Bald Head Island Ltd., LLC v. Vill. of Bald Head Island

Opinions

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.

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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