Appeal by plaintiff from order entered 15 December 2006 by
Judge W. Erwin Spainhour in Cabarrus County Superior Court. Heard
in the Court of Appeals 10 October 2007.
McNaughton & Associates, P.L.L.C., by Edward J. McNaughton,
for plaintiff-appellant.
Hartsell & Williams, P.A., by Fletcher L. Hartsell, Jr. and
Andrew T. Cornelius, for defendants-appellees.
CALABRIA, Judge.
D.W. Flowe & Son, Inc. (“plaintiff”) appeals an order granting
defendants' motion to cancel plaintiff's claim of lien on funds,
dismiss the claim for lien enforcement and return defendants' cash
bond. We dismiss plaintiff's appeal as interlocutory.
I. Background Information
Plaintiff is a first-tier subcontractor. Defendant CDC, LLC
(“CDC”) provides property development services and defendant
Tucker Chase, LLC (“Tucker Chase”) is the owner of “approximately
62.940 acres (less 11.3921 acres) located in the Town of Midland,
Cabarrus County, North Carolina, commonly known as Tract One of theTucker Chase Subdivision” and “approximately 5.821 acres located in
the Town of Midland . . . commonly known as Tract Two of the Tucker
Chase Subdivision” (“the property”). Tucker Chase contracted with
CDC to develop the property and with plaintiff to perform site work
(“the contract”). Plaintiff's contract with Tucker Chase included
erosion control, earthwork/grading, water main service, sanitary
sewer, storm drainage, curb, gutter and paving work.
Plaintiff began work on the property one day after Tucker
Chase entered into the contract with plaintiff, 17 May 2005. By 7
April 2006, plaintiff allegedly completed sixty-five percent of the
work under the contract and Tucker Chase terminated the contract
with plaintiff. On 18 May, plaintiff demanded payment in the
amount of $340,576.31.
Plaintiff served a “Notice of Claim of Lien upon Funds” on 12
June 2006, and filed a “Claim of Subrogated Lien on Real Property”
pursuant to the contract and N.C. Gen. Stat. §§ 44A-11, 44A-12,
44A-18, 44A-19 (2005) on 30 June 2006. Plaintiff commenced an
action to enforce his claim of lien by filing a complaint on 31
August 2006. The complaint named CDC and Tucker Chase as
defendants as well as seven additional parties who have an interest
in the property (“additional defendants”). Plaintiff asserted four
claims: (1) breach of contract against CDC and/or Tucker Chase, (2)
unjust enrichment against Tucker Chase, (3) enforcement of a claim
of lien on funds against CDC and Tucker Chase and (4) enforcement
of a claim of lien on real property against CDC and Tucker Chase. Enforcement of the claim of lien on real property was the only
claim in the complaint asserted against the additional defendants.
On 4 October 2006, Tucker Chase deposited a cash bond in the
amount of $340,576.31 which cancelled plaintiff's claim of lien on
the property. On 19 October 2006, plaintiff filed a “Partial
Stipulation of Voluntary Dismissal and Waiver of Right to
Apportionment,” (“stipulation”) in which plaintiff voluntarily
dismissed the additional defendants “from this matter, including
any and all claims, counterclaims and crossclaims therein, pursuant
to the provisions of Rule 41(a) of the North Carolina Rules of
Civil Procedure.” Plaintiff, CDC and Tucker Chase consented in the
stipulation that the cash bond deposited by Tucker Chase “shall
further act to cancel Plaintiff's Claim of Subrogated Lien on Real
Property filed on June 30, 2006 . . . and the corresponding Notice
of Claim of Lien served on [sic] June 8, 2006, as allowed pursuant
to N.C. Gen. Stat. § 44A-16(5) (2005).” CDC and Tucker Chase also
consented to be
liable for the full undivided amount of any
judgment, if any, awarded to Plaintiff . . .
and [they agreed to] waive any rights they
have or may have to seek or demand the
apportionment of any portion thereof, if any,
paid by or from the Cash Bond, including but
not limited to any claim or demand for
apportionment pursuant to statute or [sic]
Dial Plumbing v. Baker, 64 N.C. App. 682
(1983). . . .
