CB&I CONSTRUCTORS, INC.,
Plaintiff
v
.
TOWN OF WAKE FOREST, NORTH CAROLINA; and LANDMARK STRUCTURES I,
L.P.,
Defendants
Ogletree, Deakins, Nash, Smoak & Stewart, P.C., by Kimila L.
Wooten, and Keith E. Coltrain, for plaintiff-appellee, CB&I
Constructors, Inc.
Wyrick Robbins Yates & Ponton, L.L.P., by Benjamin N.
Thompson, Lee M. Whitman, and Jennifer M. Miller, for
defendant-appellee, Town of Wake Forest, North Carolina.
Lewis & Roberts, P.L.L.C., by A. Graham Shirley and James A.
Roberts, III, for defendant-appellant, Landmark Structures I,
L.P.
CALABRIA, Judge.
This appeal arises from a Wake County Superior Court order
issuing preliminary and permanent injunctive relief concerning the
award of the construction of an elevated water tank needed to
alleviate concerns associated with the sufficiency of the current
water supply in the Town of Wake Forest (“Wake Forest”). After
Wake Forest selected a site for the future water tank, a subsurface
investigation evaluated site grading and foundation support
considerations. The resulting report (“Geotech report”) analyzed
two commonly utilized foundations, shallow spread footingfoundations and pile foundations, as well as the amount of
settlement that could be expected from each foundation. The pile
foundation, although more costly than the shallow spread footing
foundation, benefits from lower differential settlement.
Thereafter, Wake Forest employed the engineering consulting firm of
Hazen and Sawyer to prepare an invitation for bids (“IFB”) for the
construction of the future water tower.
Wake Forest issued the IFB in January of 2002. The IFB set
forth mandatory specifications for the design of the water tank,
its components, and its foundation. It also included illustrative
drawings and the Geotech report as an attachment. Any party
submitting a bid was required to design and submit a foundation as
shown in the drawings and compliant with the mandatory
specifications contained in the IFB.
CB&I Constructors, Inc. (“CB&I”) and Landmark Structures I,
L.P. (“Landmark”) are businesses engaged in the commercial
construction of water tanks who both submitted bids in response to
the IFB. Landmark interpreted the IFB to allow a manufacturer to
design and submit a shallow spread footing foundation, while CB&I
interpreted the IFB to require a pile foundation. When the bids
were opened, Landmark had submitted the lowest bid.
Instead of awarding the contract to Landmark as the lowest
responsive bidder, Wake Forest contacted Landmark with several
concerns. These concerns included the differential settlement that
could be expected if a shallow spread footing foundation, as
proposed in their bid, was utilized as well as whether the bidcomplied with the foundation required by the specifications in the
IFB. Thereafter, Landmark agreed to provide a pile foundation for
the same price as the price stated in their bid, and Wake Forest
voted to award the contract to Landmark.
CB&I initiated this action against Wake Forest on 31 May 2002
alleging Wake Forest improperly awarded the construction contract
of the proposed water tank to Landmark. CB&I contended the bid
submitted by Landmark to Wake Forest was not responsive to the
mandatory foundation specifications in the IFB, that Wake Forest
engaged in inappropriate post-bid negotiations with Landmark, and
that CB&I should be awarded the construction contract as the lowest
responsible, responsive bidder on the project pursuant to N.C. Gen.
Stat. §§ 143-128, -129. CB&I sought a declaratory judgment and
injunctive relief, or, in the alternative, monetary damages.
On 6 June 2002, Judge Ripley Rand entered a temporary
restraining order prohibiting Wake Forest from executing a contract
with Landmark or any other contractor other than CB&I for the water
tank construction project. The trial court also set a hearing on
a preliminary injunction for 14 June 2002, the same day as the
expiration of the temporary restraining order. On 14 June 2002,
with the consent of all parties, the trial court joined Landmark as
a necessary party. After the hearing, the trial court granted both
preliminary and permanent injunctive relief “prohibiting the award
of the Project to any entity other than CB&I . . . [and] directing
[Wake Forest] to issue a notice of award for the Project to CB&I.
. . .” It was the express intention of the trial court to “disposeof all claims including [CB&I's] claim for a declaratory judgment”
which was made moot by the order. Landmark appeals.
Before we address Landmark's assignments of error, we must
determine whether the order of the trial court is properly
presented to this Court. Because we find the trial court exceeded
its jurisdiction with respect to the permanent injunction and the
order was interlocutory with respect to the preliminary injunction,
we vacate in part and remand in part for further proceedings.
I. Permanent Injunction
“A permanent injunction is an extraordinary equitable remedy
and may only properly issue after a full consideration of the
merits of a case.” Shishko v. Whitley, 64 N.C. App. 668, 671, 308
S.E.2d 448, 450 (1983). “A judge conducting a hearing to determine
whether a temporary restraining order should be continued as a
preliminary injunction . . . has no jurisdiction to determine a
controversy on its merits.” Everette v. Taylor, 77 N.C. App. 442,
444, 335 S.E.2d 212, 214 (1985) (holding “it was error for the
court to issue a permanent injunction at a hearing to show cause
why a temporary restraining order should not be continued [via a
preliminary injunction]”). “[Where] the judgment entered [is]
beyond the jurisdiction of the judge . . ., such jurisdiction
[cannot] be conferred by agreement, and objection to the
jurisdiction may be made at any stage of a proceeding, even in the
Supreme Court[.]” MacRae & Co. v. Shew, 220 N.C. 516, 518, 17
S.E.2d 664, 665 (1941). On 14 June 2002, Judge Evelyn Hill conducted a hearing to
determine whether the temporary restraining order, granted
previously and set to expire on the day of the hearing, should be
continued as a preliminary injunction. However, at the conclusion
of the hearing, the trial court granted both a preliminary and a
permanent injunction, which, by intent and effect, determined the
controversy on its merits. The granting of the permanent
injunction exceeded the jurisdiction of the court. Accordingly,
that portion of the order granting the permanent injunction and
awarding affirmative injunctive relief is vacated.
II. Preliminary Injunction
Because the portion of the order granting a permanent
injunction has been vacated, the dispositive remaining question is
whether the remainder of the order granting a preliminary
injunction is interlocutory. “The purpose of a preliminary
injunction is ordinarily to preserve the status quo pending trial
on the merits.” State v. School, 299 N.C. 351, 357, 261 S.E.2d
908, 913 (1980). “Its impact is temporary and lasts no longer than
the pendency of the action. Its decree bears no precedent to guide
the final determination of the rights of the parties. In form,
purpose, and effect, it is purely interlocutory.” Id., 299 N.C. at
357-58, 261 S.E.2d at 913. “As a result, issuance of a preliminary
injunction cannot be appealed prior to final judgment absent a
showing that the appellant has been deprived of a substantial right
which will be lost should the order 'escape appellate review before
final judgment.'” Clark v. Craven Regional Medical Authority, 326N.C. 15, 23, 387 S.E.2d 168, 173 (1990) (quoting State v. School,
299 N.C. at 358, 261 S.E.2d at 913). The appellant has the burden
of showing that a substantial right would be prejudiced without
immediate review. Abe v. Westview Capital, 130 N.C. App. 332, 334,
502 S.E.2d 879, 881 (1998).
Landmark asserts a substantial right is implicated because if
the preliminary injunction is left in place, Wake Forest would
arguably be required to award the contract to CB&I. We disagree.
Paragraph 30 of the trial court's order reads as follows:
Based on these facts, the Court hereby issues
a preliminary and permanent injunction
prohibiting the award of the Project to any
entity other than CB&I. In addition, the
Court issues affirmative injunctive relief,
directing the Town to issue a notice of award
for the Project to CB&I within five (5) days
of the date of this Order.
As noted previously, because the affirmative injunctive relief and
the portion of the order purporting to be a permanent injunction
impermissibly decide the merits of the case, both exceed the
jurisdiction of the trial court and have been vacated. The
remaining, valid portion of paragraph 30 does not require Wake
Forest to award the contract to anyone; rather, it requires merely
that Wake Forest award the contract to no one other than CB&I.
Wake Forest has asserted Landmark's bid was responsive and Landmark
should be awarded the contract. The purpose of issuing the
temporary restraining order and preliminary injunction was to
prevent Wake Forest from acting on that assertion by awarding the
contract to Landmark. Accordingly, the preliminary injunction
maintains the status quo, and all parties remain free to fullylitigate the merits of the case in the correct procedural context
before the trial court to determine whether Landmark's bid was
responsive to the IFB. No substantial right has been shown to be
implicated; therefore, the order of the trial court issuing a
preliminary injunction is interlocutory, not appropriately before
this Court, and the appeal from the preliminary injunction is
dismissed.
In sum, the portion of the order effectively determining the
controversy on its merits, including the affirmative injunctive
relief and the permanent injunction, is vacated. The portion of
the order issuing a preliminary injunction is interlocutory. All
other claims presented by the parties await a final resolution on
the merits before the trial court. The appeal is dismissed in part
as interlocutory and remanded for further proceedings consistent
with this opinion.
Vacated in part, dismissed in part, and remanded in part.
Judges McCULLOUGH and TYSON concur.
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