Atlantic Coast Builders & Contractors, LLC v. Lewis
| Decision Date | 26 September 2011 |
| Docket Number | No. 27044.,27044. |
| Citation | 396 S.C. 479,722 S.E.2d 213 |
| Court | South Carolina Supreme Court |
| Parties | ATLANTIC COAST BUILDERS AND CONTRACTORS, LLC, Respondent, v. Laura LEWIS, Petitioner. |
OPINION TEXT STARTS HERE
Hemphill P. Pride, II, of Columbia, for Petitioner.
John P. Qualey, Jr. and Thomas Calvin Taylor, both of Hilton Head Island, for Respondent.
Respondent brought an action against petitioner for negligent misrepresentation, unjust enrichment, and breach of contract. The master-in-equity awarded respondent $10,160.79 in damages. The Court of Appeals affirmed. Atlantic Coast Builders and Contractors v. Lewis, Op. No.2009–UP–042 (S.C. Ct.App. filed Jan. 15, 2009). This Court granted certiorari to review the Court of Appeals' decision. We affirm.
On March 28, 2003, petitioner, acting through a leasing agent, entered into a commercial lease whereby respondent would lease from petitioner property located at 165 Fording Island Road in Beaufort County. The lease provided respondent would lease the property for twelve months at a monthly rate of $3,500. The lease provided in pertinent part:
2. Use. Lessee shall use and occupy the premises for Building & Const. office. The premises shall be used for no other purpose. Lessor represents that the premises may lawfully be used for such purpose.
...
5. Ordinances and Statutes. Lessee shall comply with all statutes, ordinances and requirements of all municipal, state and federal authorities now in force, or which may hereafter be in force, pertaining to the premises, occasioned by or affecting the use thereof by Lessee.
Although petitioner represented in the lease that the property could lawfully be used for a building and construction office, the property was zoned “rural,” meaning virtually all commercial uses were prohibited.
Upon executing the lease agreement, respondent paid petitioner a $3,500 security deposit. Subsequently, respondent occupied the property and made numerous alterations to it. Respondent repaired the ceiling and interior walls, replaced the flooring and electrical wiring, pressure washed the exterior, and installed a telephone system. Respondent made rental payments for April and May 2003.
On May 28, 2003, a Beaufort County zoning official served respondent with notice and warning of two violations for respondent's failure to obtain a certificate of zoning compliance before occupying the premises and its failure to obtain a sign permit before erecting a sign. Respondent vacated the property, relocated its business, and ceased making rental payments.
Respondent instituted this action against petitioner, alleging negligent misrepresentation, unjust enrichment, breach of contract, and breach of the covenant of quiet enjoyment. Petitioner denied these allegations and made a counterclaim for breach of contract. The master in equity entered judgment in favor of respondent.
Petitioner argues the Court of Appeals erred in affirming the master's judgment in favor of respondent on its claims of negligent misrepresentation and breach of contract, and in denying petitioner relief on her counterclaim for breach of contract. We find petitioner's arguments are unreviewable.
“Under the two issue rule, where a decision is based on more than one ground, the appellate court will affirm unless the appellant appeals all grounds because the unappealed ground will become the law of the case.” Jones v. Lott, 387 S.C. 339, 346, 692 S.E.2d 900, 903 (2010) (citing Anderson v. Short, 323 S.C. 522, 525, 476 S.E.2d 475, 477 (1996)).
On appeal to the Court of Appeals, petitioner argued the master erred in granting judgment in favor of respondent for negligent misrepresentation and breach of contract. The Court of Appeals affirmed the master pursuant to Rule 220(b), SCACR, finding the master properly granted judgment in favor of respondent.
Petitioner did not appeal all grounds on which the master's judgment was based. Namely, she did not challenge the determination that respondent was entitled to recover based on unjust enrichment. Thus, under the two-issue rule, the Court of Appeals should have declined to address the merits of petitioner's argument since petitioner failed to challenge all three grounds on which the master's judgment was based.1 See Jones v. Lott, 387 S.C. 339, 692 S.E.2d 900 (2010) (). Accordingly, we affirm the decision of the Court of Appeals.
