Court Opinion

ID: 9583675
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:41:03.080868+00
Date Added: 2024-06-11T14:58:33.771099
License: Public Domain

WYNN, Judge
dissenting.
In this appeal, Rifenburg Construction alleges that the North Carolina Department of Transportation (NCDOT) entered into a contract with Brier Creek which formed a joint venture or partnership with Brier Creek. As such, Rifenburg Construction argues that “once the partnership or joint venture was formed, then NCDOT became liable for the wrongful acts of its partner or joint venturer, Brier Creek, committed in the ordinary course of business.” I agree with Rifenburg Construction and the trial judge in this case; accordingly, I dissent from the majority opinion.
Chapter 136 of our General Statutes authorizes NCDOT to enter into construction contracts by either (1) contracting directly with road construction contractors under N.C. Gen. Stat. § 136-28.1, or by *635(2) contracting with developers to jointly build roads under N.C. Gen. Stat. § 136-28.6.1 It appears undisputed that in this case, NCDOT entered into a contract with the developer, Brier Creek, under N.C. Gen. Stat. § 136-28.6. Under that agreement, Brier Creek advertised for bids and awarded the road construction contract to Rifenburg Construction. While NCDOT argues that it was not an express party to that contract, a Rule 12(b) dismissal of this case is precluded because the facts are sufficient to find that the N.C. Gen. Stat. § 136-28.6 contract between NCDOT and Brier Creek created a joint venture or partnership.
It is well established that a joint venture exists when (1) parties combine their property, money, efforts, skill or knowledge in a common undertaking (2) for the benefit of the parties in which (3) each has a right in some measure to direct the conduct of the other. Pike v. Wachovia Bank & Trust Co., 274 N.C. 1, 161 S.E.2d 453 (1968). Here, under their contract authorized by N.C. Gen. Stat. § 136-28.6, NCDOT and Brier Creek combined money, property, efforts, skill, and knowledge to a common undertaking (road construction) for the benefit of both parties. Brier Creek benefitted by having a road built with the help of State funds through its property, and NCDOT benefitted by having a public road built with monetary assistance from the developer.2 Thus, elements one and two are established.
The last element under Pike• — “each has a right in some measure to direct the conduct of the other” — presents the focal issue in the case. I disagree with the majority’s conclusion that NCDOT did not have some measure of direct control because NCDOT’s “involvement amounted to unilateral approval of the quality of work performed by Brier Creek” and NCDOT “merely concurred in the selection because public monies were being used to partially fund the project.” Instead, the record shows that under the N.C. Gen. Stat. § 136-28.6 agreement, NCDOT had the right to review and approve payment applications, review and approve design of the project, and review and approve construction of the project. Coupled with its ability to control the contract funds, NCDOT by reviewing and approving the applications, design and construction most assuredly had the “right in some measure to direct the conduct of’ Brier Creek. Likewise, Brier Creek had *636the “right in some measure to direct the conduct of’ NCDOT by controlling the cost of the project. The record shows that the N.C. Gen. Stat. § 136-28.6 contract required NCDOT to pay half of the legitimate costs of the project. It follows that Brier Creek was able to obligate NCDOT to pay additional sums by how it planned, supervised, and constructed the project. Some direction of NCDOT is evident in Brier Creek’s ability to obligate NCDOT to pay a certain amount of money for the project.
A joint venture is a type of partnership and it is governed by substantially the same rules as a partnership. Pike, 274 N.C. 1, 161 S.E.2d 453 (1968). Each partner in a partnership is jointly and severally liable to third parties for the acts and obligations of the partners. N.C. Gen. Stat. § 59-45, Hardy & Newsome, Inc. v. Whedbee, 244 N.C. 682, 94 S.E.2d 837 (1956). Thus, I would uphold the trial court’s denial of NCDOT’s motion to dismiss this action on sovereign immunity grounds. Moreover, I disagree with the majority’s contention that remedies available under N.C. Gen. Stat. § 139-29 are available only to those contractors who have directly entered into agreements with NCDOT under the provisions of N.C. Gen. Stat. § 139-28.1. The language of the statute applies it to “A contractor who has completed a contract with the Department of Transportation. . . .” N.C. Gen. Stat. § 139-29(a). Plaintiff is a contractor and completed the contractual duties it owed the joint venture that included NCDOT. There is nothing in the statute or case law that indicates that this language would exclude a joint venture.
In conclusion, the majority opinion allows NCDOT to make a contract with a developer under N.C. Gen. Stat. § 136-28.6 and reap the benefits that it could have under a contract with a road contractor under N.C. Gen. Stat. § 136-28.1 with complete immunity from liability for any breach of the construction contract. Thus, while .NCDOT controls the developer, oversees the project, attains land for a new road free of cost, benefits from the developers contribution of costs, tailors the project to meet its desires, and reaps substantial benefits from the construction, the majority nonetheless holds that under the doctrine of sovereign immunity, NCDOT should be completely absolved from any liability for a breach of the construction contract that arises under its G.S. 136-28.6 contract with the developer, Brier Creek. In short, the majority allows NCDOT to use sovereign immunity as a “shield” to escape contractual duties and responsibilities while it enjoys at half the cost, the benefits it would gain by contracting directly with the road contractor under G.S. 136-28.1. *637Since I do not believe this to have been the legislative intent, I respectfully, dissent.

. The majority correctly recognizes that the Supreme Court of North Carolina has held that the State of North Carolina waives sovereign immunity when it enters into a contract authorized by law. Smith v. State, 289 N.C. 303, 222 S.E.2d 412 (1976).

. The record shows that NCDOT and Brier Creek shared equally the $7,200,000 estimated cost of constructing the road.