NO. COA14-215

NORTH CAROLINA COURT OF APPEALS

Filed: 16 September 2014

DAVID HYATT,

Plaintiff

v.

MINI STORAGE ON THE GREEN, DAVID B. 

SMITH, AND NCI GROUP, INC. D/B/A 

DOORS AND BUILDING COMPONENTS (DBCI),

Defendants

DAVID B. SMITH,

Third-Party Plaintiff

v.

THE ESTATE OF JOHN ALVIN ROYALL, 

ROYALL COMMERCIAL CONTRACTORS, INC.

and E&S STEEL, INC.,

Third-Party Defendants

Pender County

No. 09 CVS 1320

Appeal by plaintiff from orders entered 18 July 2013 and 21

August 2013 by Judge W. Allen Cobb, Jr., in Pender County 

Superior Court. Heard in the Court of Appeals 5 June 2014.

David & Associates, P.L.L.C., by Stuart Smith; Hodges & 

Coxe P.C., by Bradley A. Coxe, for Plaintiff.

Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by Ellen P. 

Wortman, for Defendant Mini Storage on the Green.

Wallace, Morris, Barwick, Landis & Stroud, P.A., by P.C. 

Barwick, Jr., Stuart L. Stroud, and Donald K. Phillips, for 

Third-Party Plaintiff David B. Smith.

ERVIN, Judge.

Plaintiff David Hyatt appeals from an order entered 18 July 

2013 granting summary judgment in favor of Defendant Mini 
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Storage on the Green and from an order entered 19 August 2013

granting summary judgment in favor of Defendant and Third-Party 

Plaintiff David B. Smith. On appeal, Plaintiff argues that the 

trial court erred by granting summary judgment in favor of 

Defendant Mini Storage because it breached a duty to provide

renters with safe storage units and because the rental agreement 

between Plaintiff and Defendant Mini Storage fails to exculpate 

Defendant from liability for failing to provide safe storage 

units. In addition, Plaintiff argues that the trial court erred 

by granting summary judgment in favor of Defendant Smith because 

any assignment of the contract between Defendant Smith and 

Defendant Mini Storage did not relieve Defendant Smith of 

liability and because the completed and accepted work doctrine 

did not apply to the work that Defendant Smith performed on the 

storage units. After careful consideration of Plaintiff’s 

challenges to the trial court’s orders in light of the record 

and the applicable law, we conclude that the trial court’s 

orders should be affirmed.

I. Factual Background

A. Substantive Facts

1. Liability of Defendant Mini Storage

Defendant Mini Storage owns a storage facility located in 

Hampstead. On 15 October 2007, Plaintiff rented Unit No. 816 

from Defendant Mini Storage pursuant to a written agreement. 
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The rental agreement provided, among other things, that

“[l]andlord [shall not] be liable to tenant and/or tenants guest 

or invitees for any personal injuries sustained by tenant and/or 

tenants guest or invitees while on or about landlord’s 

premises.” Plaintiff admitted that he had read and signed the 

agreement and that he had not had any questions regarding the

terms of that agreement.

On 3 July 2008, Plaintiff went to his unit to collect 

various personal items. After entering the unit and collecting 

his property, Plaintiff attempted to close the roller door to 

his storage unit by pulling it down. As he did so, the door

became stuck. Acting on the basis of a belief that he could

pull the door down past the point at which it was stuck, 

Plaintiff attempted to close the door with some force, at which

point the door came off of its tracks and struck Plaintiff in 

the head, causing him to sustain personal injuries.

2. Liability of Defendant Mr. Smith

In 2005, Defendant Mini Storage accepted a bid from 

Defendant Smith in connection with the construction of Building 

No. 8, which consisted of 35 storage units, including Unit No. 

816. On 30 December 2005, Defendant Mini Storage and Defendant

Smith entered into a contract pursuant to which Defendant Smith

agreed to “furnish material and labor” for the project for a 
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total cost of $92,000. Defendant Smith subsequently assigned 

his contract with Defendant Mini Storage to John Alvin Royall 

and Royall Commercial Contractors, Inc., for $10,000. Royall 

received the balance of the contract payments, which was 

$82,000, in return for completing the project.

