An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA24-937
Filed 6 August 2025
Brunswick County, No. 23 CVS 98
BALD HEAD ISLAND LIMITED, LLC and BALD HEAD ISLAND TRANSPORTATION, INC., Plaintiffs,
v.
VILLAGE OF BALD HEAD ISLAND, Defendant.
Appeal by Defendant from order entered 14 March 2024 by Judge Jason C.
Disbrow in Brunswick County Superior Court. Heard in the Court of Appeals 8 April
2025.
Fox Rothschild LLP, by Kip D. Nelson, M. Gray Styers, Jr., and Bradley M. Risinger, and Murchison, Taylor & Gibson PLLC, by Michael Murchison and Andrew K. McVey, for Plaintiffs-Appellees.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Andrew L. Rodenbough, Gary S. Parsons, and James C. Adams, II, for Defendant- Appellant.
GRIFFIN, Judge.
Defendant appeals from the trial court’s order granting Plaintiffs’ motion for
summary judgment on Plaintiffs’ claim for declaratory judgment seeking invalidation
of a Right of First Refusal (“ROFR”) to purchase infrastructure on Bald Head Island. BALD HEAD ISLAND LTD., LLC. V. VILL. OF BALD HEAD ISLAND
Opinion of the Court
Defendant argues the trial court erred by: (1) concluding the ROFR is unenforceable
because of the failure of a condition precedent; (2) concluding Defendant could not
enforce the ROFR because Plaintiffs provided notice to Defendant of their intent to
sell the assets as required by the ROFR; and (3) failing to hold Plaintiffs’ claim for
declaratory judgment was time-barred. We hold the trial court properly determined
the ROFR is void and unenforceable because of the failure of a condition precedent
and Plaintiffs’ claim was not time-barred. We do not reach the remaining issue
involving performance of the ROFR.
I. Factual and Procedural Background
Plaintiffs Bald Head Island Limited and its subsidiary, Bald Head Island
Transportation, are closely held corporations started by the late George Mitchell in
the 1980s. The corporations own and operate much of the infrastructure on Bald
Head Island. This includes the Ferry Operation and associated Parking Operation,
which provide the only means for large-scale public access to the island; the Tram
Operation to transport individual patrons around the island as it is mostly a vehicle-
free community; and the Barge Operation, which serves to transport goods to and
from the island (collectively “the assets”). Defendant Village of Bald Head Island is
the municipal corporation on the island.
In August 1999, the parties executed the ROFR to provide Defendant with an
opportunity to purchase the assets if Plaintiffs ever decided to sell them. Section 7 of
the ROFR states “This agreement shall become effective only upon approval by the
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North Carolina Utilities Commission.” Both parties concede neither sought Utilities
Commission approval of the ROFR, but both dispute who was responsible for
obtaining it.
After Mr. Mitchell’s passing in 2013, Plaintiffs began contemplating selling the
assets as part of administering Mr. Mitchell’s estate. In March 2017, the parties met
to discuss the transfer of the assets to a newly formed, multi-jurisdictional body, but
the deal fell through before the assets were transferred. Defendant recommitted
itself to purchasing the assets thereafter. On 13 January 2022, Defendant’s mayor
sent Plaintiffs a letter asserting its alleged rights under the ROFR. However, on 31
May 2022, Plaintiffs and SharpVue, a private equity firm in Raleigh, announced they
had executed an agreement to transfer the assets.
On 6 September 2022, Plaintiff Bald Head Island Limited delivered a copy of
the Asset Purchase Agreement between itself and SharpVue to Defendant in an
attempt to satisfy the notice requirement of the ROFR. The letter qualified the offer
with Plaintiffs’ position that the ROFR is void and unenforceable. Later that month,
Defendant requested additional information about the acquisition by SharpVue.
Specifically, Defendant requested SharpVue’s offer and appraisals, reports, and
studies on the assets and related properties contemplated by the Asset Purchase
Agreement. Plaintiffs refused to provide the additional information because of its
proprietary nature but did offer to allow Defendant access to the facilities for due
diligence and inspection purposes.
