Opinion
No. COA08-643.
Filed August 18, 2009.
Alamance County No. 06CVS2542.
Appeal by defendants from orders and judgment entered 15 November, 4 December 2007 and 3 January 2008 by Judge Henry W. Hight, Jr. in Alamance County Superior Court. Heard in the Court of Appeals 3 December 2008.
Bugg Wolf, P.A., by John E. Bugg and Allen T. Wiggins, for plaintiff-appellee. Brooks, Pierce, McLendon, Humphrey Leonard, L.L.P., by S. Leigh Rodenbough, IV, James C. Adams, II, and Sarah Archer Leigh Phillips, for defendants-appellants.
John W. Daniel Company, Incorporated ("Daniel") and United States Fire Insurance Company (collectively "defendants") appeal the award of damages and attorneys' fees to JMW Concret Contractors ("plaintiff") in its breach of contract action against defendants. For the reasons stated below, we affirm.
On or about 29 April 2004, Daniel entered into a general construction contract with Alamance County to construct an addition to the Alamance County Detention Center ("the project"). Approximately one week earlier, Daniel had sent a letter to plaintiff informing it that Daniel intended to award plaintiff a subcontract for poured concrete work related to the project. On 7 May 2004, Daniel sent to plaintiff a standard form subcontract with respect to the project.
Plaintiff's owner, Jerry Holyfield, Jr. ("Holyfield"), made handwritten changes to Daniel's standard form subcontract and signed it on 5 July 2004. Holyfield added "Does not include alternates — include J.M.W. proposal as part of contract" to provision 2.1. He also amended provision 4.1 to change the total value of the contract from $711,046.00 to $734,286.00. The parties disagree as to what constituted the "proposal" included as part of the contract pursuant to Holyfield's amendment to provision 2.1.
On 13 September 2004, Holyfield and Daniel's project manager, Bion Fite ("Fite"), discussed the proposal. Fite made several handwritten changes to it and noted, "Changes OK w/Jerry Holyfield per phone conversation 9.13.04." Fite signed the standard form subcontract, including Holyfield's amendments, for Daniel on 13 September 2004.
Plaintiff submitted its final payment request for the project on or about 24 April 2006. On 7 June 2006, Daniel submitted to Alamance County a payment request dated 26 May 2006, in which it certified that plaintiff's work was one hundred percent complete. Alamance County paid the amount requested on 7 June 2006. Daniel made partial payment to plaintiff on or about 15 June 2006, claiming plaintiff had not finished its work.
Plaintiff filed a complaint for breach of contract on or about 23 October 2006. A bench trial was held over the course of several days in October and November 2007. On 15 November 2007, the trial court entered a judgment in plaintiff's favor. Plaintiff had filed a motion for attorneys' fees and costs on 9 November 2007, which it amended on 27 November 2007. A hearing on plaintiff's motion was held on 3 December 2007 and plaintiff was awarded attorneys' fees and costs by order filed 4 December 2007. Defendants appealed. On 13 December 2007, plaintiff filed a motion to correct the 15 November 2007 judgment. On 3 January 2008, the judgment was corrected to change the term during which interest would be due on the judgment from "until the date of this Judgment" to "until paid[.]" Defendants appeal.
When this Court reviews a judgment rendered in a bench trial, our standard of review
is whether there is competent evidence to support the trial court's findings of fact and whether the findings support the conclusions of law and ensuing judgment. Findings of fact are binding on appeal if there is competent evidence to support them, even if there is evidence to the contrary.
Sessler v. Marsh, 144 N.C. App. 623, 628, 551 S.E.2d 160, 163 (citation omitted), disc. rev. denied, 354 N.C. 365, 556 S.E.2d 577 (2001). "Where no exception is taken to a finding of fact by the trial court, the finding is presumed to be supported by competent evidence and is binding on appeal." Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) (citations omitted).
Defendants first argue that the trial court erred in concluding as a matter of law that the terms of plaintiff's "five page proposal" governed the parties' contractual agreement. We disagree.
Defendants contend that the trial court's finding that the "five page proposal" modified the subcontract should be classified as a conclusion of law, and reviewed de novo, because this determination requires the exercise of judgment and application of legal principles. However, whether an item was made part of a contract as finally consummated presents a "clear-cut issue of fact for the jury." Goeckel v. Stokely, 236 N.C. 604, 607, 73 S.E.2d 618, 620 (1952). "If the terms of the contract had been admitted or otherwise established, their meaning would become a question of law[.]" Embler v. Gloucester Lumber Co., 167 N.C. 457, 461, 83 S.E. 740, 742 (1914) (emphasis added).
