Barr v. Holton Constr. Concepts, LLC

• Court: Court of Appeals of North Carolina
• Decided: March 18, 2026
• Docket: 25-751
• Status: Published
• Author: Judge Fred Gore

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA25-751

Filed 18 March 2026

Mecklenburg County, No. 24CV007273-590

CATHERINE BARR and DUSTIN BARR, Plaintiffs,

v.

HOLTON CONSTRUCTION CONCEPTS, LLC, Defendant.

Appeal by defendant from order entered 19 April 2025 by Judge Peter B.

Knight in Mecklenburg County Superior Court. Heard in the Court of Appeals 10

February 2026.

Anderson, Johnson, Lawrence & Butler, LLP, by Steven C. Lawrence and Charles R. Smith, for defendant-appellant.

TLG Law, by David G. Redding and Sean A. McLeod, for plaintiffs-appellees.

GORE, Judge.

This appeal arises from a residential construction dispute. Defendant HolTon

Construction Concepts, LLC (“Holton”) appeals from an order granting summary

judgment in favor of plaintiffs Catherine and Dustin Barr (“the Barrs”) on Holton’s

counterclaim for breach of contract.

The sole issue before this Court is whether the trial court erred in granting

summary judgment on Holton’s counterclaim. We hold that it did not. Holton lacked

authority under Chapter 87 of the North Carolina General Statutes to undertake this

project, and its subsequent license upgrade cannot retroactively validate a contract BARR V. HOLTON CONSTR. CONCEPTS, LLC

Opinion of the Court

that exceeded its authorized limit at formation. Accordingly, we affirm.

Jurisdiction lies in this Court pursuant to N.C.G.S. § 7A-27(b).

I.

In late 2021, the Barrs began searching for a general contractor to build a home

on their property. They were introduced to Holly Edwards, the principal of Holton.

At their initial meeting, the Barrs provided Edwards with construction plans and

design specifications for the project, with an initial budget of $1,700,000.

On 15 March 2022, the parties executed a construction contract (the

“Contract”) for a total price of $1,870,000. The Contract allocated $1,000,000 to

construction of the residence and $870,000 to construction of a detached garage. Both

structures were to be built on the same parcel of land and funded through a single

construction loan from TD Bank.

At the time the Contract was executed, Holton held an intermediate general

contractor’s license authorizing it to act as general contractor on projects valued up

to $1,000,000. On 20 December 2022, Holton upgraded to an unlimited license.

The Contract provided that any modifications to the contract price required a

written change order signed by both parties. No written change orders were executed

during the project.

Construction proceeded, and on 15 November 2023 a certificate of occupancy

was issued for the property. The Barrs moved into the residence on 20 November

2023. By that time, TD Bank had fully disbursed the $1,870,000 contract price.

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Before the final disbursement, on 15 November 2023, the Barrs signed a Final

Lien Waiver presented by Holton, in which Holton represented that it and all

subcontractors had been paid for work performed on the project. Holton’s internal

accounting records reflect that it expended approximately $1,758,504 on the project.

In early 2024, several subcontractors submitted claims asserting they had not

been paid in full. On 4 March 2024, the plumbing subcontractor recorded a claim of

lien against the property.

The Barrs filed this action the same day, asserting claims including breach of

contract, fraud, negligent misrepresentation, and unfair and deceptive trade

practices. Holton asserted counterclaims, including breach of contract, alleging that

the Barrs caused cost overruns and failed to pay amounts allegedly owed to

subcontractors. Holton later dismissed all counterclaims except breach of contract.

The Barrs moved for summary judgment on Holton’s remaining counterclaim.

On 29 April 2025, the trial court granted partial summary judgment in favor of the

Barrs, dismissing Holton’s breach of contract counterclaim. On 6 May 2025, the

Barrs voluntarily dismissed their claims pursuant to Rule 41(a)(1). Holton timely

appealed.

II.

“Our standard of review of an appeal from summary judgment is de novo; such

judgment is appropriate only when the record shows that there is no genuine issue

as to any material fact and that any party is entitled to a judgment as a matter of

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law.” In re Will of Jones, 362 N.C. 569, 573 (2008) (cleaned up).

