R & G CONST., INC. v. LRTA, No. 3264.

• Court: Court of Appeals of South Carolina
• Writing for the Court: ANDERSON.
• Citation: 343 S.C. 424,540 S.E.2d 113
• Parties: R & G CONSTRUCTION, INC., Respondent, v. LOWCOUNTRY REGIONAL TRANSPORTATION AUTHORITY, Appellant.
• Decision Date: 04 December 2000
• Docket Number: No. 3264.

343 S.C. 424
540 S.E.2d 113

R & G CONSTRUCTION, INC., Respondent,
v.
LOWCOUNTRY REGIONAL TRANSPORTATION AUTHORITY, Appellant

No. 3264.

Court of Appeals of South Carolina.

Heard November 9, 2000.

Decided December 4, 2000.

Rehearing Denied January 29, 2001.

343 S.C. 428

H. Fred Kuhn, Jr., of Moss & Kuhn, of Beaufort, for appellant

William B. Harvey, III, of Harvey & Battey, of Beaufort, for respondent.

343 S.C. 429

ANDERSON, Judge

In this breach of contract action, Lowcountry Regional Transportation Authority (LRTA) appeals the trial court's refusal to grant a directed verdict and the court's admission of a closure report and letter. We affirm.

FACTS/PROCEDURAL BACKGROUND

LRTA runs a public transportation bus service for Beaufort, Jasper, Colleton, Hampton, and Allendale counties. From approximately 1983, LRTA operated a maintenance and fueling facility in the Burton area of Beaufort County. Two fuel pumps and two underground fuel storage tanks were located at the Burton site. The facilities were located on land owned by Beaufort County, which provided LRTA with the Burton site free of charge as part of its contribution to LRTA. LRTA installed the fuel tanks and used them for about twelve years.

Sometime in 1994 or 1995, LRTA decided to move its maintenance and fuel site from Burton to Bluffton. In anticipation of LRTA's move to Bluffton, Beaufort County located a buyer for the Burton site. However, before the County could sell the land, it had to ensure the site was environmentally clean. Over the years LRTA used the site, the underground fuel tanks corroded and leaked fuel into the surrounding soil. The County requested LRTA remove the two underground fuel tanks.

LRTA asked Beaufort County to solicit bids for the tank removal and cleanup of the Burton facility. In February of 1995, Beaufort County issued an invitation for bids for the "removal/disposal" of the two 4,000 gallon underground fuel tanks.

On March 16, 1995, R & G Construction submitted a bid setting out the following prices:

(1) $4,000 for the "Removal/Disposal of two (2) 4000 gallon fuel tanks";

(2) $17.60 per ton for field monitoring and soil analysis;

(3) $64.00 per ton for soil disposal; and

(4) $6.00 per yard for fill dirt.

Over three months later, Samuel Smith, LRTA's Executive Director, sent R & G a purchase order for the "Removal of

343 S.C. 430

fuel tanks in accordance with bid dated 3-16-95 ... $4,000.00." The purchase order was issued on a form bearing the name, address, and telephone number of LRTA

R & G removed the fuel tanks and disposed of and replaced contaminated soil. The total cost for the job was $47,982.98. LRTA refused to pay more than $4,000. LRTA contended it neither contracted for R & G to test, remove, or replace the soil at the facility nor agreed for it to do so.

R & G filed a complaint against LRTA alleging breach of contract. Alternatively, R & G claimed it performed valuable work for LRTA and should be paid under the theory of quantum meruit. R & G sought damages in the amount of the remaining contract balance, $43,982.98. LRTA answered, denying the existence of a contract and alternatively averring it withheld payment due to R & G's alleged failure to complete the project.

At the close of R & G's case, LRTA moved for a directed verdict on the grounds (1) Samuel Smith did not have the authority to bind LRTA to the alleged contract and (2) LRTA did not have a contract with R & G for the removal and replacement of the soil, but only for the removal and disposal of the tanks, which totaled $4,000. The court denied the motion. The jury awarded R & G $43,982.98 in actual damages.

STANDARD OF REVIEW

Breach of Contract Action

An action for breach of contract seeking money damages is an action at law. Sterling Dev. Co. v. Collins, 309 S.C. 237, 421 S.E.2d 402 (1992); Kuznik v. Bees Ferry Assocs., 342 S.C. 579, 538 S.E.2d 15 (Ct.App.2000). See also South Carolina Fed. Sav. Bank v. Thornton-Crosby Dev. Co., 310 S.C. 232, 423 S.E.2d 114 (1992) (action seeking money damages for breach of contract is action at law). Our review of an action at law tried by a jury extends merely to correcting errors of law. We will not disturb the facts determined by the jury unless there is no evidence which reasonably supports the jury's findings. Townes Assocs., Ltd. v. City of Greenville,

