Nat Harrison Associates, Inc. v. North Carolina State Ports Authority

• Decision Date: 14 January 1972
• Docket Number: No. 127,127
• Citation: 280 N.C. 251,185 S.E.2d 793
• Court: North Carolina Supreme Court
• Parties: NAT HARRISON ASSOCIATES, INCORPORATED v. NORTH CAROLINA STATE PORTS AUTHORITY.

Page 793

185 S.E.2d 793

280 N.C. 251

NAT HARRISON ASSOCIATES, INCORPORATED v. NORTH CAROLINA STATE PORTS AUTHORITY.

No. 127.

Supreme Court of North Carolina.

Jan. 14, 1972.

Broughton, Broughton, McConnell & Boxley, by John D. McConnell, Jr., and J. Melville Broughton, Jr., Raleigh, for plaintiff appellant and plaintiff appellee.

Atty. Gen. Robert Morgan, Asst. Atty. Gen. Eugene A. Smith, and Staff Attorney Rafford E. Jones, Raleigh, for defendant appellant and defendant appellee.

MOORE, Justice.

PLAINTIFF'S APPEAL

Plaintiff contends that the trial court erred in granting summary judgment in favor of defendant on the second and third counts in the complaint. Plaintiff alleged in the second count that plaintiff had anticipated profits on the four contracts of $497,025, but due to delays caused by defendant and other contractors, it realized profits of only $111,401.66. In this count plaintiff sought to recover the lost profits of $297,427.44. The third count in the complaint alleged that since December of 1968, when the $178,746 final payment was retained by defendant, the German mark had been revalued, requiring the plaintiff to pay a German supplier an additional $6,435 which would not have been necessary if this retainage had been timely released. On this count plaintiff sought to recover the $6,435. Summary judgment for defendant was granted on these two counts under the provision of Rule 56(c) of the Rules of Civil Procedure. G.S. § 1A--1.

Rule 56(c) provides:

'. . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment is a matter of law. . . .'

This rule provides for the disposition of cases where there is no genuine issue of fact, and its purpose is to eliminate formal trials where only questions of law are involved. Where the pleadings or proof disclose that no cause of action or defense exists, a summary judgment may be granted. Kessing v. National Mortgage Corp., 278 N.C. 523, 180 S.E.2d 823 (1971); 2 McIntosh, N.C. Practice and Procedure § 1660.5 (2d Ed., Phillips' Supp.1970); 3 Barron and Holtzoff, Federal Practice and Procedure § 1234 (Wright Ed., 1958).

Procedurally, the question in the present case is: Assuming the facts alleged in the second and third counts in the complaint to be true, was the defendant entitled to summary judgment as a matter of law? We think so.

Plaintiff brought its suit under G.S. § 143--135.3, which provides:

'Upon completion of any contract for construction or repair work awarded by any State board to any contractor, under the provisions of this article, should the contractor fail to receive such settlement as he claims to be entitled to Under terms of his contract, he may, within 60 days from the time of receiving written notice as to the disposition to be made of his claim, submit to the Director of the Department of Administration a written and verified claim for such amount as he deems himself entitled to Under the terms of said contract, setting forth the facts upon which said claim is based. In addition, the claimant, either in person or through counsel, may appear before the Director of the Department of Administration and present any additional facts and arguments in support of his claim. Within 90 days from the receipt of the said written claim, the Director of the Department of Administration shall make an investigation of the claim and may allow all or any part or may deny said claim and shall have the authority to reach a compromise agreement with the contractor and shall notify the contractor in writing of his decision.

'As to such portion of the claim which may be denied by the Director of the Department of Administration, the contractor may, within six months from receipt of the decision, institute a civil action for such sum as he claims to be entitled to Under said contract by the filing of a verified complaint and issuance of summons in the Superior Court of Wake County or in the superior court of any county wherein the work under said contract was performed. The procedure shall be the same as in all civil actions except as herein and as hereinafter set out.

'All issues of law and fact and every other issue shall be tried by judge, without jury; provided that the matter may be referred in the instances and in the manner provided for in article 20 of chapter 1 of the General Statutes.' (Emphasis added.)

