{ "id": 4115574, "name": "SOUTHERN SEEDING SERVICE, INC. v. W.C. ENGLISH, INC.; LIBERTY MUTUAL INSURANCE COMPANY; AND TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA", "name_abbreviation": "Southern Seeding Service, Inc. v. W.C. English, Inc.", "decision_date": "2012-12-04", "docket_number": "No. COA12-636", "first_page": "90", "last_page": "101", "citations": [ { "type": "official", "cite": "224 N.C. App. 90" } ], "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": "645 S.E.2d 810", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638630 ], "weight": 6, "year": 2007, "pin_cites": [ { "page": "814" }, { "page": "814" }, { "page": "815", "parenthetical": "third and fourth alterations in original" }, { "page": "815-16" }, { "page": "821" } ], "opinion_index": 0, "case_paths": [ "/se2d/645/0810-01" ] }, { "cite": "655 S.E.2d 837", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12640256, 12640257, 12640258 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/655/0837-01", "/se2d/655/0837-02", "/se2d/655/0837-03" ] }, { "cite": "362 N.C. 86", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 12640256, 12640258, 12640348, 12640253, 12640254, 12640255 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/655/0837-01", "/se2d/655/0837-03", "/se2d/656/0591-01", "/se2d/655/0836-01", "/se2d/655/0836-02", "/se2d/655/0836-03" ] }, { "cite": "647 S.E.2d 672", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638974 ], "weight": 2, "year": 2007, "pin_cites": [ { "page": "674" }, { "page": "674" } ], "opinion_index": 0, "case_paths": [ "/se2d/647/0672-01" ] }, { "cite": "614 S.E.2d 555", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12633179 ], "year": 2005, "pin_cites": [ { "page": "558" } ], "opinion_index": 0, "case_paths": [ "/se2d/614/0555-01" ] }, { "cite": "646 S.E.2d 851", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638896 ], "year": 2007, "pin_cites": [ { "page": "854" } ], "opinion_index": 0, "case_paths": [ "/se2d/646/0851-01" ] }, { "cite": "184 N.C. App. 1", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8183788 ], "year": 2007, "pin_cites": [ { "page": "6" } ], "opinion_index": 0, "case_paths": [ "/nc-app/184/0001-01" ] }, { "cite": "185 N.C. App. 153", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8208915 ], "year": 2007, "pin_cites": [ { "page": "155" } ], "opinion_index": 0, "case_paths": [ "/nc-app/185/0153-01" ] }, { "cite": "669 S.E.2d 290", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2008, "pin_cites": [ { "page": "294" } ], "opinion_index": 0 }, { "cite": "362 N.C. 628", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4150837 ], "year": 2008, "pin_cites": [ { "page": "632" } ], "opinion_index": 0, "case_paths": [ "/nc/362/0628-01" ] }, { "cite": "726 S.E.2d 198", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2012, "pin_cites": [ { "page": "204", "parenthetical": "quoting State v. Williams, 362 N.C. 628, 632, 669 S.E.2d 290, 294 (2008)" } ], "opinion_index": 0 }, { "cite": "171 N.C. App. 368", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8437072 ], "year": 2005, "pin_cites": [ { "page": "369" } ], "opinion_index": 0, "case_paths": [ "/nc-app/171/0368-01" ] }, { "cite": "556 S.E.2d 1", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2001, "pin_cites": [ { "page": "4" }, { "page": "4" } ], "opinion_index": 0 }, { "cite": "147 N.C. App. 239", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9378971 ], "weight": 2, "year": 2001, "pin_cites": [ { "page": "242" }, { "page": "242" } ], "opinion_index": 0, "case_paths": [ "/nc-app/147/0239-01" ] }, { "cite": "184 N.C. App. 665", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8187325 ], "year": 2007, "pin_cites": [ { "page": "668-69" } ], "opinion_index": 0, "case_paths": [ "/nc-app/184/0665-01" ] }, { "cite": "719 S.E.2d 211", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 2011, "pin_cites": [ { "page": "216" }, { "page": "217" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 980, "char_count": 27957, "ocr_confidence": 0.723, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.13175941917849265 }, "sha256": "111b206624f8ea7ef8869e9c737e8bb98398fbf3e2445c9a705d85fd7c9789e2", "simhash": "1:0bcbd520c07a1881", "word_count": 4463 }, "last_updated": "2023-07-14T22:14:41.206072+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUNTER, Robert C. and CALABRIA concur." ], "parties": [ "SOUTHERN SEEDING SERVICE, INC. v. W.C. ENGLISH, INC.; LIBERTY MUTUAL INSURANCE COMPANY; AND TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA" ], "opinions": [ { "text": "HUNTER, JR., Robert N., Judge.