343 S.C. 431

266 S.C. 81, 221 S.E.2d 773 (1976); Brown v. Smalls, 325 S.C. 547, 481 S.E.2d 444 (Ct.App.1997).

Directed Verdict

In ruling on a motion for directed verdict, the court must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Futch v. McAllister Towing, 335 S.C. 598, 518 S.E.2d 591 (1999); Collins v. Bisson Moving & Storage, Inc., 332 S.C. 290, 504 S.E.2d 347 (Ct.App.1998). See also Weir v. Citicorp Nat'l Servs., Inc., 312 S.C. 511, 435 S.E.2d 864 (1993) (illustrating an appellate court must apply the same standard when reviewing the trial judge's decision on such motions). When the evidence yields only one inference, a directed verdict in favor of the moving party is proper. Swinton Creek Nursery v. Edisto Farm Credit, 334 S.C. 469, 514 S.E.2d 126 (1999); Arthurs v. Aiken County, 338 S.C. 253, 525 S.E.2d 542 (Ct.App.1999). If more than one reasonable inference can be drawn from the evidence, the case must be submitted to the jury. Mullinax v. J.M. Brown Amusement Co., 333 S.C. 89, 508 S.E.2d 848 (1998); Arthurs, supra. In ruling on a directed verdict motion, the trial court is concerned only with the existence or non-existence of evidence. Long v. Norris & Assocs., Ltd., 342 S.C. 561, 538 S.E.2d 5 (Ct.App.2000); Jones v. General Elec. Co., 331 S.C. 351, 503 S.E.2d 173 (Ct.App.1998). This Court may only reverse the denial of a motion for directed verdict if no evidence supports the trial court's ruling. Swinton Creek Nursery, supra; Arthurs, supra.

ISSUES

I. Did the trial court err In denying LRTA's motion for directed verdict?

II. Did the trial court err in admitting the closure report and closure letter?

LAW/ANALYSIS

I. Directed Verdict

A. Apparent Authority

LRTA argues the trial judge erred in refusing to direct a verdict for LRTA where Samuel Smith had neither actual nor apparent authority to bind LRTA. We disagree.

343 S.C. 432

In reviewing the trial court's denial of LRTA's motion for directed verdict, this Court must determine whether, viewing the evidence in the light most favorable to R & G, there is any evidence in the record to support the trial court's finding Smith had authority to enter into the contract on LRTA's behalf. See Creech v. South Carolina Wildlife and Marine Resources Dep't, 328 S.C. 24, 491 S.E.2d 571 (1997).

A true agency relationship may be established by evidence of actual or apparent authority. See Fochtman v. Clanton's Auto Auction Sales, 233 S.C. 581, 106 S.E.2d 272 (1958). See also Fernander v. Thigpen, 278 S.C. 140, 293 S.E.2d 424 (1982) (agency relationship may be proven by evidence of apparent or implied authority, even where parties have entered agreement to contrary). The doctrine of apparent authority focuses on the principal's manifestation to a third party that the agent has certain authority. Rickborn v. Liberty Life Ins. Co., 321 S.C. 291, 468 S.E.2d 292 (1996). Concomitantly, the principal is bound by the acts of its agent when it has placed the agent in such a position that persons of ordinary prudence, reasonably knowledgeable with business usages and customs, are led to believe the agent has certain authority and they in turn deal with the agent based on that assumption. Fernander, supra; Eadie v. H.A. Sack Co., 322 S.C. 164, 470 S.E.2d 397 (Ct.App.1996). Thus, the concept of apparent authority depends upon manifestations by the principal to a third party and the reasonable belief by the third party that the agent is authorized to bind the principal. Beasley v. Kerr-McGee Chem. Corp., 273 S.C. 523, 257 S.E.2d 726 (1979); Visual Graphics Leasing Corp. v. Lucia, 311 S.C. 484, 429 S.E.2d 839 (Ct.App.1993). See also Moore v. North American Van Lines, 310 S.C. 236, 423 S.E.2d 116 (1992) (basis of apparent authority is representations made by principal to third party and reliance by third party on those representations).

Apparent authority must be established based upon manifestations by the principal, not the agent. See Shropshire v. Prahalis, 309 S.C. 70, 419 S.E.2d 829 (Ct.App. 1992). The proper focus in determining a claim of apparent authority is not on the relationship between the principal and the agent, but on that between the principal and the third

343 S.C. 433

party. Vereen v. Liberty Life Ins. Co., 306 S.C. 423, 412 S.E.2d 425 (Ct.App.1991). An agency may not be established solely by the declarations and conduct of an alleged agent. Frasier v. Palmetto Homes, 323 S.C. 240, 473 S.E.2d 865 (Ct.App.1996).

Apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe the principal consents to have the act done on his behalf by the person purporting to act for him. Id. Either the principal must intend to cause the third person to believe the agent is authorized to act for him, or he should realize his conduct is likely to create such belief. Id. See also Watkins v. Mobil Oil Corp., 291 S.C. 62, 352 S.E.2d 284 (Ct.App.1986) (to establish apparent agency, party must prove purported principal has represented another to be his agent by either affirmative conduct or conscious and voluntary inaction).

The elements of apparent agency are: (1) purported principal consciously or impliedly represented another to be his agent; (2) third party reasonably relied on the representation; and (3) third party detrimentally changed his or her position in reliance on the representation. See Graves v. Serbin Farms, Inc., 306 S.C. 60, 409 S.E.2d 769 (1991); ZIV Television Programs, Inc. v. Associated...