Harris v. A-1 Builders of NC, Inc.

• Court: Court of Appeals of North Carolina
• Decided: March 4, 2014
• Docket: 13-1048
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA13-1048 NORTH CAROLINA COURT OF APPEALS

Filed: 4 March 2014

TERRY HARRIS and MICHELLE HARRIS Plaintiffs,

v. Randolph County No. 12 CVS 2353 A-1 BUILDERS OF NC., INC., Defendant.

Appeal by defendant from order entered 24 April 2013 by

Judge L. Todd Burke in Randolph County Superior Court. Heard in

the Court of Appeals 3 February 2014.

Moser, Schmidly, & Roose, by J. Brooke Schmidly and R. Anthony Copple, for plaintiffs.

Carruthers & Roth, P.A., by Mark K. York and J. Patrick Haywood, for defendant.

ELMORE, Judge.

Defendant appeals from an order entered 24 April 2013

denying its motion for judgment on the pleadings pursuant to

North Carolina Civil Procedure Rule 12(c). After careful

consideration, we affirm the trial court’s order.

I. Facts -2- On 2 August 2010, A-1 Builders of NC, Inc. (defendant)

through its owner and president David Hazelwood, entered into a

contract (purchase contract) and New Construction Addendum (the

addendum) with Michelle A. Harris (Ms. Harris) to build a house

located at 3882 Hangar Run in Sophia, which Ms. Harris agreed to

purchase for $197,600.00. Under the “change orders” provision

of the addendum, the buyer could “order changes in the

construction of the [h]ouse within the general scope of the

[p]lans and [s]pecifications, consisting of additions, deletions

or other revisions, and the purchase price and [c]losing date

shall be adjusted accordingly.” However, the provision

specifically required that “[a]ll such changes shall be made

only by a change order, which shall be in writing and signed by

both [b]uyer and [s]eller.” The addendum also stated that

[s]eller hereby warrants that, for a period of one (1) year from the date of [c]losing or the date [b]uyer occupies the [h]ouse, whichever comes first, [s]eller will make all necessary repairs and corrections to the [h]ouse, either interior or exterior, structural or nonstructural, that shall become necessary by reason of faulty construction, labor or materials or non- conformity of construction to the [p]lans and [s]pecifications.

Ms. Harris’ husband, Terry Harris (Mr. Harris), was not a

party to either the purchase contract or the addendum. After -3- Ms. Harris and defendant executed the contract, but before

construction of the house, Mr. Harris and Ms. Harris

(collectively plaintiffs) asked that defendant install hardwood

stairs in the residence instead of carpeted stairs as originally

agreed upon. Defendant approved this change, and on 27

September 2010, Ms. Harris paid defendant $1,120.00 by check to

complete this upgrade. After defendant commenced construction

of the residence, Ms. Harris requested that defendant construct

two brick columns on the driveway’s entrance. Once again,

defendant acquiesced and was paid $1,010.00 for the cost of the

columns. On 20 October 2010, defendant signed a Warranty of

Completion of Construction, which provided that defendant

“warrants” to buyer, “the property against defects in equipment,

material, or workmanship and materials supplied or performed by

[defendant] or any subcontractor or supplier at any tier

resulting in noncompliance with standards of quality as measured

by acceptable trade practices.”

Plaintiffs conducted a final inspection of the residence on

8 November 2010 and found that some of the hardwood stairs were

cracked. Additionally, plaintiffs noticed that bricks were

falling off the columns. In response, Mr. Harris filed a pro se

small claims action entitled “complaint for money owed” (the -4- first complaint) in the amount of $2,130.00, which alleged that

“[h]ardwood steps has [sic] splits [i]n the wood, can’t use” and

“[b]rick columns – [b]ricks are falling of [sic] the columns[.]”

After a hearing, the magistrate ruled in favor of plaintiff, and

defendant filed notice of appeal to Randolph County District

Court (district court). The case was selected for court ordered

arbitration, and the arbitrator ruled that “plaintiff is awarded

nothing from the defendant” and dismissed the action. Mr.

Harris appealed for a trial de novo in district court, and the

case was heard before Judge Robert M. Wilkins. Judge Wilkins

entered an order on 4 January 2012, concluding as a matter of

law that: 1.) although Mr. Harris was not a party to the

purchase contract between defendant and Ms. Harris, he was a

“real party in interest and ha[d] standing to maintain this

action[;]” and 2.) plaintiff was entitled to $500.00 for the

cost to replace three cracked stairs.