\nLiberty Mutual Insurance Company (\u201cLiberty Mutual\u201d), Travelers Casualty & Surety Company of America (\u201cTravelers\u201d) (collectively, \u201cthe sureties\u201d), and W.C. English, Inc. (\u201cEnglish\u201d) (collectively \u201cAppellants\u201d) appeal from an Amended Judgment entered 8 March 2012 by Judge Shannon R. Joseph in Guilford County Superior Court in favor of Southern Seeding Service, Inc. (\u201cSouthern Seeding\u201d). Appellants argue that the trial court erred in awarding damages and attorneys\u2019 fees to Southern Seeding. We affirm.\nI. Factual and Procedural History\nOn 15 July 2003, the North Carolina Department of Transportation (\u201cNCDOT\u201d) initiated and published provisions for a construction project (the \u201cProject\u201d) concerning the Western Loop of Interstate 40 in Greensboro. Shortly thereafter APAC-Atlantic, Inc. (\u201cAPAC\u201d) was hired as the general contractor on the Project. APAC in turn executed a Contract Payment Bond with NCDOT, as required by N.C. Gen. Stat. \u00a7 44A-26, which guaranteed payment to all subcontractors and material suppliers on the Project. Liberty Mutual and Travelers signed as sureties to the payment bond. APAC entered into a subcontract with English on 9 September 2003 for the grading, erosion control, and grassing services of the Project. On 8 September 2003, English entered into a contract with Southern Seeding to perform grassing services on the Project. The subcontract between Southern Seeding and English contained, in pertinent part, the following provision:\nUnit prices herein quoted are based upon the assumption that the contract will be completed within time as specified in the specifications at time of bidding. Should our work be delayed beyond said time without fault on our part, unit prices herein quoted shall be equitably adjusted to compensate us for increased cost....\nNCDOT\u2019s provisions specified that the Project should have been completed by 1 July 2007, the date upon which Southern Seeding relied in preparing the equitable adjustment clause. Nowhere in the subcontract between Southern Seeding and English was the phrase \u201cequitable adjustment\u201d explicitly defined.\nSouthern Seeding began working on the Project on 26 September 2003. Through no fault of its own, Southern Seeding\u2019s work on the Project continued well past the Project\u2019s scheduled completion date. The record reveals that English\u2019s failure to properly complete the erosion work on time prior to seeding was responsible in some part for the delays.\nSouthern Seeding regularly sent English letters regarding the delays and increasing costs throughout their work on the Project. On 29 June 2006, Southern Seeding sent English a memo about the delays and cost increases, asserting that they would not be responsible for any liquidated damages charged to English for the delays. On 13 July 2006, Southern Seeding sent another memo to English regarding the extra expenses created by English\u2019s failures to complete the erosion work. The memo stated: \u201cWe have been put, and continue to be put to extreme extra expense in our work due to the manner in which the erosion control work has been managed.\u201d APAC was copied on this memo.\nOn 4 October 2007, in what the parties\u2019 refer to as the \u201cSupplemental Seeding\u201d agreement, APAC requested that Southern Seeding perform work outside of the original bid. On 24 October 2007 Southern Seeding sent another memo to English complaining of delays and price increases, and informing English that it was \u201ckeeping detailed records on all items, quantities, costs, etc. since July 1 [2007] in order to furnish the necessary information to make fair and equitable adjustments in unit prices.