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Appeal and Error_appealability_road construction_complaint verification_statute of
limitations_conditions precedent
An appeal was dismissed as interlocutory where plaintiff brought an unverified complaint
seeking additional compensation in a road construction contract, plaintiff's motion to amend its
complaint to add the verification was granted after the statute of limitations had run, with the
verification relating back to the date the complaint was filed, and DOT appealed from that order.
The General Assembly amended N.C.G.S. § 136-29 to delete the provision specifying that time
limits were conditions precedent, and thus expressed its intent that the time limits would cease to
be conditions precedent and would constitute statutes of limitation. Orders denying motions to
dismiss based upon the statute of limitations are interlocutory and not immediately appealable.
Vandeventer Black, LLP, by David P. Ferrell, Patrick A.
Genzler, and Norman W. Shearin, for plaintiff-appellee.
Attorney General Roy Cooper, by Special Deputy Attorney
General Fred Lamar and Assistant Attorney General Steven A.
Armstrong, for defendant-appellant.
GEER, Judge.
Defendant North Carolina Department of Transportation ("DOT")
appeals from the order of the trial court that allowed plaintiff
Nello L. Teer Company ("Teer") to amend its complaint to add a
verification and denied DOT's motion to dismiss. DOT argues that
it is entitled to bring this interlocutory appeal because the trial
court's ruling implicates its sovereign immunity. Even assuming,
without deciding, that a failure to comply with the statutory
requirements of N.C. Gen. Stat. § 136-29 (2005) violates theState's sovereign immunity, the effect of the General Assembly's
amendment to § 136-29 in 1987 was to make the time limitations in
that statute a statute of limitations and not a condition precedent
to suit. As such, any failure to comply with § 136-29's time
limits does not implicate the State's sovereign immunity, but
rather requires application of the law governing statutes of
limitations. Accordingly, we dismiss DOT's appeal.
Teer won a contract from DOT for the construction of certain
road improvements to Interstate 85 from the Orange County line east
to Cole Mill Road in Durham. The construction was complete on 6
June 1999, and DOT paid the final estimate for the work done on 17
May 2003. On 15 July 2003, Teer submitted a verified claim to DOT
seeking an adjustment to the final estimate and payment in
accordance with N.C. Gen. Stat. § 136-29(a). The State Highway
Administrator evaluated the claim and, in a letter dated 3 November
2003, denied Teer's claim for additional compensation.
On 11 December 2003, Teer filed an unverified complaint
against DOT for the additional compensation in Wake County Superior
Court. On 12 February 2004, DOT filed an answer that asserted a
defense of sovereign immunity generally, but did not specifically
address the failure of Teer to verify its complaint under N.C. Gen.
Stat. § 136-29(c). On 25 May 2004, after the time limitation in §
136-29(c) had run, DOT filed a motion to dismiss the complaint
based on Teer's failure to file a verification within the time
prescribed by the statute. In response, Teer filed a motion,pursuant to Rule 15 of the Rules of Civil Procedure, for leave to
amend its complaint to add a verification.
A hearing was held on the two motions before Judge Howard E.
Manning, Jr. on 11 August 2004. In his order entered 31 August
2004, Judge Manning denied DOT's motion to dismiss, granted Teer's
motion to amend its complaint, and ordered that the verification
relate back to the date the complaint was originally filed. DOT
filed a notice of appeal from the trial court's order on 16
September 2004. Teer has moved to dismiss that appeal as
interlocutory.
An interlocutory order is an order made during the pendency of
an action that does not dispose of the case, but rather requires
further action by the trial court to finally determine the rights
of all the parties involved in the controversy. Veazey v. City of
Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). Generally,
there is no right to appeal from an interlocutory order unless (1)
the trial court made the required certification under Rule 54 of
the Rules of Civil Procedure, or (2) the order affects a
substantial right that would be lost without immediate review.
Eckard v. Smith, 166 N.C. App. 312, 316, 603 S.E.2d 134, 137-38
(2004), aff'd per curiam, 360 N.C. 51, 619 S.E.2d 503 (2005).
DOT argues that the trial court's ruling on the two motions
affects DOT's sovereign immunity. Our appellate courts have
consistently recognized that "[w]here the appeal from an
interlocutory order raises issues of sovereign immunity . . . such
appeals affect a substantial right sufficient to warrant immediateappellate review." Peverall v. County of Alamance, 154 N.C. App.
426, 429, 573 S.E.2d 517, 519 (2002), disc. review denied, 356 N.C.
676, 577 S.E.2d 632 (2003). DOT contends, without citing any
authority, that its "appeal is squarely based upon the defense of
sovereign immunity. Allowing Teer to proceed with its suit without
compliance with N.C. Gen. Stat. § 136-29, which must be strictly
construed, violates NCDOT's sovereign immunity."