B. Procedural History

On 4 November 2009, Plaintiff filed a complaint seeking to 

recover damages for negligence. On 1 July 2011, Plaintiff filed 

an amended complaint that asserted claims sounding in breach of 

contract and breach of express and implied warranty against

Defendant Smith and sounding in breach of express and implied 

warranty against NCI Group, Inc., d/b/a Doors and Building 

Components. Plaintiff filed a second amended complaint on 15 

July 2011 and a third amended complaint on 5 October 2011. 

Defendant Mini Storage and Defendant Smith filed answers denying 

the material allegations of Plaintiff’s third amended complaint 

and asserting various affirmative defenses on 28 October and 3 

November 2011, respectively.

On 4 June 2013, Defendant Mini Storage filed a motion for 

summary judgment with respect to all of Plaintiff’s claims. On 

7 June 2013, Defendant Smith filed a motion for summary judgment 

as well. Defendants’ summary judgment motions came on for 

hearing before the trial court at the 15 July 2013 civil session 
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of the Pender County Superior Court. On 18 July 2013, the trial 

court entered an order granting summary judgment in favor of 

Defendant Mini Storage. On 21 August 2013, the trial court 

entered an order granting summary judgment in favor of Defendant 

Smith based upon the fact that Defendant Smith had assigned his 

contract with Defendant Mini Storage to Royall. Plaintiff noted 

an appeal to this Court from the trial court’s orders.1

II. Substantive Legal Analysis

A. Standard of Review

“‘[T]he standard of review on appeal from summary judgment 

is whether there is any genuine issue of material fact and 

whether the moving party is entitled to a judgment as a matter 

of law.’” Blackburn v. Carbone, 208 N.C. App. 519, 525, 703 

S.E.2d 788, 794 (2010) (quoting Bruce–Terminix Co. v. Zurich 

Ins. Co., 130 N.C. App. 729, 733, 504 S.E.2d 574, 577 (1998)), 

disc. review denied, 365 N.C. 194, 710 S.E.2d 52 (2011).

Summary judgment is proper “if the pleadings, depositions, 

answers to interrogatories, and admissions on file, together 

with the affidavits, if any, show that there is no genuine issue 

as to any material fact and that any party is entitled to a 

judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56. 

 

1As a result of the fact that all of the other claims that 

had been asserted in this case have been dismissed, the 

challenged trial court orders represent an appealable final 

judgment.
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We review orders granting or denying summary judgment using a de 

novo standard of review, In re Will of Jones, 362 N.C. 569, 573, 

669 S.E.2d 572, 576 (2008), under which “this Court ‘considers 

the matter anew and freely substitutes its own judgment for that 

of the [trial court].’” Burgess v. Burgess, 205 N.C. App. 325, 

327, 698 S.E.2d 666, 668 (2010) (quoting In re Appeal of the 

Greens of Pine Glen Ltd. P’ship, 356 N.C. 642, 647, 576 S.E.2d 

316, 319 (2003)).

B. Defendant Mini Storage’s Liability

In his brief, Plaintiff contends that the trial court erred 

by granting summary judgment in favor of Defendant Mini Storage 

on the grounds that the rental agreement between Plaintiff and 

Defendant Mini Storage does not absolve Defendant Mini Storage

from responsibility for providing safe storage units. More 

specifically, Plaintiff argues that the relevant provision in 

the rental agreement is not sufficiently explicit to operate as 

a valid exculpatory clause. Plaintiff’s argument lacks merit.

According to well-established North Carolina law, contracts

“which exculpate persons from liability for negligence are not 

favored,” Johnson v. Dunlap, 53 N.C. App. 312, 317, 280 S.E.2d 

759, 763 (1981), cert. denied, 305 N.C. 153, 289 S.E.2d 380 

(1982), and must be strictly construed against the person 

seeking to escape liability. Hall v. Sinclair Ref. Co., 242 
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N.C. 707, 709, 89 S.E.2d 396, 397 (1955). “Nonetheless, such an 

exculpatory contract will be enforced unless it violates a 

statute, is gained through inequality of bargaining power, or is 

contrary to a substantial public interest.” Fortson v. 

McClellan, 131 N.C. App. 635, 636, 508 S.E.2d 549, 551 (1998). 

“This principle arises out of ‘the broad policy of the law which 

accords to contracting parties freedom to bind themselves as 

they see fit[.]’” Sylva Shops Ltd. P’ship v. Hibbard, 175 N.C. 