On 9 November 2006, CDC and Tucker Chase filed an Answer,
Motion to Cancel Lien and Dismiss Claim for Lien Enforcement, and
Counterclaim of Tucker Chase. On 15 December 2006, the trial courtgranted defendants' motion and entered an order cancelling
plaintiff's claim of lien on funds, dismissing enforcement of claim
of lien on funds and ordering disbursement of the cash bond to
Tucker Chase. Plaintiff appeals.
II. Interlocutory Appeal
Defendants argue that plaintiff's appeal is from an
interlocutory order. “An order or judgment is interlocutory if it
is made during the pendency of an action and does not dispose of
the case but requires further action by the trial court in order to
finally determine the entire controversy.”
N.C. Dept. of
Transportation v. Page, 119 N.C. App. 730, 733, 460 S.E.2d 332, 334
(1995). The order at issue disposed of plaintiff's claim of lien
on funds. Plaintiff's contract and unjust enrichment claims
against CDC and Tucker Chase as well as Tucker Chase's counterclaim
against plaintiff remain undetermined.
There are two instances when a party may appeal an
interlocutory order.
First Alt. Mgmt. Corp. v. Dunlea Realty Co.,
131 N.C. App. 242, 246, 507 S.E.2d 56, 60 (1998) (citations
omitted). First, an interlocutory order can be immediately
appealed under N.C. Gen. Stat. § 1A-1, Rule 54(b) “if the order is
final as to some but not all of the claims” and “the trial court
certifies that there is no just reason to delay the appeal.”
Id.
Second, an interlocutory order may be immediately appealed pursuant
to N.C. Gen. Stat. § 1-277(a) or § 7A-27(d) “if the trial court's
decision deprives the appellant of a substantial right which would
be lost absent immediate review.”
Id. “An appeal of an interlocutory order is permitted under the
'substantial right' exception of the two statutes when the
interlocutory ruling deprives the appellant of a substantial right
which may be lost or prejudiced if not reviewed prior to final
judgment.”
Dalton Moran Shook, Inc. v. Pitt Development Co., 113
N.C. App. 707, 710, 440 S.E.2d 585, 588 (1994) (citation omitted).
Plaintiff concedes the order is interlocutory and argues the
appeal is proper because the right to “an adequate lien on the
subject matter of its labor” is a constitutionally protected right
and therefore is a substantial right. We disagree.
For plaintiff to establish that the order affects a
substantial right, it is not enough to merely state judicial
enforcement of mechanics' liens is a “constitutionally protected
right.” The test is whether “enforcement of that right, absent
immediate appeal, will be lost, prejudiced, or be less than
adequately protected by exception to entry of the interlocutory
order.”
Norris v. Sattler, 139 N.C. App. 409, 411-12, 533 S.E.2d
483, 485 (2000) (internal quotations omitted) (citations omitted).
Since plaintiff did not meet this burden, we find this argument
without merit.
Plaintiff contends that if awarded a judgment against
defendants which defendants “are unable to satisfy, and the
dismissal of Appellant's lien claim is later reversed, then
Appellant-Plaintiff would have a right to foreclose on the real
property via its mechanic's lien to satisfy any deficiency, whichwould . . . affect the rights of other parties with ownership
interests in the real property.” We disagree.
Plaintiff argues that the order was in error for two reasons:
(1) the parties' stipulation that the cash deposit would apply to
“the payment finally determined to be due” preserved plaintiff's
right to the cash deposit “independent of the enforceability of
[plaintiff's] claim of lien;” and (2) the claim of lien was not
defective, therefore the trial court erred in ordering return of
the cash deposit. Since plaintiff's appeal is interlocutory, we do
not reach the merits of these arguments.
Plaintiff's right to foreclose depends upon the claim of lien
on real property. N.C. Gen. Stat. § 44A-13(b) (2005). Plaintiff's
claim of lien on real property was discharged upon deposit of the
cash bond on 4 October 2006.
