Appeal by defendant from an order entered 5 October 2005 by
Judge J. B. Allen, Jr. in Wake County Superior Court. Heard in the
Court of Appeals 6 December 2006.
Michael W. Strickland & Associates, P.A., by Michael W.
Strickland and Daniel Meier, for plaintiff-appellee.
Safran Law Offices, by M. Anne Runheim, Brian J. Schoolman,
and M. Riana Smith, for defendant-appellant.
HUNTER, Judge.
Prime Building Company, Inc. of North Carolina (“defendant”)
appeals from a judgment and award entered 5 October 2005. After
careful review of the record, for the reasons stated herein, we
affirm the judgment and award of the trial court.
The trial court found the following: Defendant entered into
a contract with Red Dirt Properties, LLC (“plaintiff”) on 12 June
2000 for the construction of a manufacturing facility on property
owned by plaintiff. Section 2-110 of the contract required
defendant to remove trees, roots, stumps, and debris as required
and dispose of them off-site. The parties discussed that plaintiffplanned an additional expansion of its manufacturing facility, but
the area for expansion was not a part of the parties' contract
terms for the facility construction.
Construction began on the project, and on 29 November 2000,
Keith Morris (“Morris”), a co-owner of plaintiff, received a letter
from Titan Atlantic Group (“Titan”), a sub-contracted site
engineer, that clearing and grubbing material may have been buried
under the future expansion area. Morris contacted defendant
regarding the letter and Andy Ward (“Ward”), a vice-president of
defendant and project manager for the building construction,
assured Morris that he would investigate the issue, and later
assured Morris that he had looked into the matter and there were no
problems. The contract was completed and accepted in July 2001.
In 2003, plaintiff began plans on construction in the furture
expansion area and entered into a contract with Steel Dynamics,
Inc. (“Steel”). Steel began digging footings and a retaining wall
and uncovered a large amount of organic material, including tree
limbs and debris, covered by the soil, preventing construction of
the building. Plaintiff brought action against defendant for
breach of contract in improperly dumping organic materials on-site
in the future expansion area.
The trial court found that defendant breached the contract and
awarded plaintiff damages in the amount of $62,309.00. Defendant
appeals from the judgment and award.
I.
We first note the standard of review for an appeal from a
judgment entered in a non-jury trial. “[O]ur standard of review is
whether competent evidence exists to support the trial court's
findings of fact, and whether the findings support the conclusions
of law.”
Resort Realty of the Outer Banks, Inc. v. Brandt, 163
N.C. App. 114, 116, 593 S.E.2d 404, 407-08,
appeal dismissed and
disc. review denied, 358 N.C. 236, 595 S.E.2d 154 (2004). “'The
trial judge acts as both judge and jury and considers and weighs
all the
competent evidence before him.'”
Id. at 116, 593 S.E.2d at
408 (citation omitted). “The trial court's findings of fact are
binding on appeal as long as competent evidence supports them,
despite the existence of evidence to the contrary.”
Id. “When
competent evidence supports the trial court's findings of fact and
the findings of fact support its conclusions of law, the judgment
should be affirmed in the absence of an error of law.”
Id.
II.
Defendant first contends the trial court erred in failing to
dismiss plaintiff's claims pursuant to the statute of limitations.
We disagree.
N.C. Gen. Stat. § 1-52(1) (2005) establishes a three-year
statute of limitations for actions arising from a breach of
contract. However, section 1-52(16) further holds that a cause of
action for physical damage to claimant's property “shall not accrue
until . . . physical damage to his property becomes apparent or
ought reasonably to have become apparent to the claimant, whichever
event first occurs.”
Id. Plaintiff filed its action for breach of contact on 9 August
2004, more than three years after the contract between plaintiff
and defendant was completed on 20 July 2001. Plaintiff alleged
that the organic material was hidden and was not discovered until
grading commenced in the area in December of 2003, and that the
action was filed, pursuant to section 1-52(16), within one year of
when the physical damage became apparent to plaintiff.
