223 N.C. App. 37
N.C. Ct. App.2012Background
- Plaintiffs JCC, RGC, and ECC filed an amended complaint on 10 Dec 2010 against GHC and Mountain Community Bank.
- Subject property comprises about 41.87 acres between Banner Elk and Linville, improved from spring 2005 through Jan 2009; ownership shifted from Wilmor to GHC, with the bank financing the purchase.
- Plaintiffs allege an oral 2004 agreement to furnish labor and materials for grading, road construction, utilities, and related improvements due to longstanding relationships with Fields.
- Labor and materials were supplied from spring 2005 to 14 Jan 2009; an invoice for $1,377,774.02 was partly paid ($262,000) by Fields, with the remaining balance unpaid.
- Bank foreclosed on 24 Nov 2008 and purchased the property at public auction for $4,000,000; Plaintiffs filed a lien claim on 16 Jan 2009 for $1,774,119.84, asserting the bank as successor to GHC.
- Amended complaint sought lien enforcement and equitable relief, plus other claims; Bank moved to dismiss under Rule 12(b)(6) and 12(b)(7).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have a valid materialmen’s lien under 44A-8. | JCC/RGC claim a lien under 44A-8 based on labor and materials. | Bank contends no lien exists because GHC was not owner when work commenced and there was no express contract with the bank. | No; plaintiffs lacked a statutory right because there was no contract with the owner when work began. |
| Whether the equitable claim of unjust enrichment survives given Embree and remaining loan funds. | Plaintiffs are unjustly enriched by $1.8 million retained by bank. | Chapter 44A provides lien relief; equity can address remaining funds. | Overruled; Embree distinguishing remaining loan funds; no equitable relief applicable here. |
| Whether the trial court erred by not addressing joinder of Fields under Rule 12(b)(7). | Joinder of Fields is necessary to adjudicate the lien claim. | Rule 12(b)(6) disposal makes joinder moot; Fields not necessary to resolve the lien issue. | Not addressed on appeal because Rule 12(b)(6) dismissal suffices. |
Key Cases Cited
- Stanback v. Stanback, 297 N.C. 181 (1979) (tests legal sufficiency; pleadings are admitted for motion to dismiss; de novo review standard)
- Ventriglia v. Deese, 194 N.C. App. 344 (2008) (three conditions for dismissal under 12(b)(6))
- Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396 (2003) (liberal construction of complaint; de novo review)
- Carolina Builders Corp. v. Howard-Veasey Homes, Inc., 72 N.C. App. 224 (1985) (owner for lien purposes includes equitable title; expands applicability of 44A-8)
- Embree Construction Group, Inc. v. Rafcor, Inc., 330 N.C. 487 (1992) (equitable lien allowed when lender unjustly enriched; distinguishes from remaining loan funds)
- West Durham Lumber Co. v. Meadows, 179 N.C. App. 347 (2006) (concept of instantaneous seisin; timing of lien attachment)