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Contract – Construction Delays – Added Costs – Attorneys’ Fees

Southern Seeding Service, Inc. v. W.C. English, Inc. (Lawyers Weekly No. 12-07-1163, 20 pp.) (Robert N. Hunter Jr., J.) Appealed from Guilford County Superior Court (Shannon R. Joseph, J.) N.C. App.

Holding: The plaintiff-subcontractor’s invoice and accompanying itemized accounting of all of the actual costs it incurred after the original contract completion date are adequate to support the trial court’s finding that the subcontractor’s cost calculation is correct.

We affirm the trial court’s award of damages and attorneys’ fees to the subcontractor.

A party may be awarded attorneys’ fees under G.S. § 44A-35 if (1) the party so awarded is the prevailing party and (2) the party being required to pay the award unreasonably refused to resolve the matter.

Even though the payment bond is relevant to matters of payment of damages and equitable adjustment following a breach of contract, it has no bearing on an award of attorneys’ fees under § 44A-35.

Defendant contends that its duty to settle did not arise until it was ordered to pay the subcontractor damages. This notion is inconsistent with N.C. law.

As in Terry’s Floor Fashions, Inc. v. Crown General Contractors, Inc., 184 N.C. App.  1, 645 S.E.2d 810 (2007), the subcontractor here was not appropriately paid for work it performed for defendant. After failed attempts to secure payment, the subcontractor took the matter to trial. Defendant lost at trial and was required to pay attorneys’ fees under § 44A-35. In view of actions taken or not taken prior to judgment, defendant unreasonably refused to settle. Defendant’s contention – that it was not obligated to pay the equitable adjustment funds until the trial court entered judgment and thus did not unreasonably refuse to settle – is without merit.


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