Harris v. A-1 Builders of NC, Inc. ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA13-1048
NORTH CAROLINA COURT OF APPEALS
Filed: 4 March 2014
TERRY HARRIS and
MICHELLE HARRIS
Plaintiffs,
v. Randolph County
No. 12 CVS 2353
A-1 BUILDERS OF NC., INC.,
Defendant.
Appeal by defendant from order entered 24 April 2013 by
Judge L. Todd Burke in Randolph County Superior Court. Heard in
the Court of Appeals 3 February 2014.
Moser, Schmidly, & Roose, by J. Brooke Schmidly and R.
Anthony Copple, for plaintiffs.
Carruthers & Roth, P.A., by Mark K. York and J. Patrick
Haywood, for defendant.
ELMORE, Judge.
Defendant appeals from an order entered 24 April 2013
denying its motion for judgment on the pleadings pursuant to
North Carolina Civil Procedure Rule 12(c). After careful
consideration, we affirm the trial court’s order.
I. Facts
-2-
On 2 August 2010, A-1 Builders of NC, Inc. (defendant)
through its owner and president David Hazelwood, entered into a
contract (purchase contract) and New Construction Addendum (the
addendum) with Michelle A. Harris (Ms. Harris) to build a house
located at 3882 Hangar Run in Sophia, which Ms. Harris agreed to
purchase for $197,600.00. Under the “change orders” provision
of the addendum, the buyer could “order changes in the
construction of the [h]ouse within the general scope of the
[p]lans and [s]pecifications, consisting of additions, deletions
or other revisions, and the purchase price and [c]losing date
shall be adjusted accordingly.” However, the provision
specifically required that “[a]ll such changes shall be made
only by a change order, which shall be in writing and signed by
both [b]uyer and [s]eller.” The addendum also stated that
[s]eller hereby warrants that, for a period
of one (1) year from the date of [c]losing
or the date [b]uyer occupies the [h]ouse,
whichever comes first, [s]eller will make
all necessary repairs and corrections to the
[h]ouse, either interior or exterior,
structural or nonstructural, that shall
become necessary by reason of faulty
construction, labor or materials or non-
conformity of construction to the [p]lans
and [s]pecifications.
Ms. Harris’ husband, Terry Harris (Mr. Harris), was not a
party to either the purchase contract or the addendum. After
-3-
Ms. Harris and defendant executed the contract, but before
construction of the house, Mr. Harris and Ms. Harris
(collectively plaintiffs) asked that defendant install hardwood
stairs in the residence instead of carpeted stairs as originally
agreed upon. Defendant approved this change, and on 27
September 2010, Ms. Harris paid defendant $1,120.00 by check to
complete this upgrade. After defendant commenced construction
of the residence, Ms. Harris requested that defendant construct
two brick columns on the driveway’s entrance. Once again,
defendant acquiesced and was paid $1,010.00 for the cost of the
columns. On 20 October 2010, defendant signed a Warranty of
Completion of Construction, which provided that defendant
“warrants” to buyer, “the property against defects in equipment,
material, or workmanship and materials supplied or performed by
[defendant] or any subcontractor or supplier at any tier
resulting in noncompliance with standards of quality as measured
by acceptable trade practices.”
Plaintiffs conducted a final inspection of the residence on
8 November 2010 and found that some of the hardwood stairs were
cracked. Additionally, plaintiffs noticed that bricks were
falling off the columns. In response, Mr. Harris filed a pro se
small claims action entitled “complaint for money owed” (the
-4-
first complaint) in the amount of $2,130.00, which alleged that
“[h]ardwood steps has [sic] splits [i]n the wood, can’t use” and
“[b]rick columns – [b]ricks are falling of [sic] the columns[.]”
After a hearing, the magistrate ruled in favor of plaintiff, and
defendant filed notice of appeal to Randolph County District
Court (district court). The case was selected for court ordered
arbitration, and the arbitrator ruled that “plaintiff is awarded
nothing from the defendant” and dismissed the action. Mr.
Harris appealed for a trial de novo in district court, and the
case was heard before Judge Robert M. Wilkins. Judge Wilkins
entered an order on 4 January 2012, concluding as a matter of
law that: 1.) although Mr. Harris was not a party to the
purchase contract between defendant and Ms. Harris, he was a
“real party in interest and ha[d] standing to maintain this
action[;]” and 2.) plaintiff was entitled to $500.00 for the
cost to replace three cracked stairs.
