JOHNSON BROS. v. CITY OF CHARLOTTE, 2024 NCBC 12

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 THIRD-
PARTY DEFENDANT URS
CORPORATION’S MOTION TO
DISMISS THIRD-PARTY CLAIMS
ASSERTED BY PLAINTIFF/THIRD-
PARTY PLAINTIFF JOHNSON BROS.
CORPORATION, A SOUTHLAND
COMPANY
JOHNSON BROS. CORPORATION,
A SOUTHLAND COMPANY,
Third-Party
Plaintiff,
v.
URS CORPORATION,
Third-Party
Defendant.
1. 	THIS MATTER is before the Court upon Third-Party Defendant URS
Corporation’s (“URS”) Motion to Dismiss Third-Party Claims Asserted by Johnson
Brothers Corporation, a Southland Company (“JBC”) pursuant to Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure (the “Rule(s)”) in the above-captioned case
(the “Motion”).1
1 (URS Corporation’s Mot. Dismiss, ECF No. 77.)
Johnson Bros. v. City of Charlotte, 2024 NCBC 12.

2. 	Having considered the Motion, the parties’ briefs in support of and in
opposition to the Motion, the relevant pleadings, the arguments of counsel at the
hearing on the Motion, and other appropriate matters of record, the Court, in the
exercise of its discretion, hereby GRANTS in part and DENIES in part the Motion
as set forth below.
Cokinos Young, by John P. DiBiasi and Branson Rogers, and Windle
Terry 	Bimbo, 	by 	Steele 	B. 	Windle, 	III 	and 	Louis 	Segreti, 	for
Plaintiff/Third-Party Plaintiff Johnson Bros. Corporation, a Southland
Company.
Troutman Pepper Hamilton Sanders LLP, by Kiran H. Mehta, William
J. Farley, III, David C. Mancini, and Jason C. Spang, for Third-Party
Defendant URS Corporation.
Bledsoe, Chief Judge.
I.
FACTUAL BACKGROUND
3. 	The Court does not make findings of fact on motions to dismiss under Rule
12(b)(6). 	Rather, the Court recites the allegations asserted and the documents
referenced in the challenged pleading that are relevant to the Court’s determination
of the Motion.

4. 	JBC is a Texas corporation with its principal place of business in Grapevine,
Texas.2 URS is a corporation registered with the North Carolina Secretary of State
and authorized to do business in North Carolina.3
5. 	On 5 May 2014, Defendant City of Charlotte (the “City”) and URS entered
into a written contract for Engineering/Design Services and Other Project Services
(the “Design Contract”) for the CityLYNX Gold Line – Phase 2 Project in Charlotte,
North Carolina (the “Project”).4 The Project contemplated a 2.5 mile extension of the
CityLYNX Gold Line streetcar system, and, on 21 December 2016, JBC, as general
contractor, and the City, as owner, entered into a contract for the construction of the
Project (the “Construction Contract”).
6. 	Pursuant to the Design Contract, URS developed design plans for, among
other things, “light rail track alignment geometry, track plans and profiles, structural
plans for the Hawthorne Lane Bridge crossover, new and SSP stop layouts, stop
details, cross sections, and storm drainage.”5 	The drawings and specifications that
URS created in accordance with the Design Contract were ultimately incorporated
into and included in the Construction Contract (the “Design Documents”).6
2 (Pl.’s Reply and Affirmative Defenses Def.’s Countercl. and Pl.’s Third-Party Compl. Against
URS Corporation ¶ 1 [hereinafter, “Third-Party Compl.”], ECF No. 7.) The Court’s citations
to 	this 	document 	reference 	the 	section 	titled 	“Third-Party 	Complaint 	Against 	URS
Corporation” beginning on page ten.
3 (Third-Party Compl. ¶ 3.)
4 (Third-Party Compl. ¶¶ 6–7.)
5 (Third-Party Compl. ¶¶ 7–8.)
6 (Third-Party Compl. ¶ 8.)

