Sunland Builders, Inc. v. Cleveland Construction, Inc. et al
Filing
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ORDER denying 22 Motion for Summary Judgment. Signed by District Judge Terrence W. Boyle on 4/7/2016. (Romine, L.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
No. 4:14-CV-216-BO
SUNLAND BUILDERS, INC.,
Plaintiff,
v.
CLEVELAND CONSTRUCTION, INC. and
FEDERAL INSURANCE COMPANY,
Defendants.
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ORDER
This matter is before the Court on defendants' motion for partial summary judgment. [DE
22]. Plaintiff has responded [DE 24], defendant has replied [DE 25], and the matter is ripe for
ruling. For the following reasons, defendants' motion is denied.
BACKGROUND
This case concerns the construction of a Wal-Mart Neighborhood Market in Newport,
North Carolina. Movant defendant Cleveland Construction, Inc. (CCI) was the general contractor
of the project. Between November 11, 2013, and December 4, 2013, CCI exchanged emails with
plaintiff, Sunland Builders, Inc. (Sunland), about subcontracting for work on the project,
including site clearing, erosion control, grading, storm drainage, pavement, curb, and gutter. On
December 4, 2013, Sunland sent a bid estimating a cost of completion of $597,300.00. [DE 1-1].
That day, CCI employee Jason Ziegler acknowledged the bid and sent Sunland an email
authorizing Sunland to proceed with the work (the "Notice to Proceed."). [DE 23-5].
In this December 4 email, Mr. Ziegler of CCI referred to an attached "blank sample copy
of our subcontract agreement," adding that the formal subcontract agreement would be modified
to include specific information and would be sent to Sunland at a later date. Id. Sunland began
work on the project almost immediately. Over a month later, on January 8, 2014, CCI claims it
sent "the same contract form that had been previously sent on 4 December 2013, customized for
this particular Project." [DE 23]. Sunland agrees that "Defendant Cleveland ultimately attempted
to have Sunland sign a subcontract form after issuing the notice to proceed." [DE 24]. Sunland
objected to the subcontract and refused to sign after being told CCI would not accept any
changes. Plaintiff continued work on the project despite never signing the subcontract form.
Ultimately, Sunland worked on the project from December 2013 through April 2014. CCI
contends Sunland fell short of its obligations in several ways, and Sunland contends it completed
its required work and more but was not properly compensated by CCI. Plaintiff filed a lien on the
project on May 1, 2014, which CCI had discharged through a bond from defendant Federal
Insurance Company. On October 22, 2014, Sunland filed suit in Carteret County Superior Court,
stating four claims: ( 1) breach of contract against CCI; (2) restitution/quantum meruit/unjust
enrichment against all defendants; (3) foreclosure of liens against bond against Federal Insurance
Company; and (4) unfair and deceptive trade practices under North Carolina law against CCI.
[DE 1-1]. Defendants removed to federal court on November 21, 2014. [DE 1]. Defendant CCI
filed an answer and counterclaim against Sunland on November 25, 2014, for (1) breach of
contract and (2) fraud in the inducement. [DE 10]. On September 30, 2015, defendants filed the
instant Motion for Partial Summary Judgment on plaintiffs first, second, and fourth claims, as
well as defendant's first counterclaim. [DE 22].
DISCUSSION
I.
Legal Standard
Summary judgment is proper only when, viewing the facts in the light most favorable to
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the non-moving party, there is no genuine issue of material fact, and the movant is entitled to
judgment as a matter oflaw. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986); Cox v. Cty. ofPrince William, 249 F.3d 295, 299 (4th Cir. 2001). The party seeking
summary judgment "bears the initial responsibility of informing the district court of the basis for
its motion, and identifying those portions of [the record] which it believes demonstrate the
absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. Once the moving party has
met its burden, the non-moving party must then "set forth specific facts showing that there is a
genuine issue for trial." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574,
586-87 (1986). An issue is "genuine" if a reasonable jury, based on the evidence, could find in
favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Cox,
249 F.3d at 299. In determining whether a genuine issue of material fact exists for trial, a trial
court views the evidence and the inferences in the light most favorable to the nonmoving party.
Scott v. Harris, 550 U.S. 372, 378 (2007).
IL
Sunland's Breach of Contract Claim-Claim One
A genuine issue of material fact exists as to Sunland' s breach of contract claim, so
summary judgment is inappropriate. As a preliminary matter, the Court notes that defendant did
not include argument on this point beyond asserting that the subcontract form sent in January
2014-but never signed by Sunland-constitutes the controlling subcontract in the case.
