{ "id": 6787756, "name": "JOHN WM. BROWN CO., INC., Plaintiff v. STATE EMPLOYEES' CREDIT UNION, Defendant", "name_abbreviation": "John Wm. Brown Co. v. State Employees' Credit Union", "decision_date": "2013-12-03", "docket_number": "No. COA13-388", "first_page": "264", "last_page": "269", "citations": [ { "type": "official", "cite": "231 N.C. App. 264" } ], "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": "636 S.E.2d 327", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12637002 ], "year": 2006, "pin_cites": [ { "page": "329" } ], "opinion_index": 0, "case_paths": [ "/se2d/636/0327-01" ] }, { "cite": "294 F. Supp. 2d 807", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 9297005 ], "year": 2003, "pin_cites": [ { "page": "814-15", "parenthetical": "providing claims of a surety's bad faith in settlement should be asserted as a defense in the surety's action for indemnification" } ], "opinion_index": 0, "case_paths": [ "/f-supp-2d/294/0807-01" ] }, { "cite": "396 S.E.2d 626", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "628-29" } ], "opinion_index": 0 }, { "cite": "100 N.C. App. 367", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526820 ], "year": 1990, "pin_cites": [ { "page": "370" } ], "opinion_index": 0, "case_paths": [ "/nc-app/100/0367-01" ] }, { "cite": "199 S.E. 83", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1938, "opinion_index": 0 }, { "cite": "214 N.C. 288", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8630161 ], "year": 1938, "opinion_index": 0, "case_paths": [ "/nc/214/0288-01" ] }, { "cite": "558 S.E.2d 197", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "198" } ], "opinion_index": 0 }, { "cite": "148 N.C. App. 208", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9364908 ], "year": 2001, "pin_cites": [ { "page": "209-10" } ], "opinion_index": 0, "case_paths": [ "/nc-app/148/0208-01" ] }, { "cite": "180 N.C. App. 202", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8240648 ], "year": 2006, "pin_cites": [ { "page": "205-06" } ], "opinion_index": 0, "case_paths": [ "/nc-app/180/0202-01" ] }, { "cite": "682 S.E.2d 726", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2009, "pin_cites": [ { "page": "733" } ], "opinion_index": 0 }, { "cite": "199 N.C. App. 687", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4169884 ], "year": 2009, "pin_cites": [ { "page": "695" } ], "opinion_index": 0, "case_paths": [ "/nc-app/199/0687-01" ] } ], "analysis": { "cardinality": 636, "char_count": 13410, "ocr_confidence": 0.698, "pagerank": { "raw": 5.0011153170616546e-08, "percentile": 0.315035934527457 }, "sha256": "4d8d0fdbf22a2ff38840abc42cd79822151af65e45427008098a0a754e01b3e7", "simhash": "1:05875d58180dc538", "word_count": 2220 }, "last_updated": "2023-07-14T19:32:40.304740+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges McGEE and DILLON concur." ], "parties": [ "JOHN WM. BROWN CO., INC., Plaintiff v. STATE EMPLOYEES\u2019 CREDIT UNION, Defendant" ], "opinions": [ { "text": "McCullough, Judge.\nPlaintiff John Wm. Brown Co., Inc. (\u201cJWBC\u201d) appeals from an order granting defendant State Employees\u2019 Credit Union\u2019s (\u201cSECU\u201d) Motion to Approve and Enforce Settlement Agreement and Release. For the following reasons, we affirm.\nI. Background\nThis case arises out of JWBC\u2019s service as the general contractor for the construction of the SECU branch office on Poole Road in Raleigh, an LEED project.\nJWBC and SECU entered into a Standard Form of Agreement Between Owner and Contractor (the \u201cContract\u201d) for JWBC to serve as the general contractor for the project on 18 January 2008. In accordance with the terms of the Contract and in connection with a preexisting Agreement of Indemnity under which JWBC and individuals agreed to indemnify Great American Insurance Company (\u201cGAIC\u201d), JWBC obtained both a Labor and Material Payment Bond and a Performance Bond from GAIC on 18 March 2008. Each bond covered the contract amount of $2,374,000.\nAfter significant delays, a notice to proceed was issued and the project commenced in December 2008. Pursuant to the terms of the Contract, JWBC was required to achieve substantial completion of the project within 270 days of commencement. The project, however, was not completed on time.