Contract – Motion to Amend – Breach of Contract – Breach of the Implied Covenant of Good Faith and Fair Dealing – Subcontractor Pass-Through Claims

We exercised our discretion to modify our prior Order to reflect that the contract claims are dismissed without prejudice, rather than with prejudice as previously provided.

We granted in part and denied in part the motion for reconsideration, and we granted the motion to amend.

Plaintiff Johnson Bros. Corp. (JBC) asserted 10 claims against defendant City of Charlotte, including claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and subcontractor pass-through claims. The Court concluded that JBC’s contract claims were time-barred in part and dismissed those claims with prejudice “to the extent those claims [arose] from conduct occurring before January 31, 2021.” JBC then sought reconsideration of the Court’s partial dismissal of the contract claims with prejudice and, alternatively, leave to file a second amended complaint.

The interests of justice require that JBC’s contract claims be dismissed without prejudice, rather than with prejudice as provided in the Court’s order. It was not our intention in the Order to deny JBC an opportunity to replead its contract claims as to all relevant time periods on a non-payment theory of breach of contract, which we concluded had not been pleaded in the First Amended Complaint. Moreover, JBC offered new factual allegations with supporting documents in support of its contract claims that suggest JBC may be able to replead those claims as timely under the applicable statute of limitations and in satisfaction of the strictures of Rule 12(b)(6). Accordingly, we exercised our discretion to modify the Order to reflect that the contract claims are dismissed without prejudice. JBC’s motion to reconsider, however, is otherwise denied.

Among other things, the City also contended that leave to amend should be denied because JBC unduly delayed in seeking leave to amend. We disagreed. Although this case was filed on January 31, 2023, we did not hear the City’s motion to dismiss until November 2, 2023 and issued our ruling on that motion on February 27, 2024. Under these circumstances, we were unable to conclude that JBC unduly delayed in seeking leave to amend, particularly when the City has not offered any persuasive evidence or argument that the proposed amendment would cause it any material or unfair prejudice.

Granted in part, denied in part.

Johnson Bros. Corporation v. City of Charlotte (Lawyers’ Weekly No. 020-037-24, 11 pp.) (Louis A. Bledsoe III, J.) 2024 NCBC 37. Robinson Bradshaw & Hinson, P.A., by Edward F. Hennessey, IV, Margaret R. McLoughlin, and Mark Hiller, and Cokinos Young, by John P. DiBiasi and Branson Rogers, for plaintiff Johnson Bros. Corporation, a Southland Company; Hamilton Stephens Steele + Martin, PLLC, by Rebecca K. Cheney, Bentford E. Martin, and Graham B. Morgan, for defendant City of Charlotte. North Carolina Business Court