Justia Contracts Opinion Summaries

In April 2003, the City of Columbia entered into a Memorandum of Understanding (MOU) with Stevens & Wilkinson of South Carolina, Inc. (S&W) and several other parties, to develop a publicly-funded hotel adjacent to the Columbia Metropolitan Convention Center. As architect, S&W was to complete sufficient preliminary design work to determine a guaranteed maximum price for the project, which would be used by the City to obtain municipal bond funding to cover the cost of the hotel. Pursuant to the MOU, the construction company was to pay S&W directly. On June 26, 2003, the City received a letter stating S&W would complete its preliminary design on July 10, 2003, and would then stop working until the bond financing for the hotel was finalized. Realizing this could delay the start of construction, S&W offered to continue working the remaining ninety days until the anticipated bond closing date of October 13, 2003, but required assurance it would be compensated for the work it performed during this time frame. It provided an estimate requiring $650,000 and $75,000 per week after that. On July 30, the City approved "$650,000 for interim architectural design services for a period of 90 days prior to bond closing." The bond closing did not occur as scheduled, but S&W nevertheless continued to work. S&W submitted an invoice to the City for $697,084.79 for work that took place from July 10 to December 15, 2003. By letter dated December 17, 2003, S&W informed the construction company that the City had voted that day "to advance [$705,000.000] to the design team for design services and expenses. Because under the MOU the construction company was to pay S&W, not the City, the construction company agreed to reimburse the City for the funds paid to S&W after the bond closing. The City paid S&W's invoice. S&W continued to work on the project, but in March 2004, the City abandoned its plans under the MOU and ended its relationship with S&W. S&W received no further compensation and sued the City for breach of contract under the MOU and the July 2003 agreement. The City argued there was no separate agreement and the payment of interim fees was merely an advance on fees under the MOU and furthermore, the MOU provided that S&W was to be paid by the construction company, not the City. The trial court granted partial summary judgment in favor of S&W, finding a contract existed between it and the City. On certiorari, the City conceded a contract exists, but argued the contract terms have been satisfied. The Supreme Court found the City's arguments were unpreserved and affirmed as modified. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law

In September 2003, appellant The Cutler Group, Inc. sold a new house in Bucks County to Davey and Holly Fields. After living in the house for three years, the Fields sold the house to appellees Michael and Deborah Conway. In 2008, Appellees discovered water infiltration around some of the windows in the home, and, after consultation with an engineering and architectural firm, concluded that the infiltration was caused by several construction defects. In 2011, Appellees filed a one-count complaint against Appellant, alleging that its manner of construction breached the home builders' implied warranty of habitability. Appellant filed a demurrer, arguing, inter alia, that, as a matter of law, the warranty rextended from the builder only to the first purchaser of a newly constructed home because there was no contractual relationship between the builder and second or subsequent purchasers of the home. Recognizing that courts have traditionally required a showing of privity of contract before permitting a party to proceed with a warranty claim, the trial court concluded that the question presented was "one of policy as to who will bear the burden for damages caused by latent defects [in] relatively new residential dwellings." The trial court sustained Appellant's demurer based on lack of privity, and dismissed Appellees' complaint with prejudice. After an unsuccessful appeal to the Superior Court, appellees petitioned the Supreme Court. Finding no reversible error, the Supreme Court affirmed, holding that a subsequent purchaser of a previously inhabited residence may not recover contract damages for breach of the builder's implied warranty of habitability.View "Conway v. The Cutler Group, Inc." on Justia Law

