K. Lee Builders, Inc. v. Barnes

• Court: Court of Appeals of North Carolina
• Decided: July 1, 2026
• Docket: 25-1029
• Status: Published
• Author: Judge John Arrowood

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA25-1029

Filed 1 July 2026

Vance County, No. 23CVS001277-900

K. LEE BUILDERS, INC., Plaintiff,

v.

THOMAS SCOTT BARNES, Defendant.

Appeal by defendant from judgment entered 21 March 2025 and order entered

18 June 2025 by Judge Brian C. Wilks in Vance County Superior Court. Heard in

the Court of Appeals 3 June 2026.

Banzet, Thompson, Styers & May, PLLC, by Mitchell G. Styers, and Simpson Law Firm, PLLC, by Benjamin S. Gurlitz and R. Shane Walker, for plaintiff- appellee.

Haynsworth Sinkler Boyd P.A., by Lindsey E. Powell, Todd A. Jones, and Christian Lunghi, for defendant-appellant.

ARROWOOD, Judge.

Thomas Scott Barnes (“defendant”) appeals from judgment entered following

trial, wherein a jury determined that defendant breached a construction contract

with K. Lee Builders, Inc. (“plaintiff”), and from the Status Quo Order obliging the

Clerk of Court to retain funds defendant deposited pursuant to a Cash Bond, pending

disposition of this appeal.

I. Introduction K. LEE BUILDERS, INC. V. BARNES

Opinion of the Court

Defendant entered a construction contract with plaintiff, a licensed general

contractor. The contract was executed and signed by the parties on or around

1 August 2022, and it set out the parties’ responsibilities in connection with the

construction of a home on defendant’s real property in Henderson. Plaintiff was

obligated to supervise construction, furnish all necessary labor and materials, pay

taxes and procure licenses and permits, comply with construction laws and

regulations, complete clean-up, and take all reasonable safety precautions. The

contract contained a warranty of fitness as to all equipment and materials used, a

warranty of workmanlike performance, and a one-year warranty from the date of a

certificate of occupancy. The contract permitted plaintiff to terminate the contract in

the event defendant failed to make a required payment, while permitting defendant

to terminate the contract in the event plaintiff failed to perform its duties under the

agreement and then failed to cure its default within thirty days, but required

defendant to pay for all work performed to date, minus any unpaid portion of

plaintiff’s builder’s fee.

Plaintiff first “broke ground” in the construction project on 2 November 2022.

During February 2023, while construction was ongoing, defendant raised concerns

about plaintiff’s sealing of the basement, and plaintiff attempted fixes which

ultimately did not satisfy defendant. Amid this conflict, plaintiff continued to work

on the property until at least 13 September 2023.

On 4 October 2023, plaintiff filed a Claim of Lien on Real Property pursuant

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to N.C.G.S. § 44A-12, et seq, asserting a claim of $53,410.76, plus interest, attorney’s

fees, and costs, against defendant’s real property. The filing incorrectly recorded the

date that labor was first furnished as 5 September 2022 and incorrectly recorded the

date the labor was last furnished as 25 August 2023. The filing certified that

defendant was served in accordance with statute.

On 14 December 2023, plaintiff filed its Complaint in this dispute, repeating

the above incorrect labor dates, and alleging that defendant materially breached their

contract by failing to pay $53,410.76, causing plaintiff to cease performance. Plaintiff

sought recovery of this amount in actual damages plus interest and costs, judgment

against defendant in the above amount for the reasonable value of services plus

reasonable legal fees expended to enforce the claim, and requested that the judgment

constitute a lien against defendant’s real property. Plaintiff also filed Notice of Lis

Pendens noting the filing of its Complaint. Plaintiff filed an Affidavit of Service of

Process as to the summons and complaint and Notice of Lis Pendens on

11 January 2024.

On 24 January 2024, defendant filed a Cash Bond to Discharge Mechanics

Lien and deposited $53,410.76 with the Clerk of Superior Court in Vance County. On

31 January 2024, defendant filed his Answer and Defenses and Counterclaims

alleging causes of action for breach of contract, breach of express warranty, breach of

implied warranty, fraud, unfair and deceptive trade practices, and punitive damages.

On 17 January 2025, following discovery and depositions, plaintiff moved for

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Summary Judgment. Defendant moved for Judgment on the Pleadings on

10 February 2025, alleging that plaintiff’s claim of lien was fatally defective due to

failure to include “all substantive and procedural requirements necessary” and

requesting an order granting attorneys’ fees and damages resulting from cloud on

title. Defendant also moved for Summary Judgment, arguing that the incorrect date

of first furnishing failed to perfect plaintiff’s lien, and that the lien was fatally

defective. Defendant again moved for Summary Judgment on 28 February 2025

“with respect to whether Plaintiff has breached the contract at issue[.]”

