Brown Contractors, LLC v. McMarlin, 2022-UP-175

• Court: Court of Appeals of South Carolina
• Writing for the Court: PER CURIAM
• Parties: Brown Contractors, LLC, under S.C. Residential Builders License No. 20378, Appellant/Respondent, v. Andrew Joseph McMarlin a/k/a Andrew Joseph McMarlin and Amy Salzhauer, Respondents/Appellants. And Andrew McMarlin and Amy Salzhauer, Respondents/Appellants, v. James Brown, IV and Brown-Meihaus Construction Co., LLC, Third-Party Defendants.
• Decision Date: 20 April 2022
• Docket Number: 2022-UP-175,Appellate Case 2019-000513

Brown Contractors, LLC, under S.C. Residential Builders License No. 20378, Appellant/Respondent,
v.
Andrew Joseph McMarlin a/k/a Andrew Joseph McMarlin and Amy Salzhauer, Respondents/Appellants.

And

Andrew McMarlin and Amy Salzhauer, Respondents/Appellants,
v.
James Brown, IV and Brown-Meihaus Construction Co., LLC, Third-Party Defendants.

No. 2022-UP-175

Appellate Case No. 2019-000513

Court of Appeals of South Carolina

April 20, 2022

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

Heard February 9, 2022

Appeal From Charleston County Henry W. Brown, Special Referee

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Robert Bratton Varnado, of Brown & Varnado, LLC, of Charleston, for Appellant/Respondent.

Robert T. Lyles, Jr., Lyles & Associates, LLC, of Mount Pleasant, for Respondents/Appellants.

PER CURIAM

Andrew McMarlin and his wife Amy Salzhauer hired Brown Contractors, LLC (Brown) to renovate their Sullivan's Island home. After renovations were substantially underway, the parties became embroiled in dispute, leading Brown to file a mechanic's lien. The McMarlins answered and counterclaimed, asserting claims of negligence, breach of warranty, breach of contract, and unfair trade practices. The McMarlins sought judgment against Brown and its owner, Jay Brown.

Henry W. Brown, Esquire, was appointed as Special Referee to decide the case. After a trial, the Special Referee ruled Brown's mechanic's lien and other claims were barred by S.C. Code Ann. § 40-59-30 (2011), which bars an unlicensed contractor from suing in law or equity. Turning to the McMarlins' counterclaims, the Special Referee awarded the McMarlins $346, 693.00 on all their causes of action, except their claim for unfair trade practices, as to which he entered judgment in Brown's favor. The Special Referee also ruled there was no basis to hold Jay Brown personally liable. Finally, the Special Referee awarded the McMarlins $158, 132.29 in attorney's fees. Both Brown and the McMarlins appeal.

I.

In this action at law, tried without a jury, our review is limited to errors of law, and we must affirm the Special Referee's factual findings as long as they are reasonably supported by the evidence. Ritter & Assocs., Inc. v. Buchanan Volkswagen, Inc., 405 S.C. 643, 649, 748 S.E.2d 801, 804 (Ct. App. 2013).

A. Brown's Appeal

i. S.C. Code Ann. § 40-59-30

Whether Brown can enforce its mechanic's lien is governed by S.C. Code Ann. § 40- 59-30(A), which states:

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[A] person or firm who first has not procured a license or registered with the commission and is required to do so by law may not file a mechanics' lien or bring an action at law or in equity to enforce the provisions of a contract for residential building or residential specialty contracting which the person or firm entered into in violation of this chapter

S.C. Code Ann. § 40-59-30(B). "South Carolina courts have held that a builder who is not licensed at the time he enters into a contract for residential construction may not bring an action to enforce the provisions of the contract." Lenz v. Walsh, 362 S.C. 603, 607, 608 S.E.2d 471, 473 (Ct. App. 2005); Duckworth v. Cameron, 270 S.C. 647, 649, 244 S.E.2d 217, 218 (1978) ("Any builder who violates the chapter by entering into a contract for home construction without obtaining the required license simply cannot enforce the contract.").

We affirm the Special Referee's ruling that, because Brown was not properly licensed, its mechanic's lien and other claims were invalid. See Zepsa Const., Inc v. Randazzo, 357 S.C. 32, 35, 591 S.E.2d 29, 30 (Ct. App. 2004) ("An action to foreclose a mechanic's lien is a law case in South Carolina." (quoting Keeney's Metal Roofing, Inc. v. Palmieri, 345 S.C. 550, 553, 548 S.E.2d 900, 901 (Ct. App. 2001))); Ritter, 405 S.C. at 649, 748, S.E.2d at 804 ("[W]hen reviewing an action at law, on appeal of a case tried without a jury, the appellate court's jurisdiction is limited to correction of errors at law, and the appellate court will not disturb the [special referee]'s findings of fact as long as they are reasonably supported by the evidence." (quoting Mazloom v. Mazloom, 382 S.C. 307, 316, 675 S.E.2d 746, 751 (Ct. App. 2009))). Based on Jay Brown's and Amy Salzhauer's testimony, Jay Brown met Amy in March 2012 and offered to engage in the business of residential building with the McMarlins as early as April 2012, months before Brown applied for its residential contractor's license on June 6, 2012. We...