{ "id": 9000658, "name": "HARRY LAND and wife, KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and ASSURANCE COMPANY OF AMERICA, INC., as assignee of 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": "2004-08-17", "docket_number": "No. COA03-1083", "first_page": "880", "last_page": "885", "citations": [ { "type": "official", "cite": "165 N.C. App. 880" } ], "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": "595 S.E.2d 152", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12631282, 12631283 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/se2d/595/0152-02", "/se2d/595/0152-01" ] }, { "cite": "358 N.C. 235", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 12631282, 12631283, 12631284, 12631287, 12631227 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/se2d/595/0152-02", "/se2d/595/0152-01", "/se2d/595/0153-02", "/se2d/595/0154-01", "/se2d/594/0188-01" ] }, { "cite": "71 Fed. Appx. 960", "category": "reporters:federal", "reporter": "Fed. Appx.", "weight": 2, "year": 2003, "opinion_index": 0 }, { "cite": "206 F. Supp. 2d 749", "category": "reporters:federal", "reporter": "F. 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App.", "case_ids": [ 11650568 ], "year": 1998, "pin_cites": [ { "page": "401" } ], "opinion_index": 0, "case_paths": [ "/nc-app/129/0389-01" ] }, { "cite": "309 S.E.2d 183", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "187", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "309 N.C. 788", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4765494 ], "year": 1983, "pin_cites": [ { "page": "793", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/309/0788-01" ] }, { "cite": "587 S.E.2d 470", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2003, "pin_cites": [ { "page": "477" }, { "page": "476" } ], "opinion_index": 0 }, { "cite": "161 N.C. App. 34", "category": "reporters:state", "reporter": "N.C. 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App.", "case_ids": [ 8522464 ], "year": 1992, "pin_cites": [ { "page": "64" } ], "opinion_index": 0, "case_paths": [ "/nc-app/108/0063-01" ] }, { "cite": "328 S.E.2d 274", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "313 N.C. 230", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4718465 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/313/0230-01" ] }, { "cite": "240 S.E.2d 345", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "350" }, { "page": "350-51" } ], "opinion_index": 0 }, { "cite": "294 N.C. 73", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8570898 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "81" }, { "page": "82" } ], "opinion_index": 0, "case_paths": [ "/nc/294/0073-01" ] }, { "cite": "504 S.E.2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1998, "pin_cites": [ { "page": "577" } ], "opinion_index": 0 }, { "cite": "130 N.C. App. 729", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11470258 ], "year": 1998, "pin_cites": [ { "page": "733" } ], "opinion_index": 0, "case_paths": [ "/nc-app/130/0729-01" ] }, { "cite": "563 S.E.2d 8", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 8, "year": 2002, "pin_cites": [ { "page": "11" }, { "page": "135" }, { "page": "10" }, { "page": "135-36" }, { "page": "10" }, { "page": "136-37" }, { "page": "10-11" } ], "opinion_index": 0 }, { "cite": "150 N.C. App. 132", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9080169 ], "year": 2002, "pin_cites": [ { "page": "137" } ], "opinion_index": 0, "case_paths": [ "/nc-app/150/0132-01" ] } ], "analysis": { "cardinality": 613, "char_count": 12080, "ocr_confidence": 0.709, "pagerank": { "raw": 7.996093931904761e-08, "percentile": 0.4639556205786515 }, "sha256": "b3ea23d88ad311604539a88aa342489c9ecbb4bc7d8bc9fc813682689c28e33d", "simhash": "1:13ef6422128f348e", "word_count": 1993 }, "last_updated": "2023-07-14T17:46:04.930387+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUDSON and LEVINSON concur." ], "parties": [ "HARRY LAND and wife, KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and ASSURANCE COMPANY OF AMERICA, INC., as assignee of 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.\nAssurance Company of America, Inc. (\u201cACA\u201d), as assignee of Tall House Builders, Inc. (\u201cTall House\u201d), appeals from an order granting summary judgment to Dryvit Systems, Inc. (\u201cDryvit\u201d).\nThe forecast of evidence tended to show that Harry and Kathy Land (\u201cThe Lands\u201d) entered into a contract with Tall House in which Tall House agreed to serve as the general contractor for the construction of a residence in Durham County, North Carolina. Tall House used direct exterior finish systems (\u201cDEFS\u201d). Dryvit was the manufacturer of the DEFS, also known as Fastrak System 4000, and Southern Synthetic (\u201cSouthern Synthetic\u201d) applied the product to the house.\nAfter construction was completed, the Lands moved into the house. In May of 1998, the Lands sued Tall House alleging construction defects. One month later, Tall House filed a third-party complaint against Dryvit and Southern Synthetic.\nBy December of 1999, the Lands and Tall House reached a settlement agreement. In the agreement, Tall House paid the Lands $199,900.00 for a dismissal of all claims against Tall House. In exchange, the Lands agreed to assign \u201call claims, rights and causes of action they may have against any other person or entity concerning any damage to the House to \u2022 [Tall House\u2019s insurer,] Assurance Company of America (\u2018ACA\u2019).