Opinion
No. 07-1347.
Filed 5 August 2008.
Wake County, No. 04 CVS 14813.
Appeal by defendants from order and judgment entered 1 May 2007 by Judge Paul Gessner in Wake County Superior Court. Heard in the Court of Appeals 19 May 2008.
Smith Anderson Blount Dorsett Mitchell Jernigan, LLP, by J. Mitchell Armbruster and Dale E. Hollar, for plaintiff-appellee. Wyrick Robbins Yates Ponton, LLP, by K. Edward Greene and Tobias S. Hampson, for defendants-appellants.
Atlantic Forks, LLC ("Atlantic") and Davis Building Company, Inc. ("Davis Building," collectively "defendants") appeal the trial court's order and judgment in favor of Carolina Power Light Company d/b/a Progress Energy Carolinas, Inc. ("plaintiff"). We affirm.
Davis Building is a general contractor and builder of a commercial office building located at 2609 Atlantic Avenue in Raleigh, North Carolina ("the project"). Atlantic is the developer and owner of the project. As a condition for approval of the project, the City of Raleigh required Atlantic to install a traffic turn lane. In order to accommodate the traffic turn lane, it was necessary for plaintiff to relocate its underground utilities and equipment.
In July of 2002, Ed Davis, president of Davis Building ("Davis"), met with plaintiff's distribution specialist, Willard Tant, Jr. ("Tant"), to measure and review the relocation of the utilities and related equipment. On 16 July 2002, Tant faxed Davis a "Customer Cost Summary," that included a description of the work to be completed by plaintiff and an estimate of the construction cost. The total estimate for relocating the equipment was $35,211.20.
Plaintiff relocated the equipment and utilities. When plaintiff demanded payment from defendants, defendants refused to pay plaintiff. Defendants allege they never agreed to assume responsibility for the cost of relocating the equipment and utilities.
On 22 October 2004, plaintiff filed a complaint against defendants alleging breach of contract, unjust enrichment, and quantum meruit claims. Defendants filed a motion for summary judgment or in the alternative, a motion for partial summary judgment alleging the pleadings and discovery did not support the finding of a valid contract between the parties. Plaintiff also filed a motion for partial summary judgment.
On 29 January 2007, the Honorable Paul G. Gessner ("Judge Gessner") presided over a bench trial in Wake County Superior Court. Judge Gessner denied both motions for summary judgment. After hearing evidence from both parties, Judge Gessner issued an order and judgment in favor of the plaintiff, concluding (1) there was a valid contract between the parties and (2) defendants were jointly and severally liable to plaintiff in the amount of $35,211.20. Defendants appeal.
I. Standard of Review
The standard of review on appeal of a bench trial is whether the trial court's findings are supported by competent evidence and whether its conclusions of law are proper in light of such facts. Lee v. Lee, 167 N.C. App. 250, 253, 605 S.E.2d 222, 224 (2004). "Findings of fact by the trial court in a non-jury trial have the force and effect of a jury verdict and are conclusive on appeal if there is evidence to support those findings." Shear v. Stevens Bldg. Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992) (citation omitted). The trial court's conclusions of law are reviewable de novo. Id. Contract interpretation is a question of law to be reviewed de novo. Harris v. Ray Johnson Const. Co., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654 (2000).
II. Breach of Contract
Defendants argue the trial court erred in concluding there was a valid contract between defendants and plaintiff. We disagree.
Defendants contend because the trial court made no findings as to whether there was an agreement on behalf of defendants to pay the cost of relocation, the trial court could not conclude they entered into a valid contract. Defendants' argument is predicated on the assumption that there was a lack of mutual assent regarding the responsibility for payment of plaintiff's services.
"A contract, express or implied, executed or executory, results from the concurrence of minds of two or more persons, and its legal consequences are not dependent upon the impressions or understandings of one . . . of the parties to it. It is not what either thinks, but what both agree." Howell v. Smith, 258 N.C. 150, 153, 128 S.E.2d 144, 146 (1962) (quotation and citations omitted). "[W]hether a contract has been made must be determined . . . from the expressed intention of the parties . . . from a consideration of their words and acts . . . the test of the true interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant." Id. (citations and internal quotations omitted).
An enforceable contract can be implied in light of the conduct of the parties and under circumstances that make it reasonable to presume the parties intended to contract with each other. Kiousis v. Kiousis, 130 N.C. App. 569, 575, 503 S.E.2d 437, 441 (1998) (concluding conduct of the parties manifested an intent to establish a joint enterprise, giving plaintiff a fifty percent share, even when parties had no discussion about who would own stock in the new corporation). "An implied in fact contract is a genuine agreement between parties[.] . . . The term, implied in fact contract, only means that the parties had a contract that can be seen in their conduct rather than in any explicit set of words." Ellis Jones, Inc. v. Western Waterproofing Co., 66 N.C. App. 641, 646, 312 S.E.2d 215, 218 (1984). In contrast, contracts implied at law are imposed by the court as an equitable remedy and do not require evidence of an agreement between the parties. Nationwide Mut. Ins. Co. v. Chantos, 293 N.C. 431, 443, 238 S.E.2d 597, 605 (1977).
Defendants contend the trial court improperly relied upon implied at law, quantum meruit or quasi contract principles to create an express contract. We disagree.
In the case sub judice, the evidence supports the conclusion that a valid contract existed between the parties based on the conduct of plaintiff and Davis Building. Davis Building manifested assent to the performance of plaintiff's services and the cost of those services when plaintiff was authorized to proceed with the relocation. Tant testified that Davis authorized plaintiff to complete the relocation after receiving the cost summary. The fact that Davis authorized plaintiff to complete the relocation is implied in fact conduct manifesting an agreement for services. Anderson Chevrolet/Olds, Inc. v. Higgins, 57 N.C. App. 650, 654, 292 S.E.2d 159, 162 (1982) ("With regard to a contract implied in fact, one looks not to some express agreement, but to the actions of the parties showing an implied offer and acceptance.").
Defendants also argue that because they understood that the City of Raleigh would pay the cost to relocate the equipment under a Franchise Agreement between plaintiff and the City of Raleigh, this negates a finding that defendants agreed to pay plaintiff for the relocation. We disagree. Unilateral mistake is not a defense to an enforceable contract unless the other party had reason to know of the mistake or caused the mistake. Creech v. Melnik, 347 N.C. 520, 528, 495 S.E.2d 907, 912 (1998). Defendants did not present any evidence showing that Tant or plaintiff knew or caused defendants to believe that the City of Raleigh would pay for the relocation.
III. Agency
Defendants also argue the trial court erred in finding and concluding that Davis Building acted as Atlantic's agent in agreeing to pay for the relocation of utility services. We disagree.
"A principal is liable on a contract duly made when the agent acts within the scope of his actual authority." Harris, 139 N.C. App. at 830, 534 S.E.2d at 655 (citation omitted).
Actual authority is that authority which the agent reasonably thinks he possesses, conferred either intentionally or by want of ordinary care by the principal. Heath v. Craighill, Rendleman, Ingle Blythe, 97 N.C.App. 236, 241, 388 S.E.2d 178, 181 (1990); 3 Am Jur.2d Agency § 73 (1976). Actual authority may be implied from the words and conduct of the parties and the facts and circumstances attending the transaction in question. 3 Am Jur.2d Agency § 75 (1976).
Id. A principal's liability is "determined by what authority a person[,] in the exercise of reasonable care[,] was justified in believing the principal conferred on his agent." Branch v. High Rock Realty, Inc., 151 N.C. App. 244, 250, 565 S.E.2d 248, 252 (2002). The trial court found that Davis was acting as Atlantic's agent when he consented to the removal and relocation of plaintiff's equipment. This finding is supported by evidence that Davis Building was hired to be the general contractor for the project, that Davis testified he spoke with Atlantic owner, John Bruckel ("Bruckel"), who instructed him to "go ahead" with the relocation of utilities, and that the relocation of the utilities was necessary to complete the project, which was the purpose of Davis Building's agreement with Atlantic. Davis' instructions to Tant to "go ahead" with the relocation of equipment is conduct which binds Atlantic to pay for the services rendered. Id. A person exercising reasonable care would be justified believing that Atlantic's general contractor had authority to bind Atlantic to a contract for services related to the development project. This assignment of error is overruled.
IV. Joint and Several Liability
Defendants contend the trial court erred in concluding that both defendants were jointly and severally liable for the breach of contract. We disagree.
"An agent who makes a contract for an undisclosed principal is personally liable as a party . . . unless the other party had actual knowledge of the agency and of the principal's identity." Howell v. Smith, 261 N.C. 256, 258-59, 134 S.E.2d 381, 383 (1964).
Here, Tant had no actual knowledge that Davis Building was acting on behalf of Atlantic at the time Tant performed the services. Therefore, when Davis Building contracted with plaintiff, it entered into a contract for an undisclosed principal rendering Davis Building personally liable to plaintiff for the cost of services. Id.
"The liability of the agent is not exclusive. When the principal becomes known, the other party to the contract may elect whether he will resort to him or to the agent with whom he dealt unless the contract is under seal, a negotiable instrument, or expressly excludes him." Howell, 261 N.C. at 259, 134 S.E.2d at 384. "The aggrieved party seeking damages must elect whether he will hold the principal or the agent liable; he cannot hold both." Id. (citation omitted); but see Rounsaville v. North Carolina Home Fire Ins. Co., 138 N.C. 191, 50 S.E. 619 (1905) (where agent by contract or his own conduct has added his liability to the principal, both agent and principal may be jointly and severally liable).
Election of remedies is an estoppel defense that is waived on appeal unless it is pled as an affirmative defense. State ex rel. Easley v. Rich Food Services, Inc., 139 N.C. App. 691, 704, 535 S.E.2d 84, 93 (2000); King v. Owen, 166 N.C. App. 246, 601 S.E.2d 326 (2004); see also North Carolina Federal Sav. and Loan Ass'n v. Ray, 95 N.C. App. 317, 323, 382 S.E.2d 851, 856 (1989) (where defendant failed to plead affirmative defense or raise the issue at trial, could not introduce that issue for the first time on appeal). Here, defendants waived their right to raise this defense on appeal. Although plaintiff's complaint relied on an agency relationship between defendants in its breach of contract claim, defendants did not plead estoppel as an affirmative defense in their answer, nor did they raise the issue at trial. Defendants argue that they did not receive notice of the joint and several liability issue until after judgment was entered. However, plaintiff's complaint put defendants on notice that plaintiff sought recovery from both defendants under an agency theory. The trial court's order and judgment should remain undisturbed.
Affirmed.
Judges WYNN and STROUD concur.
Report per Rule 30(e).