App. 423, 428, 623 S.E.2d 785, 790 (2006) (quoting Hall, 242 

N.C. at 709, 89 S.E.2d at 397-98). “[W]hen the language of the 

contract and the intent of the parties are clearly exculpatory, 

the contract will be upheld.” Gibbs v. Carolina Power & Light 

Co., 265 N.C. 459, 467, 144 S.E.2d 393, 400 (1965). As a 

result, given the absence of any factual dispute concerning the 

nature and extent of the contractual language at issue here, the 

ultimate question raised by Plaintiff’s challenge to the trial 

court’s decision is the extent to which Defendant Mini Storage

is entitled to judgment as a matter of law based upon the 

language of the rental agreement.

The relevant provision in the rental agreement between 

Plaintiff and Defendant Mini Storage states that “[l]andlord 

[shall not] be liable to tenant and/or tenants guest or invitees 

for any personal injuries sustained by tenant and/or tenants 
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guest or invitees while on or about landlord’s premises.” As

Plaintiff concedes in his initial brief, the fact that this 

contractual language completely exempts Defendant Mini Storage 

from liability for any personal injuries that Plaintiff 

sustained as a result of Defendant Mini Storage’s negligence 

while on Defendant Mini Storage’s premises renders this 

provision exculpatory in nature.

2 In addition, despite 

Plaintiff’s argument to the contrary, the exculpatory language

contained in the rental agreement is clear, unambiguous, and 

enforceable. In attempting to persuade us that the relevant 

contractual language is not sufficiently explicit to exculpate 

Defendant Mini Storage from liability for the personal injuries 

that he sustained, Plaintiff directs our attention to a number 

of decisions. However, an examination of the decisions upon 

which Plaintiff relies demonstrates that the exculpatory 

 

2Plaintiff clearly states in his initial brief that “the 

contract clause must be analyzed as an exculpatory clause.” 

Furthermore, Plaintiff did not argue that this clause was not 

exculpatory at the hearing held before the trial court for the 

purpose of considering Defendant Mini Storage’s summary judgment 

motion. However, Plaintiff does, for the first time, argue in 

his reply brief that it was not clear whether the contractual 

provision in question constituted an indemnity clause or an 

exculpatory clause. In spite of the fact that this Court “will 

not entertain what amounts to a new argument presented in th[e] 

reply brief,” Oates v. N.C. Dep’t of Corr., 114 N.C. App. 597, 

600, 442 S.E.2d 542, 544 (1994), we do believe, as Plaintiff 

conceded until the filing of his reply brief, that the 

contractual language at issue here constitutes an exculpatory, 

rather than an indemnity, clause.
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provision contained in the agreement at issue here is more 

explicit than the language in any of the decisions upon which

Plaintiff relies.

3 Simply put, the exculpatory clause at issue 

here clearly and explicitly provides that Defendant Mini Storage 

would not be liable for personal injuries sustained on the 

premises. Such liability could only exist in the event that 

Defendant Mini Storage acted negligently. As a result, given 

that the exculpatory clause at issue here clearly absolved 

Defendant Mini Storage from personal injury claims that could 

 

3Winkler v. Appalachian Amusement Co., 238 N.C. 589, 596, 79 

S.E.2d 185, 190-91 (1953) (holding that a provision to the 

effect that “the lessees shall, at their own cost and expense, 

make any and all repairs that may be necessary inside the 

portion of the building herein demised, excepting in the case of 

. . . fire,” did not operate to excuse the defendant from 

negligence liability); Hill v. Carolina Freight Carriers Corp., 

235 N.C. 705, 710, 71 S.E.2d 133, 137 (1952) (holding that a 

provision indemnifying the defendant from “all losses thru fire, 

theft & collision” did not suffice to preclude negligence 

liability arising from the defendant’s negligence); Atlantic 

Contracting and Material Company, Inc. v. Adcock, 161 N.C. App 

273, 279-80, 588 S.E.2d 36, 41 (2003) (holding that language 

indemnifying the defendant “against all losses, damages, 

injuries, claims, demands and expenses” was not sufficiently 

explicit to be enforceable); City of Wilmington v. North 

Carolina Natural Gas Corporation, 117 N.C. App. 244, 248, 450 

S.E.2d 573, 576 (1994) (holding that the contractual language 

upon which the defendant relied did not explicitly absolve the 

defendant from responsibility for its own negligence); and Lewis 

v. Dunn Leasing Corporation, 36 N.C. App. 556, 559-60, 244 

S.E.2d 706, 708-09 (1978) (holding language indemnifying the 

defendant from “any and all claims or liability of every kind 

and nature” not sufficiently specific). In each instance, the 

cases upon which Plaintiff relies applied to a wide range of 

injuries in addition to personal injuries or did not clearly 

indicate that negligence-based claims were excluded.
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only have arisen in the event that Defendant Mini Storage had 

