Adams v. B & D, Inc.

• Decision Date: 10 January 1989
• Docket Number: No. 22972,22972
• Citation: Adams v. B & D, Inc., 377 S.E.2d 315, 297 S.C. 416 (S.C. 1989)
• Parties: Charles F. ADAMS, d/b/a Charlie's Electrical Service, Respondent, v. B & D, INC., Betty R. Rowell and McGee & Sons, Inc., Defendants, of whom B & D, Inc., and Betty R. Rowell are Appellants, and McGee & Sons, Inc. is a Respondent. . Heard
• Court: South Carolina Supreme Court

Page 315

377 S.E.2d 315

297 S.C. 416

Charles F. ADAMS, d/b/a Charlie's Electrical Service, Respondent, v. B & D, INC., Betty R. Rowell and McGee & Sons, Inc., Defendants of whom B & D, Inc., and Betty R. Rowell are Appellants and McGee & Sons, Inc. is a Respondent.

No. 22972.

Supreme Court of South Carolina.

Heard Jan. 10, 1989.

Decided Feb. 21, 1989.

[297 S.C. 417] John R. Clarke, North Myrtle Beach, for appellants.

Joseph F. Singleton and Ronald R. Norton of Cross, Singleton & Burroughs, P.A., Conway, for respondent Adams.

H.T. Abbott, III, Conway, for respondent McGee & Sons, Inc.

HARWELL, Justice:

This is an appeal from the foreclosure of a mechanic's lien. The special referee ruled that the mechanic's lien had been established and entered judgment in favor of the subcontractor. We affirm in part and remand in part.

FACTS

Appellant Betty R. Rowell (Rowell) owns a building in North Myrtle Beach. Rowell leased the building to B & D, Inc. (B & D), which used it to operate a supermarket. The lease specifically provided that Rowell "... is not and never shall be liable to any creditor of [B & D] or to any claimant against the estate or property of [B & D] for any debt, loss, contract or any other obligation of [B & D]."

B & D contracted with Respondent McGee & Sons, Inc., the general contractor, for renovations and repairs to the supermarket. The general contractor, in turn, hired Respondent Charles F. Adams (Adams), doing business as Charlie's Electrical Service, to do electrical wiring on the project. Subcontractor Adams agreed to do the work on a "cost-plus" basis: he would be reimbursed for all labor and materials costs incurred plus ten percent (10%).

B & D authorized numerous changes and construction expansions which doubled the original estimated cost of the project. The increased costs were of great concern to B & D. In March 1986, agents of B & D asked general contractor McGee & Sons to submit a final billing figure to reflect all costs anticipated to complete the job. Doug McGee, president of the general contractor, approached all subcontractors and explained that a final billing, to include all costs for completion, should be submitted to him. On March 25, Adams submitted an estimate of $2500.00 to Mr. McGee. Mr. McGee added this figure to the estimates submitted by the other subcontractors on the project to reach a completion amount of $9200.00. B & D issued McGee & Sons a $9200.00 check marked "paid in full". McGee & Sons then paid off all its subcontractors, including $2500.00 to Adams based on Adams's estimate.

Adams continued working on the project through April 11, 1986. By that date, Adams had received additional materials invoices and incurred labor expenses totalling $4600.00 over and above the $2500.00 estimate. Adams reported the additional costs to Mr. McGee, but was never paid by McGee & Sons or B & D. Adams later filed the mechanic's lien against the supermarket property.

The parties do not dispute that Adams worked through April 11, nor do they dispute the value of his labor and materials. Neither Mr. McGee nor the general manager of B & D disputed at trial that if Adams had submitted the additional $4600.00 figure when final billing was requested in March, he would have been paid.

Both McGee & Sons and B & D believed that all subcontractors' estimates were final and that no further payments from B & D would be necessary. The special referee found that both McGee & Sons and B & D were therefore operating under a mistake of fact at the time "final payment" was made. He ruled that Adams had established a valid mechanic's lien of $4600.00 against B & D's leasehold interest in the property, ordered B & D's interest sold to satisfy the lien and Adams's attorney's fees, and entered a $4600.00 judgment in favor of Adams against McGee & Sons. The referee did not rule on B & D's cross-claim against McGee & Sons for indemnification. B & D now appeals.

DISCUSSION

B & D argues that the special referee erred in finding that Adams had established a valid mechanic's lien. B & D asserts that the parties negotiated either a novation or an accord and satisfaction.

Accord and satisfaction is an affirmative defense which must be pleaded and proved. Rule 8(c), S.C.R.Civ.P. B & D did not plead the accord and satisfaction defense in its answer, nor was the issue presented to the special referee. An issue not raised before the trial court will not be addressed on appeal. Howell v. Pacific Columbia Mills, 291 S.C. 469, 354 S.E.2d 384 (1987).

A novation is a mutual agreement between all parties concerned for the discharge of a valid existing obligation by the substitution of a new valid obligation on the part of the debtor. There can be no novation unless both parties so intend. Superior Automobile Ins. Co. v. Maners, 261 S.C. 257, 199 S.E.2d 719 (1973); Pee Dee State Bank v. Prosser, 295 S.C. 229, 367 S.E.2d 708 (Ct.App.1988). Nothing in the record suggests that Adams agreed to dissolve his cost-plus contract with the general contractor. The $2500.00 figure Adams submitted was merely an estimate and cannot reasonably be characterized as a substituted agreement to perform his services for a fixed fee.

B & D next claims the referee erred in finding that B & D and McGee & Sons operated under a mistake of fact at the time "final payment" was made. We disag...