Se. Caissons, LLC v. Choate Constr. Co.

• Court: North Carolina Court of Appeals
• Writing for the Court: TYSON, Judge.
• Citation: Se. Caissons, LLC v. Choate Constr. Co., 784 S.E.2d 650, 247 N.C.App. 104 (N.C. App. 2016)
• Decision Date: 19 April 2016
• Docket Number: No. COA15–1284.,COA15–1284.
• Parties: SOUTHEAST CAISSONS, LLC, Plaintiff, v. CHOATE CONSTRUCTION COMPANY, Choate Construction Group, LLC, Falcon Engineering, Inc., BBH Design, P.A., and Kimley–Horn and Associates, Inc., Defendants.

247 N.C.App. 104

784 S.E.2d 650

SOUTHEAST CAISSONS, LLC, Plaintiff,

v.CHOATE CONSTRUCTION COMPANY, Choate Construction Group, LLC, Falcon Engineering, Inc., BBH Design, P.A., and Kimley–Horn and Associates, Inc., Defendants.

No. COA15–1284.

Court of Appeals of North Carolina.

April 19, 2016.

Randolph M. James P.C., Winston–Salem, by Randolph M. James, for plaintiff-appellee.

Johnston, Allison & Hord, P.A., by Robert L. Burchette, Michael J. Hoefling, Charlotte and David V. Brennan, for Choate Construction Company and Choate Construction Group, LLC, defendants-appellants.

TYSON, Judge.

Defendants Choate Construction Company and Choate Construction Group, LLC (collectively, "Choate") appeal from order denying Choate's motion to dismiss, or alternatively, for change of venue pursuant to Rule 12(b)(3). We affirm.

I. Factual Background

On 28 July 2011, the trustees of Wake Technical Community College entered into a prime contract with Choate for the construction of the Northern Wake Campus Parking Deck, located in Raleigh, Wake County, North Carolina. The parking deck construction (hereinafter, "the project") was a public project, and subject to a comprehensive set of statutes and regulations regarding the procurement of services and materials and the performance of the project. The project was overseen by the North Carolina Department of Administration and the State Construction Office.

Choate solicited bids for drilled shafts and concrete piers for the project. Southeast Caissons, LLC ("SEC") submitted two bid proposals to Choate. Brian Kinlaw ("Mr. Kinlaw") served as Choate's project manager for the construction of the parking deck. After SEC submitted its second bid proposal, Mr. Kinlaw corresponded via a series of emails with Keisha West ("Ms. West"), a managing member of SEC, regarding the terms of the proposed subcontract with SEC for the drilling of shafts and the installation of concrete caissons and piers to support the weight and structure of the project.

On 6 October 2011, Mr. Kinlaw emailed Ms. West an electronic copy of Choate's proposed subcontract and informed her she would also receive two hard copies by mail. The subcontract offered a lump sum payment of $438,000.00 to SEC for its work on the project, subject to contingencies, and incorporated the terms of the prime contract between Choate and Wake Technical Community College. The subcontract also contained a clause in Article X, Section 3(b) entitled "Additional Dispute Resolution Provisions." This clause stated: "Venue for any arbitration, settlement meetings or any subsequent litigation whatsoever shall be in the city of Contractor's office as shown on page 1 of the Subcontract." Choate's office was shown on page 1 of the subcontract as being located in Raleigh, Wake County, North Carolina.

Mr. Kinlaw subsequently requested that Ms. West sign and return the proposed subcontract. He explained that Choate required a signed subcontract before it would allow SEC to begin work on the project. Ms. West informed Mr. Kinlaw that SEC "had some small changes to the subcontract but generally found the subcontract agreeable."

Ms. West emailed the changes to Mr. Kinlaw and he discussed the changes with his superiors.

On 24 October 2011, Choate and SEC held a "pre-drill" meeting on-site, where the parties reached an oral agreement on where "rock payment would begin in a drilled shaft." On 26 October, Ms. West emailed Mr. Kinlaw SEC's "Proposed Addendum" to the subcontract. The "Proposed Addendum" stated "[SEC] hereby accepts the terms of the attached Subcontract, subject to and conditioned upon [Choate's] acceptance of the terms set forth in this Addendum [.]" (emphasis supplied).

On 27 October, Mr. Kinlaw and Ms. West engaged in a two-hour-long telephone call, during which they discussed the subcontract and the "Proposed Addendum." Following this telephone call, Mr. Kinlaw and Ms. West continued to exchange emails and telephone calls, in which they sought to reach an agreement on and finalize the terms contained in the subcontract and "Proposed Addendum." The correspondences included an email from Mr. Kinlaw on 2 November, in which he indicated the parties "got closer" to reaching a final agreement on the additional issues and he "hope[d] to have this resolved with [Ms. West] ASAP." Ms. West replied with an email on 7 November which read: "I just wanted to touch base with you to check the status of the Subcontract Agreement. I would like to get this contract nailed out [sic] today prior to drilling, if possible." SEC began drilling the first shaft that same day, while the amended subcontract and "Proposed Addendum" remained unsigned by both SEC and Choate.

