1. Appeal and Error--appealability--interlocutory order--certification
Although plaintiff's appeal from the grant of summary judgment in favor of defendants is
an appeal from an interlocutory order since it does not dispose of the entire case and leaves
defendants' counterclaims intact, the order is immediately appealable because: (1) the order from
which plaintiff appeals is final as to plaintiff's claims since the court entered summary judgment
in favor of defendants and dismissed plaintiff's complaint with prejudice; and (2) the trial court
certified that there was no reason to delay plaintiff's appeal.
2. Construction Claims--invalid general contractor's license--estoppel
The trial court did not err in an action to recover on a construction contract by entering
summary judgment in favor of defendant homeowners, because: (1) plaintiff contractor is barred
from recovering on the construction contract entered into by the parties based on the fact that
plaintiff did not have a valid general contractor's license at the time the contract was formed; (2)
an unlicensed contractor may not circumvent this rule by including a condition precedent that the
contract will become effective after the contractor obtains a valid license; and (3) the doctrine of
estoppel is unavailable to plaintiff when nothing in the licensing statute authorizes a person with
whom an unlicensed contractor deals to waive the requirements of the statute or grants the
unlicensed contractor immunity merely based on the fact that he advises one of his customers
that he is acting in violation of the statute.
Bain & McRae, by Edgar R. Bain and Alton D. Bain, for
plaintiff-appellant.
Akins, Hunt & Fearon, P.C., by Donald G. Hunt, Jr. and Belinda
Keller Sukeena, for defendant-appellees.
HUNTER, Judge.
Currin & Currin Construction, Inc. (“plaintiff”) appeals from
summary judgment entered in favor of James Eric Lingerfelt
(“defendant James”) and Jana Carole Lingerfelt (collectively
“defendants”). We affirm since plaintiff is barred from recoveringon the construction contract entered into by the parties because
plaintiff did not have a valid general contractor's license at the
time the contract was formed.
In May of 1999, Durane Currin (“Currin”), President of
plaintiff, orally agreed that plaintiff would construct a house for
defendants on a “cost plus” basis. In a letter dated 5 May 1999,
Currin wrote to BB&T Mortgage Loan Department and acknowledged
plaintiff's agreement to build a house, estimated to cost
approximately $380,000.00, for defendants. Subsequently, when
defendant James went to the Wake County Planning Office to secure
a building permit, defendant James discovered that plaintiff's
general contractor's license had not been renewed. Defendant James
immediately informed Currin that plaintiff's license had not been
renewed. Currin advised defendant James that there was a mistake
and that the license was in the process of being renewed.
According to Currin, “[t]he Defendants agreed that the Plaintiff
would perform the work on the contract as soon as [plaintiff's]
license was renewed and the construction permit was issued.”
Plaintiff's license became invalid on 1 March 1999 but was renewed
and reactivated on 30 June 1999.
Plaintiff began construction on defendants' house on 1 August
1999, after obtaining a valid license. Plaintiff continued
construction on the house until 20 July 2000, at which time
defendants had no funds with which to pay plaintiff for
construction and the financial institution providing construction
loans refused to advance further monies. At the time plaintiff
ceased construction on the house, defendants owed plaintiff$42,057.81. Thereafter, on 19 September 2000, plaintiff filed a
claim of lien against defendants' property in the amount of
$42,057.81. Plaintiff then brought suit on 21 December 2001
against defendants to collect the amount of the lien. Defendants
filed an answer and counterclaims. Included in defendants'
affirmative defenses was that plaintiff was not licensed pursuant
to N.C. Gen. Stat. § 87-10 (2001) when the parties negotiated and
formed their contract. Plaintiff replied to defendants'
affirmative defenses and counterclaims on 12 March 2002. On 4
March 2002, defendants filed a motion for summary judgment which
was granted by the trial court on 4 June 2002. Plaintiff appeals.
[1] As a threshold matter, we note that the order from which
plaintiff appeals is interlocutory since it does not dispose of the
entire case. See Carriker v. Carriker, 350 N.C. 71, 511 S.E.2d 2
(1999). The trial court granted defendants' motion for summary
judgment but left defendants' counterclaims intact. Generally,
there is no right of immediate appeal from an interlocutory order.
Myers v. Mutton, 155 N.C. App. 213, 215, 574 S.E.2d 73, 75 (2002),
disc. review denied, 357 N.C. 63, 579 S.E.2d 390 (2003). However,
an interlocutory order
is immediately appealable if (1) the order is
final as to some claims or parties, and the
trial court certifies pursuant to N.C.G.S. §
1A-1, Rule 54(b) that there is no just reason
to delay the appeal, or (2) the order deprives
the appellant of a substantial right that
would be lost unless immediately reviewed.
Id. The interlocutory order at issue in the instant case is
immediately appealable due to the following: (1) the order from
which plaintiff appeals is final as to plaintiff's claims since thecourt entered summary judgment in favor of defendants and dismissed
plaintiff's complaint with prejudice; and (2) the trial court
certified that there is no reason to delay plaintiff's appeal.
Accordingly, this case is properly before us to review.
[2] Plaintiff initially contends the trial court erred in
granting defendants' motion for summary judgment because plaintiff
asserts there were genuine issues of material fact as to when the
parties entered into an effective contractual relationship and
whether plaintiff was a licensed contractor at the time the
contract was formed. We disagree.
