Concord & Cumberland Horizontal Prop. Regime v. Concord & Cumberland, LLC, Appellate Case No. 2016-000076

• Decision Date: 08 August 2018
• Docket Number: Opinion No. 5585,Appellate Case No. 2016-000076
• Citation: 819 S.E.2d 166,424 S.C. 639
• Parties: CONCORD AND CUMBERLAND HORIZONTAL PROPERTY REGIME, and Thomas R. Mather, and Betty Y. Segal, and Signature Charleston, LLC and Wade Robinson, And James C. Kirkpatrick, and Paul A. Brim, and Fred Rappaport and Joyce Rappaport, and Thomas R. Debnam, as Trustee of The Trust Agreement of Thomas R. Debnam, and Pamela L. Vaughan, and 304 Concord & Cumberland, LLC, and 402 Concord & Cumberland, LLC, and Avant & Associates, LLC and Oakland Holding, LLC, and Mattison J. MacGillivray and Teresa E. MacGillivray and Pamela Queen, and Stuart Reeves, Plaintiffs, v. CONCORD & CUMBERLAND, LLC, Concord & Cumberland Manager, LLC, Estates, Inc., Estates Management Company, Superior Construction Corporation, Weather Shield Mfg., Inc., The Muhler Company, Inc., In The Wind, Inc., J. Davis Architects, PLLC, Wall Craft Construction, Inc., Weatherholtz Masonry, LLC, Philip Gasque d/b/a Philip Gasque Construction, Architectural Stone Company, Southern Mechanical, Inc., Greg Gasque Metal Works, Keating Roofing and Sheet Metal, Inc., Lowcountry Tile Contractors, Inc., Safeco Insurance Company of America, Companion Property and Casualty of America, Companion Property and Casualty Group, Watts Builders, LLC, Elias Duffy d/b/a Masonry Pros, Renaissance Steel, LLC, American Drywall Construction, Inc., Turner Electrical of SC, Inc., and Metro Waterproofing, Inc., Defendants, Of which Superior Construction Corporation is the Appellant, And The Muhler Company, Inc. is the Respondent.
• Court: South Carolina Court of Appeals

424 S.C. 639

819 S.E.2d 166

CONCORD AND CUMBERLAND HORIZONTAL PROPERTY REGIME, and Thomas R. Mather, and Betty Y. Segal, and Signature Charleston, LLC and Wade Robinson, And James C. Kirkpatrick, and Paul A. Brim, and Fred Rappaport and Joyce Rappaport, and Thomas R. Debnam, as Trustee of The Trust Agreement of Thomas R. Debnam, and Pamela L. Vaughan, and 304 Concord & Cumberland, LLC, and 402 Concord & Cumberland, LLC, and Avant & Associates, LLC and Oakland Holding, LLC, and Mattison J. MacGillivray and Teresa E. MacGillivray and Pamela Queen, and Stuart Reeves, Plaintiffs,

v. CONCORD & CUMBERLAND, LLC, Concord & Cumberland Manager, LLC, Estates, Inc., Estates Management Company, Superior Construction Corporation, Weather Shield Mfg., Inc., The Muhler Company, Inc., In The Wind, Inc., J. Davis Architects, PLLC, Wall Craft Construction, Inc., Weatherholtz Masonry, LLC, Philip Gasque d/b/a Philip Gasque Construction, Architectural Stone Company, Southern Mechanical, Inc., Greg Gasque Metal Works, Keating Roofing and Sheet Metal, Inc., Lowcountry Tile Contractors, Inc., Safeco Insurance Company of America, Companion Property and Casualty of America, Companion Property and Casualty Group, Watts Builders, LLC, Elias Duffy d/b/a Masonry Pros, Renaissance Steel, LLC, American Drywall Construction, Inc., Turner Electrical of SC, Inc., and Metro Waterproofing, Inc., Defendants,Of which Superior Construction Corporation is the Appellant,And The Muhler Company, Inc. is the Respondent.

Appellate Case No. 2016-000076

Opinion No. 5585

Court of Appeals of South Carolina.

Heard April 9, 2018

Filed August 8, 2018

Rehearing Denied October 18, 2018

Christopher Alton Majure and Timothy J. Newton, both of Murphy & Grantland, PA, of Columbia, for Appellant.

Curtis Lyman Ott and Janice Holmes, both of Gallivan, White & Boyd, PA, of Columbia, and Peter Gunnar Nistad, of Shelly Leeke Law Firm, LLC, of North Charleston, all for Respondent.

THOMAS, J.:

This case involves the alleged negligent construction of a condominium project in Charleston, which resulted in numerous construction defects. Appellant Superior Construction Corporation (Superior) appeals the circuit court's partial grant of summary judgment in favor of Respondent The Muhler Company, Inc. (Muhler), arguing the circuit court erred by misconstruing its argument and finding the relevant contracts between the parties did not require Muhler to indemnify Superior for Superior's own concurrent negligence. We affirm.

FACTS

The plaintiff, Concord and Cumberland Horizontal Property Regime (Regime), filed this action in March 2010, alleging the existence of construction defects resulting in water intrusion in the condominium units.¹ Specifically, Regime asserted numerous defects with the windows and doors, including design and installation defects. Regime alleged Superior was the general contractor who subcontracted with Muhler for installation of the windows and doors. Regime claimed Weathershield, Inc. designed, manufactured, marketed, sold, and distributed the windows and exterior doors used in the construction.

