Court Opinion

ID: 2729025
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:38:22.895757+00
Date Added: 2024-06-11T12:06:46.136153
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                                NO. COA13-1048
                       NORTH CAROLINA COURT OF APPEALS

                               Filed: 4 March 2014

TERRY HARRIS and
MICHELLE HARRIS
     Plaintiffs,

      v.                                      Randolph County
                                              No. 12 CVS 2353
A-1 BUILDERS OF NC., INC.,
     Defendant.

      Appeal by defendant from order entered 24 April 2013 by

Judge L. Todd Burke in Randolph County Superior Court.                    Heard in

the Court of Appeals 3 February 2014.

      Moser, Schmidly, & Roose, by J. Brooke Schmidly and R.
      Anthony Copple, for plaintiffs.

      Carruthers & Roth, P.A., by Mark K. York and J. Patrick
      Haywood, for defendant.

      ELMORE, Judge.

      Defendant     appeals     from   an   order    entered     24   April    2013

denying its motion for judgment on the pleadings pursuant to

North    Carolina     Civil    Procedure     Rule    12(c).       After    careful

consideration, we affirm the trial court’s order.

                                        I. Facts
                                          -2-
     On 2 August 2010, A-1 Builders of NC, Inc. (defendant)

through its owner and president David Hazelwood, entered into a

contract (purchase contract) and New Construction Addendum (the

addendum) with Michelle A. Harris (Ms. Harris) to build a house

located at 3882 Hangar Run in Sophia, which Ms. Harris agreed to

purchase for $197,600.00.           Under the “change orders” provision

of   the    addendum,       the   buyer     could   “order     changes    in     the

construction of the [h]ouse within the general scope of the

[p]lans and [s]pecifications, consisting of additions, deletions

or other revisions, and the purchase price and [c]losing date

shall      be    adjusted    accordingly.”          However,    the      provision

specifically required that “[a]ll such changes shall be made

only by a change order, which shall be in writing and signed by

both [b]uyer and [s]eller.”          The addendum also stated that

                [s]eller hereby warrants that, for a period
                of one (1) year from the date of [c]losing
                or the date [b]uyer occupies the [h]ouse,
                whichever comes first, [s]eller will make
                all necessary repairs and corrections to the
                [h]ouse,   either   interior   or   exterior,
                structural or nonstructural, that shall
                become   necessary   by  reason   of   faulty
                construction, labor or materials or non-
                conformity of construction to the [p]lans
                and [s]pecifications.

     Ms. Harris’ husband, Terry Harris (Mr. Harris), was not a

party to either the purchase contract or the addendum.                         After
                                                -3-
Ms.   Harris    and       defendant         executed    the     contract,       but     before

construction         of     the        house,     Mr.    Harris     and     Ms.         Harris

(collectively plaintiffs) asked that defendant install hardwood

stairs in the residence instead of carpeted stairs as originally

agreed     upon.          Defendant         approved     this    change,        and     on     27

September 2010, Ms. Harris paid defendant $1,120.00 by check to

complete this upgrade.                  After defendant commenced construction

of the residence, Ms. Harris requested that defendant construct

two   brick    columns          on    the   driveway’s       entrance.      Once        again,

defendant acquiesced and was paid $1,010.00 for the cost of the

columns.       On 20 October 2010, defendant signed a Warranty of

Completion      of        Construction,         which    provided        that     defendant

“warrants” to buyer, “the property against defects in equipment,

material, or workmanship and materials supplied or performed by

[defendant]        or     any        subcontractor      or    supplier     at     any        tier

resulting in noncompliance with standards of quality as measured

by acceptable trade practices.”

      Plaintiffs conducted a final inspection of the residence on

8 November 2010 and found that some of the hardwood stairs were

cracked.       Additionally,             plaintiffs     noticed     that    bricks           were

falling off the columns.                 In response, Mr. Harris filed a pro se

small claims action entitled “complaint for money owed” (the
                                          -4-
first complaint) in the amount of $2,130.00, which alleged that

“[h]ardwood steps has [sic] splits [i]n the wood, can’t use” and

“[b]rick columns – [b]ricks are falling of [sic] the columns[.]”

After a hearing, the magistrate ruled in favor of plaintiff, and

defendant filed notice of appeal to Randolph County District

Court (district court).           The case was selected for court ordered

arbitration, and the arbitrator ruled that “plaintiff is awarded

nothing   from      the    defendant”     and     dismissed        the   action.       Mr.

Harris appealed for a trial de novo in district court, and the

case was heard before Judge Robert M. Wilkins.                            Judge Wilkins

entered an order on 4 January 2012, concluding as a matter of

law   that:    1.)    although     Mr.    Harris        was   not   a    party    to   the

purchase contract between defendant and Ms. Harris, he was a

“real party in interest and ha[d] standing to maintain this

action[;]” and 2.) plaintiff was entitled to $500.00 for the

cost to replace three cracked stairs.