The court heard oral arguments from both parties in a pretrial hearing on

10 March 2025. Defendant’s counsel argued that the lien had been fatally defective

and was therefore unenforceable, because the “dates of first and last furnishing on a

lien are critical because when a lien is enforced, the lien will be held to relate back

and become effective from the first date of the furnishing” and that “[n]obody

searching the records and looking at the lien in the Complaint would have reason to

know that these dates are false.” Accordingly, if “contractors are allowed to put false

dates of furnishing on their lien, it sends a message to any other contractor that they

don’t need to be accurate with respect to the dates” and could thereby “establish false

lien priority” and “sidestep the strict statutes [setting out] the time in which they

[must] enforce the lien.”

Plaintiff’s counsel argued that, as a matter of statute, the matter was moot

because the lien was cancelled when defendant filed his cash bond in the sum

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equaling the claim. Plaintiff’s counsel also pointed out that no other parties were

“dependent on this lien date” and that because plaintiff had no claim regarding work

performed outside those dates, defendant would not have been prejudiced.

The court granted defendant’s first Motion for Summary Judgment in open

court because “the dates [in plaintiff’s Complaint] are not in compliance with the

statute.” However, the following day, the court announced that this was mistaken:

“The Court, having time to reflect on that and do further research . . . It was simply

a wrong beginning and end date that the Court will modify . . . to correspond with the

evidence as brought out through arguments and further discovery.” Following

further argument, the court found “that the defendant was put on notice of the subject

matter of the lien, that the error is not a fatal error[.]” The court “in a sanction for

the error in its discretion, will comport the dates to the evidence presented as to

timeframe, which under [N.C.G.S. §] 44A-16, the lien was discharged, which makes

the plaintiff’s claim to enforce that lien a moot point.” The court noted defendant’s

objection.

On 11 March 2025, the Court issued a written Order allowing plaintiff’s

Motion for Summary Judgment on defendant’s claims for breach of warranty and

breach of implied warranty and denying the Motion on defendant’s claims of breach

of contract, unfair and deceptive trade practices, fraud, and punitive damages. The

Court also issued a written Order denying defendant’s Motion for Summary

Judgment as to breach of contract.

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Following trial, the jury found that defendant breached the construction

contract by non-performance, entitling plaintiff to recover $53,410.76. The jury found

that plaintiff did not breach the contract by non-performance or cause defendant to

suffer damages by plaintiff’s actions, and that defendant was not entitled to recover

any amount from plaintiff. The court entered judgment in accordance with the

verdict on 21 March 2025, retaining jurisdiction to hear motions as to attorney’s fees

and costs.

On 14 April 2025, defendant filed a Rule 59 Motion requesting alteration of the

judgment or a new trial. On 17 April 2025, defendant filed notice of appeal from the

above judgment. Following a hearing on the Rule 59 Motion, the court entered a

Status Quo order, concluding that due to defendant’s appeal, the court lacked

jurisdiction over the Motion, and that the Clerk of Court should retain the funds

deposited alongside defendant’s bond pending disposition of the instant appeal.

On 15 July 2025, defendant noticed appeal from the Status Quo order. On

2 September 2025, this Court ordered defendant to file his appeals in a single record,

which was then settled by stipulation and docketed on 6 November 2025.

II. Discussion

On appeal, defendant argues that the trial court erred in denying his Motion

for Summary Judgment as to plaintiff’s lien enforcement claim, in restraining

defendant’s bond pursuant to the Status Quo Order pending the outcome of this

appeal, and in denying his Motion for Judgment on the Pleadings. We discuss each

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argument in turn.

A. Plaintiff Failed to Establish a Valid Claim of Lien

We review de novo a trial court’s order on summary judgment. Davis & Taft

Architecture, P.A., v. DDR-Shadowline, LLC, 268 N.C. App 327, 332 (2019) (citing

Shroyer v. Cty. of Mecklenburg, 154 N.C. App. 163, 167 (2002)). “We view the

pleadings and all other evidence in the light most favorable to the nonmovant and

draw all reasonable inferences in that party's favor.” N.C. Farm Bureau Mut. Ins.

Co. v. Sadler, 365 N.C. 178, 182 (2011)). Summary judgment should be granted “if

the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that any party is entitled to judgment as a matter of law.” N.C.G.S.

§ 1A-1, Rule 56(c). “An issue is genuine if it can be proven by substantial evidence

and a fact is material if it would constitute or irrevocably establish any material

element of a claim or a defense.” Id. (cleaned up).

The requirements for filing and perfecting a claim of lien on real property are

provided by N.C.G.S. § 44A-12, which states that “[a]ll claims of lien on real property

must be filed using a form substantially as follows[,]” including the names and

addresses of the parties involved, general descriptions of the property and work, and

the following:

(5) Date upon which labor or materials were first furnished upon said property by the claimant: (5a) Date upon which labor or materials were last

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furnished upon said property by the claimant:

N.C.G.S. § 44A-12(c) (emphasis added).