been negligent, we must next determine whether any of the 

exceptions to the rule providing that sufficiently clear 

exculpatory clauses are enforceable enunciated in Fortson apply.

As we have already noted, an otherwise enforceable

exculpatory clause will not be enforced in the event that it

“violates a statute, is gained through inequality of bargaining 

power, or is contrary to a substantial public interest.” 

Fortson, 131 N.C. App. at 636, 508 S.E.2d at 551. As an initial 

matter, we note that Plaintiff has not cited any statute that is 

inconsistent with the exculpatory provision at issue here, and 

we have not located any such statute in the course of our own 

research. For that reason, the first Fortson exception does not 

bar enforcement of the exculpatory clause at issue here.

Secondly, we must determine if the exculpatory clause at 

issue here “is contrary to a substantial public interest.” Id.

“[A] party cannot protect himself by contract against liability 

for negligence in the performance of a duty of public service, 

or where a public duty is owed, or public interest is involved, 

or where public interest requires the performance of a private 

duty.” Hall, 242 N.C. at 710, 89 S.E.2d at 398. “An activity 

falls within the public policy exception when the activity is 

extensively regulated to protect the public from danger, and it 
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would violate public policy to allow those engaged in such an 

activity to ‘absolve themselves from the duty to use reasonable 

care.’” Fortson, 131 N.C. App. at 637, 508 S.E.2d at 551 

(quoting Alston v. Monk, 92 N.C. App. 59, 64, 373 S.E.2d 463, 

466 (1988), disc. review denied, 324 N.C. 246, 378 S.E.2d 420 

(1989)). The self-storage industry is not, unlike the 

industries to which the public interest exception has been 

deemed applicable, extensively regulated by North Carolina law. 

Alston, 92 N.C. App. at 64, 373 S.E.2d at 466-67 (invalidating a 

release signed by a customer who received cosmetology services

in light of the extensive regulation of the cosmetology industry 

and the use of hazardous chemicals); Fortson, 131 N.C. App. at 

638, 508 S.E.2d at 552 (invalidating a release executed in 

connection with a rider’s participation in a motorcycle safety 

training program). On the contrary, the present case is more 

analogous to Hall, in which the Supreme Court refused to 

invalidate a liability waiver contained in a rental contract 

relating to the installation of a gas tank and pumping 

equipment. Hall, 242 N.C. at 710-11, 89 S.E.2d at 398. As a 

result, we conclude that the public interest exception does not

invalidate the exculpatory clause at issue here.

Finally, an exculpatory contract that has been “gained 

through inequality of bargaining power” is unenforceable.
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Fortson, 131 N.C. App. at 636, 508 S.E.2d at 551. In applying 

this exception to the general rule allowing the enforcement of 

otherwise-enforceable exculpatory clauses, reviewing courts give 

“consideration to the comparable positions which the contracting 

parties occupy in regard to their bargaining strength, i.e., 

whether one of the parties has unequal bargaining power so that 

he must either accept what is offered or forego the advantages 

of the contractual relation in a situation where it is necessary 

for him to enter into the contract to obtain something of 

importance to him which for all practical purposes is not 

obtainable elsewhere.” Hall, 242 N.C. at 710, 89 S.E.2d at 398. 

In addition to admitting that he had read and understood the 

provisions of the rental agreement before signing it, Plaintiff 

acknowledged that there was another storage facility “up the 

road” that he considered dealing with before electing to obtain 

a storage unit from Defendant Mini Storage. As a result, given 

that Plaintiff had other options for obtaining the storage unit 

that he needed, we are unable to conclude that the exculpatory 

provision contained in the rental agreement resulted from the 

exercise of unequal bargaining power.