Despite SEC beginning to drill on-site on 7 November 2011 without a signed written subcontract, Choate and SEC, through Mr. Kinlaw and Ms. West, continued to discuss the terms of the subcontract. On 15 November, Mr. Kinlaw sent an email to Ms. West, which read: "I tried calling yesterday and today ... to speak further about the Subcontract.... Sending this just in case it's not reaching you." Mr. Kinlaw sent another email to Ms. West on 18 November seeking to discuss "further definition and clarification" of certain terms in the proposed subcontract.

The parties continued discussing the terms of the proposed subcontract into December 2011. In an email dated 19 December 2011, Mr. Kinlaw wrote to Ms. West:

Further to my email below from 12/1/11 following the collaborative effort by both of our offices to reach concurrence on Contract terms, no further response has been received from Southeast Caissons—namely, a signed and executed copy of the Subcontract. In making another attempt, attached you will find a revision to the Subcontract that includes all modifications agreed-upon as clarified and documented previously.

In her supplemental affidavit, Ms. West stated she "could not sign the proposed subcontract because we were not in agreement."

Mr. Kinlaw sent a follow-up email to Ms. West on 30 December, in which he stated he wanted to "discuss several urgent paperwork issues[.]" Mr. Kinlaw also reminded Ms. West he had re-sent the proposed subcontract document for her to execute and return to Choate.

Mr. Kinlaw emailed to SEC another modified proposed subcontract on 12 January 2012. He stated in the email: "I am re-sending the subcontract to you that includes all modifications agreed-upon as clarified and documented previously and has been cleaned up to remove the handwritten notes on Exhibits B and C. Please execute and return this document immediately." Ms. West averred in her supplemental affidavit that Mr. Kinlaw considered this a "finalized subcontract," but it contained "modifications which were not acceptable to [SEC]." Ms. West did not respond to Mr. Kinlaw's correspondence, and SEC continued to perform work on the construction project. SEC drilled the last shaft on the project on 27 January 2012. The proposed "finalized subcontract," as modified and sent by Mr. Kinlaw on 12 January 2012, remained unexecuted by both parties.

On 23 February 2012, Ms. West mailed Mr. Kinlaw a letter to notify him SEC's work had been completed and to request payment from Choate. Acknowledging she had not signed the proffered subcontract as yet, Ms. West stated: "We understand Choate has maintained that a contract must be signed prior to any payment to [SEC], but it is undeniable that no matter what our disagreement might be on the amount due to [SEC] there is some amount due." In his response letter to Ms. West, Mr. Kinlaw informed her Choate would be unable to pay SEC until someone from SEC submitted a payment application to Choate.

SEC filed a complaint on 23 February 2015 against Choate, Falcon Engineering, Inc. ("Falcon"), BBH Design, P.A. ("BBH"), and Kimley–Horn and Associates, Inc. ("Kimley–Horn") in Forsyth County. Defendants Falcon, BBH, and Kimley–Horn are not parties to this appeal, and the allegations asserted in SEC's complaint pertaining to these defendants are not addressed. SEC's complaint against Choate alleged claims for: (1) breach of contract; (2) quantum meruit; (3) fraud in the inducement; (4) unfair and deceptive trade practices; and (5) punitive damages.

Choate responded and filed an answer, motion to dismiss, counterclaims, and crossclaims. Choate asserted four separate bases for the trial court to grant its motion to dismiss: (1) motion to dismiss for breach of a condition precedent to maintain a claim/or waiver of the right to maintain a claim and for failure to state a claim for relief, i.e. compliance with the condition precedent; (2) motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6); (3) motion to dismiss or alternatively for change of venue; and (4) motion to dismiss for failure to establish that "rock" was encountered beyond bearing elevation.

Choate's motion for change of venue was based upon the language contained in Article X, Section 3(b) of the unsigned subcontract, which provided: "Venue for any arbitration, settlement meetings or any subsequent litigation whatsoever shall be in the city of Contractor's office as shown on page 1 of the Subcontract."

SEC voluntarily dismissed without prejudice its claims against defendants BBH and Kimley–Horn on 30 July 2015. Choate's motion to dismiss or alternatively for change of venue was heard in Forsyth County Superior Court on 27 July 2015. Both Mr. Kinlaw and Ms. West submitted affidavits, which were filed in anticipation of this hearing.

The trial court entered a written order denying Choate's motion for change of venue on 11 August 2015. The trial court's order stated, in part:

IT APPEARS to the Court from Brian Kinlaw's affidavit filed by movants and the Affidavit of Keisha West and Supplemental Affidavit of Keisha West filed by plaintiff Southeast Caissons, LLC (SEC), a managing member of SEC, that the Subcontract attached to defendants [sic] Choate's Answer as Exhibit A was never executed by SEC or Choate ... and is therefore not

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