Opinion
No. 06-387.
Filed January 2, 2007.
Appeal by defendant from an order entered 5 October 2005 by Judge J. B. Allen, Jr. in Wake County Superior Court. Heard in the Court of Appeals 6 December 2006.
Michael W. Strickland Associates, P.A., by Michael W. Strickland and Daniel Meier, for plaintiff-appellee. Safran Law Offices, by M. Anne Runheim, Brian J. Schoolman, and M. Riana Smith, for defendant-appellant.
Wake County No. 04 CVS 10922
Prime Building Company, Inc. of North Carolina ("defendant") appeals from a judgment and award entered 5 October 2005. After careful review of the record, for the reasons stated herein, we affirm the judgment and award of the trial court.
The trial court found the following: Defendant entered into a contract with Red Dirt Properties, LLC ("plaintiff") on 12 June 2000 for the construction of a manufacturing facility on property owned by plaintiff. Section 2-110 of the contract required defendant to remove trees, roots, stumps, and debris as required and dispose of them off-site. The parties discussed that plaintiff planned an additional expansion of its manufacturing facility, but the area for expansion was not a part of the parties' contract terms for the facility construction.
Construction began on the project, and on 29 November 2000, Keith Morris ("Morris"), a co-owner of plaintiff, received a letter from Titan Atlantic Group ("Titan"), a sub-contracted site engineer, that clearing and grubbing material may have been buried under the future expansion area. Morris contacted defendant regarding the letter and Andy Ward ("Ward"), a vice-president of defendant and project manager for the building construction, assured Morris that he would investigate the issue, and later assured Morris that he had looked into the matter and there were no problems. The contract was completed and accepted in July 2001.
In 2003, plaintiff began plans on construction in the future expansion area and entered into a contract with Steel Dynamics, Inc. ("Steel"). Steel began digging footings and a retaining wall and uncovered a large amount of organic material, including tree limbs and debris, covered by the soil, preventing construction of the building. Plaintiff brought action against defendant for breach of contract in improperly dumping organic materials on-site in the future expansion area.
The trial court found that defendant breached the contract and awarded plaintiff damages in the amount of $62,309.00. Defendant appeals from the judgment and award.
I.
We first note the standard of review for an appeal from a judgment entered in a non-jury trial. "[O]ur standard of review is whether competent evidence exists to support the trial court's findings of fact, and whether the findings support the conclusions of law." Resort Realty of the Outer Banks, Inc. v. Brandt, 163 N.C. App. 114, 116, 593 S.E.2d 404, 407-08, appeal dismissed and disc. review denied, 358 N.C. 236, 595 S.E.2d 154 (2004). "`The trial judge acts as both judge and jury and considers and weighs all the competent evidence before him.'" Id. at 116, 593 S.E.2d at 408 (citation omitted). "The trial court's findings of fact are binding on appeal as long as competent evidence supports them, despite the existence of evidence to the contrary." Id. "When competent evidence supports the trial court's findings of fact and the findings of fact support its conclusions of law, the judgment should be affirmed in the absence of an error of law." Id.
II.
Defendant first contends the trial court erred in failing to dismiss plaintiff's claims pursuant to the statute of limitations. We disagree.
N.C. Gen. Stat. § 1-52(1) (2005) establishes a three-year statute of limitations for actions arising from a breach of contract. However, section 1-52(16) further holds that a cause of action for physical damage to claimant's property "shall not accrue until . . . physical damage to his property becomes apparent or ought reasonably to have become apparent to the claimant, whichever event first occurs." Id. Plaintiff filed its action for breach of contact on 9 August 2004, more than three years after the contract between plaintiff and defendant was completed on 20 July 2001. Plaintiff alleged that the organic material was hidden and was not discovered until grading commenced in the area in December of 2003, and that the action was filed, pursuant to section 1-52(16), within one year of when the physical damage became apparent to plaintiff.
Defendant contends, however, that plaintiff was given notice on 29 November 2000 by the letter from subcontractor Titan, which stated that "topsoil (and some clearing and grubbing material) has been inappropriately buried toward the rear of the site under the future building expansion area[,]" and therefore plaintiff's filing was outside the statute of limitations.
The trial court concluded defendant was estopped from asserting the statute of limitations due to its affirmative representation regarding the site in 2000. Estoppel is a defense which must be affirmatively pled. N.C. Gen. Stat. § 1A-1, Rule 8(c) (2005). "Although the failure to plead an affirmative defense ordinarily results in its waiver, the parties may still try the issue by express or implied consent." Duke University v. St. Paul Mercury Ins. Co., 95 N.C. App. 663, 673, 384 S.E.2d 36, 42 (1989). In Duke University, the plaintiff failed to plead estoppel as an affirmative defense to the defendant's statute of limitations claims. Id. However, the record and exhibits showed that the plaintiff introduced some evidence at trial pertinent to the elements of equitable estoppel, and the Court then proceeded to consider the affirmative defense of estoppel. Id.
Similarly here, plaintiff failed to affirmatively plead the defense of estoppel. However, plaintiff offered testimony by Morris as to his contact with defendant following receipt of the letter and the reassurances he received that there was no issue with organic fill at the time. Additional testimony as to this issue was given by Ward without objection. We therefore find that the issue of equitable estoppel was tried with the parties' implied consent.
The elements of equitable estoppel are as follows:
(1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; and (3) knowledge, actual or constructive, of the real facts. The party asserting the defense must have (1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice.