There is a genuine issue of material fact as to this claim. Though both parties claim that
they had a binding subcontract, the parties disagree on the terms of that contract. Sunland argues
that the subcontract consisted of the terms in its December 4, 2013, proposal and the responsive
Notice to Proceed from CCI. CCI contends that the contract was the January 2014 formal
subcontract that was sent to but never signed by Sunland. On the facts before the court, it is
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possible that the non-moving party is correct. Thus, there is a question of fact as to whether an
agreement actually existed and what the terms of that agreement were, which makes this claim
inappropriate for summary judgment. See Charbonnages de France v. Smith, 597 F.2d 406, 415
(4th Cir. 1979) ("While there may of course be situations in which the manifestations of
intention of both parties to be bound, or of either not to be bound, are so unequivocal as to
present no genuine issue of fact, this will but rarely be so in protracted negotiations involving a
'jumble ofletters, telegrams, acts, and spoken words.' Restatement (Second) of Contracts,ยง
21A, Comment a. Ordinarily in such cases, the issue whether there has at any time been the
requisite manifestation of mutual assent to a bargained exchange will be one of fact in genuine
dispute so as to preclude summary judgment."); see also Deepwater lnvs., Ltd. v. Jackson Hole
Ski Corp., 938 F.2d 1105, 1111-12 (10th Cir. 1991) ("Issues such as whether a contract has been
entered into and the terms of the alleged contract are generally questions of fact to be resolved by
the fact finder.").
III.
Sunland's Unjust Enrichment Claim-Claim Two
A genuine issue of material fact exists as to Sunland' s unjust enrichment claim, so
summary judgment is inappropriate. Defendants have moved for summary judgment on the
grounds that North Carolina law precludes recovery in quantum meruit when there is an actual
agreement between the parties. Plaintiff, however, contends that it can recover in quantum meruit
for additional work it completed for the project beyond the original scope of the contract.
Assuming, for the sake of this claim, that the parties had an operative contract, then whether
plaintiff completed work beyond the scope of that contract and, if so, how much plaintiff should
be compensated for that work create genuine issues of material fact which render summary
judgment on this claim inappropriate.
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IV.
Sunland's Unfair and Deceptive Trade Practices Claim-Claim Four
A genuine issue of material fact exists as to Sunland's unfair and deceptive trade
practices claim, so summary judgment is inappropriate. Defendants move for summary judgment
on the grounds that plaintiff has alleged a mere breach of contract, which is insufficient to give
rise to a claim for unfair and deceptive trade practices under North Carolina law. Plaintiff
contends, however, that its claim for unfair and deceptive trade practices is based on defendants'
"withholding of undisputed sums in a commercially unreasonable effort to compel Sunland to
compromise its claims in regard to the disputed claims" and not just breach of contract. Whether
such commercially unreasonable withholding occurred creates an issue of fact. See Burns v.
Anderson, 123 Fed. Appx. 543, 546 (4th Cir. 2004) (unpublished) (per curiam) ("As to whether
the sale price of the collateral was commercially reasonable, the district court found disputed
issues of material fact remained for trial."); see also Nat'/ Hous. P'ship v. Mun. Capital
Appreciation Partners, L.P., 935 A.2d 300, 314 (D.C. App. 2007) ("Commercial reasonableness
is a question of fact.") (citing Fed Deposit Ins. Corp. v. Rodenberg, 571 F.Supp. 455, 461 (D.
Md. 1983)). Accordingly, plaintiff has demonstrated that there is a genuine issue of material fact
concerning this issue, which renders summary judgment on this claim inappropriate.
V.
CCI' s Breach of Contract Claim-Counterclaim One
A genuine issue of material fact exists as to CCI' s breach of contract claim, so summary
judgment is inappropriate. Defendant has moved for partial summary judgment declaring that
there was a valid contract existing between the parties. For the reasons discussed in Section II,
supra, the Court refuses to make such a declaration at this stage, as there are genuine issues of
material fact. Accordingly, summary judgment on this claim is inappropriate as well.
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CONCLUSION
For the foregoing reasons, defendants' motion for partial summary judgment is DENIED.
[DE 22].
SO ORDERED, this
'1 day of April, 2016.
J~w.A~
TERRENCE W. BOYLE
UNITED STATES DISTRICT JUDGE
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