Stoneledge at Lake Keowee Owners' Ass'n v. Clear View Construction, LLC
Stoneledge at Lake Keowee Owners' Ass'n v. Clear View Construction, LLC
Opinion of the Court
Marick Home Builders, LLC served as one of several general contractors for the construction of townhomes known as Stoneledge at Lake Keowee. The Stoneledge at Lake Keowee Owners’ Association, Inc. (“Stoneledge”) brought suit against Marick and others alleging construction defects in the townhomes. The circuit court granted summary judgment
I. Facts and Procedural History
IMK Development Company developed a lakefront community known as Stoneledge at Lake Keowee. IMK hired Marick as a general contractor for the construction of town-homes in the community, and Marick subcontracted with Clear View Construction, LLC to perform stonework. Rick Tho-ennes is the principal of Marick.
In 2012, Stoneledge brought this lawsuit seeking damages resulting from construction defects that allowed water into the townhomes. Two of the construction defects alleged by Stone-ledge related to the stonework performed by Clear View— “installation of stone below grade and complete lack of flashing at the water table at intersections of differing building components.” Marick denied liability and brought cross-claims for equitable indemnity, negligence, breach of contract, and breach of warranty. The cross-claim defendants included the respondents Clear View and Michael Franz — -Clear View’s owner.
Clear View and Franz filed a motion for summary judgment on all of Marick’s cross-claims, which the circuit court granted. The court ruled “Marick’s negligence claim is a claim for equitable indemnity,” explaining “the allegations and remedies sought by both actions stem directly from the potential liability [Marick] could face for the damages claimed by [Stone-ledge].”
The court then considered the only remaining cross-claim against Clear View and Franz — equitable indemnity — and granted summary judgment. The court’s decision was premised on its finding that Marick “cannot be adjudged without fault” because it failed to discover building code violations that
The court addressed Marick’s claims for breach of contract and breach of warranty in a separate order not at issue in this appeal. Marick filed a motion under Rule 59(e), SCRCP, which the circuit court denied.
II. Summary Judgment
Rule 56(c) of the South Carolina Rules of Civil Procedure provides the circuit court shall grant summary judgment if “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” When the circuit court grants summary judgment on a question of law, we review the ruling de novo. Town of Summerville v. City of N. Charleston, 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008). “In determining whether any triable issue of fact exists, the evidence and all inferences which can reasonably be drawn therefrom must be viewed in the light most favorable to the nonmoving party.” Quail Hill, LLC v. Cnty. of Richland, 387 S.C. 223, 235, 692 S.E.2d 499, 505 (2010) (citation omitted). “However, it is not sufficient for a party to create an inference that is not reasonable or an issue of fact that is not genuine.” Town of Hollywood v. Floyd, 403 S.C. 466, 477, 744 S.E.2d 161, 166 (2013).
A. Negligence Claim
First, Marick argues its negligence cross-claim is a separate cause of action from its equitable indemnity claim, and thus, the circuit court erred in granting summary judgment.
“The character of an action is primarily determined by the allegations contained in the complaint.” Seebaldt v. First Fed. Sav. & Loan Ass’n, 269 S.C. 691, 692, 239 S.E.2d 726, 727 (1977). The issue Marick raises — whether the circuit court
In its cross-complaint, Marick alleged Clear View’s negligence caused Marick “to incur attorneys’ fees, costs, and face potential liability to [Stoneledge].” The cross-complaint also stated, “Should [Stoneledge] prevail on [its] claims, Marick ... is entitled to recover ... legal fees and costs or [any amount it is] ordered to pay to [Stoneledge].” Marick’s allegations demonstrate it did not sustain its own damages as a result of any negligence by the respondents. Rather, the allegations show Stoneledge is the party that suffered damages, and Marick’s injuries arose exclusively from having to defend itself in Stoneledge’s lawsuit. Consequently, the damages Marick seeks to recover resulted only from its potential liability to Stoneledge and from the expenses it incurred defending itself. When pressed at oral argument, Marick’s counsel could not identify any damages it claimed in this lawsuit that did not arise exclusively from the claims made by Stoneledge.