Parker v. Thompson-Arthur Paving Co., 100 N.C. App. 367, 370, 396 S.E.2d 626, 628-29 (1990). "`[A] party may be estopped to deny representations made when he had no knowledge of their falsity, or which he made without any intent to deceive the party now setting up the estoppel.'" Meacham v. Board of Education, 59 N.C. App. 381, 387, 297 S.E.2d 192, 196 (1982) (citation omitted). "`[T]he fraud consists in the inconsistent position subsequently taken, rather than in the original conduct. It is the subsequent inconsistent position, and not the original conduct that operates to the injury of the other party.'" Id. (citation omitted).
Here, the trial court found that upon receipt of the letter Morris contacted Ward, the project manager, and was assured that there were no problems with the soil in the expansion area. The trial court found that "under all of the circumstances it was reasonable for Red Dirt Properties, LLC to rely on the representations of the project manager and vice-president of defendant." Although defendant contends proof was not offered that defendant in fact knew about the organic fill in the expansion area, as stated in Meacham, "`[a] party may be estopped to deny representations made when he had no knowledge of their falsity[.]'" Id. at 387, 297 S.E.2d at 196 (citation omitted). The fraud lies in the subsequent inconsistent position now taken by defendant that plaintiff had notice of the hidden defect beneath the soil. A careful review of the record shows that competent evidence supported the trial court's findings that plaintiff, having relied on defendant's assertions to its prejudice, "could not have been expected to discover the hidden defect prior to commencing construction of the expansion area" and therefore properly filed within the statute of limitations. Although we note that the trial court erred in listing N.C. Gen. Stat. § 1-15 as the controlling statute in its order, we find that N.C. Gen. Stat. § 1-52(16) permits plaintiff's proper filing within one year of discovery of the hidden defect. As plaintiff properly filed with the statute of limitations, and defendant is estopped from asserting that a prior letter provided notice to plaintiff of the hidden defect due to its own conduct, we overrule this assignment of error.
III.
Defendant next contends the trial court erred in concluding that defendant was responsible for the organic materials in the expansion area. We disagree.
The trial court found that:
17. On or about November 29, 2000 Titan Atlantic Group sent a letter to [defendant] which stated that clearing and grubbing material may have been buried toward the rear of the site under the future expansion area.
. . .
25. Prior to [defendant] commencing construction the land owned by [plaintiff] was virgin soil with standing trees and brush. No other contractor worked on the site after [defendant] until the organic material was discovered.
26. The organic materials were buried by [defendant's] sub-contractor and were hidden from view.
Testimony was offered by Morris that the original lot was wooded with virgin soil, and that following the construction by defendant, further construction was not undertaken in that area until the project in 2003 when the organic material was discovered. Ward testified that a sub-contractor was used to grade and clear the lot, and that although he was the project manager, he was not on-site daily during the clearing process. Although circumstantial, the testimony that the previously undisturbed land was found to be filled with organic material following defendant's work on the project provides competent evidence to support the trial court's findings. "`The trial judge acts as both judge and jury and considers and weighs all the competent evidence before him.'" Resort Realty, 163 N.C. App. at 116, 593 S.E.2d at 408 (citation omitted). As competent evidence supports the trial court's finding that defendant was responsible for the organic materials in the expansion area, we overrule this assignment of error.
IV.
Defendant next contends the trial court erred in admitting parol evidence regarding the "future expansion" area. We disagree.
"`The parol evidence rule excludes prior or contemporaneous oral agreements which are inconsistent with a written contract if the written contract contains the complete agreement of the parties.'" Phelps-Dickson Builders, L.L.C. v. Amerimann Partners, 172 N.C. App. 427, 436, 617 S.E.2d 664, 670 (2005) (citation omitted).
Defendant generally contends that evidence regarding the "future expansion" area was parol evidence. Here, however, a careful review of the record shows that no evidence was offered as to an inconsistent oral agreement with the terms of the written contract. Rather, the terms of the contract specified that defendant was to "[r]emove any trees, roots, stumps and debris as required and dispose of off site." Testimony regarding the "expansion area," which was part of plaintiff's site, was offered to show that defendant had breached the terms of the written agreement in failing to dispose of the organic material off-site. Therefore, as no evidence of a contradictory oral agreement was offered to vary the terms of the written agreement, we overrule this assignment of error.
V.
Defendant finally contends that the trial court erroneously awarded $62,309.00 in damages. We disagree.
"The trial court's authority to award damages in a breach of contract action is well established." Southern Bldg. Maintenance v. Osborne, 127 N.C. App. 327, 331, 489 S.E.2d 892, 895 (1997). "The measure of damages for breach of express contract is an amount which reasonably may have been contemplated by the parties when they entered into the contract, or which will compensate the injured party as if the contract had been fulfilled." Catoe v. Helms Construction Concrete Co., 91 N.C. App. 492, 495, 372 S.E.2d 331, 334 (1988).
Here, plaintiff presented competent evidence of specific costs incurred as a result of the removal of the organic material left on-site in breach of the parties' contract, as well as breakdowns showing adjustments for costs associated with other aspects of plaintiff's ongoing building project, by both Morris and employees of Steel. Defendant presented competing testimony regarding the industry rate of such costs. "The trial court's findings of fact are binding on appeal as long as competent evidence supports them, despite the existence of evidence to the contrary." Resort Realty, 163 N.C. App. at 116, 593 S.E.2d at 408 (emphasis added). As competent evidence supports the trial court's findings as to the amount of damages to compensate plaintiff as if the contract had been fulfilled, we overrule this assignment of error.
As defendant fails to show the trial court erred in finding estoppel as to defendant's past representations and that plaintiff properly filed within the statute of limitations, and as competent evidence supports the trial court's findings as to causation and damages, we affirm the judgment and award.
Affirmed.
Judges McCULLOUGH and ELMORE concur.