimony revealed that the defendant never tested the water quality in the plaintiff's lake, despite plaintiff's shareholders confirming that the lake and creek had been utilized for recreational activities for forty years. Following the defendant's land-disturbing activities, sediment pollution rendered the lake unsuitable for these uses. The defendant argued that the plaintiff failed to provide evidence of harm to the corporation, such as impaired business relationships or loss of revenue, suggesting that the evidence did not support a corporate nuisance claim. However, the plaintiff's corporate charter includes objectives related to water rights and reservoir construction. The sedimentation significantly impaired water quality and affected the corporate purpose, with substantial evidence indicating that the defendant's actions unreasonably interfered with the plaintiff's enjoyment of its property.
Regarding the trespass claim, the defendant contended that no sediment was deposited on the land, as it flowed downstream, and therefore no trespass occurred. The defendant also argued that any sediment present on the plaintiff's property was not proven to have been caused by them. However, the legal precedent clarifies that a riparian proprietor has the right to maintain the natural flow and quality of water on their land, and the presence of sediment in the plaintiff's creek was linked to the defendant's activities. Testimony indicated that there was a fine sediment coating on the lake's bottom, which could resuspend and increase water turbidity, supporting the plaintiff's claims of trespass.
A trespass claim requires the plaintiff to demonstrate possession of the land, an unauthorized entry by the defendant, and damages resulting from this invasion. A jury found sufficient evidence that the defendant's activities caused sediment to unlawfully enter the plaintiff's property, leading to damage. Regarding the Sedimentation Pollution Control Act, the trial court awarded the plaintiff attorney and expert witness fees due to the defendant's violation of the Act. The defendant contended that it did not violate the Act or cause damage to the plaintiff's property. However, the Act permits private actions for damages resulting from violations, provided that the damages are causally linked to the violation. The evidence indicated that sediment from the defendant's site damaged the plaintiff's creek and lake, despite the absence of formal Notices of Violation. Testimony suggested that while the defendant attempted to comply, there were instances of insufficient measures to contain sediment, as noted in inspection reports. These reports highlighted failures to follow approved erosion control plans and the need for immediate corrective actions to prevent sediment runoff.
A report dated December 16, 1998, identified multiple violations of the Sedimentation Act by the defendant, including an inadequate buffer zone, failure to maintain erosion control measures, and insufficient sediment retention. Sedimentation damage had occurred since the last inspection, and the report mandated the re-installation of buffer zones and repairs to a silt fence. Viewing the evidence favorably for the plaintiff, the court found sufficient grounds to conclude that the defendant violated the Sedimentation Act and caused damage to the plaintiff.
Regarding the jury's verdict of $500,000, the defendant argued it was excessive, reflecting disregard for jury instructions and based on emotional bias. The defendant claimed the evidence for repair costs was speculative and requested a reduction to $20,000 or a new trial. The trial court instructed the jury to determine actual damages based on reasonable repair costs and to avoid speculation about future damages, emphasizing that damages for an abatable nuisance can only be recovered up to the time of the complaint or trial.
The recoverable damages include diminished rental value, reasonable repair costs, restoration to pre-nuisance condition, and incidental losses. The plaintiff was required to provide evidence supporting a reasonable estimate of damages without mathematical precision. Expert testimony indicated that repairing and restoring the plaintiff’s creek and lake would cost $20,000, contingent upon controlling the source of contamination from the defendant's property.
Two procedures were discussed for restoring the creek, with one estimated to cost between $75,000 and $150,000, and the other approximately double that amount. Evidence presented for repairing and restoring the plaintiff's lake and creek ranged from $95,000 to $320,000. However, the court concluded that the plaintiff failed to establish a reasonable estimate for the repair costs with sufficient certainty. Wagner testified that adequate detention to control erosion from the defendant's property would cost between $1.4 million and $4 million. Although the defendant argued that this testimony was irrelevant to the plaintiff's damage recovery, the court found it pertinent, asserting that the plaintiff could only recover costs to control sedimentation if necessary for the restoration of the creek and lake. Testimony indicated that the defendant's erosion control plan was inadequate and that without proper measures to control the sediment from the defendant's property, repairs on the plaintiff's property would be ineffective. The jury could reasonably infer that the plaintiff needed to implement adequate measures to control sedimentation on their property. However, there was no sufficient evidence regarding the plaintiff's costs for controlling the sediment source. Consequently, the court held that there was insufficient evidence to estimate the reasonable costs for restoring the lake and creek, leading to a remand for a new trial solely on damages.
Regarding jury instructions, the defendant claimed that the trial court erred in not providing four additional requested instructions. The court maintained that it is only required to give jury instructions that are correct and supported by evidence, and it has discretion to refuse instructions based on erroneous legal statements. The defendant also requested an instruction regarding the inability of the corporate plaintiff to recover for personal losses incurred by individuals related to the corporation, which the court affirmed.