4 As a result, given that 

the exculpatory clause at issue here is enforceable and clearly 

barred Plaintiff’s claim, we hold that the trial court correctly 

 

4Plaintiff does not attempt to argue in his brief or reply 

brief that any of the Fortson exceptions apply.
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granted summary judgment in favor of Defendant Mini Storage with 

respect to Plaintiff’s personal injury claim.

C. Defendant Smith’s Liability

Secondly, Plaintiff argues that the trial court erred by 

granting summary judgment in favor of Defendant Smith on the 

grounds that the assignment of the contract between Defendant 

Smith and Defendant Mini Storage to Royall did not relieve 

Defendant Smith of his liability under the contract.

Plaintiff’s argument lacks merit.

As a result of the fact that the work that allegedly 

resulted in Plaintiff’s injuries was actually performed by 

Royall rather than Defendant Smith, Plaintiff must, in order to 

successfully pursue a claim against Defendant Smith, establish 

that Defendant Smith violated some duty that he owed to 

Plaintiff. In attempting to persuade us that the assignment of 

Defendant Smith’s rights and duties under his contract with 

Defendant Mini Storage to Royall did not relieve Defendant Smith 

of liability for any injury that he might have sustained,

Plaintiff directs our attention to numerous decisions that hold, 

in effect, that a party to a contract who completely assigns all 

rights and duties under the contract to another party remains

liable to the original party with whom the assignor contracted. 

See, e.g., Rose v. Vulcan Materials Company, 282 N.C. 643, 662, 
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194 S.E.2d 521, 534 (1973) (stating that “the assignor has power 

only to delegate and not to transfer the performance of duties 

as against the other party to the contract assigned”); Atlantic 

& N.C.R. Co. v. Atlantic & N.C. Co., 147 N.C. 368, 380, 61 S.E. 

185, 189 (1908) (holding that, in the absence of a novation, 

“the assignor would, notwithstanding the assignment, still 

remain liable”). A careful study of the decisions upon which 

Plaintiff relies demonstrates, however, that all of them address 

the assignor’s liability to the other party to the original 

contract rather than to a third party like Plaintiff. As a 

result, none of the decisions upon which Plaintiff relies 

undercut the validity of the trial court’s order in any way.

In addition, Plaintiff cites N.C. Gen. Stat. § 25-2-210(1), 

which provides that “[n]o delegation of performance relieves the 

party delegating of any duty to perform or any liability for 

breach.” N.C. Gen. Stat. § 25-2-210(1). Although he 

acknowledges that the statutory provision upon which he relies 

is only applicable to contracts for the sale of goods, Plaintiff 

contends that the General Assembly intended for the principle 

enunciated in N.C. Gen. Stat. § 25-2-210(1) to apply outside the 

sale of goods context given the citation to Atlantic & N.C.R. 

Co. in the comments relating to that statutory provision. Once 

again, however, Plaintiff fails to recognize that Atlantic & 
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N.C.R. Co. and “general North Carolina contract law” provide for

an assignor’s continued liability to the other party to the 

original contract rather than to a third party. As a result, 

N.C. Gen. Stat. § 25-2-210(1) has no bearing on the proper 

resolution of this issue.

Simply put, the only arguments advanced in Plaintiff’s 

brief in opposition to the trial court’s decision to grant 

summary judgment in favor of Defendant Smith establish that

Defendant Smith, as an assignor, remains liable to Defendant 

Mini Storage under the original contract. Nothing in 

Plaintiff’s briefs provides any basis for believing that 

Defendant Smith should be held liable to him as a stranger to 

the original contract. As a result, given that Plaintiff has 

not established any basis for holding Defendant Smith liable for 

his injuries, the trial court did not err by granting summary 

judgment in favor of Defendant Smith.

III. Conclusion

Thus, for the reasons set forth above, we conclude that 

Plaintiff’s challenges to the trial court’s orders lack merit.

5 

 

5Although the parties have debated other issues in their 

briefs in addition to those discussed in the text of this 

opinion, we need not address these issues given our decision to 

hold that the exculpatory clause barred Plaintiff’s claim 

against Defendant Mini Storage and that the assignment of 

Defendant Smith’s contract with Defendant Mini Storage to Royall 

barred Plaintiff’s claim against Defendant Smith.
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As a result, the trial court’s orders should be, and hereby are, 

affirmed.

AFFIRMED.

Judge ROBERT N. HUNTER, JR. concurred in this opinion prior 

to 6 September 2014.

Judge DAVIS concurs.