The Andrews, a married couple, contracted to purchase a newly constructed home from Appellants, Joe Seneshale and his company, Legacy Builders, LLC (together, Legacy). After the Andrews took possession of the property, they discovered that the house had numerous structural and cosmetic flaws. The Andrews filed a complaint against Legacy alleging breach of contract and breach of implied warranty of habitability. The trial court entered judgment in favor of the Andrews and awarded a total of $319,302 in damages. The Supreme Court affirmed but remanded with instructions to correct the damage award, holding (1) when the cost of repairs in a homeowners’ construction case alleging breach of contract and breach of warranty may be disproportionate to the loss in value to the home resulting from the breach, the plaintiff has the burden of proving damages at trial, and the defendant has the burden of challenging the reasonableness or disproportionality of the plaintiff’s method; and (2) the district court did not commit clear error when it relied upon the majority of the Andrews’ cost of repair expert’s testimony and when it found that expansive soils caused damages to the home’s foundation.View "Legacy Builders, LLC v. Andrews" on Justia Law

Plaintiff contracted with the Town of Bethel to perform electrical work in connection with the Town’s renovation of its high school. Plaintiff later sued the Town, alleging breach of contract and unjust enrichment and claiming that the Town must reimburse it for additional costs incurred due to the Town’s ongoing asbestos abatement work at the school. The trial court rendered judgment for the Town in part, concluding that the Town's conduct did not fall within either of two judicial created exceptions to the enforcement of “no damages for delay” clauses adopted by the Court in White Oak Corp. v. Dep’t of Transportation. The Supreme Court affirmed the trial court’s decision that Plaintiff was not entitled to compensation under any of the “no damages for delay” exceptions at issue, holding (1) the term “active interference,” as used in the contract, did not require a showing of bad faith or gross negligence; but (2) the Town’s conduct in this case did not rise to the level of active interference or fall within either of the White Oak exceptions.View "C & H Elec., Inc. v. Town of Bethel" on Justia Law

In Spring 2008, Williams Company Construction, Inc. entered into a construction contract to remodel the Friendly Smiles Cosmetic Dentistry Office owned by Dr. Brenda Barfield. Dr. Barfield previously leased the building from Williams Company owner Glen Williams for approximately five years before she purchased the property from him in 2008. Dr. Barfield hired Williams to remodel the building because of its construction experience and familiarity and knowledge of the building. When Dr. Barfield hired Williams, she did not know whether the remodeling work would be done by Williams or subcontractors. Dr. Barfield did not deal directly with any subcontractors during the remodeling project nor did she direct Williams to hire any specific subcontractors. During the remodel, Williams served as the general contractor and hired subcontractors to do various construction tasks. In December 2008, a section of a copper water pipe froze and burst. The frozen water pipe caused minor water damage and was repaired by plumbing subcontractor Home Heating. During the repair process, a Home Heating employee cut a hole in the wall to locate the leak and discovered that the air in the plumbing wall was cold. The employee was concerned the pipe could freeze again and notified the Friendly Smiles Cosmetic Dentistry Office about the cold air. Dr. Barfield contacted Williams to express her concern about the pipes re-freezing from the cold air. According to testimony, Williams told Dr. Barfield not to worry about the pipes freezing again because of circulating warm air around the hole. Dr. Barfield also wanted the hole in the wall patched, but had difficulty in securing Williams or Home Heating to fix it. Dr. Barfield made repeated requests for Williams or Home Heating to resolve the cold air issue, but they did not fix the problem. Approximately one week after the pipe was fixed, the water pipe froze and broke again, this time causing extensive water damage to the dental office. Dr. Barfield and her insurance company, Travelers Insurance, brought suit against Williams, Home Heating (and other subcontractors) for negligence, and breach of contract. Before trial, the parties stipulated that the total amount of damages was $220,046.09. Williams requested the trial court to include a jury instruction concerning the independent contractor distinction (C-55.25), and a jury instruction pertaining to the failure of a party to produce witnesses (C-80.30). The court denied the two requests. At the pretrial hearing, the parties stipulated that the case would be tried before the jury based on comparative fault. The jury was given a special verdict form and found Williams seventy percent at fault, Home Heating twenty-five percent at fault, and Dr. Barfield five percent at fault. Judgment was entered against Williams. Williams subsequently filed a motion for a new trial arguing the court erred in denying its requested jury instructions and there was insufficient evidence for the jury to find Williams seventy percent at fault for the damages. Following a hearing, the district court denied the motion. Williams appealed the district court's judgment, but finding no reversible error, the Supreme Court affirmed. View "Travelers Cas. Ins. Co. of America v. Williams Co. Construction" on Justia Law