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However, while the acquisition was processing, the parties engaged in
tangential litigation surrounding the Utilities Commission’s jurisdiction over the
assets and their transfer. In February 2022, Defendant initiated an action before the
Utilities Commission in which Defendant “requested that the [Utilities] Commission
investigate and determine the public utility status of [Plaintiff Bald Head Island
Limited] and its Barge and Parking Operations.” State ex rel. Util. Comm’n v. Bald
Head Island Transp., Inc., 296 N.C. App. 199, 204, 908 S.E.2d 851, 855 (2024) (“Bald
Head I”). Defendant also requested the Utilities Commission order the Parking and
Barge Operations are subject to the Utilities Commission’s authority and regulations
as an essential component of the Ferry System and as a common carrier service,
respectively. Id. The Utilities Commission entered an order on 30 December 2022
“determining that [Plaintiff Bald Head Island Limited’s] Parking and Barge
Operations are subject to its regulatory authority and cannot be sold without prior
[Utilities Commission] approval.” Id. at 204–05, 908 S.E.2d at 856. We affirmed the
Utilities Commission’s order subjecting the Parking Operations to its jurisdiction and
authority but reversed the portion of the order including the Barge Operations as
well. Id. at 224–25, 908 S.E.2d at 867.
Contemporaneously with the proceedings in Bald Head I, SharpVue “filed an
application with the Utilities Commission seeking approval to purchase the Ferry
Operation.” In re Bald Head Island Transp., Inc., 296 N.C. App. 554, WL 4821602 at
*1 (2024) (“Bald Head II”). We dismissed Defendant’s contention that the Utilities
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Commission “inappropriately approved the sale of the Barge Operation[,]” because of
our previous decision in Bald Head I, but upheld the Utilities Commission’s order
approving the sale of the Ferry and Parking Operations by Plaintiffs to SharpVue.
Id. at **2–3.
On 19 January 2023, Plaintiffs initiated this action by filing a complaint in
Brunswick County Superior Court seeking declaratory judgment that the ROFR is
not effective and Defendant forfeited its rights under the ROFR. Plaintiffs also
sought to quiet title to the assets. On 21 March 2023, Defendant answered Plaintiffs’
complaint and asserted counterclaims for declaratory judgment that Plaintiffs failed
to fulfill their obligations under the ROFR. Three days later, Defendant filed a notice
of lis pendens for various real property holdings related to the assets. Plaintiffs later
amended their complaint to add additional claims for slander of title and tortious
interference with contract.
Following discovery, Defendant moved for summary judgment as to all claims
on 12 February 2024. Plaintiffs filed a cross-motion for partial summary judgment
as to their declaratory judgment and quiet title claims as well as to Defendant’s
counterclaim for declaratory judgment on 26 February 2024. Defendant then
supplemented its initial motion for summary judgment to include all pending claims.
After a hearing on the motions, the trial court granted Plaintiffs’ motion for summary
judgment on 14 March 2024, concluding the ROFR is void and unenforceable because
of the failure of the condition precedent contained in section 7 and that Plaintiffs
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afforded Defendant all of its rights under the ROFR but that Defendant failed to
exercise those rights. Plaintiffs then voluntarily dismissed their remaining claims
for slander of title and tortious interference with contract.
Defendant timely appeals from the trial court’s order.
II. Analysis
Defendant argues three different grounds for reversing the trial court’s order.
First, Defendant argues the trial court erred by concluding the ROFR is void and
unenforceable because of the failure to satisfy a condition precedent, that being to
obtain approval of the ROFR by the Utilities Commission. Next, Defendant contends
the trial court erred by concluding Defendant could not enforce the ROFR because
Plaintiffs afforded Defendant any rights it was entitled to under the ROFR. Finally,
Defendant alleges the trial court should have concluded Plaintiffs’ claim for
declaratory judgment was time-barred. Because we hold the trial court properly
determined the ROFR is void and unenforceable because of the failure to obtain the
Utilities Commission’s approval and because Plaintiffs’ claim was not time-barred,
we do not address Defendant’s argument about whether Plaintiffs’ afforded
Defendant an opportunity to exercise its alleged rights under the ROFR.
A. Standard of Review
We review a grant of summary judgment de novo. Forbis v. Neal, 361 N.C.
