Justia Contracts Opinion Summaries

Dr. Earl Bostick Sr. and Josie Bostick married in 1970, and Dr. Bostick developed two successful dental practices in South Carolina. In 2009, he sold one practice and continued with the other until the couple separated in 2017, after which he sold the remaining practice for $569,000. The sales contract indicated that $424,140 of this amount was for goodwill and a non-compete agreement. The couple agreed to an equal division of the marital estate but disputed whether the goodwill was personal (nonmarital) or enterprise (marital) property.The Family Court granted the divorce and ruled that the goodwill in Dr. Bostick's practice was personal, thus not subject to division. The court based its decision on the evidence that the goodwill was tied to Dr. Bostick's personal reputation and professional skills. Josie Bostick appealed, and the Court of Appeals reversed the Family Court's decision, determining that the goodwill should be considered enterprise goodwill and thus marital property.The South Carolina Supreme Court reviewed the case and reversed the Court of Appeals' decision, reinstating the Family Court's ruling. The Supreme Court found that the goodwill was indeed personal, as it was closely tied to Dr. Bostick's reputation, community involvement, and professional skills. The Court emphasized that Josie Bostick did not present evidence to prove the goodwill was enterprise in nature. The presence of a non-compete agreement further supported the conclusion that the goodwill was personal. Consequently, the value of the goodwill was excluded from the marital estate, and the Family Court's judgment was reinstated. View "Bostick v. Bostick" on Justia Law

Covil Corporation, through its receiver, sued Pennsylvania National Mutual Insurance Company for breaching their insurance contract by not contributing to a settlement in an asbestos case. David Rollins had sued Covil and others, alleging negligent asbestos exposure caused his mesothelioma. Penn National insured Covil during part of the exposure period. Covil settled the case and sought $50,000 from Penn National, which the insurer refused to pay.The circuit court granted summary judgment for Covil, requiring Penn National to indemnify Covil for the settlement. The court rejected Penn National's arguments about untimely notice, premature summary judgment, and policy exclusions. The court of appeals affirmed the decision.The South Carolina Supreme Court reviewed the case and affirmed the court of appeals' decision with modifications. The court held that the notice-prejudice rule did not apply because the underlying plaintiff, Rollins, had already been fully compensated. The court also found that Covil's untimely notice was not a material breach of the insurance contract, as Covil's interests were adequately protected by other insurers' counsel. Additionally, the court ruled that Penn National did not waive its right to timely notice by attending mediation.The court further held that the policy's "Products Hazard" and "Completed Operations Hazard" exclusions did not apply. The Products Hazard exclusion was inapplicable because Covil's liability was based on installation, not supplying asbestos. The Completed Operations Hazard exclusion did not apply because Rollins's exposure occurred before Covil's work was completed. Thus, the court affirmed the lower court's summary judgment in favor of Covil. View "Covil Corporation v. Pennsylvania National Mutual Casualty Insurance Company" on Justia Law

A group of retired firefighters from the City of Columbia claimed that the City had promised them free lifetime health insurance. This promise was allegedly made through verbal statements, newsletters, and retirement letters. The dispute arose when the City Council required all active and retired employees under 65 to contribute to their health insurance premiums, and later extended this requirement to Medicare supplemental coverage for retirees over 65. The firefighters argued that the City should be held to its promise under the doctrine of promissory estoppel.Initially, the Circuit Court granted summary judgment in favor of the City, but the Court of Appeals reversed this decision, allowing the promissory estoppel claim to proceed. After a nonjury trial, Judge Sprouse ruled in favor of the City, and the Court of Appeals affirmed this decision, stating that the firefighters had not proven an unambiguous promise or reasonable reliance on such a promise.The Supreme Court of South Carolina reviewed the case and affirmed the Court of Appeals' decision but modified the reasoning. The Supreme Court found that the firefighters did not prove the City made a clear promise of free lifetime health insurance. Additionally, the Court emphasized that the City Council, not individual employees, had the authority to make such promises. The Court also clarified that promissory estoppel claims need only be proven by the greater weight of the evidence, not by clear and convincing evidence, except in cases involving specific performance of land transfers. The Court concluded that the firefighters had no right to rely on statements made by City employees who lacked the authority to bind the City. View "Cruz v. City of Columbia" on Justia Law