Superior admitted it was the general contractor and also claimed Weathershield manufactured and supplied the windows and exterior doors. Superior claimed Muhler installed all of the windows and doors as a subcontractor for Superior. Superior alleged it was "entitled by contractual provisions, to the fullest extent permitted by law, full indemnity from" its various subcontractors, including Muhler. Superior also claimed it was entitled to equitable indemnification. However, Muhler denied it was contractually required to indemnify Superior.

Superior and Muhler executed a contract (the Subcontract) in May 2006. The Subcontract called for Muhler to provide labor and materials for the installation of all windows and exterior doors. Article 12.1 of the Subcontract contained an indemnification clause:

12.1 SUBCONTRACTOR'S PERFORMANCE. To the fullest extent permitted by law, the Subcontractor shall indemnify and hold harmless the Owner, the Architect, the Contractor (including its affiliates, parents and subsidiaries) and other contractors and subcontractors and all of their agents and employees from and against all claims, damages, loss and expenses, includingbut not limited to attorney's fees, arising out of or resulting from the performance of the Subcontractor's Work provided that

(a) any such claim, damage, loss, or expense is attributable to bodily injury, sickness, disease, or death, or to injury to or destruction of tangible property (other than the Subcontractor's Work itself) including the loss of use resulting there from, to the extent caused or alleged to be caused in whole or in any part by any negligent act or omission of the Subcontractor or anyone directly or indirectly employed by the Subcontractor or anyone for whose acts the Subcontractor may be liable, regardless of whether it is caused in part by a party indemnified hereunder.

(b) such obligation shall not be construed to negate, or abridge, or otherwise reduce any other right or obligation of indemnity which would otherwise exist as to any party or person described in this [a]rticle [12.1].

In early 2007, after the water intrusion around the windows and doors began, Superior, Muhler, and Weathershield entered into a second contract (the 2007 Agreement). The 2007 Agreement acknowledged some of the windows and doors did not comply with certain warranties. The 2007 Agreement stated it did not amend or affect "any party's contractual rights and responsibilities except to the extent specifically stated." Weathershield agreed to perform testing of some of the windows and remedy any defects in the design of the windows. Muhler agreed "to remedy any defects in the installation of the windows." The 2007 Agreement contained another indemnification clause relating to Muhler.

11. In the event either Superior or Concord and Cumberland, LLC are sued hereafter by or on behalf of any subsequent owner, alleging that one or more of the windows and/or doors do not comply with the original and amended [c]ontract [d]ocuments, or are defectively installed[,] Muhler agrees to unconditionally indemnify both Superior and Concord and Cumberland, LLC against these allegations and will pay all damages (including reasonable [attorney's] fees) incurred by either or both, as determined by a court of competent jurisdiction or award of arbitration, liability incurred by either or both as consequence including, but not limited to, costs and [attorney's] fees, any remedial costs of expert witnesses, cost of arbitration and all other damages incurred.

Following years of litigation and extensive discovery, Superior and Muhler reached separate settlements with Regime and the individual owners. Superior settled for $775,000 and also claimed approximately $630,000 in attorney's fees and expenses related to its defense of the window and door claims.

Following these settlements, Superior pursued its indemnity claims against Muhler. In May 2014, Superior filed a motion for partial summary judgment. Superior claimed it was entitled to contractual indemnity from Muhler for the settlement amount along with attorney's fees and expenses.² Specifically, Superior argued the Subcontract, "as modified by the terms of the [2007 Agreement]," required Muhler to indemnify Superior, and the "right to indemnity was not lessened by any concurrent negligence of or causation by Superior."

In response, Muhler moved for partial summary judgment. Muhler argued neither the Subcontract nor the 2007 Agreement obligated it to indemnify Superior for Superior's "own wrong-doing." Muhler claimed such an indemnity clause must be clear and unequivocal in the contract, and the contracts at issue failed to meet that burden.

The circuit court found Superior, in order to prevail, must show the language in the Subcontract or the 2007 Agreement "can only be interpreted to reach the result that the parties intended to indemnify the indemnitee for the indemnitee's own negligence." The circuit court found the Subcontract's language did not clearly and unequivocally require Muhler to indemnify Superior for Superior's own negligence and limited indemnification to damages resulting from the work Muhler performed. Likewise, the circuit court determined the 2007 Agreement did not clearly and unequivocally require Muhler to indemnify Superior for Superior's own negligence. The circuit court also found, to the extent the 2007 Agreement purported to indemnify Superior "unconditionally," it was unconscionably broad. Thus, the circuit court denied Superior's motion for partial summary judgment and granted Muhler's motion to the extent Muhler sought a declaration the Subcontract and 2007 Agreement did not require Muhler to indemnify Superior for Superior's own negligence. This appeal followed.

ISSUES ON APPEAL

1. Did the circuit court err by applying the clear and unequivocal standard based on its improper conflation of indemnification

for Superior's own negligence with indemnification for Superior's sole negligence?

2. Did the circuit court err by finding the indemnity clause in the Subcontract did not require Muhler to indemnify Superior for Superior's own concurrent negligence?

3. Did the circuit court err by failing to reconcile the Subcontract and the 2007 Agreement and construe them in conjunction when determining whether Muhler was obligated to indemnify Superior for Superior's own concurrent negligence?

STANDARD OF REVIEW

The circuit court should grant a motion for summary judgment when the evidence shows "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), SCRCP. An appellate court "reviews the grant of a summary judgment motion under the same standard as the [circuit] court." Montgomery v. CSX Transp., Inc. , 376 S.C. 37, 47, 656 S.E.2d 20, 25 (2008).

SOLE VS. CONCURRENT NEGLIGENCE

Superior argues the circuit court erred by...