519, 524, 649 S.E.2d 382, 385 (2007) (citing Builders Mut. Ins. Co. v. North Main
Constr., Ltd., 361 N.C. 85, 88, 637 S.E.2d 528, 530 (2006)). Under de novo review, we
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freely substitute our judgment for that of the lower court and consider the matter
anew. Cullen v. Logan Dev., Inc., 386 N.C. 373, 377, 904 S.E.2d 730, 734 (2024).
Summary judgment is properly granted if “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show
there is no genuine issue as to any material fact and that any party is entitled to
judgment as a matter of law.” N.C. R. Civ. P. 56(c) (2023). An issue is genuine if
supported by substantial evidence and material “if the facts alleged would constitute
a legal defense, or would affect the result of the action, or if its resolution would
prevent the party against whom it is resolved from prevailing in the action.” James
H.Q. Davis Tr. v. JHD Props., LLC., 387 N.C. 19, 23, 910 S.E.2d 652, 657 (2025)
(citations and internal marks omitted). Evidence is substantial if it constitutes more
than a scintilla of evidence and “a reasonable mind might accept [it] as adequate to
support a conclusion[.]” DeWitt v. Eveready Battery Co., Inc., 355 N.C. 672, 681, 565
S.E.2d 140, 146 (2002) (citation and internal marks omitted). “The summary
judgment standard requires the trial court to construe evidence in the light most
favorable to the nonmoving party.” Draughon v. Evening Star Holiness Church of
Dunn, 374 N.C. 479, 482, 843 S.E.2d 72, 76 (2020). “All inferences of fact must be
drawn against the movant and in favor of the party opposing the motion.” Forbis v.
Neal, 316 N.C. 519, 524, 649 S.E.2d 382, 385 (2007) (citing Caldwell v. Deese, 288
N.C. 375, 378, 218 S.E.2d 379, 381 (1975) (cleaned up)).
Similarly, “whether the language of a contract is ambiguous is a question of
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law” we review de novo. Morrell v. Hardin Creek, Inc., 371 N.C. 672, 680, 821 S.E.2d
360, 366 (2018).
B. Section 7
Defendant contends the trial court erred by concluding the ROFR is void and
unenforceable because of Defendant’s failure to fulfill a condition precedent.
Specifically, Defendant alleges obtaining approval of the ROFR by the Utilities
Commission was not a condition precedent to the ROFR becoming effective. Rather,
Defendant argues it became effective immediately upon execution and recordation.
Moreover, Defendant argues Plaintiffs waived their argument to this effect and are
estopped from making it because they waited approximately twenty years to make
this contention. Additionally, Defendant also argues the Utilities Commission only
has the authority to authorize the transfer of the assets and cannot approve the
ROFR as a stand-alone contract. In contrast, Plaintiffs argue a plain text reading of
the ROFR requires Utilities Commission approval prior to the document becoming
effective. We address each of Defendant’s arguments about section 7 in turn and hold
the trial court did not err by granting summary judgment on this ground.
1. Condition Precedent
While “[t]he controlling purpose of the court in construing a contract is to
ascertain the intention of the parties as of the time the contract was made,”
Weyerhaeuser Co. v. Carolina Power & Light Co., 257 N.C. 717, 719, 127 S.E.2d 539,
541 (1962) (citation omitted), “[w]ritten contracts are to be construed and enforced
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according to their terms[,]” Galloway v. Snell, 384 N.C. 285, 287–88, 885 S.E.2d 834,
836 (2023) (citation modified). “When the terms of a contract are plain and
unambiguous, there is no room for construction. The contract is to be interpreted as
written and enforced as the parties have made it.” State v. Philip Morris USA Inc.,
363 N.C. 623, 632, 685 S.E.2d 85, 91 (2009) (citation modified). If “the contractual
language is plain and unambiguous, a contract is to be construed as a whole with
each clause and word being considered with reference to its other provisions[,]” Davis
v. Dennis Lilly Co., 330 N.C. 314, 319, 411 S.E.2d 133, 136 (1991), but we will not
construe a term to be a “‘condition precedent in the absence of language plainly
requiring such construction.’” Goforth Props., 334 N.C. at 375–76, 432 S.E.2d at 859
(quoting Harris & Harris Const. Co. v. Crain & Denbo, Inc., 256 N.C. 110, 118, 123
S.E.2d 590, 596 (1962)). “‘An ambiguity exists where, in the opinion of the court, the
language of the [contract] is fairly and reasonably susceptible to either of the
constructions asserted by the parties.’” St. Paul Fire & Marine Ins. Co. v. Freeman-
White Assocs., Inc., 322 N.C. 77, 83, 366 S.E.2d 480, 484 (1988) (quoting Maddox v.