Here, the parties disagree on what constituted the "proposal" that was incorporated into the subcontract. Plaintiff contends the "proposal" consisted of five pages including a Bid Addendum with additional contract terms. Defendants contend that the "proposal" did not include the Bid Addendum because Daniel did not assent to its terms. Whether the "proposal" included the Bid Addendum was a question of fact for the trial court sitting as the trier of fact.
There was competent evidence supporting the trial court's determination that the "proposal" included the Bid Addendum. Plaintiff presented evidence that all pages of the "proposal" were sent together as one document. Fite and Holyfield discussed the first page, although neither party initialed it. The Bid Addendum was on the back side of the first page. The two also discussed the next two pages detailing the scope of work, inclusions, exclusions, and qualifications. It was upon these two pages that Fite made changes and noted that Holyfield gave his approval for those changes via telephone. The final page was a schedule of values for billing purposes, setting forth subtotals for each of the six general categories of work shown on the first page of the proposal. Although neither the first nor last page was initialed by a Daniel representative, the standard form subcontract was adjusted to reflect the total contract amount of $734,286.00 as shown on both the first and last pages of the proposal.
The standard form subcontract was dated 7 May 2004. Holyfield signed it, with modifications, on 5 July 2004. Fite and Holyfield discussed various changes to plaintiff's proposal on 13 September 2004. Fite signed the standard form subcontract, as modified, on 13 September 2004. Given this competent evidence, the trial court did not err in finding as fact that the "proposal" consisted of five pages, that it was incorporated into the standard form subcontract, and that it included the terms of the Bid Addendum.
Defendants also contend that the inclusion of the "five page proposal" fails as a modification to the subcontract for lack of consideration. However, although the parties were conducting business as though a contract existed as of May 2004, the final terms of the contract were still being negotiated until September 2004. As the "proposal" was integral to those negotiations, it was not a modification of an existing contract. As such, no additional consideration was required. See Mut. Benefit Life Ins. Co. v. Winston-Salem, 100 N.C. App. 300, 306, 395 S.E.2d 705, 708, disc. rev. denied, 327 N.C. 637, 399 S.E.2d 328 (1990) ("Defendant's evidence shows that from the beginning of the negotiations with plaintiff, defendant intended the `Attachment' to be part of the contract. We . . . agree with defendant's argument that the `Attachment' became a part of the contract, if ever, at the formation of the contract. Therefore, plaintiff's arguments contending lack of consideration for the `Attachment' as a separate contract or contract modification are rejected.").
Because the trial court's findings of fact are supported by competent evidence, and support the court's conclusions of law, these assignments of error are overruled.
In defendants next two arguments, they contend that the trial court erred in concluding that plaintiff was entitled to recover the contract balance. We disagree.
Defendants challenge the trial court's conclusion of law "[t]hat the total principal balance due Plaintiff from Daniel based on the signed change orders, agreed to change orders, and agreed to back charge(s) is $51,683.42." Defendants' arguments are based upon the premise that the Bid Addendum and its additional contract terms were not incorporated into the subcontract as part of plaintiff's "proposal." As to the retainage, defendants contend that plaintiff failed to satisfy conditions precedent as stated in the subcontract. As to the extra work, defendants contend that plaintiff could only recover for its extra work for which no written change orders were obtained pursuant to a theory of unjust enrichment or quantum meruit. However, we already have determined that the trial court did not err in concluding that the "proposal" included the Bid Addendum.
Pursuant to the terms of the Bid Addendum, "all retainage shall be paid by Customer or surety in full within 90 days of the date of invoice from which deducted." As to the extra work, it provides that "[a]ny oral field directive for extra work . . . shall be performed and invoiced as compensable extra work for Contractor, without additional writing." Based upon these terms, plaintiff is entitled to recover for both the retainage and the extra work it performed.
Defendants challenged the following finding of fact upon which the trial court relied as supporting its conclusion of law that the total principal balance due was $51,683.42:
83. That the total principal balance due Plaintiff from Daniel based on the signed change orders, agreed to change orders, and agreed to back charge(s) is as follows:Original Subcontract Amount $734,286.00 Signed Change Orders 25,288.22 Agreed to Change Orders Invoice #1601 1,440.00 Invoice #1733 9,979.20 Invoice #1782 1,881.77 Agreed to Back Charges (226.87) ________ Adjusted Subcontract Amount 772,646.32 Less Amount Paid to Date (720,962.90) ____________ Total Principal Balance Due $ 51,683.42 The various components of this finding of fact are supported by the following additional findings of fact:
39. That [the] subcontract as modified and agreed to between Daniel and Plaintiff, specifically excluded, among other things, the following: (1) concrete additives such as ice, hot water, accelerators and superplastisizers; and, (2) rubbing of formed slabs unless honeycombs are present on exposed surfaces.