This case involves a dispute over a real estate development project in Beaufort County, South Carolina. The developer, Road, LLC, purchased a 229-acre peninsula with plans to develop it. However, the project was contingent on resolving two disputes concerning the only access road to the peninsula. The first dispute involved neighboring landowners who claimed ownership of a parcel of land the access road crossed. The second dispute involved Beaufort County's denial of the developer's request for a zoning variance to relocate and improve the access road. The developer, the neighboring landowners, and Beaufort County settled both disputes in a written "Settlement Agreement." However, the developer eventually defaulted on its loan and the lender took title to the peninsula. After the developer's options to repurchase the peninsula expired, Beaufort County purchased the peninsula to prevent its development. Road, LLC argued that Beaufort County breached the implied covenant of good faith and fair dealing in the Settlement Agreement by purchasing the peninsula, thereby extinguishing any opportunity Road might later gain to sell the parcel to another developer.The trial court initially ruled in favor of Road, LLC, but later granted Beaufort County's motion for judgment notwithstanding the verdict, arguing that there was no breach of the Settlement Agreement and that Road presented no evidence to support the jury's $5 million award. The court of appeals affirmed the trial court's decision on the grounds that there was no evidence Beaufort County was the proximate cause of Road's damages and that the evidence showed Road did not suffer $5 million in damages because the property was still worth $5 million after the County purchased the peninsula.The Supreme Court of South Carolina affirmed the court of appeals' decision in result. The court held that the implied covenant of good faith and fair dealing cannot create new contractual duties not expressly stated or fairly implied in the contract itself. The court found that the Settlement Agreement did not prohibit Beaufort County from purchasing the peninsula once the developer's option expired. Therefore, the court concluded that Beaufort County could not have breached the implied covenant of good faith and fair dealing in the Settlement Agreement. View "Road, LLC and Pinckney Point, LLC v. Beaufort County" on Justia Law

In South Carolina, Phillip Francis Luke Hughes, on behalf of the estate of his late mother, Jane Hughes, sued Bank of America for fraud, fraudulent concealment, and breach of contract, alleging that the bank charged insurance premiums in connection with a home equity line of credit his parents obtained in 2006, even though they declined the insurance offer. The bank argued that the claims did not survive Jane Hughes's death, were barred by res judicata and the statute of limitations, and that their motion for sanctions was not premature.The Supreme Court of South Carolina held that the claims for fraud and fraudulent concealment survived Jane Hughes's death. However, it also held that all three claims were barred by the res judicata effect of rulings in related federal court litigation. The court affirmed as modified in part and reversed in part the lower court's decision. The court also affirmed the lower court's decision that the sanctions motion was not premature. The court further held that the claim for breach of contract accompanied by a fraudulent act survived Jane Hughes's death, but was also barred by res judicata.As for the statute of limitations issue, the court held that the statute of limitations had expired before the action was commenced and that the plaintiff was precluded from relitigating the equitable tolling issue. The court remanded Bank of America's sanctions motion to the lower court for disposition. View "Hughes v. Bank of America" on Justia Law

Petitioners Rick Hendrick Dodge Chrysler Jeep Ram (Rick Hendrick Dodge) and Isiah White argued an arbitrator had to decide whether they could enforce an arbitration provision in a contract even after that contract had been assigned to a third party. The court of appeals rejected this argument and affirmed the circuit court's determinations that: (1) the circuit court was the proper forum for deciding the gateway question of whether the dispute is arbitrable; and (2) Petitioners could not compel arbitration because Rick Hendrick Dodge assigned the contract to a third party. The South Carolina Supreme Court held that the doctrine announced in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) required the arbitrator to decide whether the assignment extinguished Petitioners' right to compel arbitration. Therefore, the Court reversed the court of appeals' decision and vacated the circuit court's discovery order. View "Sanders v. Savannah Highway Automotive Company" on Justia Law

Hicks Unlimited, Inc. contracted to rent uniforms for its employees from UniFirst Corporation. The contract contained an arbitration provision stating all disputes between them would be decided by binding arbitration to be conducted "pursuant to the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association [AAA] and shall be governed by the Federal Arbitration Act [FAA]." A dispute arose; UniFirst moved to compel arbitration. Hicks contended the arbitration agreement was unenforceable because it did not comply with the notice requirements of South Carolina's Arbitration Act (SCAA). The circuit court denied the motion to compel arbitration, ruling the contract did not implicate interstate commerce and, therefore, the FAA did not apply. The circuit court further ruled the arbitration provision was not enforceable because it did not meet the SCAA's notice requirements. UniFirst appealed. The court of appeals reversed, holding arbitration should have been compelled because the contract involved interstate commerce and, therefore, the FAA preempted the SCAA. The South Carolina Supreme Court found that because the contract between Hicks and UniFirst did not involve interstate commerce in fact, the order of the circuit court denying UniFirst's motion to compel arbitration was affirmed, and the court of appeals' opinion was reversed. View "Hicks Unlimited v. UniFirst" on Justia Law