Ins. Co., 303 N.C. 648, 650, 280 S.E.2d 907, 908 (1981)).
“A condition precedent is an event which must occur before a contractual right
arises, such as the right to immediate performance.” Foreclosure of Goforth Props.,
Inc. v. Birdsall, 334 N.C. 369, 375, 432 S.E.2d 855, 859 (1993) (citing Farmers Bank
v. Brown Distrib., 307 N.C. 342, 350, 298 S.E.2d 356, 362 (1983)). “Where parties
enter a contract containing a condition precedent, they are bound when the condition
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is satisfied.” Powell v. City of Newton, 364 N.C. 562, 566, 703 S.E.2d 723, 727 (2010)
(emphasis added). Our Supreme Court has held words like ‘when,’ ‘after,’ ‘as soon
as,’ ‘whether,’ and ‘if’ give “clear indication that a promise is not to be performed
except upon the happening of a stated event.” Farmers Bank, 307 N.C. at 351, 298
S.E.2d at 362 (citing Jones v. Palace Realty Co., 226 N.C. 303, 306, 37 S.E.2d 906, 908
(1946) (cleaned up)).
Defendant directs us to the “ROFR’s purpose, intent, scope, terms, and the
parties’ conduct” as evidence that the parties intended the ROFR become effective
immediately upon execution and recordation. However, as the plain language of the
ROFR is unambiguous by stating the contract is to become effective only upon
Utilities Commission approval, we will not look beyond its plain language. Here, the
ROFR provides in pertinent part:
THAT WHEREAS, [Defendant] was granted certain rights with regard to the Bald Head Island transportation system, herein after defined; and
WHEREAS, substantial questions exist with regard to rights and obligations of the parties hereto with regard to such transportation system; and
WHEREAS, rather than engaging in lengthy and costly litigation regarding those issues, the parties hereto desire to resolve all outstanding questions between them by the execution of this agreement;
...
1. That [Defendant] be and hereby is granted a Right of First Refusal, pursuant to the terms and conditions of this
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agreement, to purchase the Bald Head Island Transportation System or any portion thereof.
2. The purchase price to be paid by [Defendant] for the Transportation System and the terms of such purchase shall be equal to the price of the assets comprising the Transportation System and the terms of purchase as shall be contained in any bona fide offer from a third party dealing at arm’s length with [Plaintiffs] or any successor in title to [Plaintiffs].
3. [Plaintiff Transportation] agrees that it shall notify [Defendant] at such time as [Plaintiff Transportation] begins to contemplate the sale of the Transportation System or any portion thereof, other than such sales as shall be exempt from this Right of First Refusal pursuant to paragraph 1 hereof.
4. Upon receipt by [Plaintiffs] of any acceptable offer to purchase the Transportation System or any portion thereof, [Plaintiffs] shall notify [Defendant] of the existence of an offer acceptable to [them] for the sale of such asset or assets. Notice shall be delivered in writing to the Village Manager and shall include notice to [Defendant] of the existence of an offer to purchase the Transportation System or a portion thereof and shall identify the following:
(1) The asset or assets which are the subject of such offer;
(2) The identity of the individual or entity making such offer;
(3) The proposed purchase price and terms including any conditions on sale; and
(4) The proposed closing date.
Upon receipt of notice from [Plaintiffs] as to the existence
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of an offer acceptable to [Plaintiffs], [Defendant] shall have a period of sixty (60) days from the date of receipt of such notice to determine whether to match such offer. [Defendant] shall inform [Plaintiffs], in writing, of its decision within sixty (60) days of the receipt of notice. In the event that [Defendant] shall fail to respond in writing to [Plaintiffs] within sixty (60) days of the receipt of notice, such failure shall constitute a waiver of the Right of First Refusal herein contained by [Defendant]. If [Defendant] elects to exercise its option to match the offer, [Defendant] shall close upon the purchase of such assets within a period of time equal to one hundred eighty (180) days from the date that [Defendant] exercises its Right of First Refusal or the closing date as set forth in the proposed offer, whichever date shall be later.