The moving party “bears the initial burden of demonstrating the absence of a

genuine issue of material fact.” Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571,

579 (2002). If the moving party satisfies this burden, the nonmoving party must

respond with a forecast of evidence demonstrating specific facts from which a prima

facie case could be established at trial. Gaunt v. Pittaway, 139 N.C. App. 778, 784–

85 (2000).

III.

North Carolina’s General Contractor Licensing Act, N.C. Gen. Stat. § 87-1 et

seq., establishes a comprehensive regulatory scheme designed “to protect the public

from incompetent builders.” Builders Supply v. Midyette, 274 N.C. 264, 270 (1968).

The Act requires that any person who undertakes to construct a building where the

cost of the undertaking is $40,000 or more must hold an appropriate general

contractor’s license. N.C.G.S. § 87-1.

The licensing statute establishes three tiers of licensure. At the time relevant

to this appeal, an intermediate license authorized a contractor to act as general

contractor on any single project valued up to $1,000,000. N.C.G.S. § 87-10(a1) (2021).

An unlimited license carried no such restriction. Id.

North Carolina courts apply a “bright line” rule requiring strict compliance

with these licensing provisions. Dellinger v. Michal, 92 N.C. App. 744, 747 (1989)

(quoting Sample v. Morgan, 311 N.C. 717, 723 (1984)). In Brady v. Fulghum, our

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Supreme Court held that “a contract illegally entered into by an unlicensed general

construction contractor is unenforceable by the contractor. It cannot be validated by

the contractor’s subsequent procurement of a license.” 309 N.C. 580, 586 (1983).

The question presented is whether this rule applies where a contractor holds

a valid license but undertakes a project exceeding the license’s monetary limitation.

A.

It is undisputed that when the Contract was executed on 15 March 2022,

Holton held an intermediate license authorizing projects up to $1,000,000. It is

equally undisputed that the Contract obligated Holton to construct both a residence

and a garage on the same parcel for a combined price of $1,870,000.

Under 21 N.C. Admin. Code 12.0211, “all structures and units on the same

parcel of land shall be considered as a single project.” Holton cannot avoid this rule

by characterizing the Contract as two separate undertakings. Hodgson Const., Inc.

v. Howard, 187 N.C. App. 408, 414 (2007) (rejecting the argument that a contractor

may “circumvent the consumer protections of Chapter 87 by stringing together

piecemeal contracts for different phases of the construction of a single building”).

Accordingly, the Contract constituted a single undertaking valued at

$1,870,000—nearly double Holton’s $1,000,000 license limitation. Holton lacked

authority under Chapter 87 to undertake this project as a general contractor.

B.

Holton argues that its upgrade to an unlimited license on 20 December 2022

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brought it into compliance with Chapter 87 and permits enforcement of the Contract.

Holton relies principally on Dellinger, in which this Court stated that “competence”

under Chapter 87 “is measured by the extent of the contractor’s license” and that

courts should “look to see whether the construction was by one licensed while

performing the work.” 92 N.C. App. at 747.

Dellinger does not support Holton’s position. In that case, the contractor

entered a cost-plus contract providing that “[t]he cost of the house will be figured on

a cost plus 10% basis with a ceiling of $186,880.00.” Id. at 745. The contractor held

a $175,000 limited license at formation. Id. The final construction cost—$237,259—

exceeded the license limit only because of “changes and additions . . . made to the

contract after plaintiff began construction.” Id. Critically, the contractor upgraded

to an unlimited license just two months after execution, having performed only

approximately $2,800 of work under the limited license. Id. at 746.

Under those circumstances, this Court held that “the value of the work done

by plaintiff was never in excess of his license limit” and that the contractor “should

be allowed to prove his case.” Id. at 747.

Dellinger involved a contract that did not obligate the contractor to exceed his

license limit at formation. The contract price was indeterminate—to be “figured”

based on actual costs—and the stated ceiling exceeded the license limit by a modest

amount. Id. at 745. The cost overruns resulted from owner-requested changes after

the work began, and the contractor upgraded promptly before performing substantial

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work under the limited license.