A claim of lien on real property is perfected once filed and a copy is served upon

the property’s record owner. N.C.G.S. § 44A-11(a). However, “a lien is lost if the

steps required to perfect it are not taken in the same manner and within the time

prescribed by law.” Strickland v. Gen. Bldg. & Masonry Contractors, Inc., 22 N.C.

App. 729, 731 (1974) (citation omitted).

“When a lien is validly perfected, and is subsequently enforced by bringing an

action within the statutory period . . . the lien will be held to relate back and become

effective from the date of the first furnishing of labor or materials under the contract,

and will be deemed perfected as of that time.” Frank H. Conner Co. v. Spanish Inns

Charlotte, Ltd., 294 N.C. 661, 667 (1978). A claim of lien cannot be amended, so the

lien claimant is bound by the claim of lien as filed. N.C.G.S. § 44A-12(d); see also

Brown v. Middleton, 86 N.C. App. 63 (1987).

Here, we ask whether a claim of lien substantially complies with statute where

both dates of furnishing are plainly incorrect. If the claim of lien was legally

insufficient, it would have been proper to grant summary judgment as to the lien

enforcement claim. “The claim of lien is the foundation of the action to enforce the

lien, and if such lien is defective when filed, it is no lien.” Mebane Lumber Co. v.

Avery & Bullock Builders, Inc., 270 N.C. 337, 341 (1967) (citation omitted).

In a recent case, where a plaintiff’s claim of lien omitted any date of final

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furnishing, we held that this date was required and that the lien was therefore legally

deficient. Fine Line Homes, LP v. Luthra, 298 N.C. App. 670, 674 (2025). As in the

instant case, the plaintiff argued that only substantial compliance was necessary

under § 44A-12 and that the filing was legally sufficient. We disagreed and held that

the claim of lien required a correct date of final furnishing “to determine whether the

contractor has brought both the filing and the enforcement action within the

statutory time period, which must be completed in order to perfect and enforce a

mechanic’s lien.” Id. at 675. In rejecting the plaintiff’s argument, the Court stated:

While Plaintiff correctly provides that the Legislature used the phrase “must be filed using a form substantially as follows,” the statutory history suggests, and our case law confirms, the Legislature amended N.C.G.S. § 44A-12 in 1977, “whereby subsection (c)(5a) was added to require that all claims of lien state the date upon which labor or materials were last furnished.”

Accordingly, because the date of furnishing is necessary to the perfection and enforcement of a mechanic’s lien, and because this Court has provided that section (c)(5a) was added by the Legislature “to require that all claims of lien state the date upon which labor or materials were last furnished,” we conclude the trial court did not err in finding Plaintiff’s lien defective where Plaintiff left off the date of the last furnishings of labor or materials.

Id. (emphasis in original, quotes and citations omitted).

This holding compels an analogous result in the instant case. Indeed, because

of its effect upon the statutory time limit for filing a claim, and because the claim of

lien cannot be amended, an incorrect final furnishing date renders a lien legally

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defective just as does an omitted date.

Moreover, plaintiff’s incorrect date was not an obvious scrivener’s error. In

Canady v. Creech, 288 N.C. 354 (1975), an erroneous date of final furnishing was so

obvious that it could not mislead anyone and therefore did not render the claim of

lien defective. Canady, 288 N.C. at 358. In that case, the listed date of final

furnishing was subsequent in time to the claim’s filing date, rendering the document

internally incoherent, and therefore, any reader would have been on notice of an

accidental scrivener’s error. Id. at 356.

Likewise, in Beach & Adams Builders, Inc. v. The Northwestern Bank, 28 N.C.

App. 80 (1975), the Court held that the plaintiff was bound by an incorrect date of

last furnishing on his claim of lien where there was nothing on its face to indicate

that the date was erroneous. To reach that holding, the Court distinguished Canady

and Strickland to set out the following reasoning:

In Strickland, we wrote that “. . . a lien is lost if the steps required to perfect it are not taken in the same manner and within the time prescribed.” We further held in Strickland that to force the examiner to go outside the record as filed would “. . . impose an undue burden on the title examiner, and would damage the principle of reliance upon the public record.” We believe these principles remain sound in North Carolina after Canady, but for those rare instances in which an examiner should be able to detect errors which on the face of the record seem incongruous, obvious, self- apparent and easily reconcilable.

Beach & Adams Builders, Inc., 28 N.C. App. at 84. So too here. Because the error

was not obvious and self-apparent, these principles must apply.

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Although in the instant case, neither defendant nor any third party was

actually prejudiced by the incorrect date, this factor does not control our analysis.