The North Carolina State Ports Authority, defendant in this action, was created by Article 22 of Chapter 143 of the General Statutes, and is an instrumentality and agency of the State, created and empowered to accomplish a public purpose. G.S. § 143--217; Webb v. Port Commission of Morehead City, 205 N.C. 663, 172 S.E. 377 (1934).

In Great American Insurance Co. v. Gold, Commissioner of Insurance, 254 N.C. 168, 172, 118 S.E.2d 792, 795 (1961), Justice Clifton Moore stated for the Court:

". . . An action against a Commission or Board created by Statute as an agency of the State where the interest or rights of the State are directly affected is in fact an action against the State.' Prudential Insurance Co. of America v. Powell, supra (217 N.C. 495, 8 S.E.2d 619, 621). The State is immune from suit unless and until it has expressly consented to be sued. It is for the General Assembly to determine when and under what circumstances the State may be sued. When statutory provision has been made for an action against the State, the procedure prescribed by statute must be followed, and the remedies thus afforded are exclusive. The right to sue the State is a conditional right, and the terms prescribed by the Legislature are conditions precedent to the institution of the action. Kirkpatrick v. Currie (Comr. of Revenue), 250 N.C. 213, 108 S.E.2d 209; Duke v. Shaw (Comr. of Revenue), 247 N.C. 236, 100 S.E.2d 506; Prudential Insurance Co. v. Powell, supra; Rotan v. State, supra (195 N.C. 291, 141 S.E. 733.)'

In Nello L. Teer Co. v. North Carolina State Highway Commission, 265 N.C. 1, 143 S.E.2d 247 (1965), Justice Bobbitt (now Chief Justice), speaking of G.S. § 136--29 (a statute almost identical to G.S. § 143--135.3), which permits suits on highway construction claims against the State Highway Commission, said: 'the quoted statute, which assumes a valid contract is subsisting, provides for recovery 'under the said contract.' In our view, recovery, if any, 'under the said contract' must be based on the terms and provisions thereof.' And the Court then continued: 'Even so, recovery, if any, must be within the terms and framework of the provisions of the contract of July 8, 1958 and not otherwise.'

In the present case, the trial judge correctly found that there was no provision in the contracts for recover of damages for delays or for losses by reason of the devaluation of the German mark. Under the provisions of G.S. § 143--135.3, the plaintiff is only entitled to recover 'such settlement as he claims to be entitled to under terms of his contract' and since plaintiff's claims as set out in the second and third counts of its complaint did not arise under the terms of its contracts, the court properly entered summary judgment on these two counts.

DEFENDANT'S APPEAL

Defendant contends the trial court committed prejudicial error in failing to allow defendant's motion to dismiss. At the beginning of the trial, defendant moved to dismiss this action under Rule 12(b)(6) of the Rules of Civil Procedure on the ground that the plaintiff had not complied with the conditions of the contracts and the pertinent statutes so as to be entitled to bring this action. At the close of plaintiff's evidence, the defendant moved to dismiss for failure to establish a cause of action. At the close of all the evidence, defendant moved to dismiss under Rule 41(b) of the Rules of Civil Procedure. Each motion was denied, and defendant excepted.

Defendant contends that the four contracts involved in this case were not completed within the meaning of G.S. § 143--135.3 so as to enable plaintiff to proceed with the filing of its claim before the Director of the Department of Administration. This contention is based first upon Section 29.00 of the Special Conditions of each contract, which is as follows:

'29.00 AS-BUILT DRAWINGS. As the work progresses, each Contractor shall keep a complete record of any and all variations between actual project installations and contract drawing and specification requirements. Upon completion of project one set of drawings shall be marked in red to show all such variations and these drawings shall be forwarded to Architect-Engineer.'

It is also based on Section 1.08 of the Technical Specifications in Contract No. 3, which provides:

'1.08 RECORD DRAWINGS. Upon completion of the work the contractor shall furnish to the engineer original or reproducible tracings of a complete set of drawings and calculations of the facility, as built, and furnish in book form 8 copies of instructions for operation, maintenance and lists of spare parts. These books are to include all descriptive material, parts list, drawings covering all items of electrical equipment and...