By Matt Bouchard

When Crescent University City Venture, LLC v. Trussway Manufacturing, Inc., 376 N.C. 54, 852 S.E.2d 98 (2020) was released in December 2020, the decision left some ambiguity about the scope of its intended reach. On the one hand, the North Carolina Supreme Court in Crescent reiterated that the purpose of the economic loss rule was to “prevent contract law from drowning in a sea of tort;” that the rule bars recovery in tort for the simple failure of a defendant to perform its contract; and that where a plaintiff has a bargained-for remedy, it must look solely to contract law when seeking recovery for purely economic losses. On the other hand, the Court more broadly concluded that “North Carolina’s state courts have consistently applied the economic loss rule to hold that purely economic losses are not recoverable under tort law, particularly in the context of commercial transactions.” That language arguably suggests a potentially more expansive application of the economic loss rule, one not dependent upon the existence or non-existence of a bargained-for exchange between the adversaries.

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By Anthony Bradley (“Brad”) Eben, III

This year, North Carolina owners, developers, and contractors will need to read up on new legislation that could fundamentally affect their businesses. On January 26, 2022, Governor Roy Cooper signed Session Law 2022-1. This legislation, most of which is effective as of March 1, significantly changes North Carolina General Statutes applicable to in-state construction projects (except for Department of Transportation design-build projects). Overall, Session Law 2022-1: (1) clarifies and updates statutory provisions related to the design-build contracting process; (2) renders void any unenforceable provisions in construction and design-professional agreements requiring lien waivers or claims as a condition for progress payments, with limited exceptions; and (3) modifies attorneys’ fees provisions applicable in statutory lien actions.

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By Luke J. Farley

It’s commonplace for plaintiffs in construction cases, especially owners, to assert unfair trade practice claims. But those claims rarely succeed. Most construction disputes involve a breach of contract between two sophisticated parties. In those circumstances, North Carolina law requires a substantial aggravating factor to turn the breach of contract into an unfair trade practice under G.S. 75-1.1 But a new decision in Gilmore’s Farm, Inc. v. Herc Rentals, Inc. from the U.S. District Court for the Eastern District of North Carolina has recognized that wrongfully asserting a lien can be the basis for a claim under G.S. 75-1.1.

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By Sheldon L. Schenck

In Milone & MacBroom, Inc. v. Corkum, 2021-NCCOA-526, the North Carolina Court of Appeals issued a stark reminder about the importance of executing on a judgment prior to initiating supplemental proceedings as part of collection efforts. In Milone, the plaintiff obtained a judgment against the defendant for monies owed. Defendant had partially paid on that debt under a prior agreement, which authorized entry of a Consent Judgment in the event of default. After default and entry of the Consent Judgment, the plaintiff served interrogatories and requests for production of documents in a supplemental proceeding. Defendant did not respond, and plaintiff filed a motion to compel.

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