Defendant contends, however, that plaintiff was given notice
on 29 November 2000 by the letter from subcontractor Titan, which
stated that “topsoil (and some clearing and grubbing material) has
been inappropriately buried toward the rear of the site under the
future building expansion area[,]” and therefore plaintiff's filing
was outside the statute of limitations.
The trial court concluded defendant was estopped from
asserting the statute of limitations due to its affirmative
representation regarding the site in 2000. Estoppel is a defense
which must be affirmatively pled. N.C. Gen. Stat. § 1A-1, Rule
8(c) (2005). “Although the failure to plead an affirmative defense
ordinarily results in its waiver, the parties may still try the
issue by express or implied consent.”
Duke University v. St. Paul
Mercury Ins. Co., 95 N.C. App. 663, 673, 384 S.E.2d 36, 42 (1989).
In
Duke University, the plaintiff failed to plead estoppel as an
affirmative defense to the defendant's statute of limitations
claims.
Id. However, the record and exhibits showed that the
plaintiff introduced some evidence at trial pertinent to theelements of equitable estoppel, and the Court then proceeded to
consider the affirmative defense of estoppel.
Id.
Similarly here, plaintiff failed to affirmatively plead the
defense of estoppel. However, plaintiff offered testimony by
Morris as to his contact with defendant following receipt of the
letter and the reassurances he received that there was no issue
with organic fill at the time. Additional testimony as to this
issue was given by Ward without objection. We therefore find that
the issue of equitable estoppel was tried with the parties' implied
consent.
The elements of equitable estoppel are as follows:
(1) conduct on the part of the party sought to
be estopped which amounts to a false
representation or concealment of material
facts; (2) the intention that such conduct
will be acted on by the other party; and (3)
knowledge, actual or constructive, of the real
facts. The party asserting the defense must
have (1) a lack of knowledge and the means of
knowledge as to the real facts in question;
and (2) relied upon the conduct of the party
sought to be estopped to his prejudice.
Parker v. Thompson-Arthur Paving Co., 100 N.C. App. 367, 370, 396
S.E.2d 626, 628-29 (1990). “'[A] party may be estopped to deny
representations made when he had no knowledge of their falsity, or
which he made without any intent to deceive the party now setting
up the estoppel.'”
Meacham v. Board of Education, 59 N.C. App.
381, 387, 297 S.E.2d 192, 196 (1982) (citation omitted). “'[T]he
fraud consists in the inconsistent position subsequently taken,
rather than in the original conduct. It is the subsequentinconsistent position, and not the original conduct that operates
to the injury of the other party.'”
Id. (citation omitted).
Here, the trial court found that upon receipt of the letter
Morris contacted Ward, the project manager, and was assured that
there were no problems with the soil in the expansion area. The
trial court found that “under all of the circumstances it was
reasonable for Red Dirt Properites, LLC to rely on the
representations of the project manager and vice-president of
defendant.” Although defendant contends proof was not offered that
defendant in fact knew about the organic fill in the expansion
area, as stated in
Meacham, “'[a] party may be estopped to deny
representations made when he had no knowledge of their falsity[.]'”
Id. at 387, 297 S.E.2d at 196 (citation omitted). The fraud lies
in the subsequent inconsistent position now taken by defendant that
plaintiff had notice of the hidden defect beneath the soil. A
careful review of the record shows that competent evidence
supported the trial court's findings that plaintiff, having relied
on defendant's assertions to its prejudice, “could not have been
expected to discover the hidden defect prior to commencing
construction of the expansion area” and therefore properly filed
within the statute of limitations. Although we note that the trial
court erred in listing N.C. Gen. Stat. § 1-15 as the controlling
statute in its order, we find that N.C. Gen. Stat. § 1-52(16)
permits plaintiff's proper filing within one year of discovery of
the hidden defect. As plaintiff properly filed with the statute of limitations,
and defendant is estopped from asserting that a prior letter
provided notice to plaintiff of the hidden defect due to its own
conduct, we overrule this assignment of error.
III.
Defendant next contends the trial court erred in concluding
that defendant was responsible for the organic materials in the
expansion area. We disagree.