7. 	JBC alleges that the Design Documents were “inaccurate, deficient, and
inadequate” as to storm drainage7 and included numerous errors, omissions, and
discrepancies in regard to the Hawthorne Lane Bridge.8 	JBC further alleges that
“URS’s negligence and failure to use reasonable care in undertaking the scope of the
Design Contract, including, but not limited to, design issues, errors, and omissions,
directly led to” the damages the City asserts that JBC is responsible for in the City’s
counterclaims.9
II.
PROCEDURAL HISTORY
8. 	JBC filed the Complaint initiating this litigation on 12 April 2023, asserting
ten claims against the City.10 	The City answered JBC’s Complaint on 1 June 2023
and asserted counterclaims against JBC for breach of contract and breach of
warranty.11 	In response to the City’s counterclaims, JBC filed a Third-Party
Complaint against URS 	on 31 July 2023, asserting 	claims for: 	(i) indemnity/
contribution, (ii) negligence, and (iii) professional negligence/malpractice.12
7 (Third-Party Compl. ¶ 10.)
8 (Third-Party Compl. ¶ 11.)
9 (Third-Party Compl. ¶ 12.)
10 (First Am. Verified Compl.)
11 (Def. City Charlotte’s Mots. Dismiss, Answer First Am. Verified Compl. & Countercl., ECF
No. 3.)
12 (Third-Party Compl. ¶¶ 13–25.)

9. 	On 23 October 2023, URS filed the pending Motion, seeking the dismissal of
JBC’s third-party claims pursuant to Rule 12(b)(6).13
10. 	After full briefing, the Court convened a hearing on the Motion on 14
December 2023, at which all parties were represented by counsel (the “Hearing”).
The Motion is now ripe for resolution.
III.
LEGAL STANDARD
11. 	When deciding whether to dismiss a claim pursuant to Rule 12(b)(6), the
Court considers “whether the allegations of the complaint, if treated as true, are
sufficient to state a claim upon which relief can be granted under some legal theory.”
Corwin v. Brit. Am. Tobacco, PLC, 371 N.C. 605, 615 (2018) (quoting CommScope
Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 51 (2016)).
12. 	“[D]ismissal pursuant to Rule 12(b)(6) is proper when ‘(1) the complaint on
its face reveals that no law supports the [claimant’s] claim; (2) the complaint on its
face reveals the absence of facts sufficient to make a good claim; or (3) the complaint
discloses some fact that necessarily defeats the [claimant’s] claim.’ ” 	Corwin, 371
N.C. at 615 (quoting Wood v. Guilford County, 355 N.C. 161, 166 (2002)).
13. 	Under Rule 12(b)(6), “the trial court is to construe the pleading liberally and
in the light most favorable to the [claimant], taking as true and admitted all well-
pleaded factual allegations contained within the [pleading].” 	Donovan v. Fiumara,
114 N.C. App. 524, 526 (1994) (cleaned up).
13 (URS Corporation’s Mot. Dismiss.)

IV.
ANALYSIS
A. 	Economic Loss Rule
14. 	URS seeks dismissal of all of JBC’s third-party claims on grounds that they
are barred by the economic loss rule.14
15. 	“Originating in the products liability context, the economic loss rule, in its
simplest form, holds that purely economic losses are not ordinarily recoverable under
tort law.” 	Crescent Univ. City Venture, LLC v. AP Atl., Inc., 2019 NCBC LEXIS 49,
at *14 (N.C. Super. Ct. Aug. 14, 2019) (citation omitted), aff’d, 376 N.C. 54 (2020)
(hereinafter, “Crescent II”). Our Supreme Court embraced the principles underlying
the economic loss rule in North Carolina State Ports Auth. v. Lloyd A. Fry Roofing
Co., 294 N.C. 73 (1978), explaining that “ordinarily, a breach of contract does not give
rise to a tort action by the promisee against the promisor,”15 id. at 81, and the Court
14 (URS Corporation’s Mem. Supp. Mot. Dismiss [hereinafter, “URS’s Br. Supp.”], ECF No.
78.)
15 In Ports Authority, the Supreme Court noted that, while it had never held that “a tort
action lies against a promisor for his simple failure to perform his contract, even though such
failure was due to negligence or lack of skill,” 294 N.C. at 83, there are four, non-exclusive
situations in which the North Carolina courts have recognized that “a promisor [may be held]
liable in a tort action for a personal injury or damage to property proximately caused by his
negligent, or wilful, act or omission in the course of his performance of his contract,” id. at
82. Ports Authority’s four exceptions are as follows:
(1) The injury, proximately caused by the promisor’s negligent act or omission
in the performance of his contract, was an injury to the person or property of
someone other than the promisee.
(2) The injury, proximately caused by the promisor’s negligent, or wilful, act or
omission in the performance of his contract, was to property of the promisee
other than the property which was the subject of the contract, or was a personal
injury to the promisee.