[Defendant] may exercise its Right of First Refusal subject to approval by the Local Government Commission of any financing required to consummate the purchase of the Transportation System and further subject to any required to consummate the purchase of the Transportation System and further subject to any other governmental approvals that would be necessary for [Defendant] to purchase and operate the Transportation System and to finance the purchase price thereof.
5. With regard to the existence of real estate which shall be the subject of this Right of First Refusal, the parties agree to record the original of this Right of First Refusal or a memorandum thereof, together with a description of such real estate, in the office of the Register of Deeds for Brunswick County. In the event that [Plaintiff Transportation] desires to sell any real estate subject hereto, [Defendant] shall release such real estate from this Right of First Refusal upon (1) designation by [Plaintiffs] of a suitable substitute therefor and (2) upon determination by [Defendant] that the proposed substitute real estate is substantially equivalent or superior to the released property for the purposes for which the released property has been used in the Transportation System. The parties shall then execute such documents as shall release
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the original property from this Right of First Refusal and subject the substituted property thereto.
7. This agreement shall become effective only upon approval by the North Carolina Public Utilities Commission.
(Emphasis added). Section 7, as Plaintiffs contend, contains language to the effect
that the ROFR only becomes effective if the Utilities Commission approves the
agreement. The use of “only upon,” like the words if, after, whether, and as soon as,
indicate section 7 is a condition precedent, not to the transfer of the assets as required
by law, see N.C. Gen. Stat. § 62-111 (2023) (requiring Utilities Commission approval
prior to the transfer of certain public utilities), but to the ROFR becoming effective
and granting Defendant the contractual right it claims. Thus, Plaintiff did not have
an obligation to fulfill the terms of the ROFR and offer Defendant the assets until the
agreement was approved by the Utilities Commission. Goforth Props., 334 N.C. at
375, 432 S.E.2d at 859.
Moreover, despite Defendant’s contentions, we do not read any ambiguity into
the contract as a whole. Section 1 provides that Defendant “be and hereby is granted
a Right of First Refusal . . . to purchase the Bald Head Island Transportation System
or any portion thereof[]” in the present tense. However, this clause contains limiting
language referencing the additional terms and conditions of this agreement—one
such condition being the Utilities Commission’s approval of the agreement. In the
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same vein, Defendant contends language contained in the preamble also evidences
the parties’ intent for the ROFR to become immediately effective as “the parties could
not have intended to exchange ‘certain rights’ for conditional ones.” We agree the
parties intended to exchange rights through the ROFR, but the language of section 1
reflects they intended to do so only after fulfilment of the ROFR’s explicit terms,
including the unfulfilled term of obtaining the Utilities Commission’s approval of the
document.
The recordation of the ROFR does not persuade us either. The plain language
prefacing section 5 “[w]ith regard to the existence of real estate” lends itself to the
interpretation that recordation provided notice to other parties interested in
purchasing the real property or assets contemplated by the agreement. See Hill v.
Pinelawn Memorial Park, Inc., 304 N.C. 159, 163, 282 S.E.2d 779, 782 (1981) (stating
North Carolina’s recording statute partially “serves to provide constructive notice of
claims related to real property”). In fact, that is precisely what happened here.
SharpVue’s title insurer had notice of the filed document and refused to issue
insurance until its effect is determined. Defendant concedes recordation was done
“to give the public notice of the Village’s interest.” However, the ROFR, as stated
above, conditions vesting of Defendant’s interest upon Utilities Commission approval.
The effect of each act, recordation to provide notice and approval to vest interest, can
coexist without ambiguity if each are done.
Uncontroverted record evidence also supports the trial court concluding the
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Utilities Commission approval was a condition precedent to the ROFR’s effectiveness.
During the failed 2017 transaction, Defendant drafted and delivered to Plaintiffs a
“Termination of Right of First Refusal” to be held in escrow until the transaction was
finalized. The termination describes the ROFR and states “[Defendant] and
[Plaintiffs] entered into that [ROFR] . . . whereby [Plaintiffs] indicated a willingness
to grant a right of first refusal to [Defendant] with regard to the Bald Head Island
Transportation System [], subject to the express condition that prior approval of the
North Carolina Public Utilities Commission [] be obtained[.]” (Emphasis added).