Here, by contrast, Holton made a definite commitment at formation to

undertake a $1,870,000 project—87% above its $1,000,000 license limitation. There

was no indeterminacy in the contract price. Holton did not upgrade until nine months

after execution, during which time substantial construction work occurred. This is

not a case where unforeseen cost increases pushed a lawful contract beyond the

license limit; this is a case where the contractor knowingly undertook a project far

exceeding its authorized capacity from the outset.

Our holding does not disturb Dellinger. It simply recognizes that Dellinger

presupposes a contract that is lawful at formation. Where, as here, the contractor

lacks authority under Chapter 87 to undertake the project at formation, the contract

is unenforceable and cannot be cured by a subsequent license upgrade. To hold

otherwise would permit contractors to contract first and upgrade later—precisely the

outcome Chapter 87’s strict compliance rule is designed to prevent.

C.

Holton raises several additional arguments, none of which alter our analysis.

First, Holton contends that Brady applies only to “unlicensed” contractors and

not to contractors who hold some license but exceed its limits. This is a distinction

without a difference. A contractor with a $1,000,000 license who undertakes a

$1,870,000 project lacks the required license for that project. The statutory scheme

does not authorize partial compliance; it requires that the contractor hold a license

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appropriate to the undertaking. See Sample, 311 N.C. at 722 (explaining that “the

legislature reasonably determined that as the cost of a structure increased, there

would be additional demands of expertise and responsibilities from the contractor”).

Second, Holton argues that the Contract should be characterized as “cost-plus”

rather than “fixed-price,” creating ambiguity that precludes summary judgment.

This argument misses the point. Regardless of how the Contract allocated risk for

cost overruns, the undisputed contract price at formation was $1,870,000. That figure

exceeded Holton’s license authority. Whether the Contract was “fixed-price” or “cost-

plus” does not change the amount Holton undertook to perform.

Because Holton lacked authority under Chapter 87 to undertake this project

at formation, its breach of contract counterclaim is unenforceable as a matter of law.

The trial court properly granted summary judgment on this ground.

IV.

Even if the licensing bar did not apply, the trial court’s grant of summary

judgment would be proper on alternative grounds.

The Contract expressly provided that any modifications to the contract price

required a written change order signed by both parties. It is undisputed that no

written change orders were executed. Holton has not identified any contractual

mechanism entitling it to compensation beyond the fully paid contract price.

Holton argues that the Barrs’ conduct—allegedly requesting upgrades and

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causing delays—waived the written change order requirement. But Holton did not

develop this argument below with the specificity required to survive summary

judgment. See Gaunt, 139 N.C. App. at 784–85. A nonmoving party must forecast

specific facts, not mere allegations. Holton has not identified which alleged

modifications were requested, when they occurred, what the additional costs were, or

how the Barrs’ conduct manifested an intent to waive the contractual requirement.

To establish a breach of contract claim, a party must prove damages resulting

from the breach. Poor v. Hill, 138 N.C. App. 19, 26 (2000). The undisputed record

shows that Holton received the full $1,870,000 contract price and, according to its

own internal accounting, expended approximately $1,758,504 on the project.

Holton’s damages theory rests entirely on amounts allegedly owed to

subcontractors. But Holton has not paid these amounts, nor has it demonstrated any

legal obligation requiring it to do so. The record contains no judgment, settlement,

or contract establishing Holton’s liability to any subcontractor. Holton cannot

establish damages by pointing to third-party claims it has not satisfied and may never

be required to satisfy.

Holton argues for the first time on appeal that its counterclaim rests on the

Barrs’ alleged late payments and resulting contractual late fees. Issues not raised

before the trial court will not be considered on appeal. Westminster Homes, Inc. v.

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Town of Cary Zoning Bd. of Adjustment, 354 N.C. 298, 309 (2001). The record reflects

that Holton’s counterclaim and opposition to summary judgment focused on alleged

subcontractor debts and cost overruns—not late payments. This argument is not

properly before us.

For the foregoing reasons, the trial court’s order granting summary judgment

on Holton’s breach of contract counterclaim is affirmed.

AFFIRMED.

Judges ARROWOOD and CARPENTER concur.

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