Blue v. Harrelson

• Decision Date: 22 December 2004
• Docket Number: 2004-UP-656
• Parties: Victor L. Blue and Gail V. Blue, Respondents, v. Larry Harrelson and Nancy Harrelson d/b/a Angle Construction Company, Appellants.
• Court: South Carolina Court of Appeals

Victor L. Blue and Gail V. Blue, Respondents, v. Larry Harrelson and Nancy Harrelson d/b/a Angle Construction Company, Appellants.

No. 2004-UP-656

Court of Appeals of South Carolina

December 22, 2004

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(1), SCACR.

Submitted November 1, 2004

Appeal From Florence County B. Hicks Harwell, Jr., Circuit Court Judge

Kenneth E. Merriman, of Florence, for Appellants.

Daryl James Corbin, of Florence, for Respondents.

PER CURIAM

In this action to recover damages arising from a construction contract, Larry Harrelson and Nancy Harrelson, d/b/a Angle Construction Company (the Harrelsons), appeal the trial judge's entry of judgment in favor of Victor L. Blue and Gail Blue (the Blues). We affirm. ^[1]

FACTS

The Blues entered into a construction contract with the Harrelsons on April 6, 1999. The Harrelsons agreed to complete construction of the Blues' home no later than 265 days from the date of the contract for a purchase price of $340, 000. In addition, the parties negotiated a late-fee provision of $120 per day after December 28, 1999, if the home was not complete. The Harrelsons never completed the home. During this time period, the Blues were also subjected to litigation with the Shaw Lumber Company and forced to refinance their home due to the Harrelsons' failure to satisfy an account that was designated for the Blues' construction project.

On November 22, 2000, the Blues filed this action, alleging breach of contract with fraudulent intent, negligence, breach of fiduciary duty, and civil conversion. Underlying these causes of action, the Blues primarily asserted the Harrelsons breached the contract by: (1) failing to complete the construction within the designated 265-day time period; (2) failing to construct the home in a workmanlike manner; and (3) failing to pay the material suppliers and subcontractors involved in the project. The Blues sought relief of $150, 000 in actual damages and $150, 000 in punitive damages.

Because the Harrelsons failed to answer or respond to the pleadings the trial judge entered an order of default on February 14 2001. This order provided that all allegations contained within the Plaintiffs' pleadings are deemed true.” The judge denied the Harrelsons' motion to set aside the entry of default. The judge then held a hearing solely on the amount of damages.

The judge found the Blues were entitled to an award of actual damages for completion costs of construction in a proper manner, reputational harms and damages, and emotional distress.” The judge also concluded the Blues were entitled to additional damages under its breach of contract theory given the [Harrelsons'] violation of the late-fee provision for some of the period of time between December 28 1999, and May 1, 2001.” The judge entered judgment in the amount of $50, 000 for breach of contract, violation of the late-fee penalty provision, negligence, breach of fiduciary duties, and civil conversion.” The judge denied the Blues' request for punitive damages.

Subsequently, the Harrelsons filed a motion pursuant to Rule 59(e), SCRCP. The judge denied the motion and affirmed his previous ruling, explaining:

In considering damages, the Court based its consideration on the causes of action contained in the Plaintiff's complaint: breach of contract, breach of fiduciary duty, negligence, conversion and emotional and reputational harm. The Court's consideration of damages was also based on the following: delay in not complying with the construction completion date which was provided for in the contract, injury to the Plaintiff's credit standing, including refinancing with increased interest on the loan, assorted tools, including but not limited to, saws, hammers and paint brushes that were charged to the Plaintiffs but were never given to them, and those items charged to the building site that were not found in the construction.

The Harrelsons appeal.

STANDARD OF REVIEW

This case presents an action at law. See Roberts v. Gaskins, 327 S.C. 478, 483, 486 S.E.2d 771, 773 (Ct. App. 1997) (stating an action for a breach of contract seeking money damages is an action at law); see also Corley v. Ott, 326 S.C. 89, 92 n.1, 485 S.E.2d 97, 99 n.1 (1997) (recognizing an action for breach of fiduciary duty is an action at law); Advance Int'l, Inc. v. North Carolina Nat'l Bank of South Carolina, 316 S.C. 266, 271, 449 S.E.2d 580, 583 (Ct. App. 1994), aff'd in part and vacated in part, 320 S.C. 532, 466 S.E.2d 367 (1996) (action alleging, inter alia, fraud and negligence and seeking damages is one at law); Blackwell v. Blackwell, 289 S.C. 470, 471, 346 S.E.2d 731, 732 (Ct. App. 1986)(An action for damages for conversion is an action at law.”). In an action at law, tried without a jury, our scope of review extends merely to the correction of errors of law. Crary v. Djebelli, 329 S.C. 385, 388, 496 S.E.2d 21, 23 (1998). Thus, the trial judge's factual findings will not be disturbed on appeal unless a review of the record discloses that there is no evidence which reasonably supports the judge's findings. Id.; Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976).

