207 N.C. App. 576
N.C. Ct. App.2010Background
- Signature and Sandler entered a Development Management Agreement to develop Cureton Town Center with Signature as Project Manager; Sandler retained control of the project.
- Signature’s duties included planning, development, construction management, marketing, and leasing coordination, with performance subject to Owner’s direction and approval.
- Compensation included an Initial Development Fee, Base Development Fee, Leasing Fee, Sales Fee, and a Participation Fee; Signature alleges Sandler did not pay the Participation Fee.
- Signature filed a lien on the Property to secure the Participation Fee and pursued a broad litigation course seeking damages and equitable relief; Wells Fargo challenged attachment rights.
- Sandler moved to dismiss under Rule 12(b)(6) arguing Signature is an unlicensed general contractor under N.C. Gen.Stat. § 87-1, which would bar recovery; the trial court partially granted the motion and struck Signature’s lien and dissolved attachment.
- The Court of Appeals reversed in part, holding Signature was not a general contractor under the licensing statute, affirmed the lien-strike, but remanded related attachment issues for Wells Fargo’s and other proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Signature was a general contractor under § 87-1. | Signature acted as Owner's agent, not a general contractor; not required to be licensed. | Signature controlled the project and thus was a general contractor needing a license. | Signature was not a general contractor; trial court erred in dismissing claims. |
| Whether the contract claims were properly dismissed under the unlicensed-contractor theory. | Claims should survive because Signature was not required to be licensed and acted as project manager. | Unlicensed general contractor cannot recover; claims should be dismissed. | Dismissal reversed; claims can proceed. |
| Whether the strike of the lien was proper. | Lien was properly filed to secure payment of the Participation Fee. | Lien should be struck because Participation Fee is not a debt for labor or materials. | Lien-striking affirmed; lien not proper under § 44A-8. |
| Whether the order of attachment should have been dissolved. | Attachment properly secured the potential monetary judgment. | Attachment should be dissolved if claims dismissed or as to the attached property. | Order dissolving attachment reversed; remand for Wells Fargo application proceedings. |
| Whether this interlocutory order is appealable. | Immediate appeal permitted due to substantial rights at stake and risk of inconsistent verdicts. | Interlocutory orders typically not appealable; certification governs. | Interlocutory order deemed appealable; merits reached. |
Key Cases Cited
- Helms v. Dawkins, 32 N.C. App. 453 (1977) (control-test approach to determine general contractor status)
- Mill-Power Supply Co. v. CVM Assocs., 85 N.C. App. 455 (1987) ( Helms-based control test; general contractor status depends on project-wide control)
- Duke Univ. v. Am. Arbitration Ass'n, 64 N.C. App. 75 (1983) (supervision by construction manager; not controlling general contractor status)
- Bryan Builders Supply v. Midyette, 274 N.C. 264 (1968) (bright-line rule protecting the public from unlicensed builders)
- Zickgraf Enters., Inc. v. Yonce, 63 N.C. App. 166 (1983) (licensing statutes not to shield unjust obligations; innocent party favored)
- Goldston v. American Motors Corp., 326 N.C. 723 (1990) (substantial-rights test for appealability of interlocutory orders)
- Anderson v. Atlantic Cas. Ins. Co., 134 N.C. App. 724 (1999) (relates to necessity of immediate review to avoid prejudice from non-final orders)
- Mill-Power Supply Co. v. CVM Assocs., 85 N.C. App. 455 (1987) (control-based analysis for who is a general contractor)
- Dellinger v. Michal, 92 N.C. App. 744 (1989) (warning against using licensing statutes to shield unjust obligations)
- Miley v. H.C. Barrett & Assocs., 2002 N.C. App. LEXIS 2167 (2002) (construction-management context showing non-general-contractor role)
