Lupo v. Share of North Carolina, Inc., No. COA08-899 (N.C. App. 8/18/2009), COA08-899
| Decision Date | 18 August 2009 |
| Docket Number | No. COA08-899,COA08-899 |
| Court | North Carolina Court of Appeals |
| Parties | EDWARD LUPO, d/b/a EDWARD LUPO PLUMBING; CONNECTIONS ELECTRIC, INC.; HAROLD WATTS and MICHAEL SMITH, d/b/a WATTS & SMITH PLUMBING CONTRACTORS; and COMFORT MANAGEMENT HEATING & AIR CONDITIONING, INC., Plaintiffs, v. SHARE OF NORTH CAROLINA, INC., DYNACON DEVELOPMENT, INC., and WILLIAM WALLER, Defendants. |
Appeal by plaintiffs Connections Electric, Inc. and Walter Winchester from order entered 3 March 2008 by Judge John O. Craig, III and order entered 15 April 2008 by Judge James M. Webb in Guilford County Superior Court. Appeal by defendants from order entered 28 May 2008 by Judge James M. Webb and order entered 12 June 2008 by Judge Catherine C. Eagles in Guilford County Superior Court. Heard in the Court of Appeals 29 January 2009.
Smith, James, Rowlett & Cohen, LLP, by Norman B. Smith, for plaintiffs Connections Electric, Inc. and Walter Winchester.
No brief filed on behalf of plaintiffs-appellees Edward Lupo, Michael Smith, Harold Watts, and Comfort Management Heating & Air Conditioning, Inc.
Rightsell Eggleston, LLP, by Donald P. Eggleston, for defendants.
Plaintiffs Connections Electric, Inc. and Walter Winchester appeal from the trial court's order granting summary judgment to defendants Share of North Carolina, Inc. ("SNC"), Dynacon Development, Inc., and William Waller on plaintiffs' breach of contract claim. While Connections Electric was not legally incorporated at the time Winchester, its CEO, entered into the contract with defendants, we hold that Connections Electric has submitted sufficient evidence that it subsequently adopted the contract, entitling it to sue for breach of contract. Because that was the sole issue disputed by the parties with respect to the summary judgment motion, we reverse the trial court's summary judgment order with respect to Connections Electric's breach of contract claim and remand for further proceedings. We uphold, however, the trial court's award of attorneys' fees to defendants under N.C. Gen. Stat. § 44A-35 (2007) and N.C. Gen. Stat. § 75-16.1 (2007), but remand for further findings of fact regarding the amount of the fee award.
The corporate defendants appeal from the trial court's order denying their motion for attorneys' fees against plaintiffs Michael Smith and Harold Watts. Individual defendant Waller also appeals the court's order denying his motion for attorneys' fees against plaintiffs Edward Lupo and Comfort Management Heating & Air Conditioning, Inc. Because, however, defendants failed to file an appellant's brief, we dismiss their appeal.
In 2006, SNC began developing land it owned in High Point, North Carolina. Waller, SNC's president and "primary contact for all contractors," employed Dynacon Development as the general contractor. Later in 2006, defendants entered into contracts with several subcontractors to do various construction work on the houses in the development. Specifically, defendants contracted with Edward Lupo Plumbing and Watts & Smith Plumbing to do plumbing work and with Comfort Management to do heating and air conditioning work. Winchester entered into a contract with defendants to do electrical subcontracting work on the houses. Winchester is the sole shareholder, president, and CEO of Connections Electric. While Winchester submitted evidence that he entered into the contract on behalf of Connections Electric, Connections Electric was not incorporated at the time the contract was signed and performed.
Although the timing is unclear, a dispute ultimately arose between plaintiffs and defendants regarding the quality of the work and the timeliness of payment under the contracts. Between 18 August 2006 and 9 November 2006, Winchester filed 12 claims of lien against SNC, stating that Connections Electric had performed the work that was the subject of each lien.
Plaintiffs filed a complaint on 3 January 2007, asserting claims for (1) breach of contract, (2) unfair and deceptive trade practices ("Chapter 75 claims"), (3) enforcement of subcontractors' liens ("Article 44A claims"), and (4) conversion of personal property. On 5 March 2007, plaintiffs filed an amended complaint adding as defendants LaRonda L. Arnold, Raymond Miller, Jr., Barbara Miller, Branch Banking & Trust Company, and the City of High Point. On 6 June 2007, however, plaintiffs voluntarily dismissed their claims against Arnold, the Millers, Branch Banking & Trust, and the City of High Point.
