Delta Environmental v. Wysong & Miles Co.

• Decision Date: 02 February 1999
• Docket Number: No. COA98-214.,COA98-214.
• Citation: 510 S.E.2d 690,132 NC App. 160
• Court: North Carolina Court of Appeals
• Parties: DELTA ENVIRONMENTAL CONSULTANTS OF NORTH CAROLINA, INC., Plaintiff-appellee, cross-appellant, v. WYSONG & MILES COMPANY, Defendant-appellant, cross-appellee.

510 S.E.2d 690

132 NC App. 160

DELTA ENVIRONMENTAL CONSULTANTS OF NORTH CAROLINA, INC., Plaintiff-appellee, cross-appellant, v. WYSONG & MILES COMPANY, Defendant-appellant, cross-appellee.

No. COA98-214.

Court of Appeals of North Carolina.

February 2, 1999.

Kennedy, Covington, Lobdell & Hickman, L.L.P., by Kiran H. Mehta and Stanford D. Baird, and Ruff, Bond, Cobb, Wade & Bethune, L.L.P., by Hamlin L. Wade, Charlotte, for plaintiff-appellee.

Adams, Kleemeier, Hagan, Hannah & Fouts, by Amiel J. Rossabi and David S. Pokela, Greensboro, for defendant-appellant. SMITH, Judge.

In the late 1980's, extreme environmental contamination and pollution of soil and groundwater occurred at the manufacturing facility of Wysong & Miles Company (Wysong) in Greensboro, North Carolina. Wysong sought an environmental consultant to help it deal with the pollution and contamination. Wysong hired Delta Environmental Consultants of North Carolina, Inc. (Delta), a Charlotte-based subsidiary of a national environmental consulting and engineering firm, to assist Wysong in formulating and implementing a cleanup plan. In March or April 1988, Delta and Wysong entered a service contract for environmental services (first contract). On 24 February 1994, Delta and Wysong entered a second contract, which remained effective until Wysong terminated the Contract in April 1995. Over the course of their seven-year relationship, Delta performed tasks and billed Wysong on a time, fees, and materials basis. From October 1994 to April 1995, Wysong failed to pay Delta for the invoices it submitted each month. Despite being delinquent in payment, Wysong continued to ask Delta to perform work and in January 1995, assured Delta that it would bring its account current. In April 1995, Delta brought suit to collect $29,370.58. On 18 January 1996, Wysong amended its answer and counterclaimed against Delta. Wysong counterclaimed alleging unjust enrichment because Delta had received payment for work that had not actually been performed. Wysong's counterclaim also alleged negligence in that Delta failed to perform its remedial work to the level of skill ordinarily exercised by members of its profession. Wysong's motion to amend its answer and counterclaim to include allegations of unfair or deceptive acts or practices in commerce in violation of N.C. Gen.Stat. § 75-1.1 was denied.

The matter was heard before a duly impaneled jury on 11 February 1997. The jury returned the following verdicts:

PLAINTIFF, DELTA, CLAIM:

1. Does the Defendant, Wysong, owe the Plaintiff, Delta money on account? YES

2. What amount if any does the Defendant, Wysong, owe the Plaintiff, Delta, on account? NONE

DEFENDANT, WYSONG, COUNTERCLAIMS:

I.

1. Was the Plaintiff, Delta, unjustly enriched by receiving payments from the Defendant, Wysong, for work that was not performed or costs that were not incurred in relation to work performed? YES

2. What amount, if any, should the Defendant, Wysong, recover of the Plaintiff, Delta, based upon unjust enrichment? $225,000

II.

1. Was the Defendant, Wysong, damaged by the negligence of the Plaintiff, Delta? Yes

2. What amount of damages has the Defendant, Wysong, sustained as a proximate result of any negligence? $9,000

Judge Lamm's order and judgment was filed on 8 April 1997. On 14 April 1997, Judge Marvin K. Gray entered an order denying Delta's motion for partial summary judgment and Wysong's motion for summary judgment. Judge Gray's order denied Wysong's motion to amend its previously amended answer and counterclaim and declared all other motions moot. On 24 July 1997, Judge Lamm filed an order that denied Delta's motions for judgment notwithstanding the verdict and for new trial. This order also denied Wysong's motion to amend/alter the judgment but granted Wysong's motion for a conditional new trial on the issue of damages in its unjust enrichment claim. Defendant and plaintiff appeal.

Wysong filed its notice of appeal on 8 August 1997, and Delta filed its notice of appeal on 15 August 1997. Wysong appeals from the 14 April 1997 order of Judge Gray denying their motion to amend, oral orders by Judge Lamm of 3 February 1997 allowing Delta's motion for directed verdict on several of Wysong's negligence claims and dismissing Wysong's claim for breach of contract, the order and judgment of 8 April 1997 taxing only a small portion of costs against Delta, and the order of 24 July 1997 granting a partial new trial on the issue of damages for Wysong's unjust enrichment claim. Delta appeals from oral orders denying their motion for directed verdict and judgment notwithstanding the verdict on Wysong's unjust enrichment claim. For similar reasons they appeal from the order and judgment of 8 April 1997, and they also appeal from the order of 24 July 1997 denying Delta's motion for a new trial on Delta's payment on account action.