\u201d On 4 December 2007 Southern Seeding notified English of: (a) its intention to file a claim against them, (b) its plan to file a claim for extra costs for the Supplemental Seeding work from NCDOT, and (c) that it was keeping track of all costs incurred after 1 July 2007 for purposes of calculating and recovering an equitable adjustment.\nThe Project was not completed until 21 March 2008, over 250 days past 1 July 2007, the scheduled completion date. Southern Seeding performed roughly one-third of its work after 1 July 2007. On 24 March 2008 Southern Seeding notified English that it had completed work on the Project.\nSouthern Seeding demanded payment for work performed after the completion date. On 17 July 2008 it sent a letter to APAC informing them and their sureties that it would file a claim against the payment bond if English did not pay them for the Supplemental Seeding work and the work completed after the scheduled completion date. On 13 November 2008 English replied that it needed actual certified payrolls and invoices for work performed after the completion date before it could assess any additional compensation claim.\nOn 23 February 2009 Southern Seeding demanded: (a) payment for the Supplemental Seeding work, and (b) money owed because of work performed after the completion date. On 10 June 2009 English responded, offering Southern Seeding $35,424.44 for the Supplemental Seeding work and $2,300.00 for the work performed after the scheduled completion date. On 16 June 2009, Southern Seeding rejected the offer, and demanded $75,140.80 for the Supplemental Seeding work and $194,941.39 for the work performed after the completion date. On 30 June 2009, English sent a letter to Southern Seeding with a check for $77,440.80 in an effort to settle both claims: (a) the Supplemental Seeding work, and (b) the work performed after the completion date. On 6 July 2009 Southern Seeding returned and rejected the check, and notified English of Southern Seeding\u2019s intent to bring legal action.\nOn 23 September 2009, Southern Seeding filed a complaint in Guilford County Superior Court, claiming: (1) that English breached its subcontract with Southern Seeding by failing to pay Southern Seeding $194,941.39 under the equitable adjustment clause for the increased costs of materials, labor, and equipment accrued after 1 July 2007, and (2) that Liberty Mutual and Travelers are liable to Plaintiff for payment under the payment bond because of English\u2019s failure to compensate Southern Seeding for its work on the Project.\nAfter a bench trial, the trial court entered judgment denying Southern Seeding\u2019s requested relief, holding that \u201cEnglish was not obligated to equitably adjust Southern Seeding\u2019s unit prices for increased cost, if any, arising from working past 1 July 2007.\u201d Southern Seeding appealed the trial court\u2019s decision to this Court on 3 November 2010. This Court held \u201cthat the trial court erred in concluding that [Southern Seeding] [wa]s not entitled to an equitable adjustment,\u201d and \u201creverse[d] and remand[ed] to the trial court for further proceedings consistent with\u201d its opinion. Southern Seeding Serv. v. W.C. English, Inc.,_N.C. App._,_, 719 S.E.2d 211, 216 (2011).\nOn remand and following a bench trial on the merits, the trial court found that Southern Seeding\u2019s \u201cinvoice of 18 November 2008 represented a reasonable, equitable adjustment to the Subcontract to compensate Southern Seeding for its actual costs for work performed after 1 July 2007.\u201d Furthermore, the trial court held that \u201cEnglish\u2019s unreasonable refusal to equitably adjust the Subcontract, to compensate Southern Seeding for its actual costs for work performed after 1 July 2007, constitute^] material breach of the Subcontract, and proximately caused damages to Southern Seeding in the amount of $194,941.39.\u201d Accordingly, the court held that Southern Seeding \u201c[wa]s entitled to recover a money judgment against Defendants, jointly and severally, in the amount of $194,941.39, plus interest at the rate of eight percent (8%) per annum from 18 December 2008, until paid.