The Eastern Municipal Water District (EMWD) hired general contractor S.J. and Burkhardt, Inc. (SJB) for a public works construction project in 2006. Safeco Insurance Company (Safeco) executed performance and payment bonds for the project. Plaintiff Golden State Boring & Pipe Jacking, Inc. (GSB) was a subcontractor for the project, completing its work by September 2006, but it did not receive payment. In March 2008, SJB sent a voluntary default letter to Safeco. In July 2008, GSB sued SJB, EMWD, and Safeco for the unpaid amounts under the contract, separately seeking payment from Safeco under its payment bond. EMWD filed a cross-complaint to interplead retained sums. Safeco made a motion for summary judgment on the cause of action for payment under the bond on the ground that GSB’s claim was untimely. The trial court granted the motion, finding that there had been three cessations of labor that triggered GSB’s duty to file a stop notice in order to secure payment under Safeco's payment bond. At a subsequent court trial on the contract claims, GSB was awarded judgment against SJB, and Safeco was awarded judgment on the interpleader action. GSB appealed the summary judgment ruling, arguing: (1) the trial court erroneously overruled its objections to evidentiary matters presented in support of Safeco’s summary judgment; and (2) the court erred in finding the action was untimely. Finding no reversible error, the Court of Appeal affirmed. View "Golden State v. Eastern Municipal Water Dist." on Justia Law

In August, 2010, Appellants, Washington County residents Raymond and Donna Mantia, hired Appellee, West Virginia contractor Shafer Electric & Construction, to build a 34 foot by 24 foot, two-car garage addition onto their house. The proposals for the garage did not comply with several requirements of Section 517.7 of the Home Improvement Consumer Protection Act. Specifically, any home improvement contract, in order to be valid and enforceable against the owner of real property, had to be legible, in writing, and contain thirteen other specific requirements. Despite the detail in the specifications for the work to be completed, the contract here only complied with subsections (5), (7), and (8) of Section 517.7(a). Notwithstanding these deficiencies, work on the project began in October, 2010, when Appellants, who owned their own excavation business, began the foundation excavation. When Appellee commenced construction of the addition, it contended that problems surfaced because of Appellants' failure to complete the excavation work properly. During the subsequent months, Appellants eventually reexcavated the foundation area for the addition and, in the process (according to Appellee), changed the design of the addition several times. Negotiations into these design changes and other necessary alterations as a result of the excavation problems occurred, but ultimately failed when Appellants apparently refused to enter into a new contract with Appellee. Upon the breakdown of the negotiations, the parties mutually agreed that Appellee would invoice Appellants for the work completed, and that Appellee would discontinue efforts on the project. Appellants refused to pay the bill. Appellee responded by filing a mechanic's lien in the Washington County Court of Common Pleas. When Appellants still had failed to satisfy the outstanding balance, Appellee filed a civil action in the common pleas court, alleging both breach of contract and quantum meruit causes of action. The Supreme Court granted allowance of appeal in this matter to determine whether the Act barred a contractor from recovery under a theory of quantum meruit in the absence of a valid and enforceable home improvement contract as defined by the Act. The Superior Court held that the Act did not bar a cause of action sounding in quantum meruit and, for slightly different reasons, the Supreme Court affirmed. View "Shafer Electric & Construction v. Mantia" on Justia Law

A.E.M. Electric Services Corporation, a general contractor, contracted with Transtar Electric, Inc., a subcontractor, to provide electrical services for the installation of a pool at Holiday Inn. A.E.M. did not pay Transtar for its last three invoices because the owner of the project had failed to pay A.E.M. for the work performed by Transtar. A.E.M. alleged that the contract between the parties, which used the phrase “receipt of payment by contractor from the owner for work performed by subcontractor is a condition precedent to payment by contractor to subcontractor for that work”, was sufficient to establish a pay-if-paid payment provision. The court of appeals concluded that the payment provision in the contract was not specific enough to show that both parties understood and agreed that the risk of the owner’s nonpayment would be borne by Transtar instead of A.E.M. The Supreme Court reversed, holding that the use of the term “condition precedent” was an explicit statement of the parties’ intent to transfer the risk of the project owner’s nonpayment from A.E.M. to Transtar. View "Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp." on Justia Law