      Plaintiffs          filed   a      separate        complaint        (the     second

complaint)     on    24    September     2012     for    breach     of    the    purchase

contract and addendum; negligent construction and repair; breach

of express warranty; breach of implied warranty of habitability;

and   unfair        and    deceptive      trade     practices           after    numerous

unsuccessful        attempts,     both    orally        and   in    writing,      to   get
                                              -5-
defendant to correct defective work in and around the residence.

Plaintiffs    alleged       that       they    only       noticed      these     additional

defects after they occupied the residence on 22 November 2010.

Defendant    moved    for    judgment         on    the    pleadings,          arguing   that

plaintiffs’     second      complaint          was     barred       by    res     judicata.

Defendant’s motion was denied in an order entered 24 April 2013

by Judge Burke.        Defendant timely appealed Judge Burke’s order

to this Court on 2 May 2013.

                                         II. Analysis

a.) Interlocutory Appeal

    We      first    address       plaintiffs’         argument          that    we   should

dismiss defendant’s appeal because the order is interlocutory

and fails to affect a substantial right.                       We disagree.

    “Generally,       there       is    no    right    of      immediate        appeal   from

interlocutory orders and judgments.”                        Goldston v. Am. Motors

Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990).                                      “An

interlocutory       order    is    one       made    during      the     pendency     of   an

action, which does not dispose of the case, but leaves it for

further   action     by     the    trial       court      in    order     to    settle     and

determine the entire controversy.”                     Veazey v. City of Durham,

231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) (citation omitted).

Therefore, a trial court’s denial of a motion for judgment on
                                           -6-
the    pleadings     is    interlocutory         and    normally    not   appealable

because a denial of the motion “does not finally determine the

rights of the parties[.]”              Boyce & Isley, PLLC v. Cooper, 169

N.C.   App.   572,    574,      611   S.E.2d     175,    176    (2005).     However,

immediate appeal of an interlocutory order is available when it

“affects a substantial right[.]”                  Sharpe v. Worland, 351 N.C.

159, 162, 522 S.E.2d 577, 579 (1999).                     Our Supreme Court has

noted that “the right to avoid the possibility of two trials on

the same issues can be such a substantial right.”                         Bockweg v.

Anderson,     333   N.C.       486,   490-91,    428    S.E.2d     157,   160   (1993)

(citation and quotation omitted).

       Under the doctrine of res judicata, “a final judgment on

the merits in one action precludes a second suit based on the

same cause of action between the same parties or their privies.”

Williams v. Peabody, ___ N.C. App. ___, ___, 719 S.E.2d 88, 92

(2011) (citation and quotations omitted).                       Thus, a motion for

judgment on the pleadings based on res judicata seeks to prevent

“a successful defendant, or one in privity with that defendant,

[from] twice hav[ing] to defend against the same claim by the

same    plaintiff,        or    one   in    privity      with    that     plaintiff.”

Bockweg, 333 N.C. at 491, 428 S.E.2d at 161.                       An order denying

such a motion can affect a substantial right because it “could
                                                 -7-
lead    to     a    second        trial     in    frustration       of     the     underlying

principles of the doctrine of res judicata.”                        Id.

       Here,       defendant’s        motion      requested      that     the    trial       court

dismiss plaintiffs’ complaint because the claims asserted “were

or should have been litigated in the previous action[.]”                                     Thus,

defendant’s motion was based on the defense of res judicata.

The trial court’s denial of defendant’s motion could result in

defendant      having       to    litigate        the   same     claims    in     the    second

complaint      that        were       brought     by     Mr.     Harris    in     the    first

complaint.           Therefore,        we     conclude    the     order    is     immediately

appealable         because       it    affects     a    substantial        right,       and    we

address the merits of defendant’s arguments on appeal.

b.) Judgment on the Pleadings

       Defendant argues that the trial court erred in denying his

motion for judgment on the pleadings because plaintiffs’ second

complaint is barred by res judicata.                           Specifically, defendant

avers   that        both     complaints          were    based    upon     breach       of    the

purchase contract and addendum.                    We disagree.

       We review a trial court’s ruling on a motion for judgment

on the pleadings under a de novo standard of review.                                Builders

Mut. Ins. Co. v. Glascarr Properties, Inc., 202 N.C. App. 323,

325,    688        S.E.2d    508,       510      (2010)    (citation        and     quotation
                                         -8-
omitted).       “‘Under a de novo review, the court considers the

matter anew and freely substitutes its own judgment’ for that of

the lower tribunal.” State v. Williams, 362 N.C. 628, 632-33,

669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen,

Ltd. P’ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)); see

also Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334, 337,

678 S.E.2d 351, 354 (2009) (“Under a de novo review, the court

considers       the    matter   anew    and       freely   substitutes    its    own

judgment for that of the lower tribunal.”).                      Judgment on the

pleadings “is appropriate when all the material allegations of

fact are admitted in the pleadings and only questions of law

remain.”    Groves v. Community Hous. Corp., 144 N.C.App. 79, 87,

548 S.E.2d 535, 540 (2001) (citation and quotations omitted).

In ruling on a motion for judgment on the pleadings, we look

“solely    to    the   pleadings”      and    “only   consider    facts   properly

pleaded and documents referred to or attached to the pleadings.”