\u201d The trial court\u2019s calculation of damages was based upon:\n(i) the escalation language in Paragraph 15 of the Subcontract, (ii) the actual production rate incurred by Southern Seeding\u2019s forces after 1 July 2007 (as distinct from Southern Seeding\u2019s work productivity prior to 1 July 2007, which was less productive and more costly), (iii) NCDOT\u2019s prior approval of a $45.00 labor/equipment rate per man-hour for Southern Seeding\u2019s forces to overrun items, and (iv) English\u2019s prior agreement to a $45.97 labor/equipment rate per man-hour for Southern Seeding\u2019s extra work performed by Southern Seeding for English (for which NCDOT was not responsible).\nIn addition, the trial court held that since Southern Seeding \u201cis the prevailing party in this action as defined in N.C. Gen. Stat. \u00a7 44A-35 and there was an unreasonable refusal by English to fully resolve the matter which constituted the basis of the suit[,]\u201d English was required, pursuant to N.C. Gen. Stat. \u00a7 44A-35 to pay Southern Seeding reasonable attorneys\u2019 fees \u201cin the total amount of $24,310.50[.]\u201d\nII. Jurisdiction\nJurisdiction rests in this Court pursuant to N.C. Gen. Stat. \u00a7 7A-27(b) (2011), as Appellants appeal from a final judgment of the Superior Court as a matter of right.\nIII. Analysis\nEnglish argues that the trial court erred: (1) by awarding damages to Southern Seeding \u201cthat were speculative and not supported by the evidence\u201d and (2) by awarding attorneys\u2019 fees to Southern Seeding under N.C. Gen. Stat. \u00a7 44A-35, \u201cbecause neither the principal nor the sureties failed to make payment and English is not a party to the bond.\u201d We disagree.\nA. Equitable Adjustment\nAs English acknowledges, North Carolina law does not provide a legal definition for the term \u201cequitable adjustment.\u201d The contract between the parties is similarly silent as to the term\u2019s meaning. Nothing in the record suggests the parties implicitly or explicitly contemplated the methodology which was to be used in calculating any \u201cequitable adjustment.\u201d\nAt trial, Ralph Stout, the president of Southern Seeding, testified that, in calculating the \u201cequitable ad[justment,\u201d he compared his original bid amount for the per-unit costs with the per-unit costs after 1 July 2007. Mr. Stout testified that Southern Seeding sought the following: the per-unit costs of doing work after 1 July 2007 minus the original per-unit bid amount.\nJohn Jordan, English\u2019s senior vice president, in turn testified that he believed Southern Seeding\u2019s claim was for damages incurred after 1 July 2007 and that he defined \u201cequitable adjustment\u201d as \u201cthe difference in the cost of [] materials.\u201d Mr. Jordan, while silent on the matter of the methodology used to determine the equitable adjustment, testified that he thought the rates used in Southern Seeding\u2019s calculation for materials and labor were \u201coverstated.\u201d He did testify, however, that the quantities were \u201cprobably accurate.\u201d Thus, it appears the parties disagreed on the rates used in the calculation, not the calculation methodology itself.\n\u201cEquitable adjustment\u201d can be defined by the parties to a contract. Normally, standard form contracts or government contracts allocate the risks of an equitable adjustment to the parties by providing an accounting methodology by which the parties can calculate the amount of any adjustment. However, in the absence of such express terms, as is the case here, the courts are left to examine industry custom, usage, and practice in determining the method of damage calculation.\nThe American Institute of Architects (\u201cAIA\u201d) defines \u201cequitable adjustment\u201d as a remedy for contract breach that is calculated as \u201ca price based upon cost plus overhead and profit.\u201d 1 Jonathan J. Sweet, Sweet on Construction Industry Contracts Major AIA Documents \u00a7 13.03 (5th ed. 2009). The \u201cGovernment Contracts Cyclopedic Guide to Law, Administration, [and] Procedure\u201d defines \u201cequitable adjustment\u201d as \u201cthe difference between the cost of the work required by the contract and the cost of the changed work, plus profit, whether or not the fair market value is the same. The object is to make the contractor whole.