Plaintiffs filed a separate complaint (the second
complaint) on 24 September 2012 for breach of the purchase
contract and addendum; negligent construction and repair; breach
of express warranty; breach of implied warranty of habitability;
and unfair and deceptive trade practices after numerous
unsuccessful attempts, both orally and in writing, to get
-5-
defendant to correct defective work in and around the residence.
Plaintiffs alleged that they only noticed these additional
defects after they occupied the residence on 22 November 2010.
Defendant moved for judgment on the pleadings, arguing that
plaintiffs’ second complaint was barred by res judicata.
Defendant’s motion was denied in an order entered 24 April 2013
by Judge Burke. Defendant timely appealed Judge Burke’s order
to this Court on 2 May 2013.
II. Analysis
a.) Interlocutory Appeal
We first address plaintiffs’ argument that we should
dismiss defendant’s appeal because the order is interlocutory
and fails to affect a substantial right. We disagree.
“Generally, there is no right of immediate appeal from
interlocutory orders and judgments.” Goldston v. Am. Motors
Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). “An
interlocutory order is one made during the pendency of an
action, which does not dispose of the case, but leaves it for
further action by the trial court in order to settle and
determine the entire controversy.” Veazey v. City of Durham,
231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) (citation omitted).
Therefore, a trial court’s denial of a motion for judgment on
-6-
the pleadings is interlocutory and normally not appealable
because a denial of the motion “does not finally determine the
rights of the parties[.]” Boyce & Isley, PLLC v. Cooper, 169
N.C. App. 572, 574, 611 S.E.2d 175, 176 (2005). However,
immediate appeal of an interlocutory order is available when it
“affects a substantial right[.]” Sharpe v. Worland, 351 N.C.
159, 162, 522 S.E.2d 577, 579 (1999). Our Supreme Court has
noted that “the right to avoid the possibility of two trials on
the same issues can be such a substantial right.” Bockweg v.
Anderson, 333 N.C. 486, 490-91, 428 S.E.2d 157, 160 (1993)
(citation and quotation omitted).
Under the doctrine of res judicata, “a final judgment on
the merits in one action precludes a second suit based on the
same cause of action between the same parties or their privies.”
Williams v. Peabody, ___ N.C. App. ___, ___, 719 S.E.2d 88, 92
(2011) (citation and quotations omitted). Thus, a motion for
judgment on the pleadings based on res judicata seeks to prevent
“a successful defendant, or one in privity with that defendant,
[from] twice hav[ing] to defend against the same claim by the
same plaintiff, or one in privity with that plaintiff.”
Bockweg, 333 N.C. at 491, 428 S.E.2d at 161. An order denying
such a motion can affect a substantial right because it “could
-7-
lead to a second trial in frustration of the underlying
principles of the doctrine of res judicata.” Id.Here, defendant’s motion requested that the trial court
dismiss plaintiffs’ complaint because the claims asserted “were
or should have been litigated in the previous action[.]” Thus,
defendant’s motion was based on the defense of res judicata.
The trial court’s denial of defendant’s motion could result in
defendant having to litigate the same claims in the second
complaint that were brought by Mr. Harris in the first
complaint. Therefore, we conclude the order is immediately
appealable because it affects a substantial right, and we
address the merits of defendant’s arguments on appeal.
b.) Judgment on the Pleadings
Defendant argues that the trial court erred in denying his
motion for judgment on the pleadings because plaintiffs’ second
complaint is barred by res judicata. Specifically, defendant
avers that both complaints were based upon breach of the
purchase contract and addendum. We disagree.
We review a trial court’s ruling on a motion for judgment
on the pleadings under a de novo standard of review. Builders
Mut. Ins. Co. v. Glascarr Properties, Inc., 202 N.C. App. 323,
325, 688 S.E.2d 508, 510 (2010) (citation and quotation
-8-
omitted). “‘Under a de novo review, the court considers the
matter anew and freely substitutes its own judgment’ for that of
the lower tribunal.” State v. Williams, 362 N.C. 628, 632-33,
669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen,
Ltd. P’ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)); see
also Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334, 337,
678 S.E.2d 351, 354 (2009) (“Under a de novo review, the court
considers the matter anew and freely substitutes its own
judgment for that of the lower tribunal.”). Judgment on the
pleadings “is appropriate when all the material allegations of
fact are admitted in the pleadings and only questions of law
remain.” Groves v. Community Hous. Corp., 144 N.C.App. 79, 87,
548 S.E.2d 535, 540 (2001) (citation and quotations omitted).
In ruling on a motion for judgment on the pleadings, we look
“solely to the pleadings” and “only consider facts properly
pleaded and documents referred to or attached to the pleadings.”
