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Tort/Negligence – Misrepresentation – Civil Practice – Post-Trial Motions – Construction Contract – Project Owner’s Bank

Helm Builders, LLC v. United Bank & Trust Co. (Lawyers Weekly No. 14-03-0472, 15 pp.) (N. Carlton Tilley Jr., Sr. J.) 1:11-cv-00187; M.D.N.C.

Holding: The plaintiff-contractor has presented no persuasive authority for its position that, under circumstances similar to this case, a bank owes a duty to disclose a borrower/project owner’s ability to pay its contractual obligations to the borrower’s contractor. Accordingly, having presented insufficient evidence for a reasonable finder of fact to conclude that such a duty existed between the parties in this case, or authority suggesting that such a duty might exist on the forecast evidence, there was no error in foreclosing the contractor’s claims based on any such duty from proceeding to trial.

The contractor’s post-trial motions are denied.

In the context of this case, where alleged misrepresentations were the only factual basis for Chapter 75 liability, actual reliance would be necessary to establish the contractor’s claim. Therefore, the contractor’s Chapter 75 claim was subsumed in its negligent and intentional misrepresentation claims.

A witness for the defendant-bank admitted that, contrary to his statement in a letter, the bank never intended to allocate $13,050,000 of the project owner’s loan to pay the plaintiff-contractor. Nonetheless, there is ample evidence to support the jury’s finding that the contractor did not rely on the statement in the letter (the contractor began work on the project more than two months before the letter was written; the contractor had received over $300,000 in payment directly from the project owner by that time; no one from the bank spoke to the contractor before the contractor agreed to take the job; and the letter expressly stated that it was being provided for use in acquiring a payment and performance bond, and the contractor did in fact use the letter for that purpose). Accordingly, the jury’s conclusion that the contractor did not rely on the letter in its decision to begin or continue construction of the project is adequately supported by the evidence, and the jury’s verdict should not be disturbed.

Although an attorney for the bank left the contractor a voicemail suggesting that a second loan to the project owner would be used to pay the contractor, the evidence shows that the contractor’s work was substantially complete at the time the attorney left the voicemail in question. Moreover, the attorney’s inclusion of “I guess” (regarding how the loan proceeds would be used) reflects on the equivocal nature of the information he provided. Accordingly, the evidence is sufficient to support the jury’s finding that the contractor did not rely on the voicemail, and there is no basis for a new trial or an alteration of amendment of the judgment.

Motions denied.


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