{ "id": 9080169, "name": "HARRY LAND and KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and TALL HOUSE BUILDING CO., Third-Party Plaintiff v. DRYVIT SYSTEMS, INC.; COLIN W. McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; EDWARD McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; PICKARD ROOFING COMPANY, INC.; and MARVIN WINDOWS, INC., Third-Party Defendants", "name_abbreviation": "Land v. Tall House Building Co.", "decision_date": "2002-05-07", "docket_number": "No. COA01-27", "first_page": "132", "last_page": "138", "citations": [ { "type": "official", "cite": "150 N.C. App. 132" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "72 S.E.2d 231", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "pin_cites": [ { "page": "233", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "236 N.C. 157", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8623114 ], "year": 1952, "pin_cites": [ { "page": "160", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/236/0157-01" ] }, { "cite": "314 S.E.2d 801", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "804" } ], "opinion_index": 0 }, { "cite": "68 N.C. App. 246", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526962 ], "year": 1984, "pin_cites": [ { "page": "251" } ], "opinion_index": 0, "case_paths": [ "/nc-app/68/0246-01" ] }, { "cite": "293 S.E.2d 767", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "306 N.C. 540", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571675 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/306/0540-01" ] }, { "cite": "362 S.E.2d 812", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "88 N.C. App. 1", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8357716 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc-app/88/0001-01" ] }, { "cite": "484 S.E.2d 527", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "opinion_index": 0 }, { "cite": "346 N.C. 170", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 139555 ], "year": 1997, "opinion_index": 0, "case_paths": [ "/nc/346/0170-01" ] }, { "cite": "478 S.E.2d 7", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "344 N.C. 735", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 867687, 867626, 867659, 867663, 867666 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/nc/344/0735-03", "/nc/344/0735-02", "/nc/344/0735-05", "/nc/344/0735-04", "/nc/344/0735-01" ] }, { "cite": "473 S.E.2d 649", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "654-55", "parenthetical": "Greene, Judge, dissenting" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 345", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11913273 ], "year": 1996, "pin_cites": [ { "page": "353", "parenthetical": "Greene, Judge, dissenting" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0345-01" ] }, { "cite": "240 S.E.2d 360", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "367" } ], "opinion_index": 0 }, { "cite": "294 N.C. 146", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571110 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "158" } ], "opinion_index": 0, "case_paths": [ "/nc/294/0146-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 1-57", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "opinion_index": 0 }, { "cite": "139 S.E.2d 723", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1965, "pin_cites": [ { "page": "726" } ], "opinion_index": 0 }, { "cite": "263 N.C. 445", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8570568 ], "year": 1965, "pin_cites": [ { "page": "448-49" } ], "opinion_index": 0, "case_paths": [ "/nc/263/0445-01" ] }, { "cite": "550 S.E.2d 822", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "825", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "145 N.C. App. 169", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11436508 ], "year": 2001, "pin_cites": [ { "page": "175", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/145/0169-01" ] } ], "analysis": { "cardinality": 603, "char_count": 12673, "ocr_confidence": 0.756, "pagerank": { "raw": 8.26860372557566e-08, "percentile": 0.4786141971983695 }, "sha256": "a4bb44d6fc3c60b5a1756b51b19ea8d67d5bc94103e17b1cc54acc5e3cc9f5be", "simhash": "1:27841b66571c7a9d", "word_count": 2102 }, "last_updated": "2023-07-14T19:52:10.836930+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge EAGLES and Judge BIGGS concur." ], "parties": [ "HARRY LAND and KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and TALL HOUSE BUILDING CO., Third-Party Plaintiff v. DRYVIT SYSTEMS, INC.; COLIN W. McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; EDWARD McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; PICKARD ROOFING COMPANY, INC.; and MARVIN WINDOWS, INC., Third-Party Defendants" ], "opinions": [ { "text": "McCullough, judge.