. . . .
34. That as modified by Daniel and Plaintiff, the initial amount of the subcontract between Daniel and Plaintiff was $734,286.00.
. . . .
42. That Daniel issued the following formal, signed change orders related to Plaintiff's scope of work during the course of Plaintiff's performance:C.O. 802.1 (13,009.78) C.O. 802.2 7,910.00 C.O. 802.3 (12,000.00) C.O. 802.4 22,271.00 C.O. 802.6 3,719.00 C.O. 802.7 6,874.00 C.O. 802.8 3,500.00 C.O. 802.12 6,022.00 ________ $25,286.22
43. That the standard procedure followed relative to the issuance of change orders to Plaintiff for extra work on this project was that Plaintiff would do the work first at the request/direction of Daniel, and Plaintiff would later submit an invoice and request for a formal written change order after the work was performed.
44. That Daniel did not issue formal written change orders until after the work was performed and had usually already paid for such extra work pursuant to Plaintiff's invoice/payment applications.
45. That Article 7 of the Subcontract Documents entitled "Changes in the Work," does not require that Plaintiff be issued a formal written change order in order to be paid for extra work performed at the request/direction of Daniel.
46. That the subcontract as modified provides under page 2 of the proposal entitled "Bid Addendum of J. M. W. Contractors," and more specifically under numbered paragraph 8 that "any oral field directive for extra work, delays, overtime, or changes in scope or general conditions, or changes in plans by an employee or representative of Customer, or Owner, or Owner's Architect or Engineer, shall be performed and invoiced as compensable extra work for Contractor, without additional writing."
47. That on or about January 18, 2005, Plaintiff submitted, as part of Payment Application No. 6 to Daniel, a request for a change order in the amount of $1,440.00 (Plaintiff Invoice #1601) for extra excavation work requested and approved by Daniel's project manager, Bion Fite.
48. That pursuant to Plaintiff's standard practice on this project, this requested change order No. 6 in the amount of $1,440.00 was billed as extra work on the schedule of values attached to the payment application.
49. That on or about March 2, 2005, Daniel sent a payment to Plaintiff for the entire amount requested in Payment Application No. 6, including the requested change order amount of $1,440.00 for this extra excavation work.
50. That prior to June 2005, Daniel's project manager, Bion Fite, approved as extra work Plaintiff's use of superplastisizer, 3/8" stone and lubricon in Plaintiff's concrete mix.
51. That on or about June 16, 2005, Plaintiff requested a change order in the amount of $9,979.20 for the extra superplastisizer, 3/8" stone and lubricon previously approved by Daniel's project manager, Bion Fite.
52. That on or about June 19, 2005, Plaintiff again submitted, as part of Payment Application No. 10, a request for a change order in the amount of $9,979.20 for the extra superplastisizer, 3/8" stone and lubricon.
53. That pursuant to Plaintiff's standard practice on this project, the requested change order in the amount of $9,979.20 was billed as extra work on the schedule of values attached to the payment application.
54. That on or about July 22, 2005, at the request of Daniel's project manager, Bion Fite, Plaintiff resubmitted its request for a change order in the amount of $9,979.20 (Plaintiff Invoice #1733) for the extra superplastisizer, 3/8" stone and lubricon.
55. That on or about July 21, 2005, Daniel sent a payment to Plaintiff for the entire amount requested in Payment Application No. 10, including the requested change order amount of $9,979.20 for the extra superplastisizer, 3/8" stone and lubricon.
. . . .
58. That Daniel's project manager, Bion Fite, ceased working for Daniel on or about August 2005, before Daniel issued formal change orders for the extra work referenced above.
59. That on or about September 2005, Daniel also requested that Plaintiff order $1,881.77 worth of stone through Plaintiff's account and for Daniel's use and benefit on the project.
60. That Plaintiff ordered the stone as requested.
61. That on or about October 21, 2005, Plaintiff submitted as Payment Application No. 12 a request for a change order in the amount $1,881.77 (Plaintiff's Invoice #1782) for the extra stone requested by Daniel.
62. That pursuant to Plaintiff's standard practice on this project, this requested change order amount of $1,881.77 was billed as extra work on the schedule of values attached to the payment application.
63. That except for the site concrete work (i.e., sidewalk work), Daniel in its payment applications to Alamance County, the Owner, had completely billed out and certified to the Owner, without reservation, that Plaintiff's scope of work including the rubbing and grinding of columns and slabs, was 100% complete by November 22, 2005.
64. That on or about January 12, 2006, Daniel sent a payment to Plaintiff for the entire amount requested in Payment Application No. 12, which consisted solely of the extra stone requested by [] Daniel.