Substantial compliance with the filing requirements for claims of lien requires

plaintiffs to record their claims “in sufficient detail to put interested parties, or

parties who may become interested, on notice[.]” Mebane Lumber Co., 270 N.C. at 341

(emphasis added). Indeed, as to any claim of lien, it has always been important to

ensure that “[n]o one need misunderstand it who should become interested in the

property.” Cameron v. Lumber Co., 118 N.C. 266, 268 (1896).

The requirement of accurate furnishing dates is grounded on the principle that

inconsistent public records must be avoided, because such errors permit not only

pleadings filed outside of statutory time limits but undue burdens on potential title

examiners. The purpose, therefore, is the prevention of inaccurate or insufficient

public notice. Regarding the previous form of the statute, which required of laborer’s

liens that “all claims shall be filed in detail, specifying the materials furnished or

labor performed, and the time thereof,” our Supreme Court held that:

The obvious purpose of this requirement is to give public notice in the offices designated of the plaintiff's “claim,” his debt, the amount of it, the materials supplied, or the labor done, when done, on what property, on what farm or crop, and when, specified with such detail and certainty as will give reasonable notice to all persons of the character of the claim and the property to which the lien on account of the same attaches; and of the lien thereby established.

Cook v. Cobb, 101 N.C. 68, 7 S.E. 700, 701 (1888).

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Accordingly, because plaintiff’s claim of lien contained incorrect dates and

thereby failed to give either accurate or “reasonable notice to all persons of the

character of the claim[,]” a valid lien was not established, and a lienor can neither

perfect nor enforce a legally defective lien.

Therefore, the trial court erred in concluding that plaintiff’s filing substantially

complied with statutory requirements. For this reason, we vacate the court’s order

denying defendant’s Motion and remand for entry of summary judgment in favor of

defendant as to plaintiff’s lien enforcement claim.

B. The Status Quo Order Should be Vacated

As a natural consequence of plaintiff’s failure to establish a valid lien, the Clerk

of Court is required to release defendant’s bond. Despite plaintiff’s successful

litigation of his breach of contract claim, the methods to discharge claims of lien on

real property pursuant to N.C.G.S. § 44A-16 are “not to provide a ready source of

money for those who have been injured.” George v. Hartford Acc. & Indem. Co., 330

N.C. 755, 760 (1992). Instead, the bond’s primary purpose is “to provide the

landowner a convenient way to unburden the land while the lien claimant’s claim is

litigated.” Id. “Because the bond acts as a substitute for the land, logic dictates that

the lien claimant’s right to make demand upon the bond accrues at the same time

that he would have been able to enforce the lien against the land.” Id. at 161.

Accordingly, plaintiff was required to prosecute and prevail on a lien claim to

recover against this bond, and where a plaintiff had no valid claim of lien to enforce,

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he is unable to do so. Plaintiff is still entitled to collect $53,410.76 pursuant to the

jury’s verdict, as a remedy for defendant’s breach of contract. However, we vacate

the Status Quo Order.

C. The Denial of Defendant’s Motion for Judgment on the Pleadings is Not Appealable

“[N]ormally an appeal does not lie from the denial of a motion for judgment on

the pleadings.” Whitaker v. Clark, 109 N.C. App. 379, 381 cert. denied, 333 N.C. 795

(1993) (citing Barrier v. Randolph, 260 N.C. 741, 743 (1963)). Such appeals are

permitted only where “such order affects a substantial right.” Sherrill v. Amerada

Hess Corp., 130 N.C. App. 711, 719 (1998).

“[T]he right itself must be substantial and the deprivation of that substantial right must potentially work injury to plaintiff if not corrected before appeal from final judgment.” Goldston v. American Motors Corp., 326 N.C. 723, 726 (1990). The substantial right test is “more easily stated than applied.” Waters v. Qualified Personnel, Inc., 294 N.C. 200, 208 (1978). And such a determination “usually depends on the facts and circumstances of each case and the procedural context of the orders appealed from.” Estrada v. Jaques, 70 N.C. App. 627, 642 (1984).

Wood v. McDonald’s Corp., 166 N.C. App. 48, 54 (2004).

The pleadings in this case were clearly sufficient to state a claim for breach of

contract and the jury found that plaintiff was entitled to recover on that breach.

Therefore, we find that the denial of defendant’s motion for judgment on the

pleadings is moot, does not affect a substantial right and we dismiss the same.

III. Conclusion

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For the foregoing reasons, we reverse the court’s denial of defendant’s Motion

for Summary Judgment as to plaintiff’s lien enforcement claim, vacate the Status

Quo Order, affirm the court’s entry of judgment as to plaintiff’s breach of contract

claim, and remand for further proceedings.

REVERSED IN PART; AFFIRMED IN PART AND REMANDED.

Judges STROUD and COLLINS concur.

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