835 S.E.2d 473
N.C. Ct. App.2019Background
- Shadowline Partners, LLC owned land intended for student housing; DDR-Shadowline, LLC (DDR) and Deeds Realty Services, LLC (Deeds) expressed interest in buying/developing it.
- DDR originally contracted with Brent Davis Architecture (later assigned to Davis & Taft) to prepare architectural plans; Davis & Taft provided a fee proposal and received an initial payment.
- On Sept. 30, 2016 Shadowline and Deeds signed a Purchase and Sale Agreement that expressly named Davis & Taft in a “Third Party Payments” clause obligating Shadowline to pay up to $230,000 (including a $74,500 invoice due on execution).
- Deeds assigned its interest to DDR; DDR failed to close and Shadowline terminated the Agreement on Dec. 7, 2016. Shadowline still owed Davis & Taft about $80,000, and Davis & Taft filed an $80,000 claim of lien on the property.
- Davis & Taft sued Shadowline, DDR, and Deeds (claims for breach of contract, quantum meruit, and enforcement of lien). The trial court dismissed the lien claim under Rule 12(b)(6) and later granted summary judgment for Davis & Taft on the breach (and quantum meruit) claims; claims against Deeds were dismissed.
- Shadowline appealed the summary judgment; Davis & Taft sought review of the lien dismissal by writ of certiorari. The Court of Appeals affirmed both trial-court orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforcement of claim of lien: did Davis & Taft have a contract with an “owner” permitting a lien? | Davis & Taft: furnished architectural services under contract tied to the property and therefore had lien rights. | Shadowline: §44A-8 requires a contract with an “owner” for an actual improvement to real property; Davis & Taft’s design work did not directly improve the land. | Court: Lien dismissed—no “owner” contract because no work directly impacted the property; statutory lien inapplicable. |
| Breach of contract / third-party beneficiary: was Davis & Taft an intended third-party beneficiary of the Purchase & Sale Agreement? | Davis & Taft: expressly named in the Agreement’s “Third Party Payments” clause and performed services; parties intended to confer a direct benefit. | Shadowline: no intent to create an enforceable third-party right. | Court: Summary judgment for Davis & Taft—was an intended third-party beneficiary; no genuine issue of material fact. |
| Quantum meruit remedy: could Davis & Taft recover in quantum meruit despite the contract? | Davis & Taft: alternatively sought recovery on an implied contract theory. | Shadowline: existence of an express contract precludes quantum meruit. | Court: Did not reach merits—express contract exists, so quantum meruit is precluded once contract claim is resolved. |
Key Cases Cited
- Parker v. Town of Erwin, 243 N.C. App. 84 (N.C. App. 2015) (Rule 12(b)(6) tests legal sufficiency of the complaint).
- Signature Dev., L.L.C. v. Sandler Commercial at Union, L.L.C., 207 N.C. App. 576 (N.C. App. 2010) (standards for dismissal when complaint shows missing or defeating facts).
- O & M Indus. v. Smith Eng’g Co., 360 N.C. 263 (N.C. 2006) (materialman’s lien statute is remedial to protect suppliers and professionals).
- S.E. Steel Erectors, Inc. v. Inco, Inc., 108 N.C. App. 429 (N.C. App. 1993) (lien requires actual work that directly impacts the real property).
- Hospira Inc. v. AlphaGary Corp., 194 N.C. App. 695 (N.C. App. 2009) (third-party beneficiary exists only if contracting parties intended to confer a legally enforceable benefit).
- Vogel v. Supply Co., 277 N.C. 119 (N.C. 1970) (express naming of third party supports beneficiary status).
- Ron Medlin Constr. v. Harris, 364 N.C. 577 (N.C. 2010) (quantum meruit is not available where an express contract governs the matter).