George v. Hartford Accident and
Indemnity Co., 330 N.C. 755, 760, 412 S.E.2d 43, 46 (1992)
(depositing cash bond frees the land of the lien and relieves
creditor from taking steps to protect his interest in the land);
see also N.C. Gen. Stat. § 44A-16(5):
Any claim of lien on real property filed under
this Article may be discharged by any of the
following methods:
. . . .
(5) Whenever a sum equal to the amount of the
claim or claims of lien on real property
claimed is deposited with the clerk of court,
to be applied to the payment finally
determined to be due, whereupon the clerk of
superior court shall cancel the claim or
claims of lien on real property or claims of
lien on real property of record.
N.C. Gen. Stat. § 44A-16(5) (2005). The order dismissing the claim
of lien was entered on 15 December 2006, approximately two monthsafter plaintiff's claim of lien on real property was discharged.
Plaintiff's right to foreclose on the property did not exist at the
time of the order. Reversal of the order would restore the claim
of lien on funds and require defendants to return the cash bond.
Return of a cash bond pursuant to a claim of lien does not affect
a substantial right.
See In re Woodie, 85 N.C. App. 533, 534, 355
S.E.2d 163 (1987).
Plaintiff also asserts that this appeal affects a substantial
right because “[o]ur Supreme Court has held that the right to avoid
the possibility of two trials on the same issues can be a
substantial right so as to warrant an immediate appeal . . . .”
Dalton, 113 N.C. App. at 710, 440 S.E.2d at 588 (citing
Green v.
Duke Power Co., 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982)).
In
Dalton, this Court determined that when dismissal of
enforcement of a claim of lien against multiple defendants “might
prejudice plaintiff's right to avoid separate trials involving the
identical issues,” the appeal affected a substantial right and
should be heard.
Id., 113 N.C. App. at 712, 440 S.E.2d at 589. In
Dalton, four parcels of the property subject to plaintiff's claim
of lien were sold between the time plaintiff's claim arose and the
filing of the claim of lien.
Id., 113 N.C. App. at 709, 440
S.E.2d at 587. Plaintiff timely filed a claim of lien on the
property and perfected the claim against the principals of the
contract as well as subsequent purchasers of the property.
Id.
The trial court granted summary judgment in favor of two defendants
who were successors in interest to one of the parcels subject tothe lien.
Id., 113 N.C. App. at 708-09, 440 S.E.2d at 587.
Plaintiff's claim of lien action continued against the remaining
defendants. This Court noted that “should plaintiff successfully
enforce its lien against more than one defendant, the lien must be
apportioned among the several defendants.”
Id., 113 N.C. App. at
711, 440 S.E.2d at 588 (citing
Dail Plumbing v. Roger Baker &
Assoc., 64 N.C. App. 682, 685-86, 308 S.E.2d 452, 454 (1983)). We
concluded that “dismissal of the present appeal might prejudice
plaintiff's right to avoid separate trials involving the identical
issues.”
Id., 113 N.C. App. at 712, 440 S.E.2d at 589.
Dismissal of this appeal does not affect plaintiff's right to
avoid separate trials for three reasons: (1) CDC and Tucker Chase
waived any right to apportionment pursuant to
Dail Plumbing in the
stipulated dismissal filed on 19 October 2006; (2) plaintiff
voluntarily dismissed the additional defendants from the suit
before the order was granted; and (3) reversal of the order would
result only in reinstating the lien on funds, since the claim of
lien on real property was discharged prior to the order and the
real property lien was the only claim plaintiff asserted against
the additional defendants. The right to return of a cash bond
“affects no substantial right in need of immediate protection.”
In
re Woodie, 85 N.C. App. at 534, 355 S.E.2d at 163.
III. Conclusion
Accordingly, plaintiff is free to raise these issues after a
final judgment is entered. Plaintiff's appeal is dismissed.
Dismissed.
Judges McCULLOUGH and STEPHENS concur.
Report per Rule 30(e).
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