We do not find this assertion as obvious as DOT does. We note
that the State has waived its sovereign immunity with respect to
claims against DOT arising from construction contracts by enacting
N.C. Gen. Stat. § 136-29. We also acknowledge that because "acts
permitting suit are in derogation of the sovereign right of
immunity, . . . they should be strictly construed." Floyd v. N.C.
State Highway & Pub. Works Comm'n, 241 N.C. 461, 464, 85 S.E.2d
703, 705 (1955).
Nonetheless, it does not necessarily follow that, once an act
permits suit, any failure to comply with that statute gives rise to
a defense of sovereign immunity as opposed to simply no recovery or
other defenses, such as a lack of subject matter jurisdiction, a
failure to exhaust administrative remedies, or a violation of the
statute of limitations. See, e.g., Middlesex Constr. Corp. v.
State, 307 N.C. 569, 575, 299 S.E.2d 640, 644 (1983) (holding that
when the plaintiff failed to comply with N.C. Gen. Stat. § 143-
135.3 (Supp. 1981), the trial court should have dismissed the case
"for lack of jurisdiction"). At the very least, DOT's proposition
_ fundamental to its right to bring this interlocutory appeal _requires citation of authority. We need not, however, resolve this
question since even if we assume, without deciding, that DOT has a
right to appeal, its argument regarding the trial court's subject
matter jurisdiction _ the lynchpin for its invocation of sovereign
immunity _ fails.
DOT's analysis presumes that the failure to file a verified
complaint within the time limitation set forth in N.C. Gen. Stat.
§ 136-29 deprives the trial court of subject matter jurisdiction
because the time limit is a condition precedent and not a statute
of limitations. As our Supreme Court has explained, "[o]rdinary
statutes of limitation are clearly procedural, affecting only the
remedy directly and not the right to recover," while "a condition
precedent establishes a time period in which suit must be brought
in order for the cause of action to be recognized." Boudreau v.
Baughman, 322 N.C. 331, 340-41, 368 S.E.2d 849, 857 (1988). With
respect to conditions precedent, if the plaintiff does not file
suit within the specified time frame, "the plaintiff 'literally has
no cause of action. The harm that has been done is damnum absque
injuria _ a wrong for which the law affords no redress.'" Id. at
341, 368 S.E.2d at 857 (quoting Rosenberg v. Town of North Bergen,
61 N.J. 190, 199, 293 A.2d 662, 667 (1972)). Thus, although
conditions precedent and statutes of limitations both involve time
limitations, they are different in that a condition precedent must
be met before the court acquires jurisdiction, whereas a violation
of a statute of limitations does not implicate the court's power to
hear the case. N.C. Gen. Stat. § 136-29(c) specifies:
As to any portion of a claim that is denied by
the State Highway Administrator, the
contractor may, in lieu of the procedures set
forth in subsection (b) of this section,
within six months of receipt of the State
Highway Administrator's final decision,
institute a civil action for the sum he claims
to be entitled to under the contract by filing
a verified complaint and the issuance of a
summons in the Superior Court of Wake County
or in the superior court of any county where
the work under the contract was performed.
The procedure shall be the same as in all
civil actions except that all issues shall be
tried by the judge, without a jury.
Id. (emphases added). In arguing that this statute involves a
condition precedent, DOT relies upon C.W. Matthews Contracting Co.
v. State, 75 N.C. App. 317, 330 S.E.2d 630 (1985) and E.F.
Blankenship Co. v. N.C. Dep't of Transp., 79 N.C. App. 462, 339
S.E.2d 439 (1986), aff'd per curiam by evenly divided court, 318
N.C. 685, 351 S.E.2d 293 (1987).
DOT is correct that in C.W. Matthews, 75 N.C. App. at 319, 330
S.E.2d at 631, this Court held that the requirements under § 136-29
"are conditions precedent" that "must be satisfied to vest the
trial court with jurisdiction to hear the action." Similarly, in
E.F. Blankenship, 79 N.C. App. at 464, 339 S.E.2d at 440-41, the
Court affirmed the dismissal of a complaint filed without a
verification _ even though the plaintiff subsequently filed an
amended complaint with a verification _ because the filing of a
verification within six months was "a condition precedent to
bringing this action in superior court." Both opinions, however, construed a prior version of N.C. Gen.
Stat. § 136-29, which expressly provided that its time requirements
were conditions precedent to bringing an action. The statute, as
it existed at the time of those two opinions, read in pertinent
part:
The submission of the claim to the State
Highway Administrator within the time and as
set out in subsection (a) of this section and
the filing of an action in the superior court
within the time as set out in subsection (b)
of this section . . . shall be a condition
precedent to bringing such an action under
this section and shall not be a statute of
limitations.
