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A.H. Beck Foundation Co.11/2/2004
PUBLISHED
The North Carolina Department of Transportation ("NCDOT") appeals the trial court order denying its motion to dismiss the third-party complaint of Jones Brothers, Inc. ("Jones"). For the reasons discussed herein, we reverse.
The facts and procedural history pertinent to the instant appeal are as follows: In 1996, NCDOT began receiving bids for Highway Project No. 8.1631701 ("the project"), which involved the construction of a new bridge on Highway 49 over the Yadkin River at Tuckertown Lake. On 17 December 1996, Jones submitted the lowest bid for the project, and on 5 February 1997, NCDOT awarded Jones a contract to perform the work on the project. Jones subsequently received bids from subcontractors for separate portions of the work required by the project. On 13 February 1997, Jones entered into a subcontract with A.H. Beck Foundation Company, Inc. ("Beck"), whereby Beck would drill vertical subsurface shafts and install casings therein, in order to stabilize and retain the hillside slopes above and adjacent to the roadway approaching the bridge.
In June 1997, Beck began drilling the slope-stabilization shafts and immediately encountered hard, dense rock below the surface. On 6 August 1997, Beck advised Jones that it was encountering significant problems related to the subsurface conditions, and that it would require additional compensation and a time extension in order to complete the work. In response, Jones submitted a claim to NCDOT on Beck's behalf on 11 August 1997. On 20 August 1997, NCDOT Resident Engineer K.E. Raulston ("Raulston") replied by letter as follows:
I have received your letter dated August 11, 1997, which contained notification of intent to file a claim. The claim is filed on behalf of [Beck] who claim that they are encountering conditions different than that shown in the subsurface plans. I refer you to Section 102-07 on the North Carolina Standard Specifications "subsurface information." The department does not warrant or guarantee the accuracy of the subsurface information. The contractor shall have no claim for additional compensation or for an extension of time for any reason resulting from the actual conditions encountered at the site differing from those indicated in the subsurface information. Therefore any claim regarding subsurface conditions is denied.
Beck continued to encounter dense rock at the drill sites, and as a result was unable to finish the slope-stabilization portion of the work until 17 April 1998. Beck thereafter submitted to Jones a "Claim for Adjustment in Compensation Relative to Slope Stabilization Piles," which detailed Beck's "unanticipated delays disruptions, denials, interference, altered and/or extra work" in the form of "force account records." Jones forwarded Beck's claim to NCDOT on 12 August 1998, but subsequently requested return of the claim. On 15 October 1998, Raulston advised Jones that "initial review of the claim indicates that it would have been denied for the same reason it was denied the first time." Subsequent claims were filed by Jones on behalf of Beck; however, each claim was denied by NCDOT.
On 23 April 2000, Beck filed a complaint against Jones, alleging, inter alia, breach of subcontract, breach of implied warranty, unfair and deceptive trade practices, wrongful termination, and mutual mistake. The complaint requested "at least" $7,973,528.14 in damages. On 10 October 2000, Jones filed an answer, counterclaim, and third-party complaint against NCDOT. In its third-party complaint, Jones alleged that its contract with NCDOT "contained terms and conditions providing for the preparation of Supplemental Agreements and change orders to compensate the contra
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