JOHNSON BROS. v. CITY OF CHARLOTTE, 2024 NCBC 37

STATE OF NORTH CAROLINA
MECKLENBURG COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23CVS002076-590
JOHNSON BROS. CORPORATION,
A SOUTHLAND COMPANY,
Plaintiff,
v.
CITY OF CHARLOTTE,
Defendant.
ORDER AND OPINION ON
PLAINTIFF’S MOTION FOR
RECONSIDERATION OR, IN THE
ALTERNATIVE, TO AMEND THE
COMPLAINT
1. 	THIS 	MATTER 	is 	before 	the 	Court 	upon 	Plaintiff 	Johnson 	Bros.
Corporation, 	a 	Southland 	Company’s 	(“JBC”) 	Motion 	for 	Reconsideration 	(the
“Motion to Reconsider”) or, in the Alternative, to Amend the Complaint (the “Motion
to Amend”; together, the “Motions”) pursuant to Rules 54(b) and 15(a), respectively,
of the North Carolina Rules of Civil Procedure (the “Rule(s)”) in the above-captioned
case.1
2. 	Having considered the Motions, the parties’ briefs in support of and in
opposition to the Motions, the relevant pleadings, and the arguments of counsel at
the hearing on the Motions, the Court, in the exercise of its discretion, hereby
GRANTS in part and DENIES in part the Motions as set forth below.
Robinson Bradshaw & Hinson, P.A., by Edward F. Hennessey, IV,
Margaret R. McLoughlin, and Mark Hiller, and Cokinos Young, by John
P. DiBiasi and Branson Rogers, for Plaintiff Johnson Bros. Corporation,
a Southland Company.
1 (Pl.’s Mot. Recons. or, in the Alt., Amend Compl. [hereinafter, the “Mots.”], ECF No. 105.)
Johnson Bros. Corp. v. City of Charlotte, 2024 NCBC 37.

Hamilton Stephens Steele + Martin, PLLC, by Rebecca K. Cheney,
Bentford E. Martin, and Graham B. Morgan, for Defendant City of
Charlotte.
Bledsoe, Chief Judge.
I.
FACTUAL AND PROCEDURAL BACKGROUND
3. 	On 31 January 2023, JBC initiated this action by requesting and obtaining
the issuance of a summons and permission from the Court to file its complaint within
20 days thereafter under Rule 3(a).2 JBC then timely filed its original Complaint on
20 February 20233 and thereafter filed its First Amended Complaint on 12 April
2023.4 In the First Amended Complaint, JBC asserted ten claims against Defendant
City of Charlotte (the “City”), including claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, and subcontractor pass-through
claims (the “Contract Claims”).5
4. 	On 1 June 2023, the City filed its Motions to Dismiss, Answer to First
Amended Verified Complaint and Counterclaim, seeking, in part, the dismissal of all
2 (Application and Order Extending Time File Compl., ECF No. 9.)
3 (Verified Compl., ECF No. 10.)
4 (First Am. Verified Compl. [hereinafter, “FAC”], ECF No. 2.)
5 The contract at issue in this litigation is the contract JBC and the City entered into for the
construction of the City’s CityLYNX Gold Line Streetcar extension project (the “Contract”).
(FAC ¶¶ 7–9, 19.) The specific claims comprising the Contract Claims are the First Cause of
Action (breach of contract), the Fourth Cause of Action (breach of the implied covenant of
good faith and fair dealing), and the Tenth Cause of Action (sub-contractor pass-through
claims). (FAC.)