Wysong first seeks reinstatement of the verdict granting Wysong damages for its unjust enrichment claim against Delta arguing that the trial court erred by setting aside the jury award. We disagree. It is well established that "[i]f there is a contract between the parties[,] the contract governs the claim[,] and the law will not imply a contract." Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d 554, 556, reh'g denied, 323 N.C. 370, 373 S.E.2d 540 (1988). Here, the first and second contracts govern the relationship between the parties with regard to payment and services rendered. Thus, an action for breach of contract, rather than unjust enrichment, is the proper cause of action. Accordingly, we reverse the trial court's decision to permit Wysong's unjust enrichment claim. Consequently, the trial court's grant of a conditional new trial on the issue of damages for unjust enrichment is reversed.

Wysong next argues that the trial court erred when it denied Wysong's motion to amend its previously amended pleadings to include a claim for unfair or deceptive acts or practices in commerce. Motions to amend are governed by N.C. Gen.Stat. § 1A-1, Rule 15 (1990). Generally, Rule 15 is construed liberally to allow amendments where the opposing party will not be materially prejudiced. See Members Interior Construction v. Leader Construction Co. Inc., 124 N.C.App. 121, 476 S.E.2d 399 (1996)

disc. review denied, 345 N.C. 754, 485 S.E.2d 56 (1997). Despite cases cited by Wysong, our standard of review for motions to amend pleadings requires a showing that the trial court abused its discretion. See Isenhour v. Universal Underwriters, 345 N.C. 151, 478 S.E.2d 197 (1996). Denying a motion to amend without any justifying reason appearing for the denial is an abuse of discretion. See Coffey v. Coffey, 94 N.C.App. 717, 381 S.E.2d 467,

disc. review allowed, 325 N.C. 705, 388 S.E.2d 450 (1989), disc. review improvidently granted, 326 N.C. 586, 391 S.E.2d 40 (1990). However, proper reasons for denying a motion to amend include undue delay by the moving party and unfair prejudice to the nonmoving party. See News and Observer Publishing Co. v. Poole, 330 N.C. 465, 412 S.E.2d 7 (1992). Other reasons that would justify a denial are bad faith, futility of amendment, and repeated failure to cure defects by previous amendments. See Chicopee, Inc. v. Sims Metal Works, 98 N.C.App. 423, 391 S.E.2d 211,

plaintiff's disc. review allowed, 327 N.C. 426, 395 S.E.2d 674, defendant's disc. review denied, 327 N.C. 426, 395 S.E.2d 675, reconsideration of defendant's motion for disc. review denied, 327 N.C. 632, 397 S.E.2d 76 (1990), withdrawn, 328 N.C. 329, 402 S.E.2d 826 (1991). When the trial court states no reason for its ruling on a motion to amend, this Court may examine any apparent reasons for the ruling. See Coffey, 94 N.C.App. 717,

381 S.E.2d 467. In the instant case, the trial judge denied the motion because it came "rather late in the case." We interpret this as the trial court's determination that the timing of the motion was the result of undue delay. Wysong claims that the trial court's ruling is an abuse of discretion. We disagree. Wysong correctly cites Mosley & Mosley Builders, Inc. v. Landin, Ltd., 97 N.C.App. 511, 389 S.E.2d 576,

disc. review denied, 326 N.C. 801, 393 S.E.2d 898 (1990), for the proposition that in showing prejudice (by undue delay, bad faith, etc.), the burden is on the party opposing the motion to amend. However, in Mosley, the plaintiff's amendment adding a claim for unfair or deceptive acts or practices in commerce was allowed by the trial court. There, this Court recognized that the defendant had not met its burden in convincing the trial court of the existence of prejudice. Here, however, the trial court was convinced by Delta's argument and denied Wysong's motion to amend. Because Wysong has failed to show an abuse of discretion, we find no error in the trial court's denial of their second motion to amend.

Wysong next assigns error to the trial court's failure to tax Delta with the full costs. Taxing of costs is governed by Article 6 of the North Carolina General Statutes. N.C. Gen.Stat. §§ 6-18 and 6-19 (1986) detail certain actions where costs are allowed as a matter of course. Costs not allowed as a matter of course under sections 6-18 and 6-19 may be allowed in the court's discretion under N.C. Gen.Stat. § 6-20 (1986). The court's discretion under section 6-20 is not reviewable on appeal. See Minton v. Lowe's Food Stores, 121 N.C.App. 675, 468 S.E.2d 513,

disc. review denied, 344 N.C. 438, 476 S.E.2d 119 (1996) (citing Chriscoe v. Chriscoe, 268 N.C. 554, 151 S.E.2d 33 (1966)) (emphasis added). In the instant case, Wysong's action does not fall within the purview of sections 6-18 and 6-19. Therefore, the costs assessed by the trial judge are governed by section 6-20 and are not reviewable by this Court.

Wysong also argues that the trial court erred by not taxing Wysong's attorneys' fees against Delta. We disagree. "As a general rule[,] contractual provisions for attorney's fees are invalid in the absence of...