\nDefendant/third-party plaintiff Tall House Building Co. appeals from an order granting summary judgment to third-party defendant Dryvit Systems, Inc., entered by Judge Orlando F. Hudson, Jr., at the 31 July 2000 Session of Durham County Civil Superior Court.\nIn 1993, plaintiffs in the original suit, Harry and Kathy Land, contracted with appellant Tall House to be their general contractor and oversee the construction of the Lands\u2019 house. The house was completed in 1995. Eventually, the Lands became dissatisfied with the construction of their home, specifically, the exterior stucco that had been installed had begun to cause problems with the integrity and appearance of the house.\nOn 11 May 1998, the Lands filed a complaint against Tall House for damages arising out of alleged defects in the construction of their house. On 3 June 1998, Tall House answered the Land complaint denying liability. On the same day, Tall House also filed a third-party complaint against Dryvit Systems, Inc., the manufacturer of the stucco applied to the Lands\u2019 house, and numerous other subcontractors involved with the application of the stucco, for contribution and indemnity pursuant to Rule 14.\nBy 28 December 1999, the Lands and Tall House had reached a settlement agreement. In this settlement agreement, Tall House was to pay the Lands $199,900.00 in exchange for the Lands assigning \u201call claims, rights and causes of action they may have against any other person or entity concerning any damage to the House to Assurance Company of America (\u201cACA\u201d).\u201d ACA is the insurance carrier for Tall House, and it is the entity that actually paid the settlement money to the Lands. The Lands dismissed their suit against Tall House on 19 April 1999.\nThe third-party complaint of Tall House against Dryvit Systems and the subcontractors, however, was still active. ACA had not taken any action post-settlement to have itself substituted for Tall House as the real party in interest. On 5 July 2000, third-party defendant Dryvit moved for summary judgment based on the following:\nTall House Builders has no claim against Dryvit and it is not the real party in interest;\nSome or all of the claims are barred by the applicable statutes of limitations;\nSome or all of the claims are barred by North Carolina\u2019s statute of repose;\nThe claims are barred pursuant to N.C. Gen. Stat. Chapter 99B; and\nSome of the claims and cross claims are barred as a matter of law.\nThis is the first mention in the record of Dryvit\u2019s objection as to Tall House not being a real party in interest.\nThe hearing on the motion for summary judgment was held on 31 July 2000. The trial court\u2019s order, filed 1 August 2000, simply stated that the Court \u201cis of the opinion that there are no genuine issues of material fact in dispute, and that judgment in favor of Third-Party Defendants Dryvit Systems, Inc. ... is appropriate as a matter of law[.]\u201d It is from this order that Tall House appeals.\nDefendant/third-party plaintiff makes the following assignments of error: The trial court erred in granting summary judgment in favor of third-party defendant Dryvit Systems, Inc., on the grounds that there were genuine issues of material fact regarding whether (1) third-party defendant caused or contributed to the water-intrusion damage to plaintiff\u2019s house; (2) Tall House Building Company was the real party in interest; and (3) the third-party claims were barred by the applicable statutes of limitations and repose.\nI.\nWe first address the arguments of the parties relating as to who in fact is the real party in interest.\nN.C. Gen. Stat. \u00a7 1A-1, Rule 17(a) (1999), provides that \u201c[e]very claim shall be prosecuted in the name of the real party in interest[.]\u201d Id.\n\u201cThe real party in interest is the party who by substantive law has the legal right to enforce the claim in question. More specifically, a real party in interest is \u2018. . . a party who is benefitted or injured by the judgment in the case.