In 2018, Appellant Nationwide Affinity Insurance Company of America (Nationwide) issued a personal automobile insurance policy to Shameika Clark, Respondent Andrew Green's mother. The policy included $25,000 in UIM property damage coverage for Clark and her family members. The general definition section broadly defined "property damage" as "physical injury to, destruction of[,] or loss of use of tangible property." The UIM endorsement, however, more narrowly defined "property damage" as "injury to or destruction of 'your covered auto.'" In October 2018, Green was hit by a vehicle while walking home from school. Green pursued a claim against Nationwide for UIM bodily injury, but Nationwide refused to pay because the accident did not result in “damage to a “covered auto.” Nationwide filed this declaratory judgment action and requested a declaration that Green was not entitled to UIM property damage. The circuit court reformed Nationwide’s policy rider issued to Clark, finding that under South Carolina case law, insurers could not limit that coverage to vehicles defined in policy as “covered autos.” The South Carolina Supreme Court affirmed the circuit court’s judgment. View "Nationwide v. Green" on Justia Law

The federal district court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. In 2019, USAA issued a personal automobile policy to Megan Jenkins. The policy defined "your covered auto" as any vehicle shown on the policy's declaration, any newly acquired vehicle, and any trailer owned by the insured. While riding her bicycle, Jenkins was struck and killed by an underinsured motorist. Defendant Vincent Rafferty—Jenkins' personal representative—made a claim under Jenkins' policy for UIM property damage arising from damage to the bicycle. USAA Casualty Insurance Company (USAA) denied the claim and commenced this action in federal court, asserting Jenkins' bicycle did not fall within the definition of "your covered auto." Whether USAA prevailed depended upon whether automobile insurers were required to offer UIM property damage coverage at all. If insurers were not required to offer UIM property damage coverage, they were free to restrict such coverage to an insured's "covered auto." The federal court asked the Supreme Court whether, under South Carolina Law, an auto insurer could validly limit underinsured motorist property damage coverage to property damage to vehicles defined in the policy as a “covered auto.” In their briefs and during oral argument, the parties did not directly address the question as framed by the district court. Instead, the parties briefed and argued the broader question of whether an automobile insurer's offer of underinsured motorist (UIM) coverage had to include property damage coverage. Because the answer to the broader question yielded the answer to the certified question, the Supreme Court addressed the parties’ question. USAA rightly conceded that if the Supreme Court held an insurer was required to offer UIM property damage coverage, the Court had to answer the certified question "no." The Court indeed held insurers were required to offer UIM property damage coverage, and therefore answered the certified question "no." View "USAA Casualty v. Rafferty" on Justia Law

This case involved promises made and broken to homeowners by a developer and its affiliated entities. A jury returned verdicts on several causes of action in favor of the homeowners, and the developer appealed. The court of appeals initially upheld the jury's verdict for $1.75 million on the homeowners' breach of fiduciary claim and a verdict for $10,000 on a breach of contract claim by an individual homeowner. Thereafter, upon petitions for rehearing, the court of appeals completely reversed course, dismissing all of the homeowners' claims as a matter of law and reversing and remanding the breach of contract claim by the individual homeowner. The South Carolina Supreme Court granted certiorari and affirmed in part and reversed in part, thus reinstating the jury's verdicts. The Court: (1) reversed the court of appeals' ruling on the statute of limitations because the issue as to when Homeowners had adequate notice to begin the limitations clock was properly presented to the jury and resolved by it; (2) found any procedural issues related to the derivative claims either (a) moot as the HOA was realigned as a plaintiff and the trial court explicitly found it adopted its own claims against the Developers, or (b) demand was saved by futility due to the Developer's continuing veto power; (3) held that Developers breached the fiduciary duties owed to Homeowners; (4) reversed the court of appeals' decision that Developers could not be amalgamated, as there was more than enough evidence of bad faith, abuse, fraud, wrongdoing, or injustice resulting from the blurring of the entities' legal distinctions; and (5) affirmed the court of appeals that the recreational easement was invalid. View "Walbeck, et al. v. The I'On Company" on Justia Law