Correctly Naming Necessary Parties in Real Estate Disputes

by de Ondarza Simmons, PLLC on September 14, 2011

Naming all necessary parties in Real Estate Dispute

In a real estate dispute where the subject property is owned as tenancy by the entirety, both husband AND wife are necessary parties and must be named in the lawsuit.

In a previous posts we have talked about the importance of correctly naming the right business entity parties in lawsuits. (See Correctly Naming Business Entity Defendants in Business Litigation Complaints & You Cannot Wait until Supplemental Proceedings to Pierce Corporate Veil.)  In this post, we look at a recent case that highlights the importance of naming the right individual human parties in a real estate dispute.

Plaintiffs in Boundary Dispute fail to Name both Husband and Wife as Defendants

In this case, Boone v. Rogers, neighbors sued each other over the location of the dividing line between their properties and the existence of an easement. The Plaintiffs filed their lawsuit against a man who was an owner of the subject property, but they did not name his wife as a defendant, even though the deeds of record for the subject property showed the that he and his wife owned the subject property as tenants by the entirety.

After a District Court jury trial, the jury found in favor of the Defendant husband.  The Trial Court Judge, however, entered a judgment not withstanding the verdict (a “JNOV”) in favor of the Plaintiffs.  The Defendant Husband appealed.

Defendant Husband’s Appeal

The North Carolina Court of Appeals began its opinion by stating its holding directly:

As the trial court entered an order without all of the necessary parties, we vacate and remand.

Rule 19 of the North Carolina Rules of Civil Procedure requires that all necessary parties be joined.  It reads in part,

“those who are united in interest must be joined as plaintiffs or defendants….”

In this case the Court of Appeals quoted from a previous case to explain what the rule actually requires and the effect of failing to follow it:

Rule 19 of the North Carolina Rules of Civil Procedure requires that those who are united in interest must be joined as plaintiffs or defendants. A person is united in interest with a party when that person’s presence is necessary for the court to determine the claim before it without prejudicing the rights of a party or the rights of another who is not before the court. Necessary parties are those who have or claim material interests in the subject matter of a controversy, and those interests will be directly affected by an adjudication of the controversy. When there is an absence of necessary parties, the trial court should correct the defect [on its own] upon failure of a competent person to make a proper motion. A judgment which is determinative of a claim arising in an action in which necessary parties have not been joined is null and void.

Tenancy by the Entirety makes both Husband and Wife Necessary Parties

In the current case, the Court of Appeals then went on to explain that the ownership of the subject property by the Defendant husband and his wife as a tenancy by the entirety meant that he and his wife were united in interest and that she was, therefore, a necessary party, and that Rule 19 required her to have been joined before trial:

Here, defendant and [Defendant’s wife] owned the real property as tenancy by the entirety.

When land is conveyed or devised to a husband and wife as such, they take the estate so conveyed or devised, as tenants by the entirety, and not as joint tenants, or tenants in common. This tenancy by the entirety takes its origin from the common law when husband and wife were regarded as one person, and a conveyance to them by name was a conveyance in law to but one person. The estate rests upon the doctrine of the unity of person, and upon the death of one the whole belongs to the other, not solely by right of survivorship, but also by virtue of the grant which vested the entire estate in each grantee. These two individuals, by virtue of their marital relationship, acquire the entire estate, and each is deemed to be seized of the whole, and not of a moiety or any undivided portion thereof.

[Citation omitted.]  [Defendant’s wife], as one of the owners of an undivided interest in the real property… has a “material interest[ ] in the subject matter of a controversy, and [her] interests will be directly affected by an adjudication of the controversy.” [Citation Omitted.] Therefore, we “vacate the verdict and judgment below and remand so that a new trial may be had upon joinder of all necessary parties.” [Citation Omitted.]

Lessons from this Case

This case shows the importance of naming all owners of real estate that is in dispute.  In particular, it demonstrates the need to name both husband and wife when the subject property is owned by them as tenancy by the entirety.  But in North Carolina, there is another important reason to join both spouses in almost all real estate litigation, even if only one of them is on the deed. Contact us if you would like to know more.

Link to the Court’s Opinion

If you would like to read the Court’s whole opinion, please click the Contact Us button below and send us a email. We will be happy to reply with the link to the Court’s official opinion.

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You may have a residential or commercial boundary dispute involving an individual owner or owners who are married.  de Ondarza Simmons, PLLC handles boundary disputes and real estate litigation in Raleigh and throughout North Carolina.  If we can be of help, please click the Contact Us button below, and call or send us an email.  We will be happy to set up an initial consultation to review your real estate dispute with you.

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