SNC, Dynacon Development, and Waller filed an answer on 8 March 2007 and an answer to the amended complaint on 27 March 2007, denying plaintiffs' claims and asserting various counterclaims. With respect to Connections Electric, in particular, defendants denied liability on the ground that Connections Electric was not incorporated until after the contract had been executed and the liens had already been filed.
By consent order, Winchester was substituted as a plaintiff for Connections Electric. Subsequently, however, plaintiffs moved to have Connections Electric added back into the action as a named plaintiff. On 5 December 2007, defendants moved for partial summary judgment on all claims asserted by Connections Electric or Winchester. On 3 March 2008, the trial court allowed Connections Electric to be added as a plaintiff, but granted summary judgment to defendants on Connections Electric's and Winchester's claims.
Defendants subsequently filed a motion under N.C. Gen. Stat. § 44A-35 and N.C. Gen. Stat. § 75-16.1 for attorneys' fees against Connections Electric and Winchester. In an order entered 15 April 2008, the trial court found that Connections Electric and Winchester unreasonably refused to resolve their Article 44A claims and that their Chapter 75 claims were frivolous and malicious. The court determined that defendants were entitled to attorneys' fees as the prevailing parties, found that $200.00 per hour was a reasonable rate, and awarded defendants $11,680.00 in attorneys' fees. Plaintiffs filed a motion for reconsideration on 29 April 2008 that was denied on 28 May 2008.
The remaining plaintiffs' claims and defendants' counterclaims were set for trial on 14 April 2008. On 17 April 2008, the parties announced to the trial court that they had settled their claims, with plaintiffs voluntarily dismissing their claims against defendants and defendants voluntarily dismissing their counterclaims.
On 1 May 2008, SNC and Dynacon Development moved for attorneys' fees against Smith and Watts. The trial court denied the motion on 28 May 2008. On 12 May 2008, Waller filed a motion to recover attorneys' fees from Lupo and Comfort Management; this motion was also denied.
Connections Electric and Winchester appealed from the trial court's order granting summary judgment to defendants and the order awarding attorneys' fees. Lupo, Smith, Watts, and Comfort Management are not parties to that appeal. SNC and Dynacon Development filed a notice of appeal from the trial court's order denying their motion for attorneys' fees against Smith and Watts. Waller appealed from the trial court's order denying his motion for attorneys' fees against Lupo and Comfort Management. Connections Electric and Winchester are not parties to defendants' appeals.
Connections Electric argues that the trial court erred by granting summary judgment to defendants on its breach of contract claim. Winchester contends that, in the event the trial court properly entered judgment on the breach of contract claim, he should have been permitted to proceed individually based on a theory of quantum meruit. Connections Electric and Winchester make no argument for reversal regarding their Article 44A, Chapter 75, or conversion claims. Any argument as to those claims is, therefore, deemed abandoned on appeal. N.C.R. App. P. 28(a).
The standard of review of the grant of a motion for summary judgment requires a two-part analysis of whether (1) the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact; and (2) the moving party is entitled to judgment as a matter of law. Von Viczay v. Thoms, 140 N.C. App. 737, 738, 538 S.E.2d 629, 630 (2000), aff'd per curiam, 353 N.C. 445, 545 S.E.2d 210 (2001); N.C.R. Civ. P. 56(c). The moving party ultimately has the burden of establishing the lack of any triable issue of fact, Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985), and the evidence presented is viewed in the light most favorable to the non-moving party, Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003).
The sole issue with respect to the breach of contract claim is whether Connections Electric, which was not incorporated at the time the contract was entered into and performed, is entitled to enforce the contract. In his affidavit filed in opposition to defendant's summary judgment motion, Winchester states that he is the sole shareholder, a director, president, and chief executive officer of Connections Electric. He further states that, at the time he entered into the contract with defendants, he "believed .. . that Connections Electric, Inc., had its corporate charter issued, based on information that had been received from the attorney who was handling this matter." According to Winchester, the actions he took — entering into the contract, performing the work, and filing the liens — were done for the benefit of the corporation. Winchester acknowledged, however, that "the corporate charter was not issued until the work was completed and until after [Winchester] filed the lien[s] in the name of Connections Electric, Inc."
Our Supreme Court has held: "Although a corporation may not technically...
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