Plaintiffs filed a separate complaint (the second

complaint) on 24 September 2012 for breach of the purchase

contract and addendum; negligent construction and repair; breach

of express warranty; breach of implied warranty of habitability;

and unfair and deceptive trade practices after numerous

unsuccessful attempts, both orally and in writing, to get -5- defendant to correct defective work in and around the residence.

Plaintiffs alleged that they only noticed these additional

defects after they occupied the residence on 22 November 2010.

Defendant moved for judgment on the pleadings, arguing that

plaintiffs’ second complaint was barred by res judicata.

Defendant’s motion was denied in an order entered 24 April 2013

by Judge Burke. Defendant timely appealed Judge Burke’s order

to this Court on 2 May 2013.

II. Analysis

a.) Interlocutory Appeal

We first address plaintiffs’ argument that we should

dismiss defendant’s appeal because the order is interlocutory

and fails to affect a substantial right. We disagree.

“Generally, there is no right of immediate appeal from

interlocutory orders and judgments.” Goldston v. Am. Motors

Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). “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) (citation omitted).

Therefore, a trial court’s denial of a motion for judgment on -6- the pleadings is interlocutory and normally not appealable

because a denial of the motion “does not finally determine the

rights of the parties[.]” Boyce & Isley, PLLC v. Cooper, 169

N.C. App. 572, 574, 611 S.E.2d 175, 176 (2005). However,

immediate appeal of an interlocutory order is available when it

“affects a substantial right[.]” Sharpe v. Worland, 351 N.C.

159, 162, 522 S.E.2d 577, 579 (1999). Our Supreme Court has

noted that “the right to avoid the possibility of two trials on

the same issues can be such a substantial right.” Bockweg v.

Anderson, 333 N.C. 486, 490-91, 428 S.E.2d 157, 160 (1993)

(citation and quotation omitted).

Under the doctrine of res judicata, “a final judgment on

the merits in one action precludes a second suit based on the

same cause of action between the same parties or their privies.”

Williams v. Peabody, ___ N.C. App. ___, ___, 719 S.E.2d 88, 92

(2011) (citation and quotations omitted). Thus, a motion for

judgment on the pleadings based on res judicata seeks to prevent

“a successful defendant, or one in privity with that defendant,

[from] twice hav[ing] to defend against the same claim by the

same plaintiff, or one in privity with that plaintiff.”

Bockweg, 333 N.C. at 491, 428 S.E.2d at 161. An order denying

such a motion can affect a substantial right because it “could -7- lead to a second trial in frustration of the underlying

principles of the doctrine of res judicata.” Id.

Here, defendant’s motion requested that the trial court

dismiss plaintiffs’ complaint because the claims asserted “were

or should have been litigated in the previous action[.]” Thus,

defendant’s motion was based on the defense of res judicata.

The trial court’s denial of defendant’s motion could result in

defendant having to litigate the same claims in the second

complaint that were brought by Mr. Harris in the first

complaint. Therefore, we conclude the order is immediately

appealable because it affects a substantial right, and we

address the merits of defendant’s arguments on appeal.

b.) Judgment on the Pleadings

Defendant argues that the trial court erred in denying his

motion for judgment on the pleadings because plaintiffs’ second

complaint is barred by res judicata. Specifically, defendant

avers that both complaints were based upon breach of the

purchase contract and addendum. We disagree.

We review a trial court’s ruling on a motion for judgment

on the pleadings under a de novo standard of review. Builders

Mut. Ins. Co. v. Glascarr Properties, Inc., 202 N.C. App. 323,

325, 688 S.E.2d 508, 510 (2010) (citation and quotation -8- omitted). “‘Under a de novo review, the court considers the

matter anew and freely substitutes its own judgment’ for that of

the lower tribunal.” State v. Williams, 362 N.C. 628, 632-33,

669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen,

Ltd. P’ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)); see

also Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334, 337,

678 S.E.2d 351, 354 (2009) (“Under a de novo review, the court

considers the matter anew and freely substitutes its own

judgment for that of the lower tribunal.”). Judgment on the

pleadings “is appropriate when all the material allegations of

fact are admitted in the pleadings and only questions of law

remain.” Groves v. Community Hous. Corp., 144 N.C.App. 79, 87,

548 S.E.2d 535, 540 (2001) (citation and quotations omitted).

In ruling on a motion for judgment on the pleadings, we look

“solely to the pleadings” and “only consider facts properly

pleaded and documents referred to or attached to the pleadings.”

Builders Mut. Ins. Co., 202 N.C. App. at 324, 688 S.E.2d at 510

Res judicata, also known as claim preclusion, bars the

“relitigation of all matters . . . that were or should have been

adjudicated in the prior action.” Whitacre P'ship v. Biosignia,

Inc., 358 N.C. 1, 15, 591 S.E.2d 870, 880 (2004) (citation and -9- quotation omitted). The party seeking to assert res judicata

has the burden of establishing its elements. Bluebird Corp. v.

Aubin, 188 N.C. App. 671, 679, 657 S.E.2d 55, 62 (2008). A

party must show “(1) a final judgment on the merits in an

earlier suit, (2) an identity of the causes of action in both

the earlier and the later suit, and (3) an identity of the

parties or their privies in the two suits” in order to prevail

on a theory of res judicata. Herring v. Winston-Salem/Forsyth

Cnty. Bd. of Educ., 188 N.C. App. 441, 444, 656 S.E.2d 307, 310

(2008) (citation and quotation omitted).

The dispositive question to this appeal is whether the

first and second complaints have an identity of the causes of

action. Subsequent to entrance of the purchase contract and

addendum, two separate oral arrangements were agreed upon

between plaintiffs and defendant. Plaintiffs requested that

instead of installing carpeted stairs in the house as was

originally discussed, defendant install hardwood stairs.

Defendant agreed, and Ms. Harris paid defendant $1,120.00. Ms.

Harris also asked defendant to build two brick columns on the

driveway and paid defendant $1,010.00 to complete the task.

Under the addendum, the only way to modify the construction of

the residence was pursuant to the “change orders” provision of -10- the addendum. However, the construction of the hardwood stairs

and the columns did not operate as a “change order” because they

were neither made in writing nor signed by the parties.

Furthermore, the price of the house under the purchase contract

did not change, as required by the change order provision,

despite the additional construction costs. Thus, the terms of

the purchase contract and addendum were unchanged and remained

the same as originally contemplated.

When plaintiffs conducted a final inspection of the

residence before moving in, they observed that 3 of the 11

hardwood stairs were cracked. They also noted that the bricks

were falling off the columns, and the columns were different

heights. Accordingly, Mr. Harris filed the first complaint for

money owed in the amount of $2,130.00, which was the total sum

provided by plaintiffs to defendant for construction of the

hardwood stairs and the columns. The first complaint merely

alleged that “[h]ardwood steps has [sic] splits [i]n the wood,

can’t use” and “[b]rick columns – [b]ricks are falling of [sic]

the columns[.]” Mr. Harris also specified that “[defendant] was

paid cash for steps . . . and [b]rick columns [i]n front of

[h]ouse. The wood has splits in it and the [b]ricks are falling

off.” Thus, the totality of the circumstances surrounding the -11- first complaint shows that it originated from a separate oral

agreement arising outside the scope of the purchase contract and

addendum.

Unlike the first complaint, the subject matter of the

second complaint is not money owed for the hardwood steps or

columns. Rather, the second complaint is based on a statutory

violation and breach of contract that alleges defendant’s breach

of the purchase contract and addendum, negligent construction

and repair, breach of express warranty, breach of implied

warranty of habitability, and unfair and deceptive trade

practices. The allegations address defendant’s failure to abide

by the terms of the contracts by not: 1.) “perform[ing] work on

the [r]esidence and property in a proper, workmanlike and

ordinarily skillful manner[;]” 2.) working “in accordance with .

. . the standards of good workmanship common in the construction

industry[;]” and 3.) “correct[ing] the defective work performed

on the [r]esidence[.]” Plaintiffs list over twenty-five

discovered alleged defects, none of which include faulty

construction of the hardwood stairs or the columns. While the

first complaint involved an issue for money owed stemming from

an agreement made outside the purview of the purchase contract

and addendum before plaintiffs occupied the residence, the -12- second complaint directly relates to defendant’s breach of the

purchase contract, addendum, warranties, and industry standards

after plaintiffs’ occupancy. Thus, the claims in the complaints

arise from two different causes of action. Accordingly, we rule

that the trial court did not err in denying defendant’s motion

for judgment on the pleadings because plaintiffs’ second

complaint is not barred by res judicata.

III. Conclusion

In sum, the trial court did not err in denying defendant’s

motion for judgment on the pleadings. Thus, we affirm the trial

court’s order.

Affirmed.

Chief Judge MARTIN and Judge HUNTER, Robert N., concur.

Report per Rule 30(e).