Ap Atl., Inc. v. Crescent Univ. City Venture, LLC

2017 NCBC 91
North Carolina Business Court·Decided October 5, 2017·No. 15-CVS-14745·Published

Opinion

AP Atl., Inc. v. Crescent Univ. City Venture, LLC, 2017 NCBC 91.

NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 15 CVS 14745 (Master File) 16 CVS 14844 (Related Case) AP ATLANTIC, INC. d/b/a ADOLFSON & PETERSON CONSTRUCTION,

Plaintiff,

v.

CRESCENT UNIVERSITY CITY VENTURE, LLC; THE GUARANTEE COMPANY OF NORTH AMERICA USA; BB&M ARCHITECTURE, PLLC; SCA ENGINEERS, INC.; MADISON CONSTRUCTION GROUP, INC.; TRUSSWAY MANUFACTURING, INC.; and T. A. KAISER HEATING & AIR, INC.,

Defendants. ORDER AND OPINION ON DEFENDANT CRESCENT v. UNIVERSITY CITY VENTURE, LLC’S SEARS CONTRACT, INC.; MACEDO OBJECTION TO PLAINTIFF’S CONTRACTING CO.; WHALEYS THIRD-PARTY COMPLAINT DRYWALL, LLC; GRANADA INTERIORS, INC.; STALLINGS DRYWALL, LLC; MAYNOR PI, INC.; MATUTE DRYWALL, INC.; INTERIOR DISTRIBUTORS, A DIVISION OF ALLIED BUILDING PRODUCTS, CORP.; MANUEL BUILDING CONTRACTORS, LLC; EAGLES FRAMING COMPANY, INC.; DIAZ CARPENTRY, INC.; SOCORRO CASTILLE MONTLE; AND GUERRERO CONSTRUCTION PRO, INC.

Third-Party Defendants.

MADISON CONSTRUCTION GROUP, INC.,

Third-Party Plaintiff,

v. MANUEL BUILDING CONTRACTORS, LLC,

Third-Party Defendant.

1. This Matter is before the Court upon Defendant Crescent University

City Venture, LLC’s (“Crescent”) Objection to Plaintiff’s Third-Party

Complaint (the “Objection”) in the above-captioned matter.

2. After considering the Objection, the arguments of counsel for the

parties at the September 25, 2017 expedited hearing on the Objection, and the

briefs by the parties in support of and in opposition to the Objection, the Court

hereby OVERRULES the Objection.

Swindell & Bond, PLLC, by John D. Bond, III, and Bradley Arant Boult Cummings LLP, by Douglas L. Patin and Avery A. Simmons, for Defendant Crescent University City Venture, LLC.

Bell, Davis & Pitt, P.A., by Edward B. Davis, Jason B. James, and Demitra Sourlis, for Defendant BB&M Architecture, PLLC.

Johnston, Allison & Hord, P.A., by Greg C. Ahlum, Robert L. Burchette, and Parker Evans Moore, Hall Booth Smith, P.C., by Robert McCune and Alan R. Belcher, Ragsdale Liggett PLLC, by William W. Pollock and Edward E. Coleman, III, and Robinson Elliot & Smith, by William C. Robinson and Dorothy M. Gooding, for Plaintiff AP Atlantic, Inc. d/b/a Adolfson & Peterson Construction.

Bledsoe, Judge.

I.

FACTUAL & PROCEDURAL BACKGROUND

3. This case began over two years ago, in August 2015. It has proceeded

in this Court since its designation as a complex business case in April 2016. (Designation Order, ECF No. 36.) On October 10, 2016, this case was

consolidated with a related action, Crescent University City Venture, LLC v.

Adolfson & Peterson, Inc., No. 16 CVS 14844 (Mecklenburg County), and

designated as the master case on the Court’s docket. For the purposes of

resolving the Objection before the Court, the alleged facts and complex

procedural history of this litigation can be distilled as follows.

4. The dispute at the center of this litigation concerns the construction

of student apartments in Charlotte, North Carolina (the “project” or

“construction”) by Plaintiff AP Atlantic, Inc. d/b/a Adolfson & Peterson

Construction (“AP Atlantic”) for Crescent. (See generally Compl., ECF No. 1.)

