NC appeals court revives contractor’s $700K construction dispute

SUMMARY

• NC Court of Appeals partially reversed trial court summary judgment in construction dispute
• Case is AC Developments LLC v. Edwards, an 11-page opinion
• Court found factual disputes over contractor identity and enforceability of the agreement
• Ruling allows $700,000 construction payment claims to proceed despite licensing challenges

The North Carolina Court of Appeals reversed in part a trial court’s summary judgment in a construction dispute, finding genuine issues of material fact regarding the identity of the parties to the contract and the enforceability of the agreement.

The 11-page opinion is AC Developments LLC v. Edwards.

The plaintiff, a licensed general contractor operating under a newly issued unlimited license, filed suit to recover over $700,000 in unpaid labor and materials after the defendants allegedly stopped making payments on a residential construction project. Initially, work began under a limited license held by the plaintiff’s principal operating as a separate entity. Once the unlimited license was issued, the plaintiff assumed control of the project.

The defendants moved for summary judgment, asserting that the contract was void due to an illegal agreement exceeding the scope of the contractor’s licensing authority. The trial court agreed and dismissed all claims, including breach of contract, unjust enrichment, and misrepresentation.

On appeal, the plaintiff argued that the contract’s language was ambiguous regarding who the contracting parties were and that the trial court erred in refusing to consider extrinsic evidence before ruling. The appellate court agreed, noting that the agreement included contradictory references: it listed “Anderson Construction by Shawn Anderson” as the contractor and included a license number corresponding to that entity, while also referencing the plaintiff by name.

Because a contractor may lawfully cure a license limitation during the performance of work, and the value of the work performed before the license upgrade remained within the limited authorization, the court held that the contract may still be enforceable. The ambiguity in the contract’s language created a factual dispute as to whether both entities were parties to the agreement, precluding summary judgment.

EXTERNAL LINKS

• North Carolina Judicial Branch appellate reporter
• North Carolina Licensing Board for General Contractors