Shoffner Industries, Inc. v. W. B. Lloyd Const. Co., 7815SC875

• Decision Date: 17 July 1979
• Docket Number: No. 7815SC875,7815SC875
• Citation: 257 S.E.2d 50,42 N.C.App. 259
• Court: North Carolina Court of Appeals
• Parties: SHOFFNER INDUSTRIES, INC., Plaintiff, v. W. B. LLOYD CONSTRUCTION COMPANY, Defendant, v. Noel N. COLTRANE, Jr., Additional Defendant.

Page 50

257 S.E.2d 50

42 N.C.App. 259

SHOFFNER INDUSTRIES, INC., Plaintiff, v. W. B. LLOYD CONSTRUCTION COMPANY, Defendant, v. Noel N. COLTRANE, Jr., Additional Defendant.

No. 7815SC875.

Court of Appeals of North Carolina.

July 17, 1979.

Smith, Anderson, Blount, & Mitchell by James G. Billings and Nigle B. Barrow, Jr., Raleigh, for defendant-appellant.

Allen, Allen, Walker & Washburn by J. Kent Washburn, Burlington, for additional defendant-appellee.

CARLTON, Judge.

In light of the unusual disposition of this action by the trial court, it is first necessary that we determine the proper posture of the case on appeal. The trial court denied the additional defendant's motion for summary judgment but allowed his motion to dismiss pursuant to G.S. 1A-1, Rule 12(b)(6) for failure to state a claim upon which relief may be granted. We agree with the additional defendant, Coltrane, that the trial court's action was inconsistent. However, we do not find that inconsistency to constitute prejudicial error. As discussed Infra, however, the inconsistent ruling by the trial court does affect our review of the case on appeal.

In reviewing additional defendant's contention that it is prejudicial error to first deny a motion for summary judgment and then grant a 12(b)(6) motion for failure to state a claim upon which relief may be granted, we note several distinctions between the two motions. Granted, several of them are subtle. A 12(b)(6) motion for failure to state a claim upon which relief can be granted addresses the claim itself and the moving party is simply asserting that the pleading to which the motion is directed does not sufficiently state a claim for relief. Unless the motion is converted into one for summary judgment, as permitted by the last sentence in Rule 12(b), it does not challenge the actual existence of meritorious claim. The motion only entails an examination of the sufficiency of the pleadings. By contrast, the summary judgment motion embraces more than the pleadings and the trial court may properly consider affidavits, depositions, and other information designated in the Rule. The Rule 56 motion is an assertion that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment on the merits and as a matter of law on the basis of the record then existing. Obviously, the summary judgment motion may be made on the basis of the pleadings alone and, in that event, it is the same as the motion under Rule 12(b)(6). Dyal v. Union Bag-Camp Paper Corp., 263 F.2d 387 (5th Cir. 1959).

The confusion between Rule 56 and Rule 12(b)(6) motions has evolved primarily around the question whether matter outside the pleadings can be presented on a Rule 12(b)(6) motion to dismiss. The confusion resulted in a 1948 amendment to Rule 12 of the Federal Rules of Civil Procedure, upon which our rule was based, providing that when outside matter is presented to and not excluded by the court on a motion under either Rule 12(b)(6) or Rule 12(c), it should be treated as one for summary judgment under Rule 56. The result is that the party moving for dismissal for failure to state a claim may show that, even if the complaint is sufficient on its face, undisputed facts not appearing in the complaint entitle him to a summary judgment. Moreover, the Rule 12(b)(6) motion is addressed solely to the sufficiency of the complaint and does not prevent summary judgment from subsequently being granted based on material outside the complaint. Beedy v. Washington Water Power Co., 238 F.2d 123 (9th Cir. 1956). When a court decides to dismiss an action pursuant to Rule 12(b) (6), any pending motion for summary judgment against the claimant may be treated as moot and therefore not be decided. Harber v. Kentucky Ridge Coal Co., 85 F.Supp. 233 (E.D.Ky.1949), Aff'd on other grounds, 188 F.2d 62 (6th Cir. 1951); See Wright and Miller, Federal Practice and Procedure, Civil, § 2713, pp. 391-400.

