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Kays v. Colonial Building Co.

May 19, 1998

BARRETT KAYS & ASSOCIATES, P.A. PLAINTIFF,
v.
COLONIAL BUILDING COMPANY, INC. OF RALEIGH, AND EDD K. ROBERTS, DEFENDANTS.



Appeal by defendants from judgment filed 6 November 1996 and from orders filed 12 December 1996, and cross appeal by plaintiff from order filed 12 December 1996 by Judge Howard E. Manning, Jr. in Wake County Superior Court. Heard in the Court of Appeals 17 March 1998.

The opinion of the court was delivered by: Greene, Judge.

Colonial Building Company, Inc. and Edd K. Roberts (president and principal shareholder of Colonial Building Company, Inc.) (collectively, defendants) appeal from a jury verdict awarding Barrett Kays & Associates, P.A. (plaintiff) $103,392.00. The plaintiff cross appeals from orders denying their motion for attorneys' fees and calculating the amount of interest due on the judgment.

The facts are as follows: The plaintiff is engaged in the business of providing engineering, land planning, and landscape-architectural services and the defendants are land developers specializing in residential homes. In the 1980's, the defendants developed the Broadlands subdivision in Raleigh, North Carolina. The work was to be completed in five phases, but only three of the phases were finished. The defendants had originally received approval for construction of the remaining two phases from the City of Raleigh, but the approval expired when the work was not completed in the allotted time.

The defendant and the plaintiff entered into two written letter agreements, dated 31 March 1992 and 9 April 1992, for the plaintiff to perform engineering and planning services in order to obtain approval to develop the land for the remaining phases. Both agreements stated that the plaintiff "will provide the above described services on an hourly fee rate basis, plus reimbursable expenses, according to the attached fee rate schedule. We will invoice you monthly over progress of work." In addition to this language, both agreements gave estimates of the cost of the services but also qualified the estimates by stating that "[i]t may cost more than this depending upon the specific requirements . . . ." The March agreement stated that the services would cost "at least $4,000.00" and the April agreement stated that the services would cost "at least $9,900.00." Defendant Edd K. Roberts acknowledged receiving a letter from the plaintiff which informed him that the costs were exceeding the initial estimates. The defendants did not ask the plaintiff to stop working on the plans even though they received monthly invoices for the work completed.

The two written agreements also contained identical language concerning the time of payment and the interest to be charged for past due accounts. "Payment of each invoice will be due within fifteen days of the invoice date. Past due amounts will be assessed a carrying charge of 1.5 percent per month."

The plaintiff filed a Claim of Lien on 10 February 1993. They subsequently initiated this lawsuit to perfect and enforce the lien and to recover their fees. At trial, the trial court ruled as a matter of law that the March 1992 and April 1992 contracts were not ambiguous and only submitted the question of damages to the jury. The jury established damages at $103,392.00 and the trial court entered a judgment consistent with that award. In its order, the trial court declined "to find that there was an unreasonable refusal by the [d]efendants to fully resolve the matter which constituted the basis of the suit, and therefore . . . [plaintiff is] not entitled to recover attorneys' fees pursuant to N.C.G.S. § 44A-35." The trial court assessed the rate of pre-judgment and post-judgment interest at the legal rate of 8 percent.

The issues presented are whether: (I) the price estimates in the contract caused the contract to be ambiguous; (II) the pre-judgment interest at the contractual rate was enforceable; and (III) the trial court abused its discretion in denying the plaintiff's request for attorneys' fees.

We first note that the defendants argue in their brief that the motions for relief from judgment and directed verdict as to the individual defendant, Edd K. Roberts, should have been granted. We decline to address these issues, however, because the defendants did not give notice of appeal from the order denying those motions. N.C.R. App. P. 3(d); Johnson & Laughlin, Inc. v. Hostetler, 101 N.C. App. 543, 546, 400 S.E.2d 80, 82 (1991).

I.

An ambiguity exists in a contract if the "language of a contract is fairly and reasonably susceptible to either of the constructions asserted by the parties." Bicket v. McLean Securities, Inc., 124 N.C. App. 548, 553, 478 S.E.2d 518, 521 (1996) (quoting Glover v. First Union National Bank, 109 N.C. App. 451, 456, 428 S.E.2d 206, 209 (1993)), disc. review denied, 346 N.C. 275, 487 S.E.2d 538 (1997) . In other words, a contract is ambiguous when the "writing leaves it uncertain as to what the agreement was . . . ." International Paper Co. v. Corporex Constructors, Inc., 96 N.C. App. 312, 317, 385 S.E.2d 553, 556 (1989). "When an agreement is ambiguous and the intention of the parties is unclear, interpretation of the contract is for the jury." Id. When a contract is free from ambiguity, however, the trial court determines its meaning as a matter of law. Id. Appellate review of a trial court's determination of whether a contract is ambiguous is de novo. Bicket, 124 N.C. App. at 553, 478 S.E.2d at 521.

In this case, the defendants contend that the contracts were ambiguous and therefore should have been submitted to the jury for interpretation. They argue that the contracts are ambiguous because two possible interpretations exist as to the meaning of the language. According to the defendants, the contracts could be interpreted as creating "lump-sum contracts" because specific estimates were given or as creating "open-ended contracts" with the work being billed at an hourly rate.

In this case, both contracts are unambiguous as to the payment terms. The language specifically stated that the plaintiff "will provide the above described services on an hourly fee rate basis, plus reimbursable expenses . . . ." There is no mention of a "lump-sum" payment of $4,000.00 or $9,900.00 in either contract. While both contracts did contain estimates, both also contained qualifying language which expressly stated that the work "may cost more depending on the specific requirements" of the City of Raleigh and the agencies. *fn1 The trial court thus correctly submitted only the damages issue to the jury.

The defendants further argue that the trial court erred in granting partial summary judgment as to their claim for quantum meruit. Because an express contract existed, quantum meruit was not appropriate. See Whitfield v. ...


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