UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RCDI CONSTRUCTION, INCORPORATED; 

RCDI CONSTRUCTION MANAGEMENT,

INCORPORATED,

Plaintiffs-Appellants,

v.  No. 01-1676

SPACE/ARCHITECTURE PLANNING &

INTERIORS, P.A.; G. CARROLL

HUGHES,

Defendants-Appellees. 

Appeal from the United States District Court

for the Western District of North Carolina, at Asheville.

Lacy H. Thornburg, District Judge.

(CA-00-177-1-T)

Argued: December 3, 2001

Decided: January 15, 2002

Before LUTTIG, WILLIAMS, and MOTZ, Circuit Judges.

Affirmed by unpublished per curiam opinion. 

COUNSEL

ARGUED: Martin Karl Reidinger, ADAMS, HENDON, CARSON,

CROW & SAENGER, P.A., Asheville, North Carolina, for Appellants. Frederick S. Barbour, MCGUIRE, WOOD & BISSETTE, P.A.,

Asheville, North Carolina, for Appellees. ON BRIEF: George Ward
Hendon, ADAMS, HENDON, CARSON, CROW & SAENGER,

P.A., Asheville, North Carolina; Thomas E. Crafton, ALBER CRAFTON, P.L.L.C., Louisville, Kentucky, for Appellants. Heather

Whitaker Goldstein, MCGUIRE, WOOD & BISSETTE, P.A., Asheville, North Carolina, for Appellees. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

RCDI Construction, Inc. and RCDI Construction Management, Inc.

(collectively, "RCDI") challenge the order of the district court entering summary judgment against them on their claims for tortious interference with contract and prospective advantage, unfair competition,

and negligence. Finding no error, we affirm. 

I.

In November 1995, Dr. Anjil Patel entered into a contract with

RCDI Construction Management, Inc., a contractor licensed and

incorporated only in West Virginia, in which the company agreed to

serve as general contractor for a hotel construction project owned by

Dr. Patel in North Carolina. In 1996, before construction under the

contract had begun, RCDI Construction Management assigned the

construction contract to its wholly owned subsidiary, RCDI Construction, Inc. Although the subsidiary was neither incorporated in West

Virginia nor licensed as a general contractor in North Carolina when

RCDI Construction Management and Dr. Patel entered into the contract, it was a licensed general contractor in North Carolina at the time

of the assignment and throughout the time that it acted as general contractor pursuant to the assignment. 

In July 1997, when the hotel was near completion, a "catastrophic

discharge of water" occurred and caused substantial damage to the

2 RCDI CONSTRUCTION v. SPACE/ARCHITECTURE PLANNING
hotel project. Dr. Patel first requested that a contractor unaffiliated

with RCDI inspect the hotel for damage. On this contractor’s recommendation, Dr. Patel then contracted in August 1997 with Spaceplan/Architecture Planning & Interiors to "evaluat[e] the existing

conditions of the property and recommend[ ] corrections, if appropriate." After inspecting the hotel, Spaceplan recommended that the

building be substantially gutted and renovated to cure the water damage and that RCDI be terminated as contractor. Based on Spaceplan’s

recommendation, Dr. Patel immediately barred RCDI from entering

the hotel construction site to perform further construction or repairs

and ultimately terminated his contract with RCDI. 

In March 1998, RCDI sued Dr. Patel and his company, Rocky

Ridge Hospitality Corp., asserting various claims, including breach of

contract. After Dr. Patel and Rocky Ridge counterclaimed against

RCDI alleging that construction defects caused the hotel damage,

RCDI filed a third-party complaint against various subcontractors and

insurers. All parties in the litigation reached a settlement whereby

RCDI agreed to pay Dr. Patel $6,700,000 for repair costs and forego

recovery of $421,000 due RCDI under the contract. Spaceplan was

neither a party to this litigation nor named as a party released from

all claims in the settlement agreement. 

RCDI then commenced the current action against Spaceplan and its

director, G. Carroll Hughes (collectively, "Spaceplan"), for tortious

interference with contract, unfair competition, and negligence. The

tortious interference and unfair competition claims were premised on

Spaceplan’s recommendation to Dr. Patel to bar RCDI from the construction site and to terminate the contract with RCDI. The negligence

claim was based on allegations that Spaceplan failed to take steps to

remedy the water damage for several months, fostering mold infestation and biological contamination at the hotel. 

II.

Spaceplan moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(6)

and for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).

The district court granted the motions. RCDI Constr., Inc. v. Spaceplan/Architecture Planning & Interiors, 148 F. Supp. 2d 607

(W.D.N.C. 2001). The court rejected the tortious interference with

RCDI CONSTRUCTION v. SPACE/ARCHITECTURE PLANNING 3
contract claim, reasoning that there was no valid contract because

RCDI Construction Management was not a licensed contractor when

it entered the contract, as required by North Carolina law; and this

defect was not cured by the licensing of its subsidiary and assignee,

RCDI Construction, before construction commenced. Id. at 612-14.

The court ruled that RCDI’s right to seek a setoff defensively in a

claim brought by Dr. Patel conferred no right to sue third parties for

tortious interference, noting that recovery on a tortious interference

claim effectively would allow unlicensed contractors to circumvent

the rule prohibiting them from enforcing contracts that are both illegal

and invalid as against public policy. Id. at 613-14 (citing cases). The

district court rejected RCDI’s tortious interference with prospective

advantage claim on similar grounds. Id.

The court then dismissed RCDI’s unfair competition claim on the

grounds that Spaceplan was a member of a "learned profession"

exempt from North Carolina’s unfair competition statute, N.C. Gen.

Stat. § 75-1.1 (1999). Id. at 617-20. The court held that Spaceplan, as

architect, was entitled to the exemption as a matter of law because it

was engaged in the "practice of architecture," as defined by statute,

in making recommendations to Dr. Patel and soliciting his future

business. Id. at 619-20 (quoting N.C. Gen. Stat. § 83A-1(7) (1999)).

As to the negligence claim, the district court concluded that Spaceplan owed no duty of care to RCDI, a necessary element of any negligence claim. Id. at 620-22. 

RCDI appeals, contending that the district court erred in all

respects. Having had the benefit of oral argument and having carefully considered the parties’ briefs, the record, and relevant legal

authority, we conclude that the district court correctly decided the

issues before it. Accordingly, we affirm on the reasoning of the district court.

AFFIRMED

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