Case Title: Carolina Mulching Co. v. Raleigh-Wilmington Investors II, LLC

Citation: 

Docket Number: 348A20

State: north-carolina

Court: North Carolina Supreme Court

Date: 2021-08-13T00:00:00Z

Document:
IN THE SUPREME COURT OF NORTH CAROLINA 
2021-NCSC-79 
No. 348A20 
Filed 13 August 2021 
CAROLINA MULCHING CO. 
 
 
v. 
RALEIGH-WILMINGTON 
INVESTORS 
II, 
LLC 
and 
SHALIMAR 
CONSTRUCTION, INC. 
 
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of 
the Court of Appeals, 272 N.C. App. 240 (2020), reversing a judgment entered on 21 
May 2019 by Judge C. Ashley Gore in District Court, Brunswick County, and 
remanding for the trial court to make additional findings of facts and conclusions of 
law. Heard in the Supreme Court on 28 April 2021. 
 
Law Offices of Timothy Dugan, by Timothy Dugan, for plaintiff-appellee. 
 
Hodges Coxe & Potter LLP, by Bradley A. Coxe, for defendant-appellant. 
 
 
BARRINGER, Justice. 
 
¶ 1 
 
In this case, we must decide whether the Court of Appeals erred as a matter of 
law when addressing a judgment for breach of contract entered after a bench trial. 
Given the record and procedural posture of this case, we conclude that the Court of 
Appeals did not err by reversing and remanding the judgment of the trial court back 
to the trial court to make “findings of fact based on the evidence and to enter clear 
and specific conclusions of law based on the findings of fact” after holding that the 
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2021-NCSC-79 
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trial court failed to make findings of fact necessary to resolve conflicts in the evidence 
and support the conclusions of law. Carolina Mulching Co. v. Raleigh-Wilmington 
Invs. II, LLC, 272 N.C. App. 240, 248 (2020). Thus, we affirm the Court of Appeal’s 
decision. 
I. 
Background 
¶ 2 
 
Carolina Mulching Co., LLC (Carolina Mulching) commenced this action 
against Raleigh-Wilmington Investors II, LLC and Shalimar Construction, Inc. 
(Shalimar) in District Court, Brunswick County, on 26 September 2018. Carolina 
Mulching asserted a claim for breach of contract, and in the alternative, a claim for 
unjust enrichment, and sought enforcement of a lien pursuant to Chapter 44A of the 
General Statutes of North Carolina against property owned by Raleigh-Wilmington 
Investors II, LLC. Shalimar, in response, filed an answer and counterclaim for breach 
of contract. Subsequently, Carolina Mulching voluntarily dismissed all claims 
against Raleigh-Wilmington Investors II, LLC. The remaining parties, Carolina 
Mulching and Shalimar, waived their right to a jury trial. 
¶ 3 
 
During the bench trial on 2 May 2019, both parties presented testimony from 
witnesses and introduced exhibits into evidence. After taking the matter under 
advisement, the trial court entered a judgment on 21 May 2019 in favor of Carolina 
Mulching. Following the trial court’s statement that “by [the] greater weight of the 
evidence, THE COURT HEREBY FINDS THE FACTS AS FOLLOWS,” the judgment 
CAROLINA MULCHING CO. V. RALEIGH-WILMINGTON INVS. II, LLC 
2021-NCSC-79 
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contained twenty paragraphs. Then, following the trial court’s statement that 
“BASED ON the Foregoing Findings of Fact, the [trial] court concludes as a MATTER 
OF LAW,” the following five paragraphs are set forth in the judgment: 
1. 
This Court has jurisdiction over the parties and the 
subject matter of this action. 
 
2. 
[Carolina Mulching] and [Shalimar] entered into a 
written contract for [Carolina Mulching]’s tree 
mulching services. There was a meeting of the minds 
between the two parties when they entered into the 
essential terms of the written contract. [Shalimar] 
even included [Carolina Mulching]’s proposal in the 
body of the contract. 
 
3. 
Both parties signed the written contract, and the 
terms of the contract were clear and unambiguous; 
[Carolina Mulching] would provide the mulching 
services for the Lena Springs Project and [Shalimar] 
would 
pay 
[Carolina 
Mulching] 
$15,000.00. 
[Carolina Mulching]’s services included mulching 
trees [six to eight inches] in diameter and [Carolina 
Mulching] satisfied those terms of the contract. 
 
4. 
[Carolina Mulching] worked with [Shalimar] on the 
job site for approximately 10 days and [Carolina 
Mulching] satisfactorily complied with the terms of 
the contract. [Carolina Mulching] mulched the 
[eight and one-half] acres of land specified in the 
contract, and therefore should be paid for the 
completed work. There was no material breach of the 
contract by [Carolina Mulching]. 
 