Builders Mut. Ins. Co., 202 N.C. App. at 324, 688 S.E.2d at 510
(citation and quotation omitted).
Res judicata, also known as claim preclusion, bars the
“relitigation of all matters . . . that were or should have been
adjudicated in the prior action.” Whitacre P'ship v. Biosignia,
Inc., 358 N.C. 1, 15, 591 S.E.2d 870, 880 (2004) (citation and
-9-
quotation omitted). The party seeking to assert res judicata
has the burden of establishing its elements. Bluebird Corp. v.
Aubin, 188 N.C. App. 671, 679, 657 S.E.2d 55, 62 (2008). A
party must show “(1) a final judgment on the merits in an
earlier suit, (2) an identity of the causes of action in both
the earlier and the later suit, and (3) an identity of the
parties or their privies in the two suits” in order to prevail
on a theory of res judicata. Herring v. Winston-Salem/Forsyth
Cnty. Bd. of Educ., 188 N.C. App. 441, 444, 656 S.E.2d 307, 310
(2008) (citation and quotation omitted).
The dispositive question to this appeal is whether the
first and second complaints have an identity of the causes of
action. Subsequent to entrance of the purchase contract and
addendum, two separate oral arrangements were agreed upon
between plaintiffs and defendant. Plaintiffs requested that
instead of installing carpeted stairs in the house as was
originally discussed, defendant install hardwood stairs.
Defendant agreed, and Ms. Harris paid defendant $1,120.00. Ms.
Harris also asked defendant to build two brick columns on the
driveway and paid defendant $1,010.00 to complete the task.
Under the addendum, the only way to modify the construction of
the residence was pursuant to the “change orders” provision of
-10-
the addendum. However, the construction of the hardwood stairs
and the columns did not operate as a “change order” because they
were neither made in writing nor signed by the parties.
Furthermore, the price of the house under the purchase contract
did not change, as required by the change order provision,
despite the additional construction costs. Thus, the terms of
the purchase contract and addendum were unchanged and remained
the same as originally contemplated.
When plaintiffs conducted a final inspection of the
residence before moving in, they observed that 3 of the 11
hardwood stairs were cracked. They also noted that the bricks
were falling off the columns, and the columns were different
heights. Accordingly, Mr. Harris filed the first complaint for
money owed in the amount of $2,130.00, which was the total sum
provided by plaintiffs to defendant for construction of the
hardwood stairs and the columns. The first complaint merely
alleged that “[h]ardwood steps has [sic] splits [i]n the wood,
can’t use” and “[b]rick columns – [b]ricks are falling of [sic]
the columns[.]” Mr. Harris also specified that “[defendant] was
paid cash for steps . . . and [b]rick columns [i]n front of
[h]ouse. The wood has splits in it and the [b]ricks are falling
off.” Thus, the totality of the circumstances surrounding the
-11-
first complaint shows that it originated from a separate oral
agreement arising outside the scope of the purchase contract and
addendum.
Unlike the first complaint, the subject matter of the
second complaint is not money owed for the hardwood steps or
columns. Rather, the second complaint is based on a statutory
violation and breach of contract that alleges defendant’s breach
of the purchase contract and addendum, negligent construction
and repair, breach of express warranty, breach of implied
warranty of habitability, and unfair and deceptive trade
practices. The allegations address defendant’s failure to abide
by the terms of the contracts by not: 1.) “perform[ing] work on
the [r]esidence and property in a proper, workmanlike and
ordinarily skillful manner[;]” 2.) working “in accordance with .
. . the standards of good workmanship common in the construction
industry[;]” and 3.) “correct[ing] the defective work performed
on the [r]esidence[.]” Plaintiffs list over twenty-five
discovered alleged defects, none of which include faulty
construction of the hardwood stairs or the columns. While the
first complaint involved an issue for money owed stemming from
an agreement made outside the purview of the purchase contract
and addendum before plaintiffs occupied the residence, the
-12-
second complaint directly relates to defendant’s breach of the
purchase contract, addendum, warranties, and industry standards
after plaintiffs’ occupancy. Thus, the claims in the complaints
arise from two different causes of action. Accordingly, we rule
that the trial court did not err in denying defendant’s motion
for judgment on the pleadings because plaintiffs’ second
complaint is not barred by res judicata.
III. Conclusion
In sum, the trial court did not err in denying defendant’s
motion for judgment on the pleadings. Thus, we affirm the trial
court’s order.
Affirmed.
Chief Judge MARTIN and Judge HUNTER, Robert N., concur.
Report per Rule 30(e).