To support the finding that Marick’s negligence cross-claim was actually a claim for equitable indemnity, the circuit court relied on two federal district court cases — South Carolina National Bank v. Stone, 749 F.Supp. 1419 (D.S.C. 1990) and United States Fidelity & Guaranty Co. v. Patriot’s Point Development Authority, 788 F.Supp. 880 (D.S.C. 1992) (USF & G). In Stone, the defendants asserted cross-claims for breach of contract, negligence, and fraud against co-defendants that
Similarly, in USF & G, the defendants argued they had “independent claims” against a co-defendant in addition to their claim for indemnification. 788 F.Supp. at 881 n. 1. The district court barred the defendants from bringing these claims, finding “without [the] plaintiffs suing the ... defendants^] the ‘independent claims’ ... would not exist,” and thus “these claims are really nothing more than claims for indemnity.” Id.
We agree "with Stone and USF & G and find the reasoning in those decisions applies to this case. Under Marick’s own allegations, its negligence cross-claim arose only when it faced potential liability for Stoneledge’s damages and incurred fees and costs defending against Stoneledge’s lawsuit. Marick’s negligence cross-claim is nothing more than a claim for equitable indemnity.
Marick argues Addy v. Bolton, 257 S.C. 28, 183 S.E.2d 708 (1971), supports the argument that it may recover from the respondents under a negligence theory independent of its claim for equitable indemnity. Addy is one of the seminal cases in South Carolina on the theory of equitable indemnity. See Town of Winnsboro v. Wiedeman-Singleton, Inc., 307 S.C. 128, 130, 414 S.E.2d 118, 120 (1992) (stating, “This Court has long recognized the principle of equitable indemnification,” and citing Addy). We agree Addy controls this case to the extent it shows Marick may assert a claim for equitable indemnity against a negligent co-defendant. See Addy, 257 S.C. at 33, 183 S.E.2d at 709 (stating “where the wrongful act of the defendant has involved the plaintiff in litigation with others ... as makes it necessary to incur expense to protect his interest, such costs and expenses, including attorneys’ fees, should be treated as the legal consequences of the original
However, we do not read Addy to support Marick’s separate negligence claim against Clear View. First, the only claim made by the Addy appellants was for indemnity. See 257 S.C. at 31, 183 S.E.2d at 709 (“The appellants also [in addition to their answer] filed a cross action against the respondent demanding judgment in an amount equal to any judgment which may be rendered against them in favor of the Addys, together with the costs of the action and attorney fees for defending such.”); 257 S.C. at 32, 183 S.E.2d at 709 (stating “the appellants contend ... [an indemnity] contract was created by operation of law and under such an implied contract of indemnity they are entitled to recover from the respondent the fees paid their attorneys in the successful defense of this action”); 257 S.C. at 32-33, 183 S.E.2d at 709 (“We think this appeal can be disposed of by a determination of the single question of whether the appellants ... are entitled to recover their costs and attorneys’ fees incurred in the successful defense of this action under an implied contract, or because they were put to the necessity of defending themselves against the lessees’ claim by the tortious conduct of the contractor....”); 257 S.C. at 33, 183 S.E.2d at 709 (stating “the [appellants] seek to recover from the contractor the attorneys’ fees incurred by them in defending themselves against the claim asserted by the tenants”). Second, the only theory of recovery the supreme court addressed in Addy was indemnity.