5. 
[Shalimar] did not suffer any damages from 
[Carolina Mulching]’s performance of services 
rendered under their written contract. [Shalimar] 
planned on hiring a logging company to remove the 
larger trees on the job site before [Carolina 
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Mulching] finished the job, and therefore did not 
incur any unreasonable expenses by hiring D&L 
Logging months after [Carolina Mulching] left the 
job site. 
 
¶ 4 
 
Shalimar subsequently filed a notice of appeal to the North Carolina Court of 
Appeals. 
¶ 5 
 
On appeal to the Court of Appeals, Shalimar made three arguments: (1) 
“[t]here is no finding of fact by the trial court to support conclusions of law [three] 
and [four] that [Carolina Mulching] mulched all trees [six to eight inches] in diameter 
and therefore satisfied the terms of the contract”; (2) “[t]he only competent evidence 
at trial leads to the conclusion that [Carolina Mulching] did not satisfy the terms of 
their contract by failing to mulch all trees [six to eight inches] in diameter”; and (3) 
“[t]here is no finding of fact by the trial court to support . . . conclusion of law [five] 
that [Shalimar] did not suffer any damages and did not incur unreasonable expenses 
from [Carolina Mulching]’s performance of services and the only competent evidence 
presented at trial leads to the conclusion that [Shalimar] was damaged by the failure 
of [Carolina Mulching] to abide by the terms of the contract.” 
¶ 6 
 
A divided panel of the Court of Appeals agreed with Shalimar as to its first 
argument, ultimately holding that “the trial court failed to make ultimate findings of 
fact necessary to resolve conflicts in the evidence, and that therefore the findings do 
not support the conclusions of law.” Carolina Mulching Co., 272 N.C. App. at 248. As 
a result, the Court of Appeals “reverse[d] and remand[ed] the judgment of the trial 
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court with instructions to make ultimate findings of fact based on the evidence and 
to enter clear and specific conclusions of law based on the findings of fact.” Id. (cleaned 
up). The Court of Appeals rejected Carolina Mulching’s argument that certain 
statements in the paragraphs labeled conclusions of law constituted factual findings 
sufficient to support the trial court’s ultimate legal conclusion. Id. at 247. 
¶ 7 
 
In contrast, the dissent concluded that the trial court had made a finding of 
fact resolving the conflicts in the evidence. Id. at 249 (Dillon, J., dissenting). The 
dissent stated that the contract required Carolina Mulching to mulch all trees up to 
six to eight inches in diameter and that the trial court’s judgment under the 
conclusions of law section stated that Carolina Mulching “satisfied those terms of the 
contract.” Id. While acknowledging that this statement was within the conclusions of 
law section, the dissent judged that “this statement is clearly a ‘finding’ that resolves 
any conflict in the evidence, no matter how it is labeled in the [judgment].” Id. The 
dissent gathered 
that the evidence was insufficient to submit the issue to the 
fact-finder. Carolina Mulching failed to meet its burden to 
reach the fact-finder (the trial judge in this case) to put on 
evidence that it mulched the trees up to [eight inches] in 
diameter. Accordingly, the trial court’s [judgment] should 
be ‘reversed[,]’ and judgment should be entered for 
Shalimar. 
 
Id. at 249–50. 
¶ 8 
 
While the dissent admitted that it is not appropriate to reweigh the evidence 
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on appeal, that Carolina Mulching’s witnesses testified that they mulched the trees 
that were up to six to eight inches in diameter, and that on rebuttal Carolina 
Mulching’s witness testified that he was cutting down eight-inch diameter trees, the 
dissent found “the evidence [was] uncontradicted that Carolina Mulching’s witnesses 
thought ‘diameter’ meant ‘circumference’ ” because the Carolina Mulching witness 
“never demonstrated during his rebuttal testimony that he now understood what the 
term ‘diameter’ actually meant or the process by which he calculated the diameter.” 
Id. at 250–51. The dissent concluded that Carolina Mulching “failed to meet its 
burden of showing that it cut down all of the trees under [eight inches] in diameter, 
the basis of the trial court’s judgment,” id. at 250–51, and as a result, he would 
reverse and have judgment entered for Shalimar, id. at 250. 
¶ 9 
 