DISCUSSION

I.

The Harrelsons argue the trial judge erred in failing to dismiss the Blues' causes of action for civil conversion negligence, and breach of fiduciary duty. As to each cause of action, the Harrelsons contend the Blues failed to prove damages. In conjunction with their civil conversion argument, the Harrelsons claim there is no evidence to support the judge's finding that the Blues were damaged by the Harrelsons charging tools and materials to an account with the Shaw Lumber Company, which was designated for the Blues' construction project.

To the extent the Harrelsons challenge their liability, we find they are precluded from raising these issues due to the entry of default. Because the Harrelsons were found in default, they are deemed to have admitted the truth of the Blues' allegations and conceded liability. See Roche v. Young Bros., Inc., of Florence, 332 S.C. 75, 81, 504 S.E.2d 311, 314 (1998) (It is well settled that by suffering a default, the defaulting party is deemed to have admitted the truth of the plaintiff's allegations and to have conceded liability.”); Howard v. Holiday Inns, Inc., 271 S.C. 238, 242, 246 S.E.2d 880, 882 (1978) (By defaulting, a defendant forfeits his right to answer or otherwise plead to the complaint. In essence, the defaulting defendant has conceded liability. However, a defaulting defendant does not concede the amount of liability.”) (citation omitted).

Despite the entry of default, the Harrelsons may raise, as they have done, issues regarding the sufficiency of the Blues' pleadings and their entitlement to damages under each cause of action. See Masters v. Rodgers Dev. Group, S.C., 283 S.C. 251, 254, 321 S.E.2d 194, 196 (Ct. App. 1984) (holding defendant found in default was not precluded from challenging the sufficiency of the plaintiff's complaint as a basis for judgment); see also Mut. Sav. & Loan Ass'n v. McKenzie, 274 S.C. 630, 632, 266 S.E.2d 423, 424 (1980) (A party seeking a default judgment is entitled to only such relief as is framed by his pleading... It follows that if a complaint fails to state a cause of action, the rendering of a default judgment thereon is without authority of law and therefore reversible error.”). As will be discussed, we find the Blues properly pled the alleged causes of action and there is evidence to support the trial judge's award of damages under each theory.

A.

Conversion has been defined as the unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of the condition or the exclusion of the owner's rights. Powell v. A.K. Brown Motor Co., 200 S.C. 75, 78, 20 S.E.2d 636, 637 (1942). Furthermore, [c]onversion may arise by some illegal use or misuse, or by illegal detention of another's personal property.” Regions Bank v. Schmauch, 354 S.C. 648, 667, 582 S.E.2d 432, 442 (Ct. App. 2003).

A review of the Blues' complaint reveals that they sufficiently pled a cause of action for civil conversion. Specifically, the Blues alleged they entrusted funds to the Harrelsons which were supposed to have been used solely for satisfaction of labor and materials costs involving construction of their home.” They further asserted the Harrelsons intentionally took the Blues' money and used it for their own personal benefit to the Blues' detriment.” Finally, the Blues alleged the Harrelsons converted approximately $50, 000 of the Blues' money and have failed to return it to them.”

Not only did the Blues properly plead a cause of action for civil conversion, there is also evidence in the record to support their entitlement to damages under this cause of action. Mr Blue testified concerning their damages, which were outlined in a summary that was admitted into evidence. He testified the Harrelsons misused construction funds to purchase tools and materials that were not used in the construction of the home. Thomas Robertson, a construction inspector, reviewed the invoices from the Shaw Lumber Company and confirmed that items were designated for the Blues' construction projection but were not in fact used for the home. Robertson concluded that missing” construction materials and tools worth $4, 632.96 were inappropriately charged to the Blues' account. Mrs. Harrelson admitted the tools, valued at $1, 513.22, were never given to the Blues. She also testified that she understood that by charging these items to the Shaw Lumber account and specifying that they were to be used...