of Appeals formally adopted the rule in Chicopee, Inc. v. Sims Metal Works, Inc., 98
N.C. App. 423, 432 (1990) (“The majority of courts which have considered this
question have held that purely economic losses are not ordinarily recoverable under
tort law. We adopt this rule[.]” (internal citation omitted)).
16. 	The rule’s rationale posits that while “[t]he average plaintiff in a tort
lawsuit does not choose his or her tortfeasors[, c]ontracting parties, by comparison,
have the ability to allocate risk among themselves at the outset of a transaction and
are encouraged to do so.” 	Crescent Univ. City Venture, LLC v. AP Atl., Inc., 2019
NCBC LEXIS 46, at *76 (N.C. Super. Ct. Aug. 8, 2019) (hereinafter, “Crescent I”)
(citing Lord v. Customized Consulting Specialty, Inc., 182 N.C. App. 635, 639 (2007)).
The result is that “[t]he tort claim ‘must be grounded on a violation of a duty imposed
by operation of law, and the right invaded must be one that the law provides without
regard to the contractual relationship of the parties.’ ” Window Gang Ventures, Corp.
v. Salinas, 2019 NCBC LEXIS 24, at *24 (N.C. Super. Ct. Apr. 2, 2019) (quoting
Rountree v. Chowan County., 252 N.C. App. 155, 160 (2017)).
(3) The injury, proximately caused by the promisor’s negligent, or wilful, act or
omission in the performance of his contract, was loss of or damage to the
promisee’s property, which was the subject of the contract, the promisor being
charged by law, as a matter of public policy, with the duty to use care in the
safeguarding of the property from harm, as in the case of a common carrier, an
innkeeper or other bailee.
(4) The injury so caused was a wilful injury to or a conversion of the property
of the promisee, which was the subject of the contract, by the promisor.
Id. (cleaned up).

17. 	In short, to avoid the reach of the economic loss rule, “a plaintiff must
allege a duty owed to him by the defendant [that is] separate and distinct from any
duty owed under a contract.” Akzo Nobel Coatings, Inc. v. Rogers, 2011 NCBC LEXIS
42, at *48 (N.C. Super. Ct. Nov. 3, 2011). As this Court has previously observed, in
determining whether the economic loss rule bars a negligence claim, “the true
question the Court must answer is whether [the defendant owed the plaintiff] a duty
of care to avoid causing [the plaintiff] purely economic loss.” Crescent II, 2019 NCBC
LEXIS 49, at *42.
18. 	URS contends that the economic loss rule bars JBC’s third-party claims
because “[t]he tort theories now advanced by JBC and the damages it seeks vis-à-vis
its third-party claims against URS are precisely the type of ‘pure economic losses’
barred by 	Ports Authority 	and the 	[economic loss 	rule,]”16 and none 	of 	Ports
Authority’s exceptions apply.17 	URS further contends that the Court should not
recognize a new public policy exception to the economic loss rule to permit JBC to
assert its negligence claims here.18
19. 	JBC argues in opposition that the Court need not recognize a new exception
to the economic loss rule to deny the Motion because “clear, settled, and binding North
Carolina precedent” provides that a general contractor, like JBC, “in the absence of
privity 	of 	contract, 	[may] 	sue 	design 	professionals[, 	like 	URS,] 	based 	on 	the
16 (URS’s Br. Supp. 14–16.)
17 (URS’s Br. Supp. 16–19.)
18 (URS’s Br. Supp. 19–26.)