\nIn January 2010, GAIC began receiving bond claims from subcontractors on the project who alleged they had not been paid by JWBC. GAIC made payments on these bond claims in excess of $900,000.\nWhen JWBC and the individual indemnitors failed to indemnify GAIC in accordance with the Agreement of Indemnity, GAIC filed suit against JWBC and individual indemnitors for breach of Agreement of Indemnity in the Middle District of North Carolina on 2 September 2010 (the \u201cFederal Court Action\u201d). In the Federal Court Action, GAIC sought reimbursement of over $600,000 paid to subcontractors on the bond claims.\nOn 28 April 2011, JWBC and SECU began communications regarding close-out of the project. In the course of these communications, JWBC submitted claims to SECU alleging SECU owed additional funds for change order work. By email on 21 July 2011, SECU acknowledged that it owed JWBC the remaining contract balance of $195,637 that it was holding as a retainage on the project; however, SECU denied that it owed any additional funds for change order work and advised JWBC that it felt it \u201calready went above and beyond being fair\u201d by not asserting over $60,000 in liquidated damages against JWBC for delays in completion of the project, paying over $200,000 in additional funds for change order work when JWBC substituted subcontractors, and by not seeking to back charge JWBC for extra work required for LEED certification. Thereafter, in accordance with the terms of a Non-Waiver and Preservation Agreement entered into by the parties in late August 2011, SECU paid the remaining contract balance of $197,637 directly to GAIC to reduce JWBC\u2019s liability under the Agreement of Indemnity. The parties\u2019 remaining claims and defenses were preserved.\nPrior to the filing of the present action, SECU, JWBC, and GAIC met on several occasions to discuss resolution of all disputes amongst the parties. During the course of these meetings, SECU offered $100,000 to JWBC to settle all claims between them. JWBC, however, rejected the offer and filed this breach of contract action against SECU in Wake County Superior Court on 31 October 2011. In the complaint, JWBC sought compensation for \u201ccompleted extra and/or change order work[,]\u201d alleging that SECU had not remitted full payment for the project. SECU answered the complaint denying liability, asserting affirmative defenses, and counterclaiming for liquidated and compensatory damages in excess of $100,000.\nAfter a year of discovery, continued settlement negotiations, and court-ordered mediation, SECU renewed its offer to settle the dispute for $100,000. At that time, GAIC exercised its assignment rights under the Agreement of Indemnity and unilaterally accepted the $100,000 settlement offer over JWBC\u2019s objection.\nA written Settlement Agreement and Release (the \u201cAgreement\u201d) was entered into by SECU and GAIC on 3 December 2012. On the same day, SECU filed a Motion to Approve and Enforce Settlement Agreement and Release in Wake County Superior Court. SECU\u2019s motion came on for hearing on 7 January 2013 before the Honorable Paul Ridgeway. On 11 January 2013, an order granting SECU\u2019s motion was entered. JWBC filed notice of appeal on 29 January 2012.\nII. Discussion\nOn appeal, JWBC contends the trial court erred in granting SECU\u2019s motion to approve and enforce the Agreement because the doctrines of laches and equitable estoppel bar the enforcement of the Agreement over its objection. We disagree.\nStandard of Review\nA motion to approve and enforce a settlement agreement is treated as a motion for summary judgment when reviewed by this Court. See Hardin v. KCS International, Inc., 199 N.C. App. 687, 695, 682 S.E.2d 726, 733 (2009). Therefore, we review the trial court\u2019s order de novo to determine if there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law. Litvak v. Smith, 180 N.C. App. 202, 205-06, 636 S.E.2d 327, 329 (2006).