Defendant’s mayor at the time signed and notarized the termination. While the
parties never executed the termination because the 2017 transfer fell through, the
release nonetheless evidences the parties’ intent that Utilities Commission approval
was an express condition precedent to Plaintiffs granting Defendant a right of first
refusal.
Supporting this assertion, Defendant’s current village manager, during his
deposition, affirmed his understanding that section 7’s approval requirement applied
to the entire ROFR—not just the subsequent transfer contemplated by the
agreement. If parties’ differing interpretations of a contract may serve as evidence of
ambiguity, then the parties’ agreement as to the interpretation of their contract
serves the opposite conclusion. See St. Paul, 322 N.C. at 83, 366 S.E.2d at 484 (“The
fact that a dispute has arisen as to the parties’ interpretation of the contract is some
indication that the language of the contract is, at best, ambiguous.”). Similarly,
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Plaintiffs’ counsel at the time the ROFR was drafted, submitted an affidavit stating
“[t]he clear intent of [s]ection 7 was that the ROFR would not become effective until
Utilities Commission approval of the ROFR was obtained.” In contrast, Defendant’s
attorney at the time the ROFR was drafted stated nothing to the contrary in his
affidavit.
Defendant fails to direct us, and the record fails to show, evidence to the
contrary. In totality, the plain language of section 7 states Utilities Commission
approval is a necessary condition precedent to the ROFR becoming effective and
binding. Unless and until the ROFR became effective, Defendant did not have the
rights contemplated by the ROFR nor did Plaintiffs have the corresponding
obligations.
2. Utilities Commission Jurisdiction
Nonetheless, Defendant argues the Utilities Commission does not have the
authority to approve a stand-alone right of first refusal like that contained in the
ROFR, which Defendant contends is evidence of the parties’ intent for the ROFR to
become effective immediately upon execution and recordation. Specifically,
Defendant argues section 7 “simply recognizes the regulatory requirements
applicable to any actual sale of the Transportation System.”
The General Assembly authorizes the Utilities Commission “to supervise and
control the public utilities of the State as may be necessary to carry out the laws for
providing for their regulation, and all such other powers and duties as may be
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necessary or incident to the proper discharge of its duties.” N.C. Gen. Stat. § 62-30
(2023). In executing this authority, the Utilities Commission is empowered to
conduct hearings, engage in formal investigations, make decisions, and issue orders.
N.C. Gen. Stat. § 62-60 (2023). When doing so, the Utilities Commission “shall be
deemed to exercise functions judicial in nature and shall have all the powers and
jurisdiction of a court of general jurisdiction as to all subjects over which the
Commission has . . . jurisdiction by law.” Id.
In an earlier stage of the parties’ litigation over the transfer of the assets, we
held the legislature has empowered the Utilities Commission to “declare rights,
status, and other legal relations as to subjects over which it had been given
jurisdiction by law.” Bald Head I, 296 N.C. App. 199, 209, 908 S.E.2d 851, 858 (2024)
(citations and internal marks omitted). There, Defendant petitioned the Utilities
Commission for a determination that the assets Plaintiffs sought to sell were public
utilities and that the transfer of the assets to SharpVue would be subject to Utilities
Commission’s approval. Id. at 203–05, 908 S.E.2d at 855–56. We held the language
of section 62-73, which provides the mechanism through which a party may invoke
the Utilities Commission’s jurisdiction, when read in tandem with the Declaratory
Judgment Act, provided the Utilities Commission with jurisdiction to order
declaratory judgment, determining whether certain aspects of the sale at issue were
public utilities subject to the Utilities Commission oversight. Id. This holding is
persuasive here.
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Under the Declaratory Judgment Act, courts, and the Utilities Commission per
section 62-60, have broad power to “determine[] any question of construction or
validity arising under the instrument, statute, ordinance, contract, or franchise, and
obtain a declaration of rights, status, or other legal relations thereunder.” N.C. Gen.
