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Contract – Real Property – Lien – Construction Project – Agency

Young & McQueen Grading Co. v. Mar-Comm & Associates, Inc. (Lawyers Weekly No. 12-07-0595, 14 pp.) (Linda Stephens, J.) Appealed from Buncombe County Superior Court. (Mark E. Powell, J.) N.C. App. Full-text opinion.

Holding: It doesn’t matter that the plaintiff-contractor dealt with two entities – Mar-Comm & Associates, Inc. (the actual property owner) and Mar-Comm & Associates of North Carolina, LLC – with regard to a construction project since Mar-Comm of NC was acting as Mar-Comm’s agent.

We affirm the trial court’s ruling that the contractor’s lien has priority over the defendant-lenders’ lien.

Even though the contractor did not raise the issue of agency in its complaint, the lenders raised no objections at trial to evidence regarding agency on the grounds that such evidence was not within the scope of the pleadings. Thus, the issue of agency was tried with the implied consent of the parties, and the pleadings are deemed amended by implication and need no formal amendment.

Although the contractor performed work under a “Proposal and Contract” prior to the date of first furnishing set out in its claim of lien, the contractor is not seeking payment for any services rendered pursuant to the Proposal and Contract. The contractor only seeks payment for services rendered pursuant to the construction contract and its later amendments. As such, the claim of lien lists the correct date of first furnishing.

Finally, while a judgment enforcing a lien may generally be entered only for the principal amount shown to be due, if there is an agreement between the parties with regard to interest, that interest due pursuant to the agreement will be included as part of the principal. As the undisputed findings by the trial court state, the construction contract provided that the contractor “shall recover interest on all past-due payments at the rate of 18 percent per annum.” Therefore, the contractor may recover accrued interest pursuant to the contract.



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