N.C. Court of Appeals News!

N.C. Court of Appeals holds claim of lien invalid for contract implied in law or Quantum Meruit claim!

A recent ruling by the North Carolina Court of Appeals limits mechanics’ lien rights to contractors who have an express contract, or a contract implied in fact, with the property owner.

The case, Waters Edge Builders, LLC v. Longa, was appealed from the District Court in Watauga County. The plaintiff, a contractor, installed a staircase in the defendant’s home at the defendant’s request. The contractor then billed the homeowner for a price the homeowner disputed as too high. Because the parties had no written contract or clear verbal agreement on price, no express contract or contract implied in fact existed. Instead, the plaintiff’s claim in court was for Quantum Meruit, also known as unjust enrichment. Under the theory of Quantum Meruit, one who provides services or goods to another at his or her request is entitled to recover the reasonable value of said goods or services.

In trial, the contractor was successful on its Quantum Meruit claim and also prevailed on its claim of lien. The defendant homeowner appealed. The court of appeals upheld the judgment on the Quantum Meruit; however, the court overturned the judgment on plaintiff’s lien claim. In arriving at its decision, the Court ruled that an enforceable contract agreement must exist in order for one to establish a valid claim of lien under N.C.G.S. §44A-8. The plaintiff’s establishment of a claim for unjust enrichment was not sufficient to prevail on its claim of lien.

If you have any questions about this topic or any other legal issue, please contact Caroline Lindsey at (919) 277-2541 or byemail!