\u201d 4 John Cosgrove McBride & Thomas J. Touhey, Government Contracts Cyclopedic Guide to Law, Administration, Procedure (Walter A. I. Wilson ed. 2009). This treatise further notes that the \u201cterm \u2018equitable adjustment\u2019 has a long history and has become a term of art in government contracts. With respect to profit, the consistent practice is to allow it on work actually done[.]\u201d Id.\nRegarding delay damages, the treatise holds that \u201c[i]n a suit for breach of contract grounded on delay caused by the government\u2019s defective specifications, the contractor\u2019s recovery is not limited to a time extension, but encompasses whatever monetary damages the contractor can prove that resulted from the government fault.\" Id. The treatise goes into detail regarding how an equitable adjustment is to be calculated:\nAs a general proposition, a contractor can recover under the changes clause all of the increases in cost which can be shown to result directly from the defects or extra corrective work required. This recovery can include costs of delays directly resulting from government errors, loss of labor efficiency, disruption of the work sequence and acceleration costs. Recovery of any of these costs is subject to proof of the relationship of the claimed costs to the work as changed. . . .\nThe amount of an equitable adjustment is a factual issue to be resolved insofar as possible by ascertaining the actual cost to the contractor, with the addition of a reasonable and customary allowance for profit. . ..\nAs a general rule, the proper method for computing an equitable adjustment in price is the reasonable cost of the extra labor and materials plus appropriate overhead markups, plus profit. The actual costs incurred by the contractor are presumptively reasonable and are regarded as sufficient to establish a prima facie case for recovery.\nId. The treatise later notes that \u201c[w]hen an equitable adjustment is made, it must include overhead as an element.\u201d Id. In summary, an equitable adjustment is a breach of contract remedy ascertained via a factual analysis of the actual costs to the contractor of the additional or un-contracted-for work, including overhead and a reasonable profit. Id.\nThis methodology is consistent with that utilized by Southern Seeding and the trial court to calculate the equitable adjustment due Southern seeding. Indeed, English does not ask this Court to establish a standard by which an equitable adjustment should be calculated in North Carolina. Thus, in the absence of evidence in the record that the term \u201cequitable adjustment\u201d had an agreed upon meaning, and in light of North Carolina law\u2019s silence on a legal definition for the term, we must treat Southern Seeding\u2019s award as the result of a breach of contract damages calculation. It appears from the record that Southern Seeding, and the trial court, utilized a \u201cbenefit of the bargain\u201d method under the guise of calculating an \u201cequitable adjustment.\u201d And since English only argues on appeal that the rates and dates used in this calculation are not supported by competent evidence, we review on appeal only whether competent evidence exists to support the factual conclusions of the trial court\u2019s damages calculation, not the methodology itself.\nB. Competent evidence exists to support the trial court\u2019s finding that Southern Seeding\u2019s calculation of costs for work performed after 1 July 2007 is correct.\nWe review conclusions of law from a bench trial de novo. Town of Green Level v. Alamance County, 184 N.C. App. 665, 668-69, 646 S.E.2d 851, 854 (2007). The trial court\u2019s findings of fact are binding on appeal if there is competent evidence to support them. Biemann and Rowell Co. v. Donohoe Cos., Inc., 147 N.C. App. 239, 242, 556 S.E.2d 1, 4 (2001). Competent evidence is evidence that a reasonable mind might accept as adequate to support the finding. Eley v. Mid/East Acceptance Corp. of N.C., Inc., 171 N.C. App. 368, 369, 614 S.E.2d 555, 558 (2005).\nOn appeal, English contends that the trial court erred in relying on the equitable adjustment cost calculation Southern Seeding submitted because: (1) Southern Seeding used the wrong date in their costs calculation, (2) Southern Seeding failed to present evidence to prove its calculation accurately reflected its actual costs after 1 July 2007, and (3) Southern Seeding\u2019s calculation includes items other than materials and costs. Since these are questions of fact, our review on appeal is limited to a determination of whether there was competent evidence before the trial court to support its findings. Biemann, 147 N.C. App. at 242, 556 S.E.2d at 4. Thus, the issue in this case can be stated as follows: Is there competent evidence to support the trial court\u2019s finding that Southern Seeding\u2019s cost calculation is correct? The record answers this question in the affirmative.\nThe trial court found:\nSouthern Seeding\u2019s invoice of 18 November 2008 represented a reasonable, equitable adjustment to the Subcontract to compensate Southern Seeding for its actual costs for work performed after 1 July 2007, based on (i) the escalation language in Paragraph 15 of the Subcontract, (ii) the actual production rate incurred by Southern Seeding\u2019s forces after 1 July 2007 (as distinct from Southern Seeding\u2019s work productivity prior to I July 2007, which was less productive and more costly), (iii) NCDOT\u2019s prior approval of a $45.00 labor/equipment rate per man-hour for Southern Seeding\u2019s forces to overrun items, and (iv) English\u2019s prior agreement to a $45.97 labor/equipment rate per man-hour for Southern Seeding\u2019s extra work performed by Southern Seeding for English (for which NCDOT was not responsible).\nPlaintiff\u2019s Exhibit 30, a spreadsheet specifically detailing an itemized account of all of Southern Seeding\u2019s actual costs of materials and labor incurred after 1 July 2007, accompanied the invoice the court referenced above. The spreadsheet includes clear, detailed lists of the amount of materials used, how much per unit the materials had cost, when the materials were expended, and the amount and rate of man-hours utilized on which dates.\nThe trial court clearly found this invoice and the accompanying spreadsheet as competent evidence to show: (1) Southern Seeding correctly used 1 July 2007 as its starting date, (2) the calculation represented actual costs, and (3) the calculation properly included only material, labor, and costs. The spreadsheet details each of these items with clarity and specificity.\n\u201cWhen we review an order from a non-jury trial, \u2018we are strictly limited to determining whether the trial judge\u2019s underlying findings of fact are supported by competent evidence, in which event they are conclusively binding on appeal....\u2019\u201d Holloway v. Holloway,_N.C. App._,_., 726 S.E.2d 198, 204 (2012) (quoting State v. Williams, 362 N.C. 628, 632, 669 S.E.2d 290, 294 (2008)). The 18 November 2008 invoice, and the accompanying itemized accounting of all of Southern Seeding\u2019s actual costs incurred after 1 July 2007, is evidence that a reasonable mind could accept as adequate to support the trial court\u2019s finding that Southern Seeding\u2019s cost calculation is correct. Therefore, we affirm.\nC. The trial court correctly determined that English owed attorneys\u2019 fees to Southern Seeding.\nThis Court reviews a trial court\u2019s award of attorneys\u2019 fees for an abuse of discretion. Bruning & Federle Mfg. Co. v. Mills, 185 N.C. App. 153, 155, 647 S.E.2d 672, 674, disc. review denied, 362 N.C. 86, 655 S.E.2d 837 (2007). Whether an award of attorneys\u2019 fees is allowable pursuant to statute is reviewable de novo. Id. at 156, 647 S.E.2d at 674.\nThe trial court awarded attorneys\u2019 fees to Southern Seeding in the amount of $24,310.50 pursuant to N.C. Gen. Stat. \u00a7 44A-35, after finding that Southern Seeding was \u201cthe prevailing party in this action . . . and there was an unreasonable refusal by English to fully resolve the matter which constituted the basis of the suit.\u201d English argues it does not owe attorneys\u2019 fees \u201cbecause neither the principal nor the sureties failed to make payment and English is not a party to the bond.\u201d We disagree.\nSince English does not contest the amount of attorneys\u2019 fees, but only whether they should have been awarded pursuant to N.C. Gen. Stat. \u00a7 44A-35, we review whether the trial court\u2019s award of attorneys\u2019 fees was permissible under that statute de novo as a question of law.