Finally, Addy is distinguishable from this case on the question of whether Marick may assert a claim for negligence. In Addy, the appellants suffered their own damages as a direct result of the contractor’s conduct — independent of having to defend the lawsuit against them. As the supreme court explained, “the appellants ... are the owners of a store building,” and the dispute arose after “the appellants engaged ... a general contractor ... to make ... needed repairs” to the building. 257 S.C. at 31, 183 S.E.2d at 708. “In making
We find the circuit court properly granted summary judgment on Marick’s negligence cross-claim because it is not an independent cause of action from Marick’s equitable indemnity claim. The court correctly ruled that the only potential claim for the damages Marick incurred defending against Stone-ledge’s lawsuit is for equitable indemnity.
B. Thoennes’s Appeal
In addition to the reasons set forth above, we affirm summary judgment as to Thoennes’s negligence cross-claim because we find he presented no issues preserved for appeal. The circuit court found only Marick — not Thoennes — asserted cross-claims against the respondents. Thoennes did not file a Rule 59(e), SCRCP, motion to contest this finding and did not raise the finding as an issue on appeal or argue it in his brief. See Ness v. Eckerd Corp., 350 S.C. 399, 403-04, 566 S.E.2d 193, 196 (Ct.App. 2002) (“If a trial judge grants relief not previously contemplated or presented to the trial court, the aggrieved party must move, pursuant to Rule 59(e), SCRCP, to alter or amend the judgment in order to preserve the issue for appeal.” (citation and internal quotation marks omitted)); Rule 208(b)(1)(B), SCACR (“Ordinarily, no point will be considered which is not set forth in the statement of the issues on appeal.”).
C. Equitable Indemnity
We find the circuit court erred in granting summary judgment on the merits of Marick’s equitable indemnity cross-claim because Marick presented a question of fact as to whether it was at fault for the alleged construction defects.
An equitable indemnity claim may arise when a third party (Stoneledge) makes a claim against the indemnity plain
To recover damages on its equitable indemnity claim, Marick must prove the following: (1) Clear View was at fault in causing Stoneledge’s water intrusion damages; (2) Marick has no fault for those damages; and (3) Marick incurred expenses that were necessary to protect its interest in defending against Stoneledge’s claim. See Inglese v. Beal, 403 S.C. 290, 299, 742 S.E.2d 687, 692 (Ct.App. 2013) (stating the elements of equitable indemnity); Walterboro Cmty. Hosp. v. Meacher, 392 S.C. 479, 485, 709 S.E.2d 71, 74 (Ct.App. 2011) (same); see also Addy, 257 S.C. at 33, 183 S.E.2d at 709-10 (describing the requirements for proving equitable indemnity).
The circuit court granted summary judgment because it found no genuine issue as to the second element — that Marick
III. Conclusion
The circuit court’s order granting summary judgment is AFFIRMED in part, REVERSED in part, and REMANDED for trial.
. We address in this opinion only the circuit court’s decision to grant summary judgment on the negligence cross-claim. We address the circuit court's ruling on the breach of contract and breach of warranty cross-claims in a separate appeal.
. Counsel made several arguments that Marick suffered damages independent of those arising from the claims made by Stoneledge. However, we have carefully examined the record, particularly Marick’s cross-complaint, and we find Marick did not allege any damages except those it suffered exclusively as a result of potential liability to Stoneledge. As for any damages Thoennes contends he sustained independent of the Stoneledge claim, see section II. B. of this opinion.
Concurring in Part
concurring in part and dissenting in part.
I respectfully concur in part and dissent in part. I agree with the majority that the trial court erred in granting summary judgment on Marick’s cross-claim for equitable indemnity. I disagree, however, with the majority that summary judgment was proper on Marick’s negligence cross-claim. I believe Addy v. Bolton
In Addy, Thomason contracted to make repairs for a retail building owned by the Boltons and leased to the Addys. 257
[W]here the wrongful act of the defendant has involved the plaintiff in litigation with others or placed him in such relation with others as makes it necessary to incur expense to protect his interest, such costs and expenses, including attomeyt’s] fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages. In order to recover attorney[’s] fees under this principle, the plaintiff must show: (1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant or because of [the] defendant’s tortious conduct; (2) that the dispute was with a third party — not with the defendant; and (3) that the plaintiff incurred attorney[’s] fees connected with that dispute. If the attorneyfs] fees were incurred as a result of a breach of contract between plaintiff and defendant, the defendant will be deemed to have contemplated that his*628 breach might cause plaintiff to seek legal services in his dispute with the third party.
