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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
NELLO L. TEER COMPANY, INC., Plaintiff, v. JONES BROS., INC.,
FIREMAN'S FUND INSURANCE COMPANY, and NORTH CAROLINA DEPARTMENT
OF TRANSPORTATION, Defendants
Filed: 20 March 2007
1. Appeal and Error_appealability_denial of stay_exposure to overlapping issues and
The denial of defendant's motion for a stay in a construction claim involving multiple
parties was interlocutory but appealable as affecting a substantial right where the denial of the
stay exposed defendant to multiple trials on overlapping issues and the possibility of inconsistent
2. Highways and Streets_road construction--provision that administrative remedies be
exhausted_stay of claim
The trial court erred by denying defendant's motion to stay a road construction claim
where the defendant sought a stay until resolution of the administrative process as outlined in the
contract. Contractual agreements that call for the parties to exhaust administrative procedures
are binding unless such procedures are shown to be inadequate or unavailable. No such showing
was made. N.C.G.S. § 136-29.
3. Parties_State not a necessary party_no prejudice
Defendant-Jones Bros. did not show prejudice to any asserted substantial right in a road
construction case from an order that the State was no longer a necessary party. The order noted
that NCDOT continues as a party to the extent it has been made a party by proper service or has
properly intervened, and, in the event of an adverse ruling, defendant maintains its right to seek
contribution from NCDOT.
4. Declaratory Judgments_mootness_party released from contract
An appeal from a partial summary judgment dismissing a declaratory judgment claim was
moot where the claim sought release of a subcontractor from the future performance of a road-
paving subcontract, but the contractor had terminated the subcontractor. Even if not moot,
plaintiff did not argue any substantial right that would be lost absent immediate review.
Appeal by defendants-appellants and cross-appeal by plaintiff-
cross-appellant from orders entered 11 January 2005, 11 October
2005, and 18 November 2005 by Judge Steve A. Balog, Judge Wade
Barber, and Judge Michael Morgan, respectively, in Orange County
Superior Court. Heard in the Court of Appeals 8 January 2007.
Elmore & Wall, P.A., by Keith E. Coltrain, Kimila L. Wooten &
L. Franklin Elmore, for plaintiff-appellee.
Parker, Poe, Adams & Bernstein, L.L.P., by Charles C. Meeker
and Brian D. Darer, for defendants-appellants Jones Bros.,
Inc. and Fireman's Fund Insurance Co.
Attorney General Roy Cooper, by Special Deputy Attorney
General Joseph E. Herrin, for defendant-appellant North
Carolina Department of Transportation.
MARTIN, Chief Judge.
The North Carolina Department of Transportation (NCDOT)
initiated public highway construction projects to widen a 12-mile
segment of U.S. Highway 15-501 in Chatham and Orange Counties. In
January 2001, NCDOT contracted with Jones Brothers Incorporated
(Jones Bros.) to perform the work, the completion of which was
originally scheduled for thirty-five months. Jones Bros.
subcontracted all of the paving work for the project to Nello L.
Teer Company (Teer). All facets of construction were to be
performed in accordance with NCDOT's contract and Teer agreed to be
bound by these same conditions.
Teer used the Traffic Control Plan from NCDOT's specifications
to determine that it would be involved in the project for fifteen
months. Completion of the project was substantially delayed;
reasons for the delays are in controversy. Jones Bros. contended
the delays came about due to NCDOT's failure to timely relocate
underground and overhead utilities that were impeding the
construction. In addition, NCDOT redesigned the project, resulting
in a further delay of six months. Teer contended that substantial
delays were attributable to improper project management by JonesBros. Teer alleged it ultimately spent more than forty-three
months on the project, causing it significant monetary damages and
constituting a material and cardinal change to the contract. On 30
June 2004, Teer filed a complaint seeking damages for such delays
and declaratory relief excusing Teer from further performance under
the contract. Jones Bros. filed an answer, moving to dismiss,
asserting affirmative defenses, and asserting counterclaims.
Pursuant to an order of the trial court, NCDOT was made a party to
the litigation, and both Teer and Jones Bros. amended their
pleadings. Jones Bros.' amended pleading included cross-claims
against NCDOT and a motion to dismiss Teer's claims, citing Teer's
failure to exhaust its administrative remedies. NCDOT moved to
dismiss the claims of both Teer and Jones Bros.
On 11 January 2005, the trial judge granted partial summary
judgment denying Teer's claims for declaratory relief. Jones Bros.
moved for a stay in the litigation between Jones Bros. and Teer as
well as the cross-claims between Jones Bros. and NCDOT until
resolution of the administrative process as outlined in the job's
contract, which could not begin until the job was finished. By
order dated 11 October 2005, the trial court denied the motion. On
18 November 2005, NCDOT's motion to dismiss Jones Bros.' cross-
claims was denied.
Defendants-appellants Jones Bros. and Fireman's Fund Insurance
Company appeal from the order entered on 11 October 2005 denying
their motion for a stay and determining that NCDOT was not a
necessary party to the litigation at issue. Defendant-appellantNCDOT appeals the order entered 18 November 2005 denying its motion
to dismiss cross-claims asserted by Jones Bros. Plaintiff-appellee
and cross-appellant Teer cross-appeals from the order entered 11
January 2005 granting Jones Bros.' motion for partial summary
At the outset, we note that each of the appeals before this
Court is from an interlocutory order. An interlocutory order is
one made during the pendency of an action, which does not dispose
of the case, but leaves it for further action by the trial court in
order to settle and determine the entire controversy. Veazey v.
City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). A
party cannot immediately appeal an interlocutory order unless (1)
a trial court enters a final judgment to fewer than all of the
claims or parties in an action and certifies that there is no
reason to delay the appeal or (2) the failure to grant immediate
review would affect a substantial right. Davis v. Davis, 360 N.C.
518, 524-25, 631 S.E.2d 114, 119 (2006) (citation omitted). A
right is substantial if it will be lost or irremediably and
adversely affected if the trial court's order is not reviewed
before a final judgment. RPR & Assocs. v. University of N.C.-
Chapel Hill, 153 N.C. App. 342, 347, 570 S.E.2d 510, 514 (2002).
Whether a substantial right is affected is determined on a case-
by-case basis and should be strictly construed. Flitt v. Flitt,
149 N.C. App. 475, 477, 561 S.E.2d 511, 513 (2002).
 Jones Bros. first challenges the trial court's denial of
its motion to stay. The denial of a motion to stay is an
interlocutory order with no absolute right to an immediate appeal.
Howerton v. Grace Hosp., Inc., 124 N.C. App. 199, 201, 476 S.E.2d
440, 442 (1996). The order did not dispose of any of the claims or
parties. Id., 476 S.E.2d at 442-43. As a result, Jones Bros. must
demonstrate that the trial court's decision deprived it of a
substantial right which will be lost absent immediate review. Id.,
476 S.E.2d at 443. A party's right to avoid separate trials of the
same factual issues may constitute a substantial right. Green v.
Duke Power Co., 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982)
(citation omitted). This Court has interpreted Green as creating
a two-part test requiring that a party show (1) the same factual
issues would be present in both trials and (2) the possibility of
inconsistent verdicts on those issues exists. N.C. Dep't of
Transp. v. Page, 119 N.C. App. 730, 735-36, 460 S.E.2d 332, 335
(1995) (citation omitted).
Jones Bros. argues that it is entitled to an immediate appeal
because the denial of the motion to stay exposes it to multiple
trials on overlapping issues and the possibility of inconsistent
verdicts on the delay claims. Jones Bros.' motion requested that
Teer's claims be stayed pending resolution of claims against NCDOT
through the administrative process[.] The liability of NCDOT, as
third-party defendants to Jones Bros., is dependent upon the
resolution of the issue of Jones Bros.' liability to Teer.
Further, the delay claims depend upon similar factual issues andsimilar proof. The delays alleged by Teer during its
subcontracting work are the same delays that affected Jones Bros.
and which involve NCDOT. In addition, inconsistent verdicts could
occur. For example, Jones Bros. could be found liable to Teer on
some issues, but could be precluded from raising those same issues
against NCDOT during the administrative process. Having found a
substantial right to be affected, Jones Bros. motion for a stay,
which was denied by the trial court, is immediately appealable.
 Jones Bros. argues that the trial court erred by denying
the motion to stay. We agree. Contractual agreements that call
for the parties to exhaust administrative procedures are binding
unless such procedures are shown to be inadequate or unavailable.
U.S. v. Grace & Sons, Inc., 384 U.S. 424, 430, 16 L. Ed. 2d 662,
667-68 (1966) (indicating that the inadequacy or unavailability of
administrative relief must clearly appear before a party is
permitted to circumvent his own contractual agreement.) NCDOT
incorporates N.C.G.S. § 136-29 into every contract for highway
construction as a statutory ground under which contractors may sue.
See A.H. Beck Found. Co. v. Jones Bros., 166 N.C. App. 672, 679,
603 S.E.2d 819, 824 (2004). Under this provision, before a party
may pursue a judicial action against the state for money claimed to
be due under a highway construction contract, it must first pursue
its administrative remedies. Id. (quoting In re Huyck Corp. v.
Mangum, Inc., 309 N.C. 788, 792, 309 S.E.2d 183, 186 (1983)).
In the present case, N.C.G.S. § 136-29 was incorporated in the
Principal Contact within Section 107-25, requiring that all claimsbe submitted in accordance with the statute. The subcontract
agreement stated that Subcontractor agrees to give notice in
writing and make all claims for which Owner is, or may be, liable
in the manner provided and in a time framework which is consistent
with the Principal Contract[.] Teer agreed to be bound by the
terms of the contract between Jones Bros. and NCDOT which requires
that the parties exhaust administrative remedies for any claim in
which NCDOT may be liable. The delay claims asserted by Teer, for
which NCDOT is a third-party defendant, are subject to the
contract's administrative relief provision. Teer was contractually
obligated to follow the administrative process prior to seeking
judicial relief. No showing has been made that the administrative
process was either inadequate or unavailable. Grace & Sons, Inc.,
384 U.S. at 430, 16 L. Ed. 2d at 667; see also Seal & Co., Inc. v.
A.S. McGaughan Co., 907 F.2d 450, 455 (4th Cir. 1990) (finding a
subcontractor's contract to incorporate the prime contract's
administrative relief provision and reversing the denial of a
motion to stay the subcontractor's claims). We reverse the lower
court's denial of the motion to stay and remand the case to the
trial court for entry of an order staying the present action
pending the exhaustion of the administrative process.
 In addition, Jones Bros. challenges that portion of the 11
October 2005 Case Status Order finding that NCDOT is no longer a
necessary party to the litigation. This portion of the order was
predicated on prior orders effectively eliminating the pending
causes of action by Teer against NCDOT. By order dated 8 November2004, the trial court dismissed Teer's claims for damages caused by
NCDOT and, by order entered 11 January 2005, granted summary
judgment against Teer's requested declaratory relief.
A 'necessary' party is one whose interest will be directly
affected by the outcome of the litigation. Begley v. Employment
Security Comm., 50 N.C. App. 432, 438, 274 S.E.2d 370, 375 (1981).
A proper party is one whose interest may be affected by a decree,
but whose presence is not essential in order for the court to
adjudicate the rights of others. Crosrol Carding Developments,
Inc. v. Gunter & Cooke, Inc., 12 N.C. App. 448, 452, 183 S.E.2d
834, 837 (1971). Necessary parties must be joined while proper
parties may be joined. Id. at 451, 183 S.E.2d at 837. Our Court
has held that the challenge of an order declining to name an entity
a necessary party is interlocutory. Terry's Floor Fashions, Inc.
v. Murray, 61 N.C. App. 569, 570, 300 S.E.2d 888, 889 (1983).
Further, such challenges may be asserted after a final judgment on
all the claims without prejudice. Id. at 571, 300 S.E.2d at 890.
As reflected in the challenged order, NCDOT continues as a
party to the extent that it has been made a proper party by service
or has properly intervened. In the event of an adverse ruling,
Jones Bros. maintains its right to seek contribution from NCDOT.
Jones Bros. has failed to show how the trial court's order
prejudices any asserted substantial right. This assignment of
error is dismissed.
 Teer cross-appealed the trial court's grant of partial
summary judgment dismissing Teer's first cause of action, by which
Teer sought declaratory judgment excusing Teer from future
performance as the result of a cardinal change to the subcontract.
The cardinal change which formed the basis for Teer's claim was the
project's alleged extended duration. Orders granting partial
summary judgment are interlocutory. Davis v. Davis
, 360 N.C. 518,
524, 631 S.E.2d 114, 119 (2006).
Jones Bros. terminated Teer from the subcontract in August
2005, excusing Teer from future performance under the contract and
rendering Teer's appeal from the 11 January 2005 order moot. Teer
conceded as much during the 6 September 2005 hearing before Judge
MR. COLTRAIN: ... [T]he Court determined that
the declaratory relief would impact North
Carolina DOT. The Court entered an order on
the part of Nello Teer to make DOT a party to
THE COURT: That's right. The Court brought
DOT for the reason that the Court granted your
relief that it could interfere with the paving
of the highway. What's the status with
paving? Are y'all still providing asphalt?
MR. COLTRAIN: Actually, Your Honor, Nello Teer
has just recently been terminated.
THE COURT: So you got that relief that you
MR. COLTRAIN: We got the relief that we
THE COURT: All right.
MR. COLTRAIN: Not by the way we wanted it.
THE COURT: So that part of the lawsuit is
MR. COLTRAIN: Correct. Well, I'll say it's
moot for all practical purposes at this point
in time. There are some legal issues I would
Whenever, during the course of litigation it develops that
the relief sought has been granted or that the questions originally
in controversy between the parties are no longer at issue, the case
should be dismissed, for courts will not entertain or proceed with
a cause merely to determine abstract propositions of law.
Dickerson Carolina, Inc. v. Harrelson, 114 N.C. App. 693, 697, 443
S.E.2d 127, 131 (1994) (citations omitted).
Even assuming, arguendo, that Teer's appeal was not moot, Teer
has failed to argue any substantial right that will be lost absent
immediate review. See Howerton, 124 N.C. App. at 201, 476 S.E.2d
at 443. [I]t is the appellant's burden to present appropriate
grounds for this Court's acceptance of an interlocutory appeal.
Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379, 444
S.E.2d 252, 253 (1994). As a result, the issue is not properly
before this Court and we need not address defendant's related
assignments of error. See Duncan v. Bryant, 129 N.C. App. 245,
248, 497 S.E.2d 443, 445 (1998) (indicating that the party seeking
to appeal an interlocutory order has the burden of showing this
Court that such an order affects a substantial right at jeopardy
absent review prior to final judgment).
NCDOT contends the trial court erred in denying its motion to
dismiss. NCDOT argued, by virtue of the incorporation of N.C.G.S.
§ 136-29 into the contract, that any claims asserted against it
were barred by the doctrine of sovereign immunity until the project
was completed and all administrative remedies were exhausted. Our
decision to grant Jones Bros. motion to stay until the
administrative remedies have been exhausted renders NCDOT's appeal
moot and we need not address it.
Reversed and Remanded in part; Dismissed in part.
Judges MCCULLOUGH and LEVINSON concur.
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