Frank Lill & Son, Inc. v. State of NC

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. NO. COA12-496 NORTH CAROLINA COURT OF APPEALS Filed: 20 November 2012 FRANK LILL & SON, INC., Plaintiff, v. Wake County No. 11 CVS 5877 THE STATE OF NORTH CAROLINA; THROUGH THE UNIVERSITY OF NORTH CAROLINA at CHAPEL HILL and THE NORTH CAROLINA DEPARTMENT OF ADMINISTRATION., Defendants. Appeal by the State from order entered 10 October 2011 by Judge Howard E. Manning, Jr., in Wake County Superior Court. Heard in the Court of Appeals 26 September 2012. Attorney General Roy Cooper, by Special General Durwin P. Jones, for the State. Deputy Attorney Conner Gwyn Schenck, P.L.L.C., by Paul E. Davis, Ernstrom & Dreste, L.L.P., by Martha A. Connolly, plaintiff. and for ELMORE, Judge. The State of North Carolina through the University of North Carolina at Chapel Hill appeals from an order entered 10 October 2011 denying its motion to dismiss. After careful consideration of the record in light of the applicable law, we conclude that -2defendant s appeal is from an interlocutory order and must, for that reason, be dismissed. I. Factual Background On 15 April 2011, Frank Lill & Son, Inc. (plaintiff) filed a complaint University breach in of the Wake County Carolina contract of North and $8,700,000.00 in at Superior Chapel breach damages. Hill of Plaintiff Court against the (defendant) for warranty, asserted that alleging defendant caused plaintiff to incur undue delays and unanticipated costs, thus preventing plaintiff from performing its contractual duties in a timely manner. Prior entered to into filing a this action, contract on 24 plaintiff September and defendant 2004 for the construction of Phase 2A of the Manning Drive Steam Plant and Utility Distribution Tunnel. complete the construction The contract required plaintiff to project issuance of the notice to proceed. pay plaintiff $24,163,376.00. there were numerous disputed within 480 days from the In return, defendant was to However, according to plaintiff, issues between the parties, including pending and disputed change orders, as the Phase 2A project neared completion. to negotiate plaintiff s On 17 December 2009, the parties met pending and disputed change orders. -3However, the parties did not resolve their dispute at this time. At the end of the meeting defendant provided plaintiff with a letter summarizing its position of plaintiff s claims. Thereafter, the parties continued to attempt to renegotiate the terms of their plaintiff agreement; demanded however, mediation of negotiations its dispute. failed The and parties participated in mediation on 7 December 2010 but were again unable to resolve their dispute. On 9 transmittal Driver, December letter Director 2010, plaintiff containing of the its State formally verified submitted claim Construction to Office. its Gregory On 19 January 2011, Driver denied plaintiff s claim because, based on his understanding, defendant had provided plaintiff with a final disposition of the claim on 17 December 2009. Therefore, he concluded that the plaintiff s verified claim was untimely as it was not submitted to his office within sixty days receipt of defendant s 17 December 2009 final statement, as required by N.C. Gen. Stat. § 143-135.3(c). transmittal summarized letter it defendant s Plaintiff asserts that the received position on and 17 cannot final disposition of plaintiff s claim. the letter acted as a final December be 2009 merely considered the Defendant contends that disposition and defendant -4accordingly began running the applicable sixty day deadline as set out by the statute. See N.C. Gen. Stat. § 143-135.3 (c) (2012). Plaintiff timely commenced this action within six months of receipt of Driver s denial, as required by N.C. Gen. Stat. § 143-135.3(d). plaintiff s Thereafter, defendant filed a motion to dismiss complaint based on lack of subject matter jurisdiction and/or personal jurisdiction, asserting that the complaint was barred by sovereign immunity. On 3 October 2011, the Wake County Superior Court heard arguments solely based on defendant s issue. motion to dismiss, as a threshold jurisdictional On 7 October 2011, the trial court denied defendant s motion to dismiss citing Nello L. Teer Co. v. North Carolina Dept. of Transp. as the controlling authority in its order. N.C. App. 705, 625 S.E.2d 135 (2006). 175 Defendant now appeals the entry of the trial court s order, asserting that the controlling precedent is A.H. Beck Found. Co. v. Jones Bros., 166 N.C. App. 672, 603 S.E.2d 819 (2004), rather than Nello Teer. II. Legal Analysis A. Interlocutory Appeal Defendant interlocutory acknowledges order. that However, this appeal defendant stems maintains from that an its -5appeal is properly before this Court as the trial court s order deprives it of defendant contends a substantial that it did right. More not sovereign waive specifically, immunity because plaintiff failed to exhaust its administrative remedies. Parties have an appeal of right to this Court [f]rom any final judgment of a superior court[.] N.C. Gen. Stat. § 7A- 27(b) (2011). A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court. . . . An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy. Veazey v. City of Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950) (citations omitted). Generally, there is no right of immediate appeal from interlocutory orders and judgments. Goldston v. Am. Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). [I]mmediate appeal of interlocutory orders and judgments is available in at least two instances. First, immediate review is available when the trial court enters a final judgment as to one or more, but fewer than all, claims or parties and certifies there is no just reason for delay. . . . Second, immediate appeal is available from an interlocutory order or judgment which -6affects a substantial right. Sharpe v. Worland, 351 N.C. 159, 161-62, 522 S.E.2d 577, 579 (1999) (citations and quotations omitted). In the compensation instant under case, the plaintiff s parties claim contract for additional remains unsolved. Therefore, the trial court s order denying defendant s motion to dismiss is interlocutory as it does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy. Veazey, 231 N.C. at 361-62, 57 S.E.2d at 381 (citations omitted). we must determine if the interlocutory order Accordingly, is immediately appealable. B. Substantial Right An interlocutory order is immediately appealable when the challenged order affects a substantial right. 28(b)(4) (2012). When determining whether N.C.R. App. P. an interlocutory order is immediately appealable we utilize a two-part test, with the first inquiry being whether a substantial right is affected by the challenged order and the second being whether this substantial right might be lost, prejudiced, or inadequately preserved in the absence of an immediate appeal. Hamilton v. Mortgage Info. Servs., ___ N.C. App. ___, ___, 711 -7S.E.2d 185, 189 (2011). The appellants must present more than a bare assertion that the order affects a substantial right; they must right. demonstrate why the order affects a substantial Hoke Cty. Bd. Of Educ. v. State, 198 N.C. App. 274, 277-78, 679 S.E.2d 512, 516 (2009) (citation omitted) (emphasis in original). Here, defendant contends that it is not required to expend considerable resources in defending complex construction litigation when plaintiff failed to strictly comply with the limited waiver of sovereign immunity under N.C. Gen. Stat. § 143-135.3(c). As such, defendant argues that its waiver of sovereign immunity is conditioned upon plaintiff s compliance with N.C. plaintiff Gen. Stat. failed to § 143-135.3(c). exhaust the Accordingly, administrative because remedies by filing its claim with the Director of the State Construction Office within sixty days of receiving a final statement, plaintiff failed to comply with N.C. Gen. Stat. § 143-135.3(c) and, thus, may no longer file a claim against the State. Defendant s affected is whenever the argument without State, that merit. through a substantial Sovereign its right immunity authorized has is been waived officers and agencies, enters into a valid contract[ ] [because] the State -8implicitly consents to be sued for damages on the contract in the event it breaches the contract. Welch Contracting, Inc. v. North Carolina Dept. of Transp., 175 N.C. App. 45, 51, 622 S.E.2d 691, 695 (2005) (quoting Smith v. State, 289 N.C. 303, 320, 222 S.E.2d 412, 423 24 (1976)). The record indicates that the trial court considered A.H. Beck and Nello Teer, and opted to apply the law as set forth in Nello Teer. The trial court did not rule on the pending issues and limited its order to the jurisdictional issues, concluding dismiss should be denied. administrative precedent to filing bringing defendant s motion to Accordingly, under Nello Teer, the deadline an that shall action, not and be a failure condition to comply implicates a statute of limitations defense, not a sovereign immunity defense. See 175 N.C. App. at 711, 625 S.E.2d at 139. As a result, defendant has not raised a sovereign immunity defense affecting a substantial right; rather it has a statute of limitations defense, which is not immediately appealable. See Thompson v. Norfolk Southern Railway, 140 N.C. App. 115, 120-21, 535 S.E. 2d 397, 401 (2000). Accordingly, defendant has failed to demonstrate that trial court s order deprives it of a substantial right; interlocutory. therefore, we must dismiss the appeal as -9III. Conclusion After careful consideration of the record in light of the applicable law, we conclude that defendant s appeal is from an interlocutory order and must, for that reason, be dismissed. Dismissed. Judges CALABRIA and STEPHENS concur. Report per Rule 30(e).

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