In addressing the dissent, the Court of Appeals stated that 
[t]he dissent characterizes the trial court’s shortcoming not 
as a failure to show how it arrived at its conclusion but 
instead as arriving at an untenable conclusion, thus 
requiring a straight reversal instead of a reverse and 
remand with instructions. The dissent is certainly right 
that there is evidence that [Carolina Mulching] measured 
by circumference, not diameter. And it is certainly possible 
that the trial court might not be able to marshal sufficient 
evidentiary support to justify ruling for [Carolina 
Mulching] on remand. But, in the dissent’s efforts to argue 
that it is clear that [Carolina Mulching] measured by 
circumference, no such clarity emerges. The dissent 
instead merely highlights the contradictory nature of the 
testimony. It is not our place to resolve these conflicts. The 
trial court, having heard the evidence and seen the 
witnesses, is much better situated to do so. 
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Id. at 247 n.1. 
¶ 10 
 
Shalimar filed a notice of appeal based on the dissent pursuant to N.C.G.S. 
§ 7A-30(2) and N.C. R. App. P. 14. 
II. 
Analysis 
¶ 11 
 
On appeal to this Court, Shalimar asks this Court to reverse the trial court’s 
judgment and “render a judgment that, as a matter of law, Carolina Mulching failed 
to satisfy the terms of the contract and Shalimar . . . did not breach the contract.” 
Shalimar argues that there was no competent evidence to support the trial court’s 
finding that Carolina Mulching cut down all of the trees up to six to eight inches in 
diameter and the only competent evidence “leads inescapably to a conclusion of law 
that [Carolina Mulching] failed to abide by the essential terms of the Contract.” 
¶ 12 
 
On this record and in this procedural posture, we conclude the Court of Appeals 
did not err as a matter of law in its disposition of Shalimar’s appeal. As Carolina 
Mulching points out, this case addresses an appeal of a final judgment entered after 
a bench trial where the Court of Appeals agreed with Shalimar’s first argument that 
the trial court’s judgment lacked findings of fact to support the trial court’s judgment 
in favor of Carolina Mulching. Shalimar also argued in the alternative the argument 
it now makes to this Court. Specifically, Shalimar contended that “[e]ven if the Trial 
Court had made a Finding of Fact that the Plaintiff had mulched all trees up to [six 
to eight inches] in diameter, such a finding would be in error [as] [t]here is no 
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competent evidence in the record supporting any such potential Finding of Fact.” 
(Emphasis added.)1 As Shalimar prevailed on its first argument—that the trial 
court’s judgment lacked findings of fact to support the trial court’s judgment in favor 
of Carolina Mulching—Carolina Mulching asserts that the Court of Appeals did not 
err. Carolina Mulching further asserts that consideration of Shalimar’s alternative 
argument has been waived and is premature for this Court’s ruling. We agree that 
the Court of Appeals did not err and that a ruling on Shalimar’s alternative argument 
by this Court would be premature in this instance. 
¶ 13 
 
“In all actions tried upon the facts without a jury or with an advisory jury, the 
[trial] court shall find the facts specially and state separately its conclusions of law 
thereon and direct the entry of the appropriate judgment.” N.C.G.S. § 1A-1, Rule 
52(a)(1) (2019). As to the facts, the trial court need not find all facts that support the 
conclusion of law but must specially find the facts necessary to establish the plaintiff’s 
cause of action, the converse—the facts necessary to establish that plaintiff’s cause of 
action fails––or the facts necessary to establish the defendant’s affirmative defense. 
Woodard v. Mordecai, 234 N.C. 463, 470 (1951) (addressing predecessor statute, 
N.C.G.S. § 1-185 (repealed 1967)). Compliance with N.C. R. Civ. P. 52(a)(1) is not a 
                                            
1 As summarized in the background section, the Court of Appeals did not address 
Shalimar’s alternative argument other than commenting on the dissent in a footnote. 
Carolina Mulching Co. v. Raleigh-Wilmington Invs. II, LLC, 272 N.C. App. 240, 247 n.1 
(2020). 
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mere formality but generally necessary for appellate courts “to perform their proper 
function in the judicial system” of reviewing a judgment entered after a bench trial 
to determine whether the trial court’s findings of fact are supported by the evidence 
and whether the findings of fact support the conclusions of law. Coble v. Coble, 300 
N.C. 708, 712 (1980) (quoting Montgomery v. Montgomery, 32 N.C. App. 154, 158 
(1977)). 
¶ 14 
 
In this case, the Court of Appeals rejected Carolina Mulching’s argument that 
some statements in the paragraphs under the conclusions of law section in the trial 
court’s judgment were findings of fact that resolved the conflicts in the evidence. 
Carolina Mulching Co., 272 N.C. App. at 247. The Court of Appeals held in favor of 
Shalimar’s argument that “the trial court’s findings do not support its conclusion that 
[Carolina Mulching] fully performed under the contract.” Id. at 245. While the dissent 
disagreed and concluded that such statements were findings of fact resolving the 
conflicts, id. at 249 (Dillon, J., dissenting), this issue is not presented in this appeal 
since Carolina Mulching has not sought review of this aspect of the Court of Appeals’ 
decision. Shalimar’s new brief accordingly did not identify this specific issue on 
appeal. Thus, we express no opinion about this aspect of the Court of Appeals’ holding 
but consider it the final decision on this issue and respect it as such. See N.C. R. App. 
P. 16(b). 
¶ 15 
 