Builders Mut. Ins. Co., 202 N.C. App. at 324, 688 S.E.2d at 510

(citation and quotation omitted).

    Res     judicata,      also   known      as    claim   preclusion,    bars   the

“relitigation of all matters . . . that were or should have been

adjudicated in the prior action.”                 Whitacre P'ship v. Biosignia,

Inc., 358 N.C. 1, 15, 591 S.E.2d 870, 880 (2004) (citation and
                                               -9-
quotation omitted).             The party seeking to assert res judicata

has the burden of establishing its elements.                          Bluebird Corp. v.

Aubin, 188 N.C. App. 671, 679, 657 S.E.2d 55, 62 (2008).                                        A

party   must     show    “(1)      a    final    judgment      on    the       merits    in    an

earlier suit, (2) an identity of the causes of action in both

the earlier and the later suit, and (3) an identity of the

parties or their privies in the two suits” in order to prevail

on a theory of res judicata.                    Herring v. Winston-Salem/Forsyth

Cnty. Bd. of Educ., 188 N.C. App. 441, 444, 656 S.E.2d 307, 310

(2008) (citation and quotation omitted).

    The     dispositive         question        to    this    appeal      is    whether       the

first and second complaints have an identity of the causes of

action.      Subsequent to entrance of the purchase contract and

addendum,       two    separate         oral    arrangements         were       agreed       upon

between    plaintiffs        and       defendant.        Plaintiffs        requested         that

instead    of     installing       carpeted          stairs   in    the     house       as    was

originally        discussed,           defendant       install       hardwood           stairs.

Defendant agreed, and Ms. Harris paid defendant $1,120.00.                                    Ms.

Harris also asked defendant to build two brick columns on the

driveway    and       paid   defendant         $1,010.00      to    complete      the     task.

Under the addendum, the only way to modify the construction of

the residence was pursuant to the “change orders” provision of
                                          -10-
the addendum.        However, the construction of the hardwood stairs

and the columns did not operate as a “change order” because they

were    neither     made     in    writing       nor    signed    by    the      parties.

Furthermore, the price of the house under the purchase contract

did    not    change,   as   required      by     the    change    order      provision,

despite the additional construction costs.                       Thus, the terms of

the purchase contract and addendum were unchanged and remained

the same as originally contemplated.

       When    plaintiffs         conducted      a     final    inspection       of     the

residence      before    moving     in,   they       observed    that   3   of    the    11

hardwood stairs were cracked.                They also noted that the bricks

were falling off the columns, and the columns were different

heights.      Accordingly, Mr. Harris filed the first complaint for

money owed in the amount of $2,130.00, which was the total sum

provided      by   plaintiffs      to   defendant       for    construction       of    the

hardwood stairs and the columns.                     The first complaint merely

alleged that “[h]ardwood steps has [sic] splits [i]n the wood,

can’t use” and “[b]rick columns – [b]ricks are falling of [sic]

the columns[.]”         Mr. Harris also specified that “[defendant] was

paid cash for steps . . . and [b]rick columns [i]n front of

[h]ouse.      The wood has splits in it and the [b]ricks are falling

off.”    Thus, the totality of the circumstances surrounding the
                                         -11-
first complaint shows that it originated from a separate oral

agreement arising outside the scope of the purchase contract and

addendum.

      Unlike      the   first      complaint,        the      subject    matter     of   the

second complaint is not money owed for the hardwood steps or

columns.     Rather, the second complaint is based on a statutory

violation and breach of contract that alleges defendant’s breach

of the purchase contract and addendum, negligent construction

and   repair,      breach     of    express     warranty,            breach   of    implied

warranty     of     habitability,        and        unfair      and     deceptive    trade

practices.      The allegations address defendant’s failure to abide

by the terms of the contracts by not: 1.) “perform[ing] work on

the   [r]esidence       and     property       in    a     proper,      workmanlike      and

ordinarily skillful manner[;]” 2.) working “in accordance with .

. . the standards of good workmanship common in the construction

industry[;]” and 3.) “correct[ing] the defective work performed

on    the   [r]esidence[.]”            Plaintiffs             list     over   twenty-five

discovered        alleged     defects,     none          of    which     include    faulty

construction of the hardwood stairs or the columns.                            While the

first complaint involved an issue for money owed stemming from

an agreement made outside the purview of the purchase contract

and   addendum      before      plaintiffs       occupied        the     residence,      the
                                  -12-
second complaint directly relates to defendant’s breach of the

purchase contract, addendum, warranties, and industry standards

after plaintiffs’ occupancy.      Thus, the claims in the complaints

arise from two different causes of action.         Accordingly, we rule

that the trial court did not err in denying defendant’s motion

for   judgment    on   the   pleadings   because   plaintiffs’   second

complaint is not barred by res judicata.

                             III. Conclusion

      In sum, the trial court did not err in denying defendant’s

motion for judgment on the pleadings.       Thus, we affirm the trial

court’s order.

      Affirmed.

      Chief Judge MARTIN and Judge HUNTER, Robert N., concur.

      Report per Rule 30(e).