This case arose out of plaintiff Ferguson Fire's efforts to obtain payment for materials it supplied to defendant Preferred Fire Protection, LLC for defendant Immedion's data center. In 2007, Immedion, a telecommunications company, hired Rescom, L.L.C. to be the general contractor for improvements planned for its data center on property Immedion leased in Greenville. Rescom, in turn, hired Preferred Fire, a fire sprinkler company, as a subcontractor. In addition, Immedion directly hired Preferred Fire under a separate contract to install a special "pre-action" fire suppression system1 in its data center. To complete this work, Preferred Fire purchased materials from Ferguson Fire. Ferguson Fire began delivering materials to Preferred Fire in August, 2007, and the deliveries continued through October. In September, while its deliveries were in progress, Ferguson Fire sent a "Notice of Furnishing Labor and Materials" to Immedion advising it in relevant part that it had been employed by Preferred Fire to deliver labor, services, or materials with an estimated value of $15,000.00 to Immedion's premises. The Notice of Furnishing advised that it was being given as "a routine procedure to comply with certain state requirements that may exist," and that it was not a lien, nor any reflection on Preferred Fire's credit standing. Immedion paid Preferred approximately half of the contract price for installation of the system before receiving Ferguson Fire's Notice of Furnishing. After receiving the Notice, Immedion issued two additional checks to Preferred Fire for the unpaid balance of the contract price. Immedion paid everything it owed to Rescom, and it also paid its contractor Preferred Fire in full under the separate contract for the fire suppression system. However, Preferred Fire never paid Ferguson Fire for the materials it furnished. Ferguson brought a mechanic's lien foreclosure action against Immedion and Preferred Fire. Ferguson Fire contended (and the Supreme Court agreed) that the Court of Appeals erred in adding requirements to S.C Code Ann. 29-5-40 (2007) (governing a notice of furnishing) that were not in the statute itself and in concluding Ferguson Fire did not establish an effective lien upon which a foreclosure action could be premised. The Supreme Court reversed and remanded for further proceedings. View "Ferguson Fire v. Preferred Fire" on Justia Law

American General Contractors, Inc. ("AGC"), appealed a judgment assessing liability and awarding damages and interest for the cost of delays in the construction of the Williams County Law Enforcement Center in Williston. C&C Plumbing and Heating, LLP ("C&C"), the successful bidder for the mechanical prime contract, filed suit when construction the center was delayed approximately two years after "substantial completion" was supposed to have happened. The district court concluded it was appropriate for the County and AGC to share responsibility for providing temporary shelter and heat on the project. The court apportioned 47 percent of the liability for the costs of the delay for the three and one-half months of active interference to the County and 53 percent to AGC, for the four months delay inherent to the industry. The court awarded C&C approximately $73,000 on its claim against the County. After offsetting amounts owed between the parties, the court awarded AGC approximately $424,000 on its claim against the County. The court awarded Davis Masonry approximately $96,000 from AGC for masonry work completed under its subcontract with AGC, and rejected AGC's claimed offsets to that amount. Davis had provided heat, cover and shelter for the project during cold weather and sought $649,000 from the County and AGC for that expense including prompt payment interest. Davis had settled with the County for $530,000, and the court ruled AGC was responsible for 53 percent of the remaining $119,000, or $63,070. AGC argues the district court erred in determining AGC was liable for any of the costs incurred from the delay under its contract with the County. Finding no reversible error, the Supreme Court affirmed the district court. View "C&C Plumbing and Heating, LLP v. Williams County" on Justia Law