Carolina Mulching asserted, and Shalimar did not dispute, that Shalimar did 
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not challenge any of the trial court’s findings of fact in their initial appeal. Shalimar’s 
alternative argument only challenged a potential finding of fact. Without an actual—
as opposed to hypothetical—challenged finding of fact, we conclude that the Court of 
Appeals committed no error of law in its decision to reverse and remand the case back 
to the trial court for resolution of the conflicts in the evidence on remand. 
¶ 16 
 
Further, we find that neither the dissent nor Shalimar’s argument or analysis 
convinces us to reverse the trial court’s judgment and that judgment should be 
entered in favor of Shalimar. Neither cites authority in support of their conclusion, 
and a holding in their favor would seem to require us to muddle the standard of 
review applicable to actions tried by the trial court without a jury as set forth below. 
¶ 17 
 
Shalimar argues for reversal and judgment in its favor because in its opinion, 
there is no competent evidence that Carolina Mulching mulched all trees up to six to 
eight inches in diameter. Yet, Shalimar concedes its challenge to the judgment is 
pursuant to N.C. R. Civ. P. 52(c). Rule 52(c) allows parties to an action tried without 
a jury to challenge the sufficiency of the evidence supporting the trial court’s findings 
of fact. N.C.G.S. § 1A-1, Rule 52(c). However, the finding that Carolina Mulching 
mulched all trees up to six to eight inches in diameter is not in the trial court’s 
judgment but is instead a potential finding of fact identified by Shalimar and a fact 
inferred by the dissent from statements in the judgment. Carolina Mulching Co., 272 
N.C. App. at 249 (Dillon, J., dissenting). Thus, consideration of Shalimar’s argument 
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regarding a potential finding lacks support in the plain language of Rule 52(c) and 
reversing and remanding to the trial court as the Court of Appeals held respects the 
division of authority between the trial courts and appellate courts and the standard 
of review. 
¶ 18 
 
Both the dissent and Shalimar also couch their argument in terms of Carolina 
Mulching failing to meet its burden, and the dissent characterizes the evidence as 
insufficient to submit the issue to the fact-finder. Carolina Mulching Co., 272 N.C. 
App. at 249 (Dillon, J., dissenting). This terminology is generally associated with a 
motion for a directed verdict, which is not before us. See N.C.G.S. § 1A-1, Rule 50. As 
Shalimar acknowledges, a motion for a directed verdict pursuant to N.C. R. Civ. P. 
50 is not appropriate in an action tried by the trial court without a jury. See Bryant 
v. Kelly, 279 N.C. 123, 129 (1971) (“Directed verdicts are appropriate only in jury 
cases.”). Rather, the appropriate motion by which a defendant tests the sufficiency of 
a plaintiff’s evidence to show a right to relief in an action tried by the trial court 
without a jury is a motion pursuant to N.C. R. Civ. P. 41(b) for an involuntary 
dismissal. N.C.G.S. § 1A-1, Rule 41(b); see also Dealers Specialties, Inc. v. 
Neighborhood Hous. Servs., Inc., 305 N.C. 633, 637 (1982) (determining “the standard 
which the [trial court] judge must apply in testing the sufficiency of the evidence, if 
he elects to so do, when ruling upon a motion to dismiss under Rule 41(b)”). Notably, 
a motion for involuntary dismissal pursuant to N.C. R. Civ. P. 41(b) requires the 
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defendant to show that the plaintiff had “no right to relief” upon the facts and law. 
N.C.G.S. § 1A-1, Rule 41(b). In this case, the dissent did not conclude that Carolina 
Mulching had no right to relief, and Shalimar has not argued to this effect. 
¶ 19 
 
Therefore, we are not persuaded that Shalimar’s arguments are consistent 
with our precedent, and we decline to assess the sufficiency of the evidence for a 
potential finding of fact by the trial court, especially when presented and sought 
without citation to precedent or persuasive authority for this Court’s review. 
III. 
Conclusion 
¶ 20 
 
On this record and in this procedural posture, the Court of Appeals did not err 
by reversing and remanding the case back to the trial court with instructions to make 
findings of fact and to enter clear and specific conclusions of law based on the findings 
of fact. Thus, we affirm the Court of Appeal’s decision. 
AFFIRMED.