professionals’ breach of a common law duty of care.”19 	After careful consideration,
the Court agrees with JBC.
20. 	As this Court recognized in Crescent II, our Court of Appeals, through its
decisions in Davidson & Jones, Inc. v. New Hanover County, 41 N.C. App. 661, 666–
68 (1979), and Shoffner Indus., Inc. v. W. B. Lloyd Constr. Co., 42 N.C. App. 259
(1979), has “recognized a duty of care imposed upon architects for the benefit of
construction contractors in the absence of contractual privity because of the parties’
working relationship[.]” Crescent II, 2019 NCBC LEXIS 49, at *39 (cleaned up).
21. 	More specifically, the Court of Appeals held in Davidson & Jones as follows:
[a]n architect, in the performance of his contract with his employer, is
required to exercise the ability, skill, and care customarily used by
architects upon such projects. Where breach of such contract results in
foreseeable injury, economic or otherwise, to persons so situated by their
economic relations, and community of interests as to impose a duty of
due care, we know of no reason why an architect cannot be held liable
for such injury. Liability arises from the negligent breach of a common
law 	duty 	of 	care 	flowing 	from 	the 	parties’ 	working 	relationship.
Accordingly, we hold that an architect in the absence of privity of
contract may be sued by a general contractor or the subcontractors
working on a construction project for economic loss foreseeably resulting
from breach of an architect’s common law duty of due care in the
performance of his contract with the owner.
Id. at 667.
19 (Third-Party Pl. Johnson Bros. Corporation, a Southland Company’s Br. Opp’n Third-Party
Def. URS Corporation’s Mot. Dismiss 3–5 [hereinafter, “JBC’s Br. Opp’n”], ECF No. 83.) JBC
also contends that the economic loss rule does not apply because it is not in privity with URS.
(JBC’s Br. Opp’n 5–7.) Our Supreme Court held in Crescent University City Venture, LLC v.
Trussway Manufacturing, Inc., however, that “[t]he lack of privity in the commercial
context . . . is immaterial to the application of the economic loss rule.” 376 N.C. 54, 60 (2020).
As such, JBC’s contention falls flat in the commercial context pleaded here.

22. 	The Court of Appeals reached a similar conclusion in Shoffner Industries, in
which it held that “a contractor hired by the client to construct a building, although
not in [contractual] privity with the architect, may recover from the architect any
extra costs resulting from the architect’s negligence.” 	42 N.C. App. at 265–66. 	The
Court of Appeals most recently explained its rationale for this legal rule in Wright
Construction Services, Inc. v. Hard Art Studio, PLLC as follows:
First, there is nothing peculiar about these duties—when this Court
first recognized them, we described them as ordinary legal duties arising
out of the need for architects and engineers to use due care in the
exercise of their skills and abilities to avoid foreseeable harm to others.
Second, these negligence claims are entirely separate from any rights or
responsibilities that exist between [a] property owner and [a] builder
under [a] construction contract.
275 N.C. App. 972, 975–76 (2020) (cleaned up).
23. 	Numerous 	North 	Carolina 	state 	and 	federal 	decisions 	have 	followed
Davidson & Jones to permit negligence claims against design professionals in the
absence of privity of contract. See, e.g., Pompano Masonry Corp. v. HDR Architecture,
Inc., 165 N.C. App. 401, 406–09 (2004) (applying Davidson & Jones to permit
contractor to pursue negligence claim against project expediter with whom it was not
in privity of contract); Kaleel Builders, Inc. v. Ashby, 161 N.C. App. 34, 46 (2003)
(recognizing that there is a “discrete common law tort between a general contractor
and an architect specifically applicable when there is no contractual relationship
between the two[ ]”); Browning v. Maurice B. Levien & Co., 44 N.C. App. 701, 704–05
(1980) (concluding from Davidson & Jones and Shoffner Industries that “it is the law
that an architect who contracts to perform services is liable for damages proximately

caused by his negligence to anyone who can be reasonably foreseen as relying on that
architect’s 	performing 	his 	services 	in 	a 	reasonable 	manner[ ]”); 	see 	also, 	e.g.,
Walbridge Aldinger, LLC v. Cape Fear Eng’g, Inc., 2022 U.S. Dist. LEXIS 17111, at
*20 (E.D.N.C. Jan. 31, 2022) (concluding that a third-party plaintiff contractor had
stated a claim for negligence against a third-party defendant engineer since it
“alleged a breach of a duty other than any contractual duties binding upon [the] third-
party defendant[ ]”); Ellis-Don Constr., Inc. v. HKS, Inc., 353 F. Supp. 2d 603
(M.D.N.C. Dec. 29, 2004) (relying on Davidson & Jones to permit a contractor’s
negligence claim against an architect in the absence of contract privity).
24. 	Here, JBC alleges that URS agreed under its Design Contract with the City
to create the Design Documents,20 that URS owed a common law duty to the City and
to foreseeable beneficiaries of the Design Contract to exercise reasonable care in
creating the Design Documents and performing its work under the Design Contract,21
and that URS breached this common law duty by failing to prepare and provide the
Design Documents in accordance with the required standard of care.22 Considering
these allegations in the light most favorable to JBC, the Court concludes that JBC
has alleged facts showing that URS owed a common law duty of reasonable care to
JBC arising from both URS’s role as a design professional under its Design Contract
with the City and JBC and URS’s working relationship and community of interests
20 (Third-Party Compl. ¶ 7.)
21 (Third-Party Compl. ¶¶ 17, 22.)
22 (Third-Party Compl. ¶¶ 18, 22, 23.)