N.C. Gen. Stat. § 136-29(d) (1986) (emphasis added), amended by
1987 Sess. Laws ch. 847, sec. 3.
(See footnote 1)
In 1987, the year following E.F. Blankenship, the statute was
amended to its current version. As part of that amendment, the
General Assembly removed the language specifying that the time
limitations constituted conditions precedent and not statutes of
limitations. Traditional principles of statutory construction
provide that "'[i]n construing a statute with reference to an
amendment, it is presumed that the Legislature intended either (1)
to change the substance of the original act or (2) to clarify the
meaning of it.'" Spruill v. Lake Phelps Volunteer Fire Dep't,
Inc., 351 N.C. 318, 323, 523 S.E.2d 672, 676 (2000) (quoting
Colonial Pipeline Co. v. Neill, 296 N.C. 503, 509, 251 S.E.2d 457,
461 (1979)). This Court has further explained that "[w]hile thepresumption is that the legislature intended to change the law
through its amendments, where the language of the original statute
is ambiguous such amendments may be deemed, not as a change in the
law, but as a clarification in the language expressing that law."
N.C. Elec. Membership Corp. v. N.C. Dep't of Econ. and Cmty. Dev.,
108 N.C. App. 711, 720, 425 S.E.2d 440, 446 (1993).
Here, the pre-1987 version of N.C. Gen. Stat. § 136-29(d) was
clear and unambiguous. There was nothing to clarify; the plain
language of the statute spoke for itself. Thus, we hold that the
General Assembly, in 1987, intended to change the law. As other
jurisdictions have recognized, if the legislature deletes specific
words or phrases from a statute, it is presumed that the
legislature intended that the deleted portion should no longer be
the law. See, e.g., Joe v. Lebow, 670 N.E.2d 9, 19 (Ind. Ct. App.
1996) ("When a statute contains language which is deleted by the
legislature, we presume that the legislature intended the deletion
to represent a change in the law."); State v. Eversole, 889 S.W.2d
418, 425 (Tex. App. 1994) ("[W]hen the legislature amends a
particular statute and omits certain language of the former statute
in its amended version, the legislature specifically intended that
the omitted portion is no longer the law. Every word excluded from
a statute must be presumed to have been excluded for a reason.").
We find the reasoning of these and similar decisions
persuasive and hold that the General Assembly, by deleting the
provision specifying that the time limitations were conditions
precedent, expressed its intent that the time limits would cease tobe conditions precedent and, instead, would constitute statutes of
limitations. Any other conclusion would mean that this aspect of
the 1987 amendment was without purpose, and it is well established
in this State that amendments are presumed not to be without
purpose. Town of Pine Knoll Shores v. Evans, 331 N.C. 361, 366,
416 S.E.2d 4, 7 (1992) ("[W]e follow the maxims of statutory
construction that words of a statute are not to be deemed useless
or redundant and amendments are presumed not to be without
purpose.").
Since the time limitations of N.C. Gen. Stat. § 136-29 are not
conditions precedent, the question before the trial court was
whether Teer's claim was barred by the statute of limitations. Our
appellate courts have specifically recognized that a statute of
limitations defense does not implicate the State's sovereign
immunity. See Estate of Fennell v. Stephenson, 354 N.C. 327, 334,
554 S.E.2d 629, 633 (2001) (distinguishing between arguments based
on sovereign immunity and the statute of limitations); Fowler v.
Worsley, 158 N.C. App. 128, 129 n.1, 580 S.E.2d 74, 75 n.1 (2003)
("Defendant's appeal, however, does not raise the issue of
sovereign immunity. Instead, it requires application of the
statute of limitations . . . .").
Orders denying motions to dismiss based upon the statute of
limitations are interlocutory and not immediately appealable.
Thompson v. Norfolk Southern Ry. Co., 140 N.C. App. 115, 120-21,
535 S.E.2d 397, 401 (2000). Likewise, appeals from orders allowing
motions to amend are interlocutory and subject to dismissal. Howard v. Ocean Trail Convalescent Center, 68 N.C. App. 494, 496,
315 S.E.2d 97, 99 (1984). Since DOT has not identified any other
substantial right that would be lost if this Court does not review
the denial of its motion to dismiss or the granting of the motion
to amend, we dismiss this appeal. Apart from our holding regarding
N.C. Gen. Stat. § 136-29, we express no opinion as to the merits of
DOT's appeal of the trial court's order.
Appeal dismissed.
Judges CALABRIA and ELMORE concur.
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