Here, the trial court did not treat the summary judgment motion as moot. Indeed, it expressly denied the motion. Moreover, it is not clear from the record before us whether the trial court considered the affidavits in deciding the Rule 12(b)(6) motion. In light of the last sentence in Rule 12(b), we must assume that the court did exclude all matter outside the pleadings. That sentence provides that when outside matter is presented to and not excluded by the court on a motion under Rule 12(b)(6), it should be treated as one for summary judgment under Rule 56. Since the trial judge here denied the motion for summary judgment, and then allowed the motion under Rule 12(b)(6), and since outside matter is not ordinarily considered under a Rule 12(b)(6) motion, we must assume that the trial judge concluded that, as a matter of law, the defendant's counterclaim on its face failed to state a claim for which relief could be granted. For that reason, we do not review, for purposes of defendant's appeal, the affidavits or other documents, submitted in support of or opposition to the motion for summary judgment.

The result of the foregoing is this: The primary question raised on this appeal is whether the trial court properly allowed the motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.

The test on a motion to dismiss for failure to state a claim upon which relief can be granted is whether the pleading is legally sufficient. 11 Strong, N.C. Index 3d, Rules of Civil Procedure, § 12, p. 294. A complaint may be dismissed on motion filed under Rule 12(b)(6) if it is clearly without merit; such lack of merit may consist of an absence of law to support a claim of the sort made, absence of fact sufficient to make a good claim, or the disclosure of some fact which will necessarily defeat the claim. Hodges v. Wellons, 9 N.C.App. 152, 175 S.E.2d 690 (1970). For the purpose of a motion to dismiss, the allegations of the complaint are treated as true. Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282 (1976). A complaint is sufficient to withstand a motion to dismiss where no insurmountable bar to recovery on the claim alleged appears on the face of the complaint and where allegations contained therein are sufficient to give a defendant notice of the nature and basis of plaintiff's claim so as to enable him to answer and prepare for the trial. Cassels v. Ford Motor Co., 10 N.C.App. 51, 178 S.E.2d 12 (1970).

We now turn to the question of whether the counterclaim by the contractor, Lloyd, states a claim upon which relief may be granted against the architect, Coltrane. We hold that the motion to dismiss pursuant to Rule 12(b)(6) was improvidently entered.

The primary substantive issue presented is whether a third party general contractor, who may foreseeably be injured or suffer an economic loss proximately caused by the negligent performance of a contractual duty by an architect, has a cause of action against the architect, notwithstanding absence of privity, for negligent approval of defective materials and workmanship.

In 65 A.L.R.3d 249, 252, it is said:

Although, under the traditional general rule, privity of contract was required before a cause of action could arise from the negligent breach of a duty existing by virtue of contract, this requirement has been gradually eliminated in many jurisdictions, at first with respect to actions for personal injuries or death, and later in regard to suits predicated upon harm to intangible economic interests. Thus, just as the privity doctrine has been widely repudiated in architect cases involving personal injury or death stemming from negligently prepared plans and designs and from negligent supervision, the courts of several jurisdictions have indicated that the doctrine cannot be applied to shield an architect from liability to a contractor who has suffered economic damage as a result of the negligence of the architect. It has been so held with respect to causes of action arising both from negligent supervision and from the negligent preparation of plans and specifications.

We think that the evolution of related cases brings North Carolina in accord with the rules stated above. It is well settled in North Carolina that where a contract between two parties is intended for the benefit of a third party, the latter may maintain an action in contract for its breach or in tort if he had been injured as a result of its negligent performance. Jones v. Otis Elevator Company, 234 N.C. 512, 67 S.E.2d 492 (1951).

The parties to a contract impose upon themselves the obligation to perform it; the law imposes upon each of them the obligation to perform it with ordinary care and they may not substitute a contractual standard for this obligation. A failure to perform a contractual obligation is never a tort unless such nonperformance is also the omission of a legal duty. (Citation omitted.) The contract merely furnishes the occasion, or creates the relationship which furnishes the occasion, for the tort. Toone v. Adams, 262 N.C. 403, 407, 137 S.E.2d 132, 135 (1964).

The law imposes upon every person who enters upon an active course of conduct the positive duty to use ordinary care so as to protect others from harm. A violation of that duty is negligence. It is immaterial whether the person acts in his own behalf or under contract with another. Council v. Dickerson's, Inc., 233 N.C. 472, 64 S.E.2d 551 (1951). An act is negligent if the actor intentionally creates a situation which he knows, or should realize, is likely to cause a third person to act in such a manner as to create an unreasonable risk of harm to another. Toone v. Adams, supra.

The additional defendant contends primarily that the liability for negligence of an architect, as a professional, extends only to those with whom he is in privity of contract. He implicitly concedes that he would be liable to his client, the school board, for negligently prepared plans and...