AP Atlantic sued Crescent for an alleged breach of contract for outstanding

balances, for a suit on bond and to enforce a claim of lien on the property, for

priority of AP Atlantic’s claim of lien, and for quantum meruit. (Compl. 3–6.)

AP Atlantic then expanded the suit by amending its Complaint in November

2015 to add claims against several subcontractors. (Am. Compl., ECF No. 6.)

5. On January 29, 2016, Crescent filed an Answer and asserted its own

counterclaims against AP Atlantic. (Answer & Countercl., ECF No. 19.) These

counterclaims were based on two theories. First, Crescent claimed AP Atlantic

had completed the construction late. (Answer & Countercl. 43–48.) Second,

Crescent claimed a defect in the project’s floor trusses. (Answer & Countercl.

49–57.) Allegedly, following a large gathering of students in one of the

apartments, the floor of that apartment, and the ceiling of the unit beneath, began to sag and crack. (Answer & Countercl. 50.) This lead Crescent to

discover that alleged defects and damages to the apartments’ floor trusses were

“prevalent throughout the buildings.” (Answer & Countercl. 52.) Crescent

amended its counterclaims again in January 2017. (Answer & Am. Countercl.,

ECF No. 159.) That amendment added a party that was later dismissed from

the case.

6. In the interim, the litigation continued forward. On September 20,

2016, the Court entered a Case Management Order detailing the timeline on

which the case was to proceed. (Case Management Order, ECF No. 94.) Under

the Case Management Order, the parties had until April 20, 2017 to conduct

fact discovery. (Case Management Order 22.) On March 28, 2017, the Court

extended this deadline for ninety days. (Order Joint Mot. Modify Case

Management Order & Extend Disc. Deadlines 2, ECF No. 183.) In requesting

this modification, AP Atlantic and the subcontractor parties represented to the

court that the parties had been engaged in “extensive fact

discovery . . . including the exchange of written fact discovery, and [were]

pursuing discovery diligently.” (Joint Mot. Modify Case Management Order &

Extend Disc. Deadlines 3, ECF No. 177.) Under the extended deadline, the

parties continued with discovery.

7. As part of this continuing discovery, AP Atlantic received responsive

information identifying second-tier subcontractors who had worked on the

project. AP Atlantic received this information in April and May 2017, approximately seven to eight months after the Court’s entry of the Case

Management Order. AP Atlantic took no action at that time to involve the

second-tier subcontractors in the case. The Court was not informed that these

newly discovered parties existed or that AP Atlantic intended to add them to

the litigation as third-party defendants.

8. On June 6, 2017, Crescent and AP Atlantic agreed to settle all claims

between the two parties dealing with late completion of the construction and

outstanding balances on the construction contract. (Pl.’s Mem. Reply Def.’s

Obj. Pl.’s Third-Party Compl. 5, ECF No. 252.) The agreement required

Crescent to “modify its counterclaim to remove any claim for liquidated

damages[,]” i.e., any claim besides those relating to the defective floor trusses.

(Def.’s Br. Supp. Obj. Pl.’s Third-Party Compl. 3, ECF No. 231.) In an effort to

comply with this provision, Crescent filed an Amended Answer and Second

Amended Counterclaim on June 29, 2017. This pleading did not add any new

theories of liability to the case or contain new allegations; it simply removed

allegations from Crescent’s Answer and Amended Counterclaim that Crescent

believed should be deleted due to the settlement agreement. (See generally

Am. Answer & Second Am. Countercl., ECF No. 212.)

9. Without previously consulting with Crescent or the Court, AP

Atlantic filed a Reply to Crescent’s Second Amended Counterclaim and a

Third-Party Complaint on July 20, 2017. (Pl.’s Mot. Strike, Mot. Dismiss,

Reply Def.’s Second Am. Countercl. & Third-Party Compl., hereinafter “Reply & Third-Party Compl.,” ECF No. 219.) The Third-Party Complaint asserted

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Ap Atl., Inc. v. Crescent Univ. City Venture, LLC, 2017 NCBC 91 (N.C. Super. Ct. 2017).

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