\u2019 \u201d\nWhittaker v. Furniture Factory Outlet Shops, 145 N.C. App. 169, 175, 550 S.E.2d 822, 825 (2001) (citations omitted) (quoting Parnell v. Ins. Co., 263 N.C. 445, 448-49, 139 S.E.2d 723, 726 (1965)).\nIn addition, N.C. Gen. Stat. \u00a7 1-57 also says that \u201c[e]very action must be prosecuted in the name of the real party in interest....\u201d N.C. Gen. Stat. \u00a7 1-57 (1999).\nDryvit contends that summary judgment was proper because ACA, and not Tall House, is the sole real party in interest. This is due to the arrangement set forth in the settlement agreement between the Lands, Tall House, and ACA. The facts are that the agreement mandated ACA, as insurer for Tall House, pay $199,900.00 to the Lands, and in return the Lands had to assign all of their rights from the dispute to ACA. Thereafter, Tall House was no longer actually involved in the litigation. Thus, Dryvit filed its summary judgment motion against Tall House because Tall House was maintaining a lawsuit against Dryvit without being the real party in interest.\nTall House contends that it is still a real party in interest because it dismissed its counterclaims against the Lands, thereby contributing to the settlement. The counterclaims were in fact dismissed, however, the agreement itself makes no mention of this fact. The record merely indicates that Tall House voluntarily dismissed its counterclaims against the Lands.\nWe note that Tall House was entitled to file its contribution and indemnity claims against Dryvit and the other subcontractors pursuant to Rule 14. When the Lands, Tall House, and its insurer ACA entered into the settlement agreement, however, it appears that Tall House indeed ceased being a real party in interest. ACA was the only one entitled to maintain the pending litigation, and should have substituted itself for Tall House and proceeded accordingly. However, we hold that granting summary judgment was not the appropriate action for the trial court to take at that point in the litigation.\nRule 17(a) states:\nNo action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.\nN.C. Gen. Stat. \u00a7 1A-1, Rule 17(a) (1999) (emphasis added).\nThe objection was in Dryvit\u2019s motion for summary judgment filed 5 July 2000. The trial court could not dismiss this action until a reasonable time had been allowed to pass for ACA to ratify, join, or substitute itself for Tall House. The hearing on this issue was held just over a week later on 13 July 2000. The order was given on 1 August 2000, about two and one-half weeks after the hearing.\nFurthermore,\nWhen a case is not brought in the name of the real party in interest \u201cthe court should refuse to deal with the merits of the case until the absent parties are brought into the action, and in the absence of a proper motion by a competent person, the defect should be corrected by ex mero motu ruling of the court.\u201d Booker v. Everhart, 294 N.C. 146, 158, 240 S.E.2d 360, 367 (1978). \u201cThis provision is designed to avoid \u2018needless delay and technical disposition of a meritorious action.\u2019 \u201d Wilson \u00a7 17-8, at 349 (quoting N.C.G.S. \u00a7 1A-1, Rule 17 comment). Pursuant to Rule 17, the trial court should have either corrected the plaintiffs error itself or refused to hear the motion for summary judgment until the real party in interest was substituted for plaintiff.\nRichland Run Homeowners Assn. v. CHC Durham Corp., 123 N.C. App. 345, 353, 473 S.E.2d 649, 654-55 (1996) (Greene, Judge, dissenting), as to disc. review issues, disc. review denied, 344 N.C. 735, 478 S.E.2d 7 (1996), but rev\u2019dfor reasons stated in the dissent, 346 N.C. 170, 484 S.E.2d 527 (1997). See also J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C. App. 1, 362 S.E.2d 812 (1987); Crowell v. Chapman, 306 N.C. 540, 293 S.E.2d 767 (1982). Essentially, these cases say that a trial court should, on its own motion, order a continuance to provide a reasonable time for necessary parties to be joined. Booker v. Everhart, 294 N.C. 146, 240 S.E.2d 360 (1978). Unlike Rule 19, absence of a necessary party under Rule 17 does not constitute a \u201cfatal defect\u201d where opposing party failed to show prejudice in not having the real party joined. Carolina First Nat\u2019l Bank v. Douglas Gallery of Homes, 68 N.C. App. 246, 251, 314 S.E.2d 801, 804 (1984). Thus, the trial court should have corrected the problem rather than granting summary judgment.