\nLaches\n\u201cLaches\u201d is defined as \u201c[t]he equitable doctrine by which a court denies relief to a claimant who has unreasonably delayed or been negligent in asserting the claim, when that delay or negligence has prejudiced the party against whom relief is sought.\u201d Black\u2019s Law Dictionary 879 7th ed. 1999). As this Court has repeatedly stated,\nTo establish the affirmative defense of laches, our case law recognizes that 1) the doctrine applies where a delay of time has resulted in some change in the condition of the property or in the relations of the parties; 2) the delay necessary to constitute laches depends upon the facts and circumstances of each case; however, the mere passage of time is insufficient to support a finding of laches; 3) the delay must be shown to be unreasonable and must have worked to the disadvantage, injury or prejudice of the person seeking to invoke the doctrine of laches; and 4) the defense of laches will only work as a bar when the claimant knew of the existence of the grounds for the claim.\nMMR Holdings, LLC v. City of Charlotte, 148 N.C. App. 208, 209-10, 558 S.E.2d 197, 198 (2001).\nIn this case, JWBC argues the doctrine of laches applies to bar enforcement of the Agreement because GAIC, with SECU\u2019s express knowledge, sat on its right of assignment under the Agreement of Indemnity for over a year while litigation commenced. JWBC further claims it was prejudiced as a result of GAIC\u2019s delay because it spent substantial amounts of time and money pursuing the litigation. .\nIn support of its position, JWBC cites numerous cases to explain the doctrine of laches. Yet, we find the cases cited by JWBC distinguishable from the present case in two respects. First, in each of the cases cited by JWBC, the doctrine of laches was asserted as an affirmative defense to the filing of a lawsuit. See e.g. Teachey v. Gurley, 214 N.C. 288, 199 S.E. 83 (1938). In the present case, however, JWBC asserts the doctrine of laches not as a bar to the lawsuit, which JWBC itself filed against SECU, but as a bar to the enforcement of the Agreement settling the lawsuit entered into between SECU and GAIC. Second, the delay that JWBC claims resulted in prejudice was not the result of any act by SECU, but the failure of GAIC to exercise its assignment rights under the Agreement of Indemnity for over a year.\nWe have been unable to find any case where the doctrine of laches has been applied in a scenario similar to the one now before this Court. Given the unique posture in which the doctrine of laches arises and the fact that SECU was not the cause of the delay, we hold the doctrine of laches has no applicability in the present case and does not bar enforcement of the Agreement by SECU.\nNevertheless, assuming arguendo the doctrine of laches may be applied to preclude the exercise of a right of assignment by a third party in order to bar the enforcement of a settlement, the result in the present case would not be different. The language in the Agreement of Indemnity is clear, \u201c[n]o failure or delay by [GAIC] to exercise any right, power or remedy provided pursuant to this Agreement shall impair or be construed to be a waiver of [GAIC\u2019s] ability or entitlement to exercise any other right, power, or remedy.\u201d\nEquitable Estoppel\n\u201cEquitable estoppel\u201d is defined as \u201c[a] defensive doctrine preventing one party from taking unfair advantage of another when, through false language or conduct, the person to be estopped has induced another person to act in a certain way, with the result that the other person has been injured in some way.\u201d Black\u2019s Law Dictionary 571 (7th ed. 1999). As this Court has recognized,\n[t]he essential elements of estoppel are (1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; and (3) knowledge, actual or constructive, of the real facts. The party asserting the defense must have (1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice.\nParker v. Thompson-Arthur Paving Co., 100 N.C. App. 367, 370, 396 S.E.2d 626, 628-29 (1990).