Testimony regarding the lake's condition should be considered only in relation to its history and suitability for use unless tied to a corporate purpose. The trial court's failure to instruct this was noted, but the argument that shareholder testimony was irrelevant to the plaintiff's damages was rejected, as such evidence directly relates to property injury.
The defendant's request to instruct the jury that preventive measures should not be counted as damages was addressed; the court clarified that actual damages are assessed based on reasonable repair costs. Evidence concerning sediment control on the defendant's property is admissible if it pertains to necessary repairs for the plaintiff's property.
Regarding aesthetic damages, the defendant's request to instruct the jury about the lack of evidence for valuation was deemed erroneous, as sufficient evidence existed for the jury to award damages.
The defendant also sought an instruction stating that current sediment deposition was no greater than in the past; however, the jury, as fact finder, must evaluate the sediment volume based on presented evidence, which relates to the reasonableness of the injury.
On the admissibility of turbidity evidence, the defendant claimed error due to calibration issues with the plaintiff's expert's instrument. The trial court, following a voir dire hearing, found the expert's testimony reliable based on his extensive experience and past work. The defense did not present evidence challenging the accuracy of the turbidity readings, thereby supporting the trial court's ruling. All of the defendant's assignments of error were overruled.
No abuse of discretion was found regarding the admission of five jars of water with varying turbidity levels, which were used as demonstrative evidence by plaintiff’s expert, Pam Boaze, rather than as substantive evidence from the plaintiff’s lake. The trial court's decision to allow this evidence was upheld.
On appeal, the defendant contested the trial court's award of attorney and expert witness fees on three grounds:
1. The inclusion of expenses related to prosecuting common law claims and defending against a counterclaim.
2. Lack of evidentiary support for the fees awarded.
3. Awarding expert witness fees without proof of subpoena.
The general rule is that attorney fees cannot be recovered unless authorized by statute or contract, with N.C. Gen. Stat. 113A-66(c) allowing such fees in actions under the Sedimentation Pollution Control Act of 1973. Although fees are not recoverable for common law nuisance and trespass claims, apportionment of fees is unnecessary when claims arise from the same nucleus of operative facts. The trial court determined that all claims were interconnected, relating to the defendant's land-disturbing activity and its effects on the plaintiff’s property.
The trial court's observation of evidence over six days of trial and subsequent adjustments to the fee motion were deemed competent, leading to the conclusion that no apportionment was needed. The defendant's challenge regarding the reasonableness of the fees was noted, emphasizing that statutory interpretation must start with the statute's plain language.
Attorney fees under the Sedimentation Act are awarded at the trial court's discretion, as stated in N.C. Gen. Stat. 113A-66(c). The court's decision is reviewed under an abuse of discretion standard, which requires the defendant to demonstrate that the ruling lacks reasonable justification or is arbitrary (Robinson v. Shue). The defendant contends that the trial court abused this discretion by failing to make specific findings regarding the time and labor spent, requisite skill, customary fees, and the attorney's experience.
The trial court received detailed invoices and an affidavit from the plaintiff's attorney, William Clark, which confirmed that the hourly rates were appropriate and customary for the work performed. The attorney amended the fee invoice to exclude unrelated matters. The defendant did not challenge the reasonableness of the rates or hours but argued that some fees were unrelated to the case. The trial court affirmed the appropriateness of the attorney fees after considering the arguments and motions from both parties, and the defendant failed to provide evidence of any oversight by the court.
Regarding expert witness fees, detailed invoices and an affidavit were also submitted, and the Sedimentation Act permits such awards at the court's discretion. The defendant argued that the trial court erred in awarding these fees, claiming the testimony was not provided under subpoena. However, N.C. Gen. Stat. 7A-314(a) and (d) allow for expert witness compensation at the court's discretion, regardless of subpoena status. The court's decision to award both attorney and expert witness fees was ultimately affirmed.
In State v. Johnson, the North Carolina Supreme Court established that sections (a) and (d) of the relevant statutes must be read together, with section (d) allowing courts the discretion to increase compensation and allowances while still requiring that all witnesses be subpoenaed to qualify for compensation. The subpoena requirement, as outlined in G.S. 7A-314, is applicable alongside cost awards under G.S. 6-20. The case law, including Campbell v. Pitt Co. Mem. Hosp. and Brandenburg Land Co. v. Champion Int'l Corp., reinforces this principle. In the current case, the plaintiff's expert witnesses were not subpoenaed, which meant the trial court lacked the authority to grant fees for these experts. Consequently, the court reversed the order for expert witness fees while affirming the defendant's liability and remanding for a new trial solely on damages. The award of attorney fees and costs was affirmed, but the expert witness fees were reversed. Judges WYNN and HUNTER concurred with the decision.