Id. at 33, 183 S.E.2d at 709-10 (internal quotation marks omitted); see also Restatement (Second) of Torts § 914 (1979) (“One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action.”).
Alternatively, the Addy court found that, on the facts of the case, the Boltons could also recover expenses incurred in the litigation under the theory of equitable indemnity. 257 S.C. at 33-34, 183 S.E.2d at 710; see also Town of Winnsboro v. Wiedeman-Singleton, Inc., 303 S.C. 52, 59, 398 S.E.2d 500, 504 (Ct.App. 1990), aff'd by 307 S.C. 128, 414 S.E.2d 118 (1992). Because the jury exonerated the Boltons of any fault for the Addys’ injuries, equity required Thomason, the at-fault party, to indemnify them as a matter of law. Addy, 257 S.C. at 34, 183 S.E.2d at 710.
In the present case, the trial court granted summary judgment on Marick’s negligence cross-claim against Clear View, finding it was merely a disguised claim for equitable indemnification. I believe the trial court erred because Addy specifically allows the recovery of attorney’s fees and costs “at law in the form of special damages, or in equity in the form of equitable indemnity.” Griffin v. Van Norman, 302 S.C. 520, 523, 397 S.E.2d 378, 380 (Ct.App. 1990) (stating that in Addy, the supreme court “held that recovery may be had at law in the form of special damages, or in equity in the form of equitable indemnity” (emphasis added)). Here, as in Addy, “the wrongful act of [Clear View] has involved [Marick] in litigation with [Stoneledge]” such that it has made it necessary for Marick “to incur expense to protect [its] interest.” Specifically, Stoneledge sued Marick and Clear View based on allegations that Clear View’s stone work was deficient, which Clear View has admitted. As a result of the underlying action, Marick has incurred expenses, including attorney’s fees, in an attempt to protect itself from liability to Stone-ledge. Thus, Addy supports Marick’s attempt to recover attorney’s fees and costs as “special damages” arising from Clear View’s tortious conduct.
I see no reason to allow recovery of attorney’s fees and costs as “special damages” in a breach of contract action, yet deny it under a negligence cause of action. The plain language of Addy makes clear that attorney’s fees and costs incurred by Marick in defending itself against Stoneledge’s claim “should be treated as the legal consequences of the original wrongful act and may be recovered as damages.” Notably, nothing in Addy or any other controlling authority
Based on the foregoing, I would reverse the circuit court’s grant of summary judgment on Marick’s negligence cross-claim.
. 257 S.C. 28, 183 S.E.2d 708 (1971).
. In finding Marick's negligence cross-claim was merely a disguised claim for equitable indemnification, the circuit court and the majority rely on two federal district court cases — South Carolina National Bank v. Stone, 749 F.Supp. 1419 (D.S.C. 1990) and United States Fidelity & Guaranty Co. v. Patriot’s Point Development Authority, 788 F.Supp. 880 (D.S.C. 1992). I find these cases unpersuasive for several reasons. First, federal district court decisions are not binding on this court. See Walden v. Harrelson Nissan, Inc., 399 S.C. 205, 209, 731 S.E.2d 324, 326 (Ct.App. 2012). Next, I question the applicability of these cases because they involved federal securities law, which, unlike the present general contractor and subcontractor context, have policies that disfavor indemnification. See Stone, 749 F.Supp. at 1429; Patriot’s Point Dev. Auth., 788 F.Supp. at 882 n. 2. Most importantly, these decisions conflict with the holding in Addy — a decision of our supreme court that
Case-law data current through December 31, 2025. Source: CourtListener bulk data.