\nN.C. Gen. Stat. \u00a7 44A-35 (2011) states, in pertinent part:\nIn any suit brought or defended under the provisions of Article 2 or Article 3 of this Chapter, the presiding judge may allow a reasonable attorneys\u2019 fee to the attorney representing the prevailing party. This attorneys\u2019 fee is to be taxed as part of the court costs and be payable by the losing party upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter which constituted the basis of the suit or the basis of the defense. For purposes of this section, \u201cprevailing party\u201d is a party plaintiff or third party plaintiff who obtains a judgment of at least fifty percent (50%) of the monetary amount sought in a claim ....\nN.C. Gen. Stat. \u00a7 44A-35. Thus, the statute requires the satisfaction of two elements for attorneys\u2019 fees to be properly awarded: (1) the party so awarded must be the prevailing party, and (2) the party being required to pay attorneys\u2019 fees must have unreasonably refused to resolve the matter.\nEnglish does not contend that Southern Seeding was not the prevailing party, but does proffer three arguments as to why an award of attorneys\u2019 fees was inappropriate. First, it contends, \u201cthe obligations of the payment bond are not triggered until there has been a default under the bond, which has not occurred here.\u201d Second, English claims that they cannot be ordered to pay attorneys\u2019 fees because they are not \u201ca party to the payment bond[.]\u201d Finally, English argues that it does not owe attorneys\u2019 fees because it was not obligated to pay the equitable adjustment funds until the trial court entered the Amended Judgment, and thus English did not unreasonably refuse to settle. Each contention is without merit.\nEnglish\u2019s first two arguments are misplaced. Though the payment bond is relevant to matters of payment of damages and equitable adjustment following a breach of contract, it has no bearing on an award of attorneys\u2019 fees pursuant to N.C. Gen. Stat. \u00a7 44A-35. The statute is clear regarding the only elements that must be met for an award: (1) the party so awarded must be the prevailing party, and (2) the party being required to pay the fees must have unreasonably refused to resolve the matter that constituted the suit. N.C. Gen. Stat. \u00a7 44A-35. Since the trial court found that each of these elements was satisfied, English\u2019s arguments with respect to the payment bond are misplaced.\nEnglish\u2019s third and final argument is that it did not unreasonably refuse to settle because it was not obligated to pay the equitable adjustment funds until the trial court entered the Amended Judgment. Put differently, English contends that their duty to settle did not arise until they were ordered by the court to pay Southern Seeding damages. This notion is inconsistent with North Carolina law.\nIn Terry\u2019s Floor Fashions, Inc. v. Crown General Contractors, Inc., a property owner and a general contractor failed to pay a subcontractor for work the sub-contractor had performed. 184 N.C. App. 1, 6, 645 S.E.2d 810, 814 (2007). After its attempts to get paid were met with dismissiveness by the general contractor and property owner, the sub-contractor filed suit against both of them in order to recover. Id. at 7, 645 S.E.2d at 814. After winning the lawsuit in 2005, the sub-contractor \u201cfiled a motion to recover attorneys fees pursuant to N.C. Gen. Stat. \u00a7 44A-35. In support of its motion, [the subcontractor] alleged that defendant [property owner] had \u2018unreasonably refus[ed] to fully resolve [the] matter which constituted the basis of this suit.\u2019 \u201d Id. at 8, 645 S.E.2d at 815 (third and fourth alterations in original).\nAs evidence of the defendants\u2019 unreasonable refusal to settle the matter, the sub-contractor, and subsequently the trial court, relied upon correspondence between the parties conducted prior to judgment, not actions taken after judgment. Id. at 8-9, 645 S.E.2d at 815-16. Specifically, the trial court noted that two letters written before the trial court\u2019s judgment by the property owner indicating its refusal to settle the matter manifested evidence of defendants\u2019 unreasonable refusal to settle. Id.