224 N.C. App. 90
N.C. Ct. App.2012Background
- Project involved NC DOT Western Loop of I-40 in Greensboro; APAC as general contractor with NCDOT payment bond signed by Liberty Mutual and Travelers; English subcontracted with Southern Seeding for grassing; equitable adjustment clause contemplated delays and increased costs; project completion extended beyond July 1, 2007 causing Southern Seeding costs after that date; trial on remand found 18 November 2008 invoice a reasonable equitable adjustment of actual post-1 July 2007 costs; damages awarded $194,941.39 plus 8% interest; attorneys’ fees awarded under NC Gen. Stat. § 44A-35 to Southern Seeding; Appellants appealed and the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Southern Seeding entitled to an equitable adjustment and damages after July 1, 2007? | Southern Seeding seeks damages based on actual costs plus overhead and profit. | English argues no defined meaning of equitable adjustment and disputed cost methodology. | Yes; the court upheld the equitable adjustment as a damages calculation supported by competent evidence. |
| Was Southern Seeding's cost calculation properly supported by competent evidence and methodologically sound? | Southern Seeding properly used 1 July 2007 as start date and demonstrated actual costs. | English claimed rates were overstated and evidence insufficient. | Yes; the invoice and accompanying spreadsheet constituted competent evidence supporting the trial court’s calculation. |
| Should English be liable for attorneys’ fees under N.C. Gen. Stat. § 44A-35? | Southern Seeding prevailed and English unreasonably refused to resolve the matter. | English did not unreasonably refuse to settle; not a party to the bond. | Yes; the award of attorneys’ fees to Southern Seeding was permissible under § 44A-35. |
| Does Terry’s Floor Fashions support the pre-judgment unreasonable refusal finding? | Court analogized to Terry’s Floor Fashions to affirm unreasonable pre-judgment refusals by English. | ||
| Are the sureties liable and the prior payment bond context relevant to the fee award? | Southern Seeding argued sureties liable for payment under the bond; fees awarded independent of bond status. | English challenged bond-based limitations on fee liability. | Affirmed; fee award upheld independent of bond mechanics. |
Key Cases Cited
- Terry’s Floor Fashions, Inc. v. Crown General Contractors, Inc., 184 N.C. App. 1 (2007) (pre-judgment unreasonable refusal to settle supports § 44A-35 award)
- Holloway v. Holloway, 726 S.E.2d 198 (N.C. App. 2012) (standard for reviewing non-jury trial findings; competent evidence standard)
- Biemann and Rowell Co. v. Donohoe Cos., Inc., 147 N.C. App. 239 (2001) (competent evidence standard for appellate review of findings)
- Town of Green Level v. Alamance County, 184 N.C. App. 665 (2007) (de novo review of conclusions of law; findings binding if supported by competent evidence)
- Bruning & Federle Mfg. Co. v. Mills, 185 N.C. App. 153 (2007) (abuse of discretion standard for attorneys’ fees awards; de novo for statute limitations)