Stat. § 1-254 (2023) (emphasis added). Stated differently, a court may determine the
validity of a contract and obtain a declaration of the parties’ rights under a contract
between two parties. Id. ‘“The purpose of the Declaratory Judgment Act is to settle
and afford relief from uncertainty concerning rights, status and other legal
relations[.]”’ Bald Head I, 296 N.C. App. at 209, 908 S.E.2d at 859 (quoting N.C.
Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 447, 206 S.E.2d 178, 186
(1974)). “Although it is not necessary for one party to have an actual right of action
against another for an actual controversy to exist which would support declaratory
relief, it is necessary that litigation appears to be unavoidable.” Id. (quoting N.C.
Consumers Power, Inc., 285 N.C. at 446, 206 S.E.2d at 189 (internal marks removed)).
The ROFR, by its own terms, stated “substantial questions exist with regard to rights
and obligations of the parties hereto with regard to such transportation system” and
sought to avoid “lengthy and costly litigation regarding those issues[.]”
Simply put, either party filing for declaratory judgment before the Utilities
Commission seeking approval of the ROFR would have been proper in light of the
Utilities Commission’s authorization to regulate the transfer of public utilities. See
N.C. Gen. Stat. § 62-111(a) (requiring the Utilities Commission’s approval to transfer
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public utilities). Moreover, doing so would be consistent both with the Utilities
Commission’s authority to act as a court and assess the validity of a contract under
section 1-254 and its authority to approve the transfer of public utilities. The record
contains an example of a similar contract the Utilities Commission approved. In
2001, Defendant and the company Bald Head Island Utilities executed a proposed
Memorandum of Understanding and a related proposed Use Agreement. The parties
filed these documents seeking, and later obtaining, the Utilities Commission’s
approval. While the Utilities Commission did invoke its authority under section 62-
153(a) with respect to the proposed Use Agreement, it simply stated the proposed
Memorandum of Understanding “is deemed to be just and reasonable and in the
public interest.” Regardless, both documents were proposed contracts concerning
assets within the Utilities Commissions jurisdiction—not fully executed contracts
imminently attempting to transfer assets upon approval. Plaintiff or Defendant could
have done the same here.
In essence, this would have fulfilled section 7’s requirement and consequently
made the ROFR effective. Regardless, we interpret the ROFR to require Defendant
seek approval as the benefits of the agreement run to it. To this end, we do not believe
Plaintiffs would have intended to create an additional procedural hurdle when they
are not the parties receiving the primary benefit contemplated by the agreement.
But, the issue of which party was obliged to seek the Utilities Commission’s approval
is inconsequential now. The parties do not dispute that approval was never obtained.
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Because of that fact, we hold the ROFR is void and unenforceable due to the failure
of a condition precedent.
3. Waiver
Defendant also argues Plaintiffs waived their right to contend the ROFR is
void and unenforceable because they did not seek the Utilities Commission’s
approval. Specifically, Defendant contends Plaintiffs should have sought approval
because they were the ones subject to the Utilities Commission’s jurisdiction.
Waiving of a contractual right has three requirements: “‘(1) the existence, at
the time of the alleged waiver, of a right, advantage, or benefit; (2) the knowledge,
actual or constructive, of the existence thereof; and (3) an intention to relinquish such
right, advantage or benefit.’” Demeritt v. Springsteed, 204 N.C. App. 325, 328–29,
693 S.E.2d 719, 721 (2010) (quoting Fetner v. Granite Works, 251 N.C. 296, 302, 111
S.E.2d 324, 328 (1959)). “The intention to waive may be expressed or implied from
acts or conduct that naturally lead the other party to believe that the right has been
intentionally given up.” Id. at 329, 693 S.E.2d at 721 (citation and internal marks
omitted).
Here, construing the evidence in the light most favorable to Defendant, there
was not a right, advantage, or benefit that accrued to Plaintiffs. The ROFR, by its
own terms, was intended to grant Defendant the right of first refusal to purchase the
assets after Utilities Commission approval. If Plaintiffs incurred anything under the
ROFR, it was the additional obligation to provide Defendant notice and the
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opportunity to match an offer for the assets after the agreement was approved. As
such, we do not conclude Plaintiffs waived their argument that the ROFR was void
and unenforceable.
C. Statute of Limitations
Defendant also contends Plaintiffs’ action is time-barred under the applicable
statute of limitations. Specifically, Defendant argues section 1-53(1)’s two-year limit
applies while Plaintiffs contend section 1-47(2)’s ten-year limit applies.
