N. State Envtl., Inc. v. Town of Mooresville

CourtCourt of Appeals of North Carolina
DecidedJune 18, 2025
Docket24-765
StatusPublished

This text of N. State Envtl., Inc. v. Town of Mooresville (N. State Envtl., Inc. v. Town of Mooresville) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
N. State Envtl., Inc. v. Town of Mooresville, (N.C. Ct. App. 2025).

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-765

Filed 18 June 2025

Iredell County, No. 21CVS001134-480

NORTH STATE ENVIRONMENTAL, INC., Plaintiff,

v.

TOWN OF MOORESVILLE, Defendant.

Appeal by defendant from judgment entered 10 July 2023 by Judge William

Long in Iredell County Superior Court. Heard in the Court of Appeals 8 April 2025.

Craige Jenkins Liipfert & Walker LLP, by William W. Walker and Lori B. Edwards, for plaintiff-appellee.

Cranfill Sumner LLP, by Steven A. Bader and Mica N. Worthy, for defendant- appellant.

ZACHARY, Judge.

Defendant Town of Mooresville (“the Town”) appeals from the trial court’s

judgment awarding Plaintiff North State Environmental, Inc., (“North State”) the

sum of $132,657.40 plus interest on its claim for breach of contract. After careful

review, we affirm.

I. Background

We recite only the facts necessary for our analysis. These include the relevant

findings of fact made by the trial court, none of which are disputed on appeal.

In 2013, the Town contracted with the North Carolina Department of N. STATE ENVTL., INC. V. TOWN OF MOORESVILLE

Opinion of the Court

Transportation (“NCDOT”) to administer a roadway improvement project (“the

Project”) at an intersection on State Highway 115. “The Project had two principal

goals: to realign the intersection; and to install a storm water drainage system under

the roads. Installation of the drainage system was the Project’s ‘controlling

operation.’ ” The contract between the Town and NCDOT provided, inter alia, that

the Town “and/or its agent, at no liability to [NCDOT], shall relocate, adjust, relay,

change or repair all utilities in conflict with the Project, regardless of ownership.”

The Town hired the engineering firm Ramey Kemp (“Kemp”) to design plans

for the Project in 2015. In its contract with the Town, Kemp agreed to “[c]oordinate

existing private utility conflicts and relocations required for the proposed

improvements with the appropriate utility company” and to “[i]dentify all potential

utility impacts caused by the [P]roject and show [the potential utility impacts] on

plans prepared for coordination with utility owners.”

As the trial court described in its findings of fact, Kemp failed to identify

several potential utility impacts:

7. Kemp’s scope of work included a requirement that it produce information and diagrams in “Utilities By Others Plans” (UBO Plans).

8. In 2016, Public Service Company of North Carolina/Dominion Energy (Dominion) gave Kemp drawings of its underground gas lines and other facilities in the Project area.

9. Kemp’s “Utility Analysis and Routing Report” dated June 6, 2016, said Dominion’s underground gas lines would

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not conflict with the Project’s drainage system.

10. Kemp failed to identify several Dominion gas lines in conflict with the planned drainage system. In turn, Kemp failed to show all of the Dominion gas lines on the Project plans. And Kemp never produced UBO Plans.

11. Kemp finalized the Project plans on March 12, 2018.

(Internal citations omitted).

On 5 February 2019, the Town awarded the contract for the Project (“the

Contract”) to North State. The Town subcontracted the construction engineering and

inspection work to Stewart Engineering (“Stewart”), which subsequently

subcontracted these portions of the Project to A. Morton Thomas and Associates, Inc.

(“AMT”). AMT, in turn, named Brenna Stephenson the Project Engineer under the

Contract. The Contract included a term (“the Authority of Engineer Term”) giving

Stephenson, as Project Engineer, the final authority to resolve certain disputes.

The Contract also incorporated, inter alia, NCDOT Standard Specification

§ 105-8, which provided that before beginning construction, the Town was required

to “notify all utility owners known to have facilities affected by the construction of the

[P]roject and . . . make arrangements for the necessary adjustments of all affected

public or private utility facilities.” This Standard Specification further provided that

“[t]he utility adjustments may be made either before or after the beginning of

construction of the [P]roject. The adjustments will be made by the utility owner or his

representative or by [North State] when such adjustments are part of the work

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covered by [the C]ontract.”

Additionally, the Contract incorporated NCDOT Standard Specification § 108-

13, which, in pertinent part, authorized the Town to terminate the Contract if it was

impossible for North State to complete its contracted work:

The [Town] may terminate the [C]ontract in accordance with the following provisions:

(A) The [Town] will consider termination of the [C]ontract upon written notification by [North State] that any of the following circumstances exist. [North State] shall include adequate documentation of these circumstances along with such notification:

....

(2) If it is impossible for [North State] to complete the work in accordance with the [C]ontract by reason of unanticipated conditions at the site, including slides and unstable subsoil, without a major change in the design of the [P]roject and [North State] will be unduly delayed in completing the [P]roject by reason of such unanticipated conditions and changes in design . . . .

Before North State began work on the Project, it was informed that there were

no anticipated utility conflicts. However, as North State commenced its work, the

first utility conflicts were discovered and the first conflicts regarding payment for

work on the Project arose between North State and the Town:

19. In June 2019, North State’s surveyor discovered a sewer line manhole in conflict with the Project fill elevation in the southeast quadrant. The Town installed the new sewer line in the Project area unbeknownst to North State and after North State was awarded the Contract.

-4- N. STATE ENVTL., INC. V. TOWN OF MOORESVILLE

20. The first progress meeting was held on site on June 25, 2019. The AMT and North State representatives discussed the poor condition of the road pavement in the Project area, and North State’s representative asked for a GIS layout (i.e., a map) of the utilities in the Project area. AMT never supplied North State with a GIS layout of the utilities.

21. In June and July 2019, utility poles prevented North State from bringing fill to the southeast quadrant of the Project. Duke was in the process of moving the poles at that time.

22. North State sent AMT an updated progress narrative on October 3, 2019, and started work on the Project on October 25, 2019.

23. North State installed a construction entrance and temporary traffic control, cleared part of the Project area, and brought in fill materials for the southeast quadrant of the Project.

24. In early December 2019, North State began a planned “jack-and-bore” across and under NC 115. (Jack-and-bore is a procedure used to install pipe under a road without cutting open the road surface.) The plans called for the drainage pipe to run 80 feet and to end in Box 403 at the west side of NC 115 in the Project’s southwest quadrant. (A box is a concrete structure, about five feet tall, laid underground to serve as a connection and pivot point for the pipes. The Project plans had four boxes in the drainage system.)

25. The jack and bore could not be completed.

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