\nAfter considering the trial court\u2019s findings of fact regarding the defendants\u2019 pre-trial refusals to settle, this Court affirmed the ruling of the trial court, noting that the defendants\u2019 actions prior to judgment manifested an unreasonable refusal to settle and that, as a result, \u201cthe trial court\u2019s award of attorneys fees was the product of a reasoned decision.\u201d Id. at 18, 645 S.E.2d at 821.\nThe facts in the case sub judice are very similar to those in Terry. Southern Seeding, like the sub-contractor in Terry, was not appropriately paid for work it performed for the defendants. After failed attempts to secure payment, Southern Seeding, like the sub-contractor in Terry, took the matter to trial. The defendants in Terry, like those in the facts at hand, lost at trial and were required to pay attorneys\u2019 fees under N.C. Gen. Stat. \u00a7 44A-35. And just as the defendants in Terry were found to have unreasonably refused to settle specifically because of their actions taken or not taken prior to judgment, so also is English guilty of unreasonably refusing to settle because of actions taken or not taken prior to judgment. Thus, English\u2019s contention\u2014 that it was not obligated to pay the equitable adjustment funds until the trial court entered the Amended Judgment and thus did not unreasonably refuse to settle \u2014 is without merit.\nAccordingly, we hold that the trial court\u2019s award of attorneys\u2019 fees to Southern Seeding was permissible pursuant to N.C. Gen. Stat. \u00a7 44A-35. The judgment of the trial court is\nAFFIRMED.\nJudges HUNTER, Robert C. and CALABRIA concur.\n. In making these demands English seems to have given an example of what it considered to be an appropriate calculation of cost increases, or at least an example of what figures it would need to make an appropriate calculation.\n. Southern Seeding appears to have received satisfactory payment for the Supplemental Seeding work, as it does not argue the issue on appeal. Evidence of such satisfaction in the record is scant, though Southern Seeding concedes in its brief that \u201cEnglish paid ... for the Overrun Tasks and Extra Work Tasks[.]\u201d\n. This Court also held that \u201cLiberty Mutual and Travelers Casualty [were] liable to [Southern Seeding] as sureties on the payment bond.\u201d Southern Seeding Serv.,_ N.C. App. at_, 719 S.E.2d at 217.\n. English observes that \u201c[u]nfortunately, there are no North Carolina cases that provide any guidance on how to apply an equitable adjustment clause for labor and materials cost increases.\u201d", "type": "majority", "author": "HUNTER, JR., Robert N., Judge." } ], "attorneys": [ "Conner Gwyn Schenck, PLLC, by A. Holt Gwyn and Timothy R. Wyatt, for Plaintiff-appellee.", "Ragsdale Liggett, PLLC, by William W. Pollock and Amie C. Sivon, for Defendant-appellants." ], "corrections": "", "head_matter": "SOUTHERN SEEDING SERVICE, INC. v. W.C. ENGLISH, INC.; LIBERTY MUTUAL INSURANCE COMPANY; AND TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA\nNo. COA12-636\nFiled 4 December 2012\nCosts \u2014 breach of contract \u2014 cost calculation \u2014 attorney fees\nThe trial court did not err in a breach of contract case by awarding damages and attorney fees to plaintiff. The 18 November 2008 invoice and the accompanying itemized accounting of all of plaintiffs actual costs incurred after 1 July 2007 were evidence that a reasonable mind could accept as adequate to support the trial court\u2019s finding that plaintiff\u2019s cost calculation was correct. Further, the award of attorney fees was permissible pursuant to N.C.G.S. \u00a7 44A-35.\nAppeal by defendants from Amended Judgment entered 8 March 2012 by Judge Shannon R. Joseph in Guilford County Superior Court. Heard in the Court of Appeals 24 October 2012.\nConner Gwyn Schenck, PLLC, by A. Holt Gwyn and Timothy R. Wyatt, for Plaintiff-appellee.\nRagsdale Liggett, PLLC, by William W. Pollock and Amie C. Sivon, for Defendant-appellants." }, "file_name": "0090-01", "first_page_order": 100, "last_page_order": 111 }