\nSimilar to its laches argument, JWBC argues the doctrine of equitable estoppel bars the enforcement of the Agreement between SECU and GAIC because GAIC was aware of SECU\u2019s settlement offer to JWBC but waited for over a year before it exercised its right of assignment and unilaterally accepted the offer. In the meantime, JWBC incurred the expenses of litigation. JWBC further argues SECU acquiesced and facilitated GAIC\u2019s shift in position to the detriment of JWBC and should not be able to benefit from GAIC\u2019s wrongful conduct.\nFor the same reasons the doctrine of laches is of no consequence in the present case, we hold the doctrine of equitable estoppel does not bar the enforcement of the Agreement by SECU. As noted above, the act complained of is not that of SECU, but the delay of GAIC in asserting its right of assignment under the Agreement of Indemnity. Moreover, the non-waiver provision in the Agreement of Indemnity explicitly reserves GAIC\u2019s right of assignment.\nIII. Conclusion\nFor the reasons discussed above, we affirm the trial court\u2019s order granting SECU\u2019s motion to approve and enforce the Agreement. As the trial court held \u201c[t]he proper forum for JWBC\u2019s arguments [concerning the exercise of GAIC\u2019s right to assignment under the Agreement of Indemnity] is in the [Federal Court Action.]\u201d See e.g. Bell BCI Co. v. Old Dominion Demolition Corp., 294 F. Supp. 2d 807, 814-15 (E.D. Va. 2003) (providing claims of a surety\u2019s bad faith in settlement should be asserted as a defense in the surety\u2019s action for indemnification).\nAffirmed.\nJudges McGEE and DILLON concur.\n. JWBC and SECU dispute why the project was not timely completed.\n. The difference in the amount paid by GAtC on the bond claims and the amount sought in the Federal Court Action is the result of payments by SECU directly to GAIC.\n. We note the trial court explicitly reserved \u201cthe rights, claims, and and/or defenses of any party, including but not limited to JWBC, GAIC, and/or the individual [ijndemnitors, in the Federal Court Action.\u201d Moreover, following entry of the trial court\u2019s order in this action, JWBC amended its pleadings in the Federal Court Action to assert claims against GAIC for breach of contract and breach of fiduciary duty.", "type": "majority", "author": "McCullough, Judge." } ], "attorneys": [ "SafranLaw Offices, by Lindsey E. Powell, for plaintiff.", "Bailey & Dixon, L.L.P., by David S. Wisz, for defendant." ], "corrections": "", "head_matter": "JOHN WM. BROWN CO., INC., Plaintiff v. STATE EMPLOYEES\u2019 CREDIT UNION, Defendant\nNo. COA13-388\nFiled 3 December 2013\n1. Laches \u2014 bar to enforcement of settlement agreement\u2014 separate lawsuit \u2014 not applicable\nThe doctrine of laches was not applicable and did not bar enforcement of the. settlement agreement by defendant (SECU) where plaintiff (JWBC) asserted laches not as a bar to the lawsuit, which JWBC itself filed against SECU, but as a bar to the enforcement of the agreement settling the lawsuit entered into between SECU and Great American Insurance Company (GAIC), which had supplied labor and material bonds. Moreover, the delay that JWBC claims resulted in prejudice was not the result of any act by SECU, but the failure of GAIC to exercise its assignment rights under the indemnity agreement. Nevertheless, assuming the doctrine of laches was applicable, the result in this case would not be different under the language in the agreement.\n2. Estoppel \u2014 equitable\u2014enforcement of settlement agreement \u2014 act of third party\nThe doctrine of equitable estoppel did not bar the enforcement of a settlement agreement where the act complained of was not that of defendant (SECU), but the delay of Great American Insurance Company (GAIC), the bonding company, in asserting its right of assignment under an indemnity agreement. Moreover, the non-waiver provision in the Agreement of Indemnity explicitly reserved GAIC\u2019s right of assignment.\nAppeal by plaintiff from order entered 11 January 2013 by Judge Paul Ridgeway in Wake County Superior Court. Heard in the Court of Appeals 10 September 2013.\nSafranLaw Offices, by Lindsey E. Powell, for plaintiff.\nBailey & Dixon, L.L.P., by David S. Wisz, for defendant." }, "file_name": "0264-01", "first_page_order": 274, "last_page_order": 279 }