of JBC’s claims (the “Motion to Dismiss”).6 The Court issued its Order and Opinion
on the Motion to Dismiss on 27 February 2024 (the “Order” or the “February 27
Order”).7 Among its rulings in the Order, the Court concluded that JBC’s Contract
Claims were time-barred in part and dismissed those claims with prejudice “to the
extent those claims [arose] from conduct occurring before 31 January 2021.”8
5. 	JBC filed the current Motions on 17 April 2024, seeking reconsideration of
the Court’s partial dismissal of the Contract Claims with prejudice and, alternatively,
leave to file a second amended complaint.9 After full briefing, the Court convened a
hearing on the Motions on 30 May 2024, at which all parties were represented by
counsel (the “Hearing”). The Motions are now ripe for resolution.
II.
ANALYSIS
A. 	JBC’s Motion for Reconsideration
6. 	JBC asks the Court to reconsider its conclusion that JBC’s Contract Claims
are partially time-barred and contends that the Court should deny the City’s Motion
6 (Def. City Charlotte’s Mots. Dismiss, Answer First Am. Verified Compl. and Countercl.,
ECF No. 3.)
7 (Order and Op. Def. City Charlotte’s Mots. Dismiss [hereinafter, the “Order”], ECF No. 89;
Johnson Bros. Corp. v. City of Charlotte, 2024 NCBC LEXIS 32 (N.C. Super. Ct. Feb. 27,
2024).)
8 (Order ¶¶ 73, 82(b); Johnson Bros. Corp., 2024 NCBC LEXIS 32, at *42.)
9 (Mots.; Mem. Supp. Pl./Third-Party Pl.’s Mots. 21–30 [hereinafter, “JBC’s Br. Supp.”], ECF
No. 106.)

to Dismiss these claims in their entirety and permit the Contract Claims to proceed
to discovery and trial as to all relevant time periods.10
7. 	Rule 54 provides that “in the absence of [ ] a final judgment, any order or
other form of decision is subject to revision at any time before the entry of judgment
adjudicating all the claims and the rights and liabilities of all the parties.” As such,
under Rule 54, “[t]rial courts have the discretion to reconsider their interlocutory
rulings until a final judgment has been entered.” 	Ward v. FSC I, LLC, 2017 NCBC
LEXIS 19, at *6 (N.C. Super. Ct. Mar. 7, 2017); see also, e.g., Tetra Tech Tesoro, Inc.
v. JAAAT Tech. Servs., LLC, 250 N.C. App. 791, 798 (2016) (noting that when
compared to Rule 59(e), Rule 54 grants “broader discretion to trial courts to amend
their interlocutory orders before entry of a final judgment[ ]”).
8. 	After a further, careful review of the allegations of JBC’s First Amended
Complaint, and upon consideration of the parties’ briefing and arguments on the
Motion to Reconsider, the Court concludes, in the exercise of its discretion, that the
interests 	of 	justice 	require 	that 	JBC’s 	Contract 	Claims 	be 	dismissed 	without
prejudice, rather than with prejudice as provided in the Court’s Order. Indeed, it was
not the Court’s intention in the Order to deny JBC an opportunity to replead its
Contract Claims as to all relevant time periods on a non-payment theory of breach of
contract, which the Court concluded had not been pleaded in the First Amended
Complaint. 	Moreover, JBC has offered new factual allegations with supporting
documents in support of its Contract Claims that suggest JBC may be able to replead
10 (JBC’s Br. Supp. 21–25.)

those claims as timely under the applicable statute of limitations and in satisfaction
of the strictures of Rule 12(b)(6). 	Accordingly, the Court will exercise its discretion
to modify the Order to reflect that the Contract Claims are dismissed without
prejudice. See, e.g. First Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013) (“The
decision to dismiss an action with or without prejudice [under Rule 12(b)(6)] is in the
discretion of the trial court[.]”). 	JBC’s Motion to Reconsider, however, is otherwise
denied.
B. 	JBC’s Alternative Motion to Amend
9. 	Since the Court has not granted JBC the complete relief it sought through
the Motion to Reconsider, the Court will consider JBC’s alternative Motion to Amend.
JBC’s proposed Second Amended Complaint makes allegations which support and
clarify JBC’s theory of breach of contract. JBC’s theory posits that the City required
JBC to perform work that exceeded the scope of the Contract, JBC was entitled to
additional compensation and time extensions 	as a 	result, JBC 	requested this
additional compensation and time extensions through a formal claim to the City, and
the City breached the Contract by denying JBC’s formal claim and refusing to
compensate JBC or grant the requested time extensions.11 	The proposed Second
Amended Complaint also includes factual allegations that seek to support JBC’s
assertions that (i) the City waived all conditions precedent to claims under the
11 (JBC’s Br. Supp. Ex. 1–Proposed Second Am. Verified Compl. ¶¶ 14, 30, 33, 37, 41, 48–49,
52, 59, 63–64, 86–89, 92–98 [hereinafter, “Proposed SAC”], ECF No. 106.2.)

Contract through their conduct and (2) the City should be equitably estopped from
asserting the statute of limitations as a defense to JBC’s claims.12
10. 	When a party seeks leave of court to amend a pleading, “leave shall be
freely given when justice so requires.” N.C. R. Civ. P. 15(a). “A motion to amend is
addressed to the sound discretion of the trial [court]” and is reviewable only for abuse
of discretion. House of Raeford Farms, Inc. v. City of Raeford, 104 N.C. App. 280, 282
(1991). 	Our courts have held that a motion to amend may be denied for “(a) undue
delay, (b) bad faith, (c) undue prejudice, (d) futility of amendment, and (e) repeated
failure to cure defects by previous amendments.” Id. at 282–83. The Supreme Court
of North Carolina, however, has long made clear that “amendments should be freely
allowed unless some material prejudice to the other party is demonstrated.” Mauney
v. Morris, 316 N.C. 67, 72 (1986). “The burden is upon the opposing party to establish
that that party would be prejudiced by the amendment.” Id.
11. 	The City opposes JBC’s request for leave to amend on the grounds of futility
and undue delay.13
a. 	Futility
12. 	“The futility standard under Rule 15 is essentially the same standard used
in reviewing a motion to dismiss under Rule 12(b)(6)” but courts have “liberal
discretion to find that an amendment lacks futility.” Simply the Best Movers, LLC v.
12 (Proposed SAC ¶¶ 65–66, 74–79.)
13 (Def. City Charlotte’s Br. Opp’n Pl.’s Mots. 12–19 [hereinafter, “City’s Br. Opp’n”], ECF No.
112.)

Marrins’ Moving Sys., Ltd., 2016 NCBC LEXIS 28, at *5–6 (N.C. Super. Ct. Apr. 6,
2016). “[A] motion to amend is not futile when ‘the allegations of the [amendment],
treated as true, are sufficient to state a claim upon which relief may be granted under
some legal theory, whether properly labeled or not.’ ” 	Howard v. IOMAXIS, LLC,
2023 NCBC LEXIS 159, at *15 (N.C. Super. Ct. Nov. 29, 2023) (quoting Harris v.
NCNB Nat’l Bank, 85 N.C. App. 669, 670 (1987)).
13. 	On 	the 	other 	hand, 	“[a] 	motion 	for 	leave 	to 	amend 	is 	futile 	and
appropriately denied when the ‘proposed amendment could not withstand a motion
to dismiss for failure to state a claim.’ ” Insight Health Corp. v. Marquis Diagnostic
Imaging N.C., LLC, 2016 NCBC LEXIS 77, at *6 (N.C. Super. Ct. Oct. 7, 2016)
(quoting Smith v. McRary, 306 N.C. 664, 671 (1982)). 	Dismissal of a pleading for
failure to state a claim under Rule 12(b)(6) is proper only: “(1) when the [pleading] on
its face reveals that no law supports [the] claim; (2) when the [pleading] reveals on
its face the absence of fact sufficient to make a good claim; [or] (3) when some fact
disclosed in the [pleading] necessarily defeats the . . . claim.” Oates v. JAG, Inc., 314
N.C. 276, 278 (1985). Importantly here, this Court has recognized that “[w]hether a
statute of limitations defense should be resolved by a Rule 12(b)(6) motion or must
await a Rule 56 motion for summary judgment depends on whether the facts
necessary to adjudicate the defense are demonstrated by the complaint itself or
whether additional evidence must be considered.” 	BDM Invs. v. Lenhil, Inc., 2012
NCBC LEXIS 7, at *29 (N.C. Super. Ct. Jan. 18, 2012).

14. 	The City contends that granting leave for JBC to assert its revised Contract
Claims would be futile for several reasons.
15. 	First, the City contends that JBC’s revised Contract Claims are barred by
the 	applicable statute 	of 	limitations 	because 	the 	City 	denied JBC’s 	claim for
additional compensation and time extensions more than two years before this action
was filed on 31 January 202314 by assessing liquidated damages from October 201815
through at least November 2021.16 	Based on its review of the Second Amended
Complaint, 	however, 	the 	Court 	concludes 	that 	JBC’s 	proposed 	allegations—in
particular, those asserting that the City repeatedly failed to “provide any substantive
response” to JBC’s requests for additional compensation or extra time until it denied
those requests on 27 January 202317—are sufficient to state the Contract Claims for
purposes of Rule 12(b)(6).
16. 	The City next contends that JBC’s revised Contract Claims are time-barred
at least to the extent they are based on the reconstruction of the Hawthorne Lane
Bridge. 	The City argues that JBC admits in its proposed pleading that the City
informed JBC in February 2019 that it “had no intention of granting any time or cost
extension with respect to the work pertaining to the [Hawthorne Lane] bridge,”18
14 See N.C.G.S. § 1-53(1) (establishing two-year statute of limitations for most contract claims
against local governments).
15 (See Proposed SAC ¶ 48.)
16 (See Proposed SAC ¶¶ 59–60.)
17 (See Proposed SAC ¶¶ 46, 48, 51–52, 54, 57, 59–60, 78.)
18 (See Proposed SAC ¶ 49.)

thereby triggering the two-year statute of limitations and rendering the revised
claims time-barred as of February 2021. 	But the Court cannot conclude that the
City’s alleged expression of intent in JBC’s proposed pleading necessarily equates to
a rejection of a yet-to-be-filed formal claim. 	Indeed, JBC alleges in its proposed
Second Amended Complaint that, in February 2019, “JBC had not yet submitted,
pursuant to the Contract, a request for additional compensation and time extensions
related to the Project for the additional and/or extra work the City had required and
was requiring JBC to perform.”19 Therefore, this argument for futility, too, must fail.
17. 	Finally, the City contends that JBC should not be granted leave to assert its
proposed allegations concerning the City’s alleged waiver of conditions precedent and
equitable estoppel because JBC has failed to allege each factual element necessary
for those doctrines to apply.20 After careful review, however, the Court concludes that
JBC’s factual allegations concerning waiver and estoppel are sufficient to survive
Rule 12(b)(6) dismissal and that the application of these doctrines is better evaluated
upon the presentation of evidence at the summary judgment stage of the litigation.
18. 	Accordingly, based on the above, the Court concludes that the City’s various
futility arguments are unavailing.
19 (Proposed SAC ¶ 49.)
20 (City’s Br. Opp’n 14–15.)

b. 	Undue Delay and Unfair Prejudice
19. 	The City also contends that leave to amend should be denied because JBC
unduly delayed in seeking leave to amend.21 The Court disagrees. Although this case
was filed on 31 January 2023, the Court did not hear the City’s Motion to Dismiss
until 2 November 202322 and issued its ruling on that motion on 27 February 2024.23
Under these circumstances, the Court is unable to conclude that JBC unduly delayed
in seeking leave to amend, particularly when the City has not offered any persuasive
evidence or argument that the proposed amendment would cause it any material or
unfair prejudice. See, e.g., Mauney, 316 N.C. at 72 (“[A]mendments should be freely
allowed unless some material prejudice to the other party is demonstrated.”)
III.
CONCLUSION
20. 	WHEREFORE, for the reasons set forth above, the Court, in the exercise
of its discretion, hereby GRANTS in part and DENIES in part the Motion for
Reconsideration, GRANTS the Motion to Amend, and ORDERS as follows:
a. 	The Motion for Reconsideration is GRANTED in part and Paragraph
82(b) of the February 27 Order is hereby amended to state in its entirety
as follows:
The Motion is GRANTED under Rule 12(b)(6) on JBC’s
claims for breach of contract (First Cause of Action), breach
of the implied covenant of good faith and fair dealing
21 (City’s Br. Opp’n 17–19.)
22 (Am. Notice Hr’g, ECF No. 76.)
23 (Order.)

(Fourth Cause of Action), and pass-through claims (Tenth
Cause of Action) to the extent those claims arise from
conduct 	occurring 	before 	31 	January 	2021, 	and 	those
claims are hereby DISMISSED as time-barred without
prejudice.
b. 	The Motion for Reconsideration is otherwise DENIED, and this Order
shall not otherwise alter or modify any other provisions of the February
27 Order.
c. 	The Motion to Amend is GRANTED, and JBC shall file its proposed
Second Amended Complaint no later than 12 June 2024.
SO ORDERED, this the 7th day of June, 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge