Straight Edge Constr v D.W. Ward Constr, (04-1073) 08/02/2005

Appeal by defendant/third-party plaintiff from judgment entered 17 May 2004 by Judge Evelyn W. Hill in Wake County Superior Court. Heard in the Court of Appeals 24 March 2005.

Pulley, Watson, King & Lischer, PA, by James A. Clark, for defendant/third-party plaintiff-appellant.

Harley & Bey-Christopher, PLLC, by Sharon Bey-Christopher, for Diversified Mechanical Limited, Inc., third-party defendant- appellee.

    CALABRIA, Judge.

    D.W. Ward Construction Company, Inc., (“plaintiff”) appeals an order dismissing, pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (2003), its claims for recovery for repairs made to a State of North Carolina construction project by its subcontractor, Straight Edge Construction, Inc. (“Straight Edge”), following alleged damageby Diversified Mechanical Limited, Inc. (“defendant”).   (See footnote 1) We reverse.
    Both plaintiff and defendant were prime contractors selected by the State of North Carolina for the Summerset Cottage construction project at Murdock Center in Butner, North Carolina. Plaintiff's third-party complaint alleges that, in the course of performing its construction contract, defendant's agents or employees caused certain damage to the project's wall and trim surfaces. The State instructed plaintiff to repair the damage. Plaintiff hired a subcontractor, Straight Edge Construction, Inc. (“Straight Edge”) to perform the repairs. Straight Edge repaired the damage and invoiced plaintiff. Plaintiff in turn made efforts to secure payment from defendant for the repairs, alleging defendant caused the damage. However, defendant denied responsibility for the repairs. Plaintiff subsequently failed to pay Straight Edge, and Straight Edge brought the underlying suit for breach of contract. Plaintiff filed a third-party complaint against defendant claiming negligence in the performance of its contract and, in the alternative, unjust enrichment.
    At the hearing on defendant's motion to dismiss, defendant presented a copy of the contract between it and the State to the trial court. Neither party had attached a copy of the contract to its pleadings as an exhibit. After reviewing the contract, whichwas not included in the record on appeal,   (See footnote 2) the trial court granted defendant's motion to dismiss for failure to state a claim based on the following findings of fact:
        (2) That pursuant to Article 15, paragraph (c) of the Contract, the project designer received notice of purported defects in work performed by [defendant], but [plaintiff's] commencement of work through another contractor other than [defendant] under such conditions constituted acceptance of [defendant's] work as being satisfactory in all respects as to any then existing defects.
        (3) That the Contract specifies that the project designer “shall” settle all disputes between contractors, and to the extent the project designer of the Summerset Cottage project did not resolve the dispute between [plaintiff] and [defendant] according to the Contract, [plaintiff's] sole method of resolution is against the designer rather than [defendant].

From this judgment, plaintiff appeals.
    “A motion to dismiss under Rule 12(b)(6) . . . tests the legal sufficiency of a complaint.” Cline v. Teich, 92 N.C. App. 257, 259, 374 S.E.2d 462, 463 (1988). “In reviewing a Rule 12(b)(6) motion, a court must determine 'whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory, whether properly labeled or not.'” Cline v. McCullen, 148 N.C. App. 147, 149, 557 S.E.2d 588, 590 (2001) (citation omitted). “The only times, then, when dismissal is proper are: (1) when the complaint on its face reveals that no law supports plaintiff'sclaim; (2) when the complaint reveals on its face that some fact essential to plaintiff's claim is missing; and (3) when some fact disclosed in the complaint defeats the plaintiff's claim.” Schloss Outdoor Advertising Co. v. Charlotte, 50 N.C. App. 150, 152, 272 S.E.2d 920, 922 (1980). “A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that plaintiff could prove no set of facts in support of his claim which would entitle him to relief.” Leonard v. Pugh, 86 N.C. App. 207, 209, 356 S.E.2d 812, 814 (1987). Additionally, we note a trial court's findings of fact on a motion to dismiss for failure to state a claim under Rule 12(b)(6) are not binding on appeal. White v. White, 296 N.C. 661, 667, 252 S.E.2d 698, 702 (1979).
    Plaintiff asserts that, although improperly labeled, his claim for negligence in defendant's performance of its contract states a claim for relief under N.C. Gen. Stat. § 143-128 (2003). Under N.C. Gen. Stat. § 143-128(b), when performing a project under a contract with a government entity in this state,
        [e]ach separate contractor shall be directly liable to the State of North Carolina, or to the county, municipality, or other public body and to the other separate contractors for the full performance of all duties and obligations due respectively under the terms of the separate contracts and in accordance with the plans and specifications, which shall specifically set forth the duties and obligations of each separate contractor.
This Court has “interpret[ed] [N.C. Gen. Stat.] § 148-128 to mean that a prime contractor may be sued by another prime contractor working on a construction project for economic loss foreseeably resulting from the first prime contractor's failure to fullyperform “all duties and obligations due respectively under the terms of the separate contracts.” Bolton Corp. v. T. A. Loving Co., 94 N.C. App. 392, 397, 380 S.E.2d 796, 800 (1989).
    In pertinent part, plaintiff's complaint alleges: (1) under defendant's contract with the State, it had a duty to not damage the project; (2) during the performance of defendant's contract, defendant's employees or agents breached its duty by damaging certain parts of the project; (3) the State required plaintiff to repair the damages to its economic detriment; and (4) defendant was liable for plaintiff's foreseeable economic loss. Accordingly, on its face the complaint alleges sufficient facts to support a legal claim under N.C. Gen. Stat. § 148-128.
    For the foregoing reasons, we hold the trial court erred in dismissing plaintiff's claim under Rule 12(b)(6). Having so held, we need not address plaintiff's remaining assignments of error. We reverse the trial court's order and remand for further proceedings consistent with this opinion.
    Reversed and remanded.
    Judges TIMMONS-GOODSON and GEER concur.
    Report per Rule 30(e).

Footnote: 1