Court Opinion

ID: 9616374
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:46:06.369755+00
Date Added: 2024-06-11T18:03:57.705346
License: Public Domain

PHILLIPS, Judge.
Accepting the foregoing allegations as true, as we must since the sufficiency of a complaint to state a claim for relief is being determined, Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282 (1976), and bearing in mind that complaints may not be dismissed for not stating a claim under Rule 12(b)(6), N.C. Rules of Civil Procedure, unless it appears “to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim,” Stanback v. Stanback, 297 N.C. *421181, 185, 254 S.E.2d 611, 615 (1979), citing 2A Moore’s Federal Practice, Sec. 12.08, pp. 2271-74 (2d ed. 1975) (emphasis omitted), we first consider whether a legally enforceable claim is alleged against defendant bank. The claim, in substance, is that plaintiff contractor has an equitable lien on the construction loan balance for the building it built because in reliance upon the fund being disbursed it completed the construction when the property owner was not in default, and that by acquiring the completed building as security for the loan without disbursing the agreed amount the bank has unjustly enriched itself at plaintiff’s expense. The enforceability of such a claim as plaintiff’s has not been considered by our Courts. Contrary to the appellee bank’s argument, that our comprehensive lien statute, Chapter 44A of the North Carolina General Statutes, makes no provision for a lien of this type is not determinative; for that legislation did not purport to abrogate long established principles under which equitable liens have been enforced by our Courts in a variety of situations, as Garrison v. The Vermont Mills, 154 N.C. 1, 69 S.E. 743 (1910), and the cases cited indicate. Nor was the Court’s refusal to enforce such a lien in Urban Systems Development Corp. v. NCNB Mortgage Corp., 513 F.2d 1304 (4th Cir. 1975), a bar to this claim, for the contractor in that case had not completed the construction bargained for and the lender was holding an uncompleted building as security for its loan.
But claims indistinguishable from this one have been considered by other Courts, some of which have approved them. See Annotation, Building and Construction Contracts: Contractor’s Equitable Lien Upon Percentage of Funds Withheld by Contractee or Lender, 54 A.L.R.3d 848 (1974). In a number of well reasoned decisions, including Smith v. Anglo-California Trust Co., 205 Cal. 496, 271 P. 898 (1928), disapproved on other grounds by Lucas v. Hamm, 56 Cal. 2d 583, 364 P.2d 685, 15 Cal. Rptr. 821 (1961), cert. denied, 368 U.S. 987, 7 L.Ed.2d 525, 82 S.Ct. 603 (1962), Swinerton & Walberg Co. v. Union Bank, 25 Cal. App. 3d 259, 101 Cal. Rptr. 665, 54 A.L.R.3d 839 (1972), and Hayward Lumber & Investment Co. v. Coast Federal Savings & Loan Ass’n of Los Angeles, 47 Cal. App. 2d 211, 117 P.2d 682 (1941), the California Courts have upheld the lien under circumstances similar to those alleged. In Miller v. Mountain View Savings & Loan Ass’n, 238 Cal. App. 2d 644, 661, 48 Cal. Rptr. 278, 290 (1965), the California Court of Appeals cogently said —
*422Where the lender has received the benefit of the claimant’s performance, and therefore a more valuable security for its note, it is not justified in withholding or appropriating to any other use money originally intended to be used to pay for such performance and relied upon by the claimant in rendering its performance.
This is sound equitable doctrine, in our opinion, and it applies to the circumstances alleged. For if the bank’s security has been enhanced and perfected by plaintiff’s performance in reliance upon the loan funds being disbursed, and if the bank has not been relieved of its obligation to disburse the balance of funds by the borrower’s default, retaining the funds to plaintiff’s detriment and its own unearned enrichment would be unjust. Whether any of the allegations can be proved is, of course, not before us; our role under the record is to decide the sufficiency of the complaint, and we are of the opinion that it states an enforceable claim.
The bank’s argument that the view we have adopted was overruled in Boyd & Lovesee Lumber Co. v. Modular Marketing Corp., 44 Cal. App. 3d 460, 118 Cal. Rptr. 699 (1975), is incorrect. The reversal in that case was based upon a subsequently enacted California statute which abolished all rights of equitable lien against trust funds except those based upon a written contract between the claimant and the person holding the fund. North Carolina has no similar statutory prohibition. The bank’s further argument that Rafcor was in default under the terms of the deed of trust cannot be considered because the appeal concerns only the sufficiency of the complaint to state a claim for relief, the deed of trust is not a part of either the complaint or the record on appeal, as stipulated to by the parties, and the complaint alleges that Rafcor was not in default.
As to the enforceability of the claim asserted against the individual defendants the claim in substance is that: With actual knowledge of both the construction contract and the loan contract, they intentionally caused Rafcor not to request the bank to make the final payment due plaintiff under the construction contract for the wrongful purpose of limiting their personal liability under their guaranty agreement, and that plaintiff was thereby damaged to the extent of the undisbursed loan funds. The claim stated is for tortious interference with contract, the elements of which are as follows: (1) a valid contract between plaintiff and a third per*423son; (2) defendants had knowledge of the contract; (3) defendants intentionally induced the third person not to perform the contract; (4) in doing so defendants acted without justification; and (5) plaintiff was damaged thereby. United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d 375, 387 (1988); Childress v. Abeles, 240 N.C. 667, 674, 84 S.E.2d 176, 181-82 (1954), reh’g dismissed, 242 N.C. 123, 86 S.E.2d 916 (1955). All of these elements — contract, knowledge, interference, absence of justification, and damage —are explicitly alleged by plaintiff’s complaint. In dismissing the claim the court apparently was under the mistaken impression that element (4), that defendants acted without justification, cannot be established since defendants, as officers and directors of the contracting corporation, had the right and duty to act for the company in regard to its contracts and other business. G.S. 55-35. But their justification in interfering with the contract in question is not established by that duty. For “justification imports ‘a sufficient lawful reason why a party did or did not do the thing charged,’ ” Childress v. Abeles, supra, at 674-75, 84 S.E.2d at 182, citing 51 C.J.S. 421, and the right of an officer and director of a corporation to interfere with its contracts is not unlimited; “ ‘[individual liability may ... be imposed where . . . acts involve individual and separate torts distinguishable from acts solely on his employer’s behalf or where his acts are performed in his own interest and adverse to that of his firm.’ ” Wilson v. McClenny, 262 N.C. 121, 133-34, 136 S.E.2d 569, 578 (1964) (citations omitted). The allegations in the complaint that the individual defendants acted purely for their own personal benefit, rather than in the best interest of Rafcor as they were obligated to do, entitle plaintiff to support the allegations with evidence if it can.
Reversed.
Judge BECTON concurs.
Judge GREENE dissents.
(Former Judge BECTON concurred in the result reached in this case prior to 9 February 1990.)