\nTall House further contends that it is not fair to allow a party to bring third-party claims against potentially responsible parties, as under Rule 14, but then prevent that party from pursuing those claims after settlement with the original plaintiffs \u201cmerely because the defendant/third-party plaintiff had the foresight to maintain liability insurance.\u201d In addition, Tall House contends that forcing the insurance company to maintain the action in its own name will prejudice them and lower their recovery. Thus, such a restrictive view of the \u201creal party in interest\u201d requirement would penalize those who pay for and provide liability insurance.\nIn Burgess v. Trevathan our Supreme Court stated:\nWhere the insurance paid the insured covers the loss in full, the insurance company, as a necessary party plaintiff, must sue in its own name to enforce its right of subrogation against the tort-feasor. This is true because the insurance company in such case is entitled to the entire fruits of the action, and must be regarded as the real party in interest under the statute codified as G.S. \u00a7 1-57, which specifies that \u201cevery action must be prosecuted in the name of the real party in interest.\u201d\nBurgess v. Trevathan, 236 N.C. 157, 160, 72 S.E.2d 231, 233 (1952) (citations omitted).\nBecause we hold that the trial court erred by entering summary judgment for third-party defendant, third-party plaintiffs assignment of error is sustained.\nII.\nAs to the issue of statutes of limitations and repose, it was conceded by Dryvit that Tall House was not entitled to summary judgment on these issues at the trial court level. Nor did Dryvit brief these issues to this Court. It is apparent that Dryvit included these issues in their motion in anticipation of ACA asserting the assigned claims.\nHowever, because of the language of Rule 17(a), even when ACA is substituted for Tall House, the status of these issues will not change. \u201c[S]uch ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 17(a) (1999).\nReversed and remanded.\nChief Judge EAGLES and Judge BIGGS concur.", "type": "majority", "author": "McCullough, judge." } ], "attorneys": [ "Dean & Gibson, L.L.P., by Christopher J. Culp, Esq.; and Brown, Todd & Heybum, P.L.L.C., for Tall House Building Co., defendant/third-party plaintiff appellant.", "Womble Carlyle Sandridge & Rice, P.L.L.C., by Hada V. Haulsee and David J. Mazza, for Dryvit Systems, Inc., third-party defendant appellee." ], "corrections": "", "head_matter": "HARRY LAND and KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and TALL HOUSE BUILDING CO., Third-Party Plaintiff v. DRYVIT SYSTEMS, INC.; COLIN W. McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; EDWARD McKEAN, Individually and d/b/a SOUTHERN SYNTHETIC & PLASTER; PICKARD ROOFING COMPANY, INC.; and MARVIN WINDOWS, INC., Third-Party Defendants\nNo. COA01-27\n(Filed 7 May 2002)\n1. Parties\u2014 real party in interest \u2014 insurance settlement\u2014 insurer as necessary party\nThe trial court erred by granting summary judgment for a third-party defendant where the original parties had settled, the original plaintiffs assigned all of their claims to the insurer of the original defendant, and the insurer did not take any action to have itself substituted as the real party in interest. The insurer was the only party entitled to maintain the litigation after the settlement, but the trial court should have ordered a continuance on its own motion to allow a reasonable time for necessary parties to be joined.\n2. Statutes of Limitation and Repose\u2014 substituted real party in interest \u2014 status of limitations issues unchanged\nThe status of statutes of limitations and repose issues will not change when an insurer is substituted as the real party in interest after a settlement.\nAppeal by defendant/third-party plaintiff from judgment entered 1 August 2000 by Judge Orlando F. Hudson, Jr., in Durham County Superior Court. Heard in the Court of Appeals 11 February 2002.\nDean & Gibson, L.L.P., by Christopher J. Culp, Esq.; and Brown, Todd & Heybum, P.L.L.C., for Tall House Building Co., defendant/third-party plaintiff appellant.\nWomble Carlyle Sandridge & Rice, P.L.L.C., by Hada V. Haulsee and David J. Mazza, for Dryvit Systems, Inc., third-party defendant appellee." }, "file_name": "0132-01", "first_page_order": 162, "last_page_order": 168 }