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Sub Relied On Contractor Promises, Statutory Time Period Ran Out

Tuesday, June 14, 2011 07:08 am


Delay Damages

Cleveland Construction, Inc. v. Ellis-Don Construction, Inc., 2011 N.C. App. Lexis 641 (April 5, 2011)

A general contractor led an unpaid sub to believe payment would be forthcoming from the owner. While the sub was waiting, the statute of limitations on claims against the contractor expired--but a court stepped in to allow the sub to pursue recovery.

Ellis-Don Construction, Inc. (EDCI) was the prime contractor on a University of North Carolina Hospitals (UNCH) project to construct two hospitals in Chapel Hill, North Carolina. After a lengthy and contentious project, EDCI found itself in dispute with its subcontractor, Cleveland Construction, Inc. (Cleveland), which had filed claims of extra/changed work, delay/disruption and inefficiency.

EDCI argued against an earlier ruling that concluded Cleveland had timely filed suit within the three-year statute of limitations provided by N.C. Gen. Stat. 1-52(1) (2009). Cleveland countered that EDCI should be equitably estopped from hiding behind the statute of limitations defense. The court agreed and overruled EDCI's argument. The contractor was not entitled to this defense since it acknowledged that t [...]

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