. . . .
71. That on or about April 27, 2006, June 8, 2006, and July 26, 2006, Plaintiff sent additional requests to Daniel for the issuance of formal written change orders of $1,440.00 (Plaintiff Invoice #1601), $9,979.20 (Plaintiff Invoice #1733), and $1,881.77 (Plaintiff Invoice #1782) for the extra work performed by Plaintiff and previously paid for by Daniel.
. . . .
75. That the Owner's representative on the Jail Project, Brad Mills, had no issues with Plaintiff's work while he was on the project as the Owner's representative.
76. That Brad Mills acknowledged that as of the time that he left the Jail Project as [the] Owner's Representative on or about April 30, 2006 that Plaintiff had completed its work on the Jail Project.
77. That Daniel in its Payment Application No. 25 to the Owner dated May 26, 2006, completely billed out and certified to the Owner, without reservation, that Plaintiff's entire scope of work was 100% complete.
78. That Alamance County, the Owner, paid Daniel for the amounts requested in Payment Application No. 25 on June 7, 2006, including payment for Plaintiff's work.
. . . .
81. That Plaintiff agreed to a back charge in the amount of $226.87 for chipping concrete which it had deducted from Payment Application No. 8.
82. That as stipulated to by the parties, the total amount paid to date by Daniel to Plaintiff is $720,962.90.
There is competent evidence in the record to support not only finding of fact number 83, but also the underlying findings of fact supporting it. Therefore, the trial court did not err in concluding as a matter of law that the total principal balance due was $51,683.42.
Defendants also assigned error to the following conclusions of law:
That interest at the rate of eighteen [percent] (18%) annually began to accrue on this final balance on July 24, 2006.
. . . .
That Daniel has not made prompt payment to Plaintiff, a subcontractor, pursuant to the terms and conditions of the contract between the parties and duly authorized modifications thereto.
That US Fire is jointly and severally responsible for Daniel's obligation to Plaintiff as herein stated above.
Defendants failed to argue against the accrual of interest. Therefore, the assignment of error as to that conclusion of law is deemed abandoned. See N.C. R. App. P. 28(b)(6) (2007) ("Assignments of error . . . in support of which no reason or argument is stated or authority cited, will be taken as abandoned.") The argument as to the remaining two conclusions of law is found not in the text of defendants' brief, but in a footnote. These conclusions of law are supported by the trial court's findings of fact, which are supported by competent evidence of record. Therefore, these assignments of error are overruled.
Finally, defendants argue that the trial court abused its discretion in concluding that defendants had unreasonably refused to resolve the matter, thus authorizing the payment of attorneys' fees and costs. We disagree.
Recovery of attorney's fees "is within the trial court's discretion and will only be reviewed for an abuse of that discretion." Martin Architectural Prods. Inc. v. Meridian Constr. Co., 155 N.C. App. 176, 182, 574 S.E.2d 189, 193 (2002) (citations omitted). "To demonstrate an abuse of discretion, the appellant must show that the trial court's ruling was manifestly unsupported by reason, or could not be the product of a reasoned decision." Nationwide Mut. Fire Ins. Co. v. Bourlon, 172 N.C. App. 595, 601, 617 S.E.2d 40, 45 (2005), aff'd, 360 N.C. 356, 625 S.E.2d 779 (2006) (per curiam) (citations omitted).
Pursuant to North Carolina General Statutes, section 44A-35, "upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter which constituted the basis of the suit or the basis of the defense[,]" the trial court may award a reasonable attorneys' fee to the prevailing party's attorney. N.C. Gen. Stat. § 44A-35 (2007).
Here, the trial court found as fact that "there was an unreasonable refusal by the Defendants [] to fully resolve the Plaintiff's claims which constituted the basis of this civil action[.]" The trial court then made additional findings of fact recounting the manner in which defendants had unreasonably refused. This demonstrates that the trial court's decision was not "manifestly unsupported by reason," but rather is "the product of a reasoned decision." See Nationwide, 172 N.C. App. at 601, 617 S.E.2d at 45. Therefore, the trial court did not abuse its discretion and these assignments of error are overruled.
Because the trial court's findings of fact are supported by competent evidence in the record or are otherwise binding on appeal, support its conclusions of law, and those conclusions of law support the trial court's judgment, the 15 November 2007 order — as corrected by the 3 January 2008 order — awarding damages to plaintiff is affirmed. Because the trial court did not abuse its discretion in finding that defendants had unreasonably refused to resolve the matter, the 4 December 2007 order awarding attorneys' fees and costs also is affirmed.
Affirmed.
Judges HUNTER, Robert C. and ELMORE concur.
Report per Rule 30(e).