Petitioner argues the Court of Appeals erred in holding the issue of the security deposit was not preserved. We disagree.
In his initial order, the master failed to address the return of the security deposit, which respondent had sought to be returned from petitioner. Although petitioner filed a Rule 59(e), SCRCP, motion to reconsider the master's initial order, it did not address the issue of the security deposit. Shortly thereafter, respondent filed a Rule 59(e) motion specifically asking the master to consider this issue. Petitioner did not file anything in response to this motion, and never argued to the master that she should retain the security deposit. In its Amended Order, the master found respondent was also entitled to the security deposit, in addition to the damages already awarded.
On appeal, petitioner argued the master erred in awarding respondent the security deposit. The Court of Appeals found the issue was not preserved for appeal.
Because petitioner never argued until direct appeal that she should retain the security deposit, we find the Court of Appeals properly held the issue was not preserved for appeal.2 See Elam v. S.C. Dep't of Transp., 361 S.C. 9, 23, 602 S.E.2d 772, 779–80 (2004) (). Accordingly, we hold the Court of Appeals properly found the issue was not preserved for review.
Respectfully, I concur in part and dissent in part. I agree with the majority that the two-issue rule precludes our review of the master-in-equity's entry of judgment against Laura Lewis on Atlantic Coast Builder's (Atlantic) claims for negligent misrepresentation and breach of contract. However, I do not believe our error preservation rules prevent us from considering whether Lewis was entitled to retain Atlantic's security deposit and would reach the merits of that issue.
Atlantic sued Lewis for negligent misrepresentation, breach of contract, and unjust enrichment after Atlantic learned it could not use the premises it leased from Lewis for business purposes, despite the statement in the lease to the contrary. Atlantic learned of this in late May, two months into the one-year lease, and stopped paying rent. However, it remained on the premises through at least July. The master found for Atlantic on all causes of action, 4 awarding Atlantic $6,660.79 in damages, representing the expenditures Atlantic made to improve the premises and specifically excluding those improvements the master did not believe unjustly enriched Lewis. Cross motions for reconsideration under Rule 59(e), SCRCP, were filed. In particular, Atlantic moved for the master to include its security deposit of $3,500, which Lewis never returned, in the calculation of damages. Lewis did not respond to this motion, and the court modified its award to include this amount. On appeal, Lewis argues the master erred in entering judgment against her for negligent misrepresentation and breach of contract. She further argues the master erred in ordering she return Atlantic's security deposit.
Initially, I share the Chief Justice's concern regarding an “over-zealous application” of our long-standing error preservation rules. However, error preservation has been a critical part of appellate practice in this State for a long time, serving to ensure, as noted by the Chief Justice, that we do not reach issues which were not ruled upon by the trial court. Thus, I agree with the Chief Justice that we are not precluded from finding an issue unpreserved even when the parties themselves do not argue error preservation to us. A rule which would permit such an “appeal by consent” is contrary to the very core of our preservation requirement: “Issue preservation rules are designed to give the trial court a fair opportunity to rule on the issues, and thus provide us with a platform for meaningful appellate review.” Queen's Grant II Horizontal Prop. Regime v. Greenwood Dev. Corp., 368 S.C. 342, 373, 628 S.E.2d 902, 919 (Ct.App.2006). These rules, however, must also be applied consistently. If our review of the record establishes that an issue is not preserved, then we cannot reach it regardless of the status of the party raising it. This is not a “gotcha” game aimed at embarrassing attorneys or harming litigants, but rather an adherence to settled principles that serve an important function. Surely it is good practice for us to reach the merits of an issue when error preservation is doubtful, but when an issue is clearly unpreserved, we should follow our longstanding precedent and resolve the issue on error preservation grounds.
The master found for Atlantic on all three causes of action: negligent misrepresentation, breach of contract, and...
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Atlantic Coast Builders & Contractors, LLC v. Lewis
...filed Jan. 15, 2009). We granted certiorari. Our original opinion affirmed the court of appeals, Atlantic Coast Builders & Contractors, LLC v. Lewis, 396 S.C. 479, 722 S.E.2d 213, 215 (2011), and this matter is before us again on a petition for rehearing. Upon further review, we grant the m......