“‘[A] party must initiate an action within a certain statutorily prescribed period
after discovering its injury to avoid dismissal of a claim[.]’” Chisum v. Campagna,
376 N.C. 680, 716–17, 855 S.E.2d 173, 198 (2021) (quoting Christenbury Eye Ctr.,
P.A., 370 N.C. 1, 5, 802 S.E.2d 888, 891 (2017)). “[D]eclaratory judgment actions are
subject to the applicable statute of limitations, which is the one that governs the
substantive right that is most closely associated with the declaration that is being
sought.” Id. at 719, 855 S.E.2d at 199–200. The statute of limitations barring a claim
“‘should not begin running against a plaintiff until the plaintiff has knowledge that a
wrong has been inflicted upon him[,]’” Chisum v. Campagna, 376 N.C. 680, 701, 855
S.E.2d 173, 188 (2021) (quoting Black v. Littlejohn, 312 N.C. 626, 639, 325 S.E.2d
469, 478 (1985)), but, “‘as soon as an injury becomes apparent to the claimant or
should reasonably become apparent, the cause of action is complete and the limitation
period begins to run[,]’” Id. (quoting Pembee Mfg. Corp. v. Cape Fear Constr. Co., Inc.,
313 N.C. 488, 493, 329 S.E.2d 350, 352 (1985)); see Christenbury Eye Center, P.A. v.
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Medflow, Inc., 370 N.C. 1, 2, 802 S.E.2d 888, 889 (2017) (“North Carolina law has
long recognized the principle that a party must timely bring an action upon discovery
of an injury to avoid dismissal of the claim.”). Courts may issue declaratory judgment
construing a contract “either before or after there has been a breach thereof.” N.C.
Gen. Stat. § 1-254.
Section 1-53(1) states “[a]n action against a local unit of government upon a
contract, obligation, or liability arising out of a contract, express or implied” must be
brought within two years. N.C. Gen. Stat. 1-53(1) (2023). However, the statute
continues on to limit its applicability where “a different statute of limitation is
prescribed by this Article.” Id. Section 1-47(2), on the other hand, states an action
must be brought within ten years if “[u]pon a sealed instrument or an instrument of
conveyance of an interest in real property, against the principal thereto.” N.C. Gen.
Stat. § 1-47(2) (2023).
Here, whether section 1-53(1)’s two-year or section 1-47(s)’s ten-year limitation
applies is irrelevant because an injury to either party could not have occurred until
SharpVue made an offer to Plaintiffs, thus placing the ROFR’s validity in question.
While Defendant has consistently maintained the same position on the ROFR’s
effectiveness since 2017, differing interpretations of a contract do not necessarily
represent the requisite notice or injury North Carolina courts require to cause a
statute of limitations to begin running. Rather, the injury to Plaintiffs here causing
the statute of limitations to begin accruing would be Defendant’s assertion of their
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alleged rights contained in the ROFR upon SharpVue’s offer to Plaintiff in 2022.
In fact, undisputed record evidence shows Defendant’s mayor sent a letter to
this effect upon learning of Plaintiffs’ intention to sell the assets to a private business
months before SharpVue and Plaintiffs entered into the Asset Purchase Agreement.
Prior to that point, any alleged injury would be speculative as no promise between
the parties was broken. See Christenbury, 370 N.C. at 6, 802 S.E.2d at 892 (“A cause
of action is complete and the statute of limitations begins to run upon the inception
of the loss from the contract, generally the date the promise is broken.”). As such, the
earliest any statute of limitations could begin running was 2022.
Thus, we hold the trial court correctly held Plaintiffs’ action for declaratory
judgment was not time-barred because the parties’ differing interpretations did not
constitute the injury, or notice thereof, necessary to trigger the statute of limitations.
Accordingly, we affirm the trial court’s grant of summary judgment.
III. Conclusion
For the aforementioned reasons, we hold the trial court did not err by granting
Plaintiffs’ claim for declaratory judgment that the ROFR is void and unenforceable
because of the failure of a condition precedent to its validity and Plaintiffs’ claim was
not time-barred.
AFFIRMED.
Judges ZACHARY and FLOOD concur.
Report per Rule 30(e).
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