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Davis & Taft Architecture, P.A. v. DDR-Shadowline, LLC

Court of Appeals of North Carolina

November 19, 2019

DAVIS & TAFT ARCHITECTURE, P.A., Plaintiff,
v.
DDR-SHADOWLINE, LLC, DEEDS REALTY SERVICES, LLC, and SHADOWLINE PARTNERS, LLC, Defendants.

          Heard in the Court of Appeals 22 May 2019.

          Appeal by defendant Shadowline Partners, LLC from judgment entered 12 July 2018 by Judge J. Thomas Davis in Watauga County Superior Court. Cross-appeal by plaintiff from order entered 11 December 2017 by Judge R. Gregory Horne in Watauga County Superior Court No. 17 CVS 285.

          Eggers, Eggers, Eggers & Eggers, by Stacy C. Eggers, IV, and Kimberly M. Eggers, for plaintiff-appellee/cross-appellant.

          Forrest Firm, P.C., by Patrick S. Lineberry, and Clement Law Office, by D. Dale Howard, for defendant-appellant/cross-appellee Shadowline Partners, LLC.

          ZACHARY, JUDGE.

         This case arises out of a contract dispute between Shadowline Partners, LLC and Deeds Realty Services, LLC. Shadowline Partners, LLC appeals from a summary judgment order finding it liable for breach of contract and in quantum meruit. Davis & Taft Architecture, P.A., a third-party beneficiary to the contract, cross-appeals from an order dismissing its claim for enforcement of a claim of lien. After review, we affirm both orders.

         Background

         Shadowline Partners, LLC ("Shadowline") owned and intended to sell real property that was to be developed into a student-housing complex. Two companies expressed an interest in the property: Deeds Realty Services, LLC ("Deeds Realty") and DDR-Shadowline, LLC ("DDR"). On 1 August 2016, before Shadowline entered into any agreement to sell its property, DDR contracted with Brent Davis Architecture, Inc. to perform architectural work on the planned student-housing complex. The contract was subsequently assigned to Davis & Taft Architecture, P.A. ("Davis & Taft"). At the end of the month, Davis & Taft submitted a fee proposal and payment schedule to DDR. Phases I and II of the proposal, respectively, encompassed the housing complex's "schematic design" and "design development." The first payment for Phase I was made by DDR on 31 August 2016.

         On 30 September 2016, Shadowline entered into an Agreement for Purchase and Sale of Real Property ("the Agreement") with Deeds Realty. Davis & Taft agreed to perform architectural work pursuant to the Agreement between Shadowline and Deeds Realty, which explicitly named Davis & Taft under the section titled "Third Party Payments":

Davis & Taft Architecture. TWO HUNDRED THIRTY THOUSAND AND NO/100 DOLLARS ($230, 000.00) shall be payable to Davis & Taft Architecture ("Davis & Taft") by [Shadowline] on a payment schedule to be established by Davis & Taft. As of the date of execution of this Agreement, an invoice from Davis & Taft in the amount of $74, 500.00 has been received by [Shadowline] and shall be paid by [Shadowline] within five (5) business days of execution of this Agreement and is included in the above-stated $230, 000.00 obligation of [Shadowline]. [Shadowline] will expect another invoice for the remaining balance from Davis & Taft and shall pay said invoice (up to its obligation stated herein) received from Davis & Taft as and when due pursuant to said invoices. [Shadowline] agrees to pay the remaining balance owed into the [trust account of a Law Office] within five (5) business days of execution of this Agreement and authorizes [the Law Office] to pay future Davis & Taft invoice(s) up to the balance held in Trust. In the event of early termination of this Agreement for any reason, [Shadowline] shall be entitled to all plans, specifications, and any and all work product produced by Davis & Taft. [Deeds Realty] shall pay Davis & Taft all amounts owed in excess of [Shadowline's] obligation stated herein.

         After the Agreement was signed, Deeds Realty assigned its interest in the contract to DDR. Because DDR failed to close on the property, Shadowline terminated the Agreement on 7 December 2016. At the time of termination, Shadowline still owed Davis & Taft $80, 000 pursuant to the terms of the Agreement. Davis & Taft filed an $80, 000 claim of lien against Shadowline, the property's owner.

         On 7 June 2017, Davis & Taft filed a complaint in Watauga County Superior Court against DDR, Shadowline, and Deeds Realty alleging claims: (1) for breach of contract, (2) in quantum meruit, and (3) for enforcement of the claim of lien. On 5 October 2017, Shadowline filed a motion to dismiss all claims pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. On 11 December 2017, the motion was heard before the Honorable R. Gregory Horne, who dismissed Davis & Taft's claim for enforcement of the claim of lien and discharged the lien.

         On 25 June 2018, Davis & Taft moved for summary judgment on its remaining claims. The motion came on for hearing before the Honorable J. Thomas Davis, who (1) granted Davis & Taft's motion for summary judgment in its entirety, and (2) dismissed all claims against Deeds Realty. Shadowline timely filed notice of appeal from the summary judgment order. Davis & Taft ...


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