\u201d As part of the settlement, Tall House dismissed its counterclaims against the Lands for unpaid amounts to Tall House. And, although it had settled with the Lands, Tall House preserved its right to continue its claims against Dryvit.\nOn 5 July 2000, third-party defendant Dryvit moved for summary judgment on all of Tail House\u2019s claims. On 1 August 2000, the Durham County Superior Court entered an order granting summary judgment for Dryvit on all of Tall House\u2019s claims. The trial court\u2019s order did not specify the grounds upon which it was based. Tall House appealed the 1 August 2000 order to this Court.\nWe held that the trial court committed reversible error in granting Dryvit\u2019s motion for summary judgment. Land v. Tall House Bldg. Co., 150 N.C. App. 132, 137, 563 S.E.2d 8, 11 (2002). We noted that ACA was the real party in interest because \u201cthe [settlement] agreement mandated [that] 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.\u201d Id. at 135, 563 S.E.2d at 10. \u201cThereafter, Tall House was no longer actually involved in the litigation.\u201d Id. Although ACA should have substituted itself for Tall House, the trial court erred in granting summary judgment at that point in the litigation. Id. at 135-36, 563 S.E.2d at 10. Instead, the court should have ordered a continuance to allow reasonable time for ACA to substitute itself for Tall House. Id. at 136-37, 563 S.E.2d at 10-11.\nOn remand, the trial court granted a motion substituting ACA as the real party in interest. Dryvit renewed its motion for summary judgment on 5 August 2002. Once again, the trial court granted Dryvit\u2019s motion for summary judgment.\nACA, standing in the shoes of Tall House, appeals. On appeal, ACA argues that the trial court erred in granting the motion for summary judgment on the contribution and indemnity claims against Dryvit. We disagree and affirm the decision of the trial court.\nI. Standard of Review\nSummary judgment is appropriate if \u201cthe pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2003). \u201c[T]he standard of review on appeal from summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law.\u201d Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C. App. 729, 733, 504 S.E.2d 574, 577 (1998). \u201cFurther, the evidence presented by the parties must be viewed in the light most favorable to the non-movant.\u201d Id.\nII. Contribution Claims\nACA contends that the trial court erred in granting summary judgment on the contribution claims against Dryvit. However, our Supreme Court has indicated that \u201c[o]rdinarily, a breach of contract does not give rise to a tort action by the promisee against the promisor.\u201d Ports Authority v. Roofing Co., 294 N.C. 73, 81, 240 S.E.2d 345, 350 (1978), rejected on other grounds by Trustees of Rowan Tech. v. Hammond Assoc., 313 N.C. 230, 328 S.E.2d 274 (1985). Although there are exceptions to this rule, none apply to the present case. Ports Authority, 294 N.C. at 82, 240 S.E.2d at 350-51. The general rule has also been applied in cases involving contracts to build a home. In Spillman v. American Homes, 108 N.C. App. 63, 64, 422 S.E.2d 740, 741 (1992), the plaintiffs filed a tort claim alleging that defendant improperly constructed and installed their mobile home. The Spillman Court rejected the validity of this claim and stated:\nAbsent the existence of a public policy exception, as in the case of contracts involving a common carrier, innkeeper or other bailee, ... a tort action does not lie against a party to a contract who simply fails to properly perform the terms of the contract, even if that failure to properly perform was due to the negligent or intentional conduct of that party, when the injury resulting from the breach is damage to the subject matter of the contract. It is the law of contract and not the law of negligence which defines the obligations and remedies of the parties in such a situation.\nId. at 65, 422 S.E.2d at 741-42 (emphasis added).\nThe similarities between Spillman and the present case are striking. As was the case in Spillman, the Lands had a contract with Tall House for the construction of a home. After the home was completed, the Lands began to experience problems with water intrusion and other structural defects. We believe that Tall House failed to perform the terms of the contract, and this failure resulted in injury to the subject matter of the contract, the home. Thus, the law of contract, not the law of negligence, defines the obligations and remedies of the parties.\nSince there can be no recovery based on a negligence theory, ACA\u2019s contribution claim must also fail. N.C. Gen. Stat. \u00a7 IB-1 (2003) governs the right of contribution in North Carolina. \u201cUnder this statute, there is no right to contribution from one who is not a joint tort-feasor.\u201d Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 43, 587 S.E.2d 470, 477 (2003), disc. review denied, 358 N.C. 235, 595 S.E.2d 152 (2004). Because Tall House could only be liable to the Lands for breach of contract, it could not be a joint tort-feasor. Therefore, standing in the shoes of Tall House, ACA has no claim for contribution against Dryvit or any other party. This assignment of error is overruled.