The trial court found that:
17. On or about November 29, 2000 Titan
Atlantic Group sent a letter to
[defendant] which stated that clearing
and grubbing material may have been
buried toward the rear of the site under
the future expansion area.
. . .
25. Prior to [defendant] commencing
construction the land owned by
[plaintiff] was virgin soil with standing
trees and brush. No other contractor
worked on the site after [defendant]
until the organic material was
discovered.
26. The organic materials were buried by
[defendant's] sub-contractor and were
hidden from view.
Testimony was offered by Morris that the original lot was
wooded with virgin soil, and that following the construction by
defendant, further construction was not undertaken in that area
until the project in 2003 when the organic material was discovered.
Ward testified that a sub-contractor was used to grade and clear
the lot, and that although he was the project manager, he was noton-site daily during the clearing process. Although
circumstantial, the testimony that the previously undisturbed land
was found to be filled with organic material following defendant's
work on the project provides competent evidence to support the
trial court's findings. “'The trial judge acts as both judge and
jury and considers and weighs all the
competent evidence before
him.'”
Resort Realty, 163 N.C. App. at 116, 593 S.E.2d at 408
(citation omitted). As competent evidence supports the trial
court's finding that defendant was responsible for the organic
materials in the expansion area, we overrule this assignment of
error.
IV.
Defendant next contends the trial court erred in admitting
parol evidence regarding the “future expansion” area. We disagree.
“'The parol evidence rule excludes prior or contemporaneous
oral agreements which are inconsistent with a written contract if
the written contract contains the complete agreement of the
parties.'”
Phelps-Dickson Builders, L.L.C. v. Amerimann Partners,
172 N.C. App. 427, 436, 617 S.E.2d 664, 670 (2005) (citation
omitted).
Defendant generally contends that evidence regarding the
“future expansion” area was parol evidence. Here, however, a
careful review of the record shows that no evidence was offered as
to an inconsistent oral agreement with the terms of the written
contract. Rather, the terms of the contract specified that
defendant was to “[r]emove any trees, roots, stumps and debris asrequired and dispose of off site.” Testimony regarding the
“expansion area,” which was part of plaintiff's site, was offered
to show that defendant had breached the terms of the written
agreement in failing to dispose of the organic material off-site.
Therefore, as no evidence of a contradictory oral agreement was
offered to vary the terms of the written agreement, we overrule
this assignment of error.
V.
Defendant finally contends that the trial court erroneously
awarded $62,309.00 in damages. We disagree.
“The trial court's authority to award damages in a breach of
contract action is well established.”
Southern Bldg. Maintenance
v. Osborne, 127 N.C. App. 327, 331, 489 S.E.2d 892, 895 (1997).
“The measure of damages for breach of express contract is an amount
which reasonably may have been contemplated by the parties when
they entered into the contract, or which will compensate the
injured party as if the contract had been fulfilled.”
Catoe v.
Helms Construction & Concrete Co., 91 N.C. App. 492, 495, 372
S.E.2d 331, 334 (1988).
Here, plaintiff presented competent evidence of specific costs
incurred as a result of the removal of the organic material left
on-site in breach of the parties' contract, as well as breakdowns
showing adjustments for costs associated with other aspects of
plaintiff's ongoing building project, by both Morris and employees
of Steel. Defendant presented competing testimony regarding the
industry rate of such costs. “The trial court's findings of factare binding on appeal as long as
competent evidence supports them,
despite the existence of evidence to the contrary.”
Resort Realty,
163 N.C. App. at 116, 593 S.E.2d at 408 (emphasis added). As
competent evidence supports the trial court's findings as to the
amount of damages to compensate plaintiff as if the contract had
been fulfilled, we overrule this assignment of error.
As defendant fails to show the trial court erred in finding
estoppel as to defendant's past representations and that plaintiff
properly filed within the statute of limitations, and as competent
evidence supports the trial court's findings as to causation and
damages, we affirm the judgment and award.
Affirmed.
Judges McCULLOUGH and ELMORE concur.
Report per Rule 30(e).
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