N.C. Court Confirms Stormwater Runoff Across Property Lines Can Amount to Trespass

By Braden Rose and Andrew Atkins

The North Carolina Court of Appeals recently decided H/S New Bern, LLC v. First Berkshire Properties, LLC, which establishes important precedent regarding stormwater management obligations and trespass liability in construction and development contexts. The case arose when stormwater from the defendant’s retail property continued flowing into the plaintiff’s retention pond after the parties’ shared easement agreement expired. The court awarded the plaintiff nominal damages, despite the defendant admitting to trespass, and reversed part of the trial court’s order for injunctive relief against the defendant.

Clear Trespass Liability

The Court of Appeals affirmed that allowing stormwater runoff from one property to flow onto another property without authorization constitutes trespass, establishing clear liability for property owners who fail to properly manage their stormwater discharge. The decision establishes that property owners have an affirmative duty to control runoff within their boundaries once they lose contractual authorization to discharge onto adjacent properties. Importantly, the court classified stormwater intrusion as a "renewing trespass," rather than a continuing trespass, because the water at issue was not permanently diverted. Damages for such recurring trespasses are calculated not by the diminution in market value of a property, but instead by the diminished rental value of the occupied property or the reasonable cost of repair or restoration. Here, the plaintiff failed to present evidence of either damage to its occupied property or of an entitlement to punitive damages. The court, therefore, limited the plaintiff’s recovery to a nominal award of $1,000.

Specific Evidence Requirement

The Court of Appeals took issue with the trial court’s order for injunctive relief. While upholding certain provisions requiring the defendant to "build features on its property preventing its stormwater from escaping onto Plaintiff's property," the Court reversed the trial court's order to remove all impervious surfaces for lack of sufficient evidence that such repairs were necessary. This approach demonstrates that courts may approve specific, targeted remediation measures when supported by adequate evidence, as opposed to issuing a more general order to control runoff.

Key Takeaways for Property Owners

Relating to construction and development, property owners should proactively assess their stormwater discharge arrangements to ensure clear provisions regarding the parties’ obligations once the agreements terminate, and plan for independent stormwater management beforehand. When disputes arise, Owners should be aware of potential exposure for punitive damages relating to willful trespass. Parties seeking injunctive relief must develop evidence-based arguments supporting specific remediation measures rather than requesting general relief. The decision confirms that courts retain the authority to mandate prospective relief even when monetary damages are minimal, making proactive stormwater management essential for avoiding litigation and court-ordered remediation costs.

If you have any questions, please contact Braden Rose, Andrew Atkins or the Smith Anderson lawyer with whom you normally work.