\nIII. Indemnity Claims\nACA suggests that the trial court erred in granting summary judgment on the indemnity claims against Dryvit. Once again, its argument appears to be rooted in tort theory. In its brief, ACA states that \u201c[i]n order to prevail on its indemnity claims, ACA merely had to demonstrate that any negligence or fault on Tall House\u2019s part was passive or secondary, as opposed to the active negligence of Dryvit.\u201d\n\u201cTori law provides for indemnity of one secondarily liable by one who is primarily liable.\u201d In re Huyck Corp. v. Magnum Inc., 309 N.C. 788, 793, 309 S.E.2d 183, 187 (1983) (emphasis added). However, applying this principle to the present case is problematic for a number of reasons.\nFirst, we have already mentioned that the law of contract, not the law of torts, defines the obligations and remedies of the parties. As we stated in Kaleel Builders, \u201cwe acknowledge no negligence claim where all rights and remedies have been set forth in the contractual relationship.\u201d Kaleel Builders, 161 N.C. App. at 42, 587 S.E.2d at 476.\nSecond, the economic loss doctrine \u201cprohibits recovery for economic loss in tort.\u201d Moore v. Coachmen Industries, Inc., 129 N.C. App. 389, 401, 499 S.E.2d 772, 780 (1998). \u201cInstead, such claims are governed by contract law[.]\u201d Id. The courts have construed the term \u201ceconomic losses\u201d to include damages to the product itself. Id. However, \u201c[w]here a defective product causes damage to property other than the product itself, losses attributable to the defective product are recoverable in tort rather than contract.\u201d Id. at 402, 499 S.E.2d at 780.\nAt least one federal court has considered what constitutes damage to property \u201cother than the product itself\u2019 for the purposes of the economic loss rule. Wilson v. Dryvit Systems, Inc., 206 F. Supp. 2d 749, 753 (E.D.N.C. 2002), aff\u2019d, 71 Fed. Appx. 960 (2003). In North Carolina, \u201cwhen a component part of a product or a system injures the rest of the product or the system, only economic loss has occurred.\u201d Id. More importantly, the Court made the following statement about the exact same product at issue in the case at bar:\nDryvifs DEFS cladding is an integral component of plaintiffs\u2019 house. The damage caused by the allegedly defective Fastrak therefore constitutes damage to the house itself. No \u201cother\u201d property damage has resulted, and plaintiffs have suffered purely economic losses. Thus, plaintiffs\u2019 negligence claims against Dryvit are barred by the economic loss rule, and Dryvit is entitled to summary judgment on those claims.\nId. at 754.\nWe believe that a similar result is warranted in the present case. As was the case in Wilson, any damage caused by the DEFS constitutes damage to the house itself. Since no other property damage has resulted, this is purely economic loss. Therefore, the economic loss rule bars any negligence claims against Dryvit. This includes ACA\u2019s indemnity claims which were rooted in tort. Accordingly, this assignment of error is dismissed.\nAfter carefully considering the record and arguments of the parties, we conclude that the trial court acted properly in all respects. Therefore, the trial court\u2019s decision to grant summary judgment to Dryvit is\nAffirmed.\nJudges HUDSON and LEVINSON concur.", "type": "majority", "author": "McCullough, judge." } ], "attorneys": [ "Dean & Gibson, L.L.P., by Christopher J. Gulp; andDinsmore & Shohl, L.L.P., by Joseph N. Tucker and Julie Muth Goodman, for Assurance Company of America, Inc., appellant.", "Womble Carlyle Sandridge & Rice, P.L.L.C., by Hada V. Haulsee and David J. Mazsa, for Dryvit Systems, Inc., appellee." ], "corrections": "", "head_matter": "HARRY LAND and wife, KATHY LAND, Plaintiffs v. TALL HOUSE BUILDING CO., Defendant, and ASSURANCE COMPANY OF AMERICA, INC., as assignee of 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. COA03-1083\n(Filed 17 August 2004)\n1. Construction Claims\u2014 governed by contract \u2014 no joint contribution claims\nSummary judgment was correctly granted for defendant Dryvit, a third-party defendant, on joint contribution claims arising from the construction of a house. The builder failed to perform the terms of the contract, the law of contract governed, and the builder could not be a joint tortfeasor. The plaintiff here, the insurance company and assignee of the builder, stood in place of the builder and had no claim for contribution.\n2. Construction Claims\u2014 governed by contract \u2014 no indemnity claim \u2014 damage to building alone \u2014 economic loss rule\nSummary judgment was correctly granted for defendant Dryvit on indemnity claims arising from the construction of a house. The law of contract rather than of tort governs the obligations and remedies of the parties in this case. Moreover, there was no damage other than to the house itself. This is purely economic loss, which bars any negligence claims.\nAppeal by Assurance Company of America, Inc., (as assignee of Tall House Builders, Inc.) from order entered 12 May 2003 by Judge Orlando F. Hudson, Jr., in Durham County Superior Court. Heard in the Court of Appeals 29 April 2004.\nDean & Gibson, L.L.P., by Christopher J. Gulp; andDinsmore & Shohl, L.L.P., by Joseph N. Tucker and Julie Muth Goodman, for Assurance Company of America, Inc., appellant.\nWomble Carlyle Sandridge & Rice, P.L.L.C., by Hada V. Haulsee and David J. Mazsa, for Dryvit Systems, Inc., appellee." }, "file_name": "0880-01", "first_page_order": 912, "last_page_order": 917 }