Summary judgment is appropriate only “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c)
(2001). When ruling on a summary judgment motion, the trial court
is required to view the evidence in a light most favorable to the
nonmoving party. Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d
704, 707 (2001). The moving party bears the burden of
demonstrating that there is no triable issue. DeWitt v. Eveready
Battery Co., 355 N.C. 672, 681, 565 S.E.2d 140, 146 (2002). This
burden may be met “by proving an essential element of the opposing
party's claim does not exist, cannot be proven at trial, or would
be barred by an affirmative defense . . . .” Dobson v. Harris, 352
N.C. 77, 83, 530 S.E.2d 829, 835 (2000) (emphasis added). If the
moving party satisfies this burden, then the burden shifts to the
non-moving party “to produce a forecast of evidence demonstratingthat the [nonmoving party] will be able to make out at least a
prima facie case at trial.” Collingwood v. G.E. Real Estate
Equities, 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989).
Our General Assembly has enacted mandatory directives
applicable to general contractors that are designed “to protect the
public from incompetent builders.” Builders Supply v. Midyette,
274 N.C. 264, 270, 162 S.E.2d 507, 511 (1968). A “general
contractor” is statutorily defined, in pertinent part, as “any
person or firm or corporation who for a fixed price, commission,
fee, or wage, undertakes . . . to construct . . . any building
. . . where the cost of the undertaking is thirty thousand dollars
($30,000) or more . . . .” N.C. Gen. Stat. § 87-1 (2001). A
general contractor's certificate of license expires on the thirty-
first day of December following its issuance or renewal and becomes
invalid sixty days from that date unless renewed. N.C. Gen. Stat.
§ 87-10(e).
In the case sub judice, the evidence submitted to the trial
court showed that plaintiff's general contractor's license became
invalid on 1 March 1999 but was renewed and reactivated on 30 June
1999. Plaintiff entered into a contract in May of 1999, whereby
plaintiff agreed to construct a house for defendants on a cost plus
basis. Currin testified in an affidavit that after learning that
plaintiff's general contractor's license had not been renewed,
“[t]he Defendants agreed that the Plaintiff would perform the work
on the contract as soon as [plaintiff's] license was renewed and
the construction permit was issued.” Brady v. Fulghum, 309 N.C. 580, 308 S.E.2d 327 (1983) controls
this case. In Brady, our Supreme Court expressly rejected the
doctrine of “substantial compliance” with the general contractor's
licensing statute and adopted the bright line “rule that a contract
illegally entered into by an unlicensed general construction
contractor is unenforceable by the contractor.” Id. at 586, 308
S.E.2d at 331. The Brady Court further held that the contract
“cannot be validated by the contractor's subsequent procurement of
a license.” Id.
In this case, the parties entered into a construction contract
in May of 1999, at which time plaintiff's general contractor's
license was invalid. Plaintiff argues, however, that the parties'
later agreement that “the Plaintiff would perform the work on the
contract as soon as [plaintiff's] license was renewed and the
construction permit was issued[,]” was either a new contract or an
oral modification of the original contract, which included a
condition precedent that the contract was to become effective after
plaintiff's license was renewed. Assuming arguendo that the later
agreement was a new contract or modification of the original
contract, containing such condition precedent, under Brady, the
contract would still be unenforceable by plaintiff. The Brady
Court “agree[d] that the existence of a license at the time the
contract is signed is determinative and attach[ed] 'great weight to
the significant moment of the entrance of the parties into the
relationship.'” Id. (quoting Latipac, Inc. v. The Superior Court
of Marin County, 411 P.2d 564, 568 (Cal. 1966)). Therefore, an
unlicensed contractor may not circumvent Brady by including acondition precedent that the contract will become effective after
the contractor obtains a valid license. Thus, we must, in
following Brady, affirm the trial court's summary judgment entered
in favor of defendants. Defendants met their burden of proving
that plaintiff was barred from recovering on the construction
contract because plaintiff did not have a valid general
contractor's license at the time of the contract's inception.
Accordingly, defendants were entitled to a judgment as a matter of
law.
Plaintiff additionally argues that if this Court determines
Brady controls and, therefore, upholds the trial court's entry of
summary judgment in favor of defendants, the Brady rule should be
reexamined due to the harsh and inequitable results arising from
its application to the facts of this case. However, we are, of
course, bound by Brady regardless of its harsh results unless
either our Supreme Court or the General Assembly decides otherwise.
Plaintiff finally argues that defendants waived and are
estopped from asserting the defense of lack of a contractor's
license because defendants became aware that plaintiff was
unlicensed but nevertheless chose to continue to have plaintiff
perform construction on their home after plaintiff's license was
renewed.
Plaintiff has not cited, nor have we found, any North Carolina
cases in which our Courts have held that an owner may waive the
statutory licensing requirements. In fact, this Court has
previously stated: “'[N]othing in the licensing statute authorizes
a person with whom an unlicensed contractor deals to waive therequirements of the statute or grants the unlicensed contractor
immunity merely because he advises one of his customers that he is
acting in violation of the statute.'” Allan S. Meade & Assoc. v.
McGarry, 68 N.C. App. 467, 471, 315 S.E.2d 69, 71-72 (1984)
(quoting Construction Co. v. Anderson, 5 N.C. App. 12, 20, 168
S.E.2d 18, 23 (1969)). Therefore, the doctrine of estoppel is not
available to plaintiff.
Affirmed.
Chief Judge EAGLES and Judge CALABRIA concur.
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