as participants in the Project. 	Since JBC has alleged that it was not in privity of
contract with URS and that, under North Carolina law, URS owed JBC a common
law duty of reasonable care under Davidson & Jones and its progeny, the Court
concludes that JBC’s allegations are sufficient to state its claims against URS and
require the Court to deny URS’s motion on this ground.
25. 	URS attempts to distinguish Davidson & Jones, arguing that the damages
at issue in Davidson & Jones resulted from property damage, not purely economic
loss, and thus that Davidson & Jones fits neatly within the second exception
enumerated in Ports Authority, whereas JBC’s negligence claim, which asserts purely
economic losses, does not.23 	The Court finds this argument unpersuasive for two
reasons.
26. 	First, the plain language of the holding in Davidson & Jones specifically
provides for the recovery of economic loss for a breach of an architect’s common law
duty of due care. 	See Davidson & Jones, 41 N.C. App. at 667 (“[W]e hold that an
architect in the absence of privity of contract may be sued by a general contractor or
the subcontractors working on a construction project for economic loss foreseeably
resulting 	from 	breach 	of 	an 	architect’s 	common 	law 	duty 	of 	due 	care 	in 	the
performance of his contract with the owner.” (emphasis added)).
27. 	Second, the Court of Appeals has applied Davidson & Jones when the tort
claim at issue, like the negligence claim here, sought recovery for only economic
losses. For example, in Pompano Masonry Corp., the defendant was hired to oversee
23 (URS’s Br. Supp. 25.)

project design work related to the construction of a building, and the plaintiff was
hired as a subcontractor to perform masonry work on that building. 	165 N.C. App.
at 403–04. 	The plaintiff asserted a tort claim against the defendant, alleging that
the defendant “failed to properly schedule and coordinate the work on the project, and
that as a result, plaintiff was forced to perform out-of-sequence work and incurred
significant disruptions to its work, substantially impairing plaintiff's ability to
efficiently perform its work thereby increasing plaintiff's costs to perform its work.”
Id. at 404 (cleaned up). 	The defendant sought dismissal of the plaintiff’s claim, in
part based on the economic loss rule. Id. at 405.
28. 	The Court of Appeals concluded that the defendant could be “held liable for
the foreseeable economic injury resulting from its alleged negligent performance of
its duties as project expediter[,]” reasoning that “Davidson [& Jones] authorize[d]
plaintiff to sue defendant for the economic loss resulting from defendant’s alleged
breach of its common law duty of care[,]” which arose from the “working relationship
and community of interests” between the defendant and the plaintiff. 	Id. at 408
(cleaned up) (emphasis added).
29. 	URS seeks to distinguish Pompano on grounds that the court partially relied
upon the absence of a contractual remedy for the plaintiff, while here the existence of
JBC’s contract rights against the City should “compel this Court to defer to those
contractual terms as the sole means to resolve the instant disputes.”24 The court in
Pompano, however, did not base its ruling on the availability of a contractual or
24 (URS Corporation’s Reply Supp. Mot. Dismiss 8, ECF No. 85.)

statutory remedy for the plaintiff. Rather, the court concluded that the plaintiff, who
did not have contract rights against the defendant, nonetheless had a common law
duty of care arising from the defendant design professional’s working relationship
and community of interests with the plaintiff, which was wholly separate from any
duty or remedies arising under statute or by contract.
30. 	Based on the above, the Court concludes that JBC has sufficiently pleaded
that URS, independent of any contract, owed and breached a common law duty of due
care to JBC in rendering its services on the Project and that, under Davidson & Jones
and its progeny, JBC has adequately stated its negligence claims against URS.
Accordingly, 	URS’s 	Motion 	to 	dismiss 	JBC’s 	Third-Party 	Complaint 	through
application of the economic loss rule must be denied.25
25 The Court recognizes that tension exists between Davidson & Jones and its progeny, on
the one hand—which permit a negligence claim based on a breach of a duty of reasonable
care that is tied to the design professional’s performance of a contract with a party other than
the plaintiff—and Ports Authority, Crescent II, and their progeny, on the other hand—which
find privity of contract immaterial and reject claims based on the negligent performance of a
contract. The Court’s response is that Davidson & Jones, Pompano, and the other cases cited
above are squarely on point with the instant case, have established the law of design
professional liability in this State for many years, and therefore must be applied, even if to
do so may be characterized as recognizing another exception to the economic loss rule. See,
e.g., Provectus Biopharmaceuticals, Inc. v. RSM US, LLP, 2018 NCBC LEXIS 101, at *54
(N.C. Super. Ct. Sept. 2, 2018) (holding that accountants have a common law duty of care
independent of contract); Austin v. Regal Inv. Advisors, LLC, 2018 NCBC LEXIS 3, at *27
(N.C. Super. Ct. Jan. 8, 2018) (finding investment advisor had duty of care independent of
contract).

B. 	Statute of Limitations
31. 	Separate and apart from the economic loss rule, URS also seeks dismissal
of JBC’s claims for negligence and professional negligence on grounds that they are
barred by the applicable three-year statute of limitations.26
32. 	“A statute of limitations defense may properly be asserted in a Rule 12(b)(6)
motion to dismiss if it appears on the face of the complaint that such a statute bars
the claim.” Horton v. Carolina Medicorp, Inc., 344 N.C. 133, 136 (1996). “Whether a
statute of limitations defense may be determined at the 12(b)(6) stage depends on
whether the facts necessary to adjudicate the defense are demonstrated by the
complaint itself or whether additional evidence must be considered.” Window World
of Baron Rouge, LLC v. Window World, Inc., 2017 NCBC LEXIS 60, at *23 (N.C.
Super. Ct. July 12, 2017) (citation omitted). Importantly for this Motion, under Rule
12(b)(6), a trial court “may not consider materials that are not mentioned, contained,
or attached in or to the pleading; otherwise, a Rule 12(b)(6) motion will be converted
into a Rule 56 motion and subject to its standards of consideration and review.”
Alamance Fam. Prac., P.A. v. Lindley, 2018 NCBC LEXIS 83, at *8 (N.C. Super. Ct.
Aug. 14, 2018) (citing Fowler v. Williamson, 39 N.C. App. 715, 717 (1979)).
33. 	URS argues that JBS’s Third-Party Complaint was filed on 31 July 2023
and that “[i]nsofar as JBC’s claims are premised upon issues raised in correspondence
prior to July 31, 2020 and/or issues JBC otherwise knew about prior to July 31,
2020 . . . , 	such 	claims 	are 	barred 	by 	the 	applicable 	three-year 	statute 	of
26 (URS’s Br. Supp. 26–28.)

limitations.”27 	The “correspondence” URS relies upon to establish the accrual of
JBC’s claims, however, are letters JBC sent to the City between 18 March 2020 and
September 2020 that are referenced in JBC’s Complaint against the City (the
“Letters”)28 but are not attached to or referenced anywhere in the Third-Party
Complaint.
34. 	At the Hearing, JBC objected to the Court’s consideration of the Letters and
to the conversion of URS’s motion into one under Rule 56. 	The Court agrees with
JBC that it cannot consider the Letters under Rule 12(b)(6) because they are not
“mentioned, contained, or attached in or to the [Third-Party Complaint],” and the
Court finds it inappropriate to exercise its discretion to treat URS’s Motion as one
under Rule 56 at this early stage of the litigation. 	As a result, the Court will not
consider the Letters on URS’s Motion.
35. 	Looking then to the allegations of the Third-Party Complaint (and without
considering the Letters), the Court cannot conclude that JBC’s claims accrued more
than three years prior to the filing of that pleading under either party’s view of the
date of accrual of those claims.29 As a result, the Court will deny the Motion to the
27 (URS’s Br. Supp. 28.)
28 (See First Am. Verified Compl. ¶¶ 49–53.)
29 URS argues that JBC’s negligence claims accrued “when the wrong giving rise to the right
to bring suit is committed,” quoting Harrold v. Dowd, 149 N.C. App. 777, 781 (2002).
According to URS, the wrongs on which JBC bases its negligence claims occurred more than
three years prior to the filing of JBC’s Third-Party Complaint. (URS’s Br. Supp. 26.) There
are no allegations in the Third-Party Complaint, however, from which the Court can
ascertain the date upon which JBC’s claims accrued under URS’s theory of accrual. 	JBC
argues in opposition that “a cause of action accrues, so as to start the running of statute of
limitations, as soon as the right to institute and maintain a suit arises,” quoting Thurston
Motor Lines, Inc. v. Gen. Motors Corp., 258 N.C. 232, 235 (1962). According to JBC, its right

extent it seeks dismissal of JBC’s negligence and professional negligence claims on
statute of limitations grounds.
C. 	Indemnity
36. 	JBC asserts a claim against URS for indemnity, alleging that “[s]everal of
the claims made by the City against JBC in its [counterclaims] arise out of, or are
connected 	with 	URS’[s] 	negligence 	and 	failure 	to 	perform 	design 	services 	in
conformance with its Design Contract with the City[.]”30
37. 	URS contends that this claim should be dismissed because the claims the
City asserts against JBC do not sound in tort, and in the absence of a tort claim, JBC
cannot seek indemnification from URS.31 The Court agrees.
38. 	“In North Carolina, a party’s rights to indemnity can rest on three bases: (1)
an express contract; (2) a contract implied-in-fact; or (3) equitable concepts arising
from the tort theory of indemnity, often referred to as a contract implied-in-law.”
Kaleel Builders, Inc., 161 N.C. App. at 38. 	JBC does not allege an express contract
or a contract implied-in-fact giving rise to a right to indemnity, so JBC’s right to
indemnity, if it exists at all, is based on a right to indemnity implied-in-law.
to institute and maintain suit did not arise until the City filed its counterclaims in 2023,
because that was when JBC first suffered injury. 	(JBC’s Br. Opp’n 12–13.) 	Under JBC’s
theory of accrual, JBC filed its third-party claims well within the applicable three-year
statute of limitations. Given that URS’s motion necessarily fails on the pleaded facts under
either party’s theory of accrual, however, the Court need not, and therefore does not,
determine which theory of accrual shall prevail in resolving the Motion.
30 (Third-Party Compl. ¶¶ 13–15.) 	URS also seeks dismissal of JBC’s third-party claim
against URS for contribution. (URS’s Br. Supp. 30.) Since JBC agreed in its opposition brief
to withdraw that claim, (JBC’s Br. Opp’n 15), the Court will grant the Motion to this extent
and dismiss JBC’s contribution claim.
31 (URS’s Br. Supp. 29.)

39. 	“For indemnification implied-in-law, more an equitable remedy than an
action in and of itself, North Carolina law requires there be an underlying injury
sounding in tort. 	The party seeking indemnity must have imputed or derivative
liability for the tortious conduct from which indemnity is sought.” Id. at 41.
40. 	Our appellate courts have held that:
[p]rimary and secondary liability between defendants exists only when:
(1) they are jointly and severally liable to the plaintiff; and (2) either (a)
one has been passively negligent but is exposed to liability through the
active negligence of the other or (b) one alone has done the act which
produced the injury but the other is derivatively liable for the negligence
of the former.
Id. (emphasis in original) (citing Edwards v. Hamill, 262 N.C. 528, 531 (1964)).
41. 	The Third-Party Complaint makes plain that the claim for which JBC seeks
indemnity is the City’s claim for breach of contract. There is no tort claim for which
indemnity is sought. 	As a result, JBC’s claim does not fit the “active-passive tort-
feasor framework” required to state a claim for a right to indemnity implied-in-law.
See id. at 47 (holding that “the parties do not fit the active-passive tort-feasor
framework required to support an equitable right to indemnity implied-in-law” where
the plaintiff’s claim sought indemnification from a claim for breach of contract and
not one sounding in tort). 	Since JBC has not sufficiently alleged any of the three
bases that permit a right to indemnity, the Court will grant the Motion dismissing
JBC’s claim for indemnification.

IV.
CONCLUSION
42. 	WHEREFORE, for the reasons set forth above, the Court hereby GRANTS
in part and DENIES in part the Motion as follows:
a. 	The Motion is hereby GRANTED as to JBC’s third-party claims against
URS for contribution and indemnity, and those claims are hereby
DISMISSED with prejudice; and
b. 	The Motion is hereby DENIED as to JBC’s third-party claims against
URS for negligence and